Pay equity versus pay equality

24 Jul, 2020 by Barry 2 Comments

Are “market forces” capable of ensuring a “fair day’s pay for a fair day’s work”? The fact that almost every nation has legislation requiring women to be paid the same as men for the same job would indicate that this is not so.

Pay equity vs equal pay
Pay equity is about women and men receiving the same pay for doing jobs that are different, but of equal value (that is, jobs that require similar degrees of skills, responsibility and effort).
Equal pay is about men and women getting the same pay for doing the same job.

Historically, there has been pay disparity between the sexes, but since the early 1970s, equal pay laws in Aotearoa New Zealand require that men and women should be paid equally for the same for jobs of equal value, even if those jobs are different. In theory that should result in everyone being paid equally for work of equal value – pay equity. That never happened.

The problem with the legislation is that pay equity could only be claimed through the courts– there was no provision for pay equity to be negotiated through the existing “good faith” bargaining framework. Litigation can be a costly and lengthy process and this has resulted in jobs that have historically been female dominated continuing to be paid less than similar jobs where the workforce is predominantly male.

Kiwis are not a litigious lot by nature and workers are usually reluctant to take their employers to court. Following a landmark court decision in 2014 that resulted in significant pay increases to those working in the aged care sector, the unions, employers and government agreed there had to be a better way to ensure pay equity. The outcome was the Equal Pay Amendment Bill that passed through it’s final stage in Parliament at one minute to midnight yesterday.

The amendment should benefit those who have been underpaid due to systemic sex-based discrimination. According to the Minister for Workplace Relations, Andrew Little, the Bill makes it easier to raise a pay equity claim, and encourages collaboration and evidence-based decision making to address pay inequity, rather than relying on an adversarial court process. Employers already have a duty not to pay people differently on the basis of sex – this Bill helps parties to come to an agreement about what equitable remuneration would be, and makes court action a last resort rather than a first step.

A modern and more effective system for dealing with pay equity claims is long overdue. It is just one step in a long journey towards gender equality, the work does not end here

Andrew Little, Minister for Workplace Relations

As Andrew Little has stated, this piece of legislation does not resolve all gender inequality – it’s just another step in that direction. What’s next?