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The Employment Court and then the Court of Appeal recently considered the issue of pay equity following a claim under the Equal Pay Act 1972 (Act) by aged care workers, where the workforce is predominantly made up of women.

In essence, pay equity means gender doesn’t affect what people are paid and women receive the same pay as men for doing the same work, and also for doing work that is different, but of equal value. The value of work is assessed in terms of skills, knowledge, responsibility, effort and working conditions.

Although the Act is not new, it has not been well utilised, so this was a test case which triggered the Government’s appointment of a Joint Working Group on Pay Equity Principles.  The Working Group reported back with recommendations last month.

In summary, the Working Group recommended a process by which pay equity claims could be raised with employers, including requiring notification by the employer to other potentially affected employees, and a requirement to respond within a reasonable timeframe.  It also provided that the parties would then bargain to resolve the claim, in line with pay equity principles, and with recourse to the Employment Relations Authority if the claim was not accepted by the employer or resolved between the parties.

The Working Group recommended consideration of the following elements to determine whether pay equity exists:

Is the work mostly performed by women?
Has remuneration for the work been undervalued?Assessment includes consideration of factors including:Features of the market, industry or sector, including for example one main source of funding, and/or lack of effective bargaining; and
Any failure to properly assess remuneration that should be paid taking into account the nature of the work, its level of responsibility, work conditions and the degree of effort it requires.
The assessment required to make sense of pay equity claims represents a complex equation which will create a challenge for employers in many industries, unless the Government takes further steps to clarify this tricky area.

The Government will now consider the Working Group’s recommendations and respond to them.  If they are adopted, the Act and the Employment Relations Act 2000 would need to be amended to provide for the recommended claims process.

These considerations are particularly relevant for employers operating in workforces dominated by women such as the early childcare and caregiving sectors – if you would like to discuss what this could mean for your workforce, please contact one of our team

Disclaimer:  We remind you that while this article provides commentary on employment law topics, it should not be used as a substitute for legal or professional advice for specific situations.  Please seek guidance from your employment lawyer for any questions specific to your workplace.