The goal is to make raising and resolving pay equity claims more robust, workable, and sustainable
Brooke van Velden, workplace relations and safety minister, has announced that the government recently introduced a bill to amend the Equal Pay Act with the goal of making raising and resolving pay equity claims more robust, workable, and sustainable.
The bill is moving urgently through Parliament and will be effective the day after royal assent is received. van Velden said that the proposed pay equity system seeks to reduce the Crown’s costs and improve confidence regarding the correct identification and proper resolution of genuine pay equity issues.
According to the government, specific amendments include:
raising the threshold of “predominantly performed by female employees” to 70 percent from 60 percent
requiring that this has been the case for a minimum of 10 consecutive years
requiring evidence to ensure the existence of reasonable grounds to believe the work is historically and currently undervalued
clarifying and giving further guidance on the use of comparators
phasing settlements to ensure employers can comply with their pay equity obligations while being able to sustain their business
The changes will discontinue current pay equity claims, allow the raising of new claims under the amended legislation if they comply with the new requirements, permit the re-raising of settled claims a decade after settlement if they abide by the new requirements, and make review clauses in existing settlements unenforceable, the government said.
“It is clear the current Act is not working as intended, and amendments made by the previous government in 2020 have created issues,” van Velden said in the government’s news release.
“Claims have been able to progress without strong evidence of undervaluation and there have been very broad claims where it is difficult to tell whether differences in pay are due to sex-based discrimination or other factors,” van Velden explained.
The government expressed its commitment to tackling the issues that arise from the current legislation. van Velden noted that the country’s pay equity regime is an outlier internationally.
“The Act allows employees and unions to bargain a pay equity settlement with multiple employers,” van Velden said. “In most countries we compare ourselves to, people raise pay equity claims against their own employer only, or there are legal requirements on employers to proactively take steps to achieve pay equity.”
The government shared that the Crown’s total annual costs for all pay equity settlements so far amount to $1.78bn yearly. The government added that pay equity settlements can involve significant workforces, with the teachers’ claim covering roughly 94,000 individuals.
