Equal pay laws in New Zealand

New Zealand has several employment and human rights laws that prohibit discrimination against women in rates of pay. On paper, these laws comply with the UN Conventions we have ratified - but are they working?

Two Acts - the Equal Pay Act 1972 and the Government Services Equal Pay Act 1960 - address direct and indirect discrimination in wage rates. They require equal pay for women and men in the same job and equal pay for work of equal value for occupations that employ exclusively or predominantly women.

Three additional Acts - the Employment Relations Act 2000, the Human Rights Act 1993 and the NZ Bill of Rights Act 1990 - prohibit discrimination on grounds of sex. The State Sector Act 1988 requires government agencies to implement and report on EEO programmes and to be 'good employers'.

All these Acts can be read on the government's legislation website.

Anecdotal evidence and a smattering of complaints cases suggest, however, that the equal pay principle is not always respected by employers, even for women and men doing the same job. In regard to the principle of equal pay for women and men for work of equal value in different jobs, there is currently no active government policy or programme to ensure this for state sector employees, and no policy for the private sector beyond verbal encouragement.

What the Acts say...

Equal Pay Amendment Act 2020

This legislation was passed in July 2020 to provide processes for pay equity claims. Amendment, rather than writing a whole new Act, means the case law arising from Bartlett vs. Terranova is retained. The Amendment Act will come into force in November 2020. Both the Act and the Amendment Act are currently online, and in due course will be consolidated into one text.

The Amendment Act now states more explicitly that:

The Bill provides a detailed process for taking a pay equity claim. Claimants may be an individual, or a union, or group of unions acting on behalf of members. Claims must briefly set out information in support of the claim being 'arguable' - that it is female-dominated work and why it may currently be and/or has historically been undervalued. Within 45 days the employer must agree the claim is arguable or provide reasons why not. The Bill then covers how the work is to be assessed and the selection of male (or other) comparators. The process aligns with 'good faith' collective bargaining under the Employment Relations Act. If the parties cannot agree on 'arguability' or other matters, the claim can be referred to mediation or (as in the 1972 Act) to the Employment Relations Authority for a Determination.

CEVEP supports the strong role for unions in the legislative changes. The process for union claims aligns with collective bargaining, and with ongoing proposals for Fair Pay Agreements covering particular occupations or sectors. However, the new processes may not work well for the 79% of the female workforce that is un-unionised and usually on an individual employment contract with their employer. Those without union coverage can only each make a separate individual claim, directly to their employer and negotiate on their own. The employer must notify others doing the same work, but can choose whether or not to give them any pay rise resulting from the first individual's claim - despite the 'no differentiation' principle. The lack of legislated processes in the 1972 Act, and lack of pay transparency, made pay equity claims difficult before the Bartlett vs. Terranova rulings. This new law provides a process for individual claims that has several small fishhooks likely to discourage them.

Lack of transparency about occupational pay rates and about claim outcomes will continue to make it difficult for most women to know if their work is undervalued.

Equal Pay Act 1972 and Government Services Equal Pay Act 1960

The purpose of these Acts was the 'removal and prevention of discrimination based on the sex of employees' (EPA 1972, S.1) - that is, they abolished discriminatory female pay rates and seek to eliminate any 'element of discrimination' in future wage negotiations.

To address both direct and structural discrimination, the Acts provide additional criteria for work done 'exclusively or predominantly by females'.

The Government Services Equal Pay Act (S.3(1)) states:

"...the following principles: (a) That differentiations based on sex in scales of salary or wages of Government employees shall be eliminated, to the end that women shall be paid the same salaries or wages as men where as Government employees they do equal work under equal conditions: (b) That in cases where women as Government employees perform work of a kind which is exclusively or principally performed by women and there are no corresponding scales of pay for men to which they can fairly be related, regard shall be had to scales of pay for women in other sections of employment where the principal stated in paragraph (a) of this subsection has been or is being implemented."

The Equal Pay Act 1972(S.3(1)) spells out criteria for assessing work typically done by women in more detail:

3(1)(a) For work which is not exclusively or predominantly performed by female employees--- (i) The extent to which the work or class of work calls for the same, or substantially similar, degrees of skill, effort, and responsibility; and (ii) The extent to which the conditions under which the work is to be performed are the same or substantially similar: (b) For work which is exclusively or predominantly performed by female employees, the rate of remuneration that would be paid to male employees with the same, or substantially similar, skills, responsibility, and service performing the work under the same, or substantially similar, conditions and with the same, or substantially similar, degrees of effort.

This legislation was enacted in the context of a labour relations system based on relativities - between occupations, and between public and private sectors. Comparisons between the skills, responsibilities and conditions of different occupations were a normal part of wage bargaining until 1991. These Acts are weak on how these criteria should be operationalised in wage bargaining rounds, but the Equal Pay Act 1972 gives the Court power to state general principles for implementation(S.9). (To date, no court has done so.)

The intention of Parliament was that the principles of equal pay and equal pay for work of equal value would apply not just to occupations covered by awards but to 'any instrument' by which wages are negotiated or set, including simply 'a decision by an employer' (S.4).

The shift in 1991 to 'enterprise' bargaining means that any equal pay agreement or ruling reached would apply only to the women concerned and any other women in the same job within the same firm (or in a few cases firms covered by a multi-employer agreement). For these reasons, the effectiveness of the equal pay legislation has been questioned, particularly as a means of addressing the gender pay gap.

Government and departmental opinions have oscillated between saying equal value comparisons are not required by the Act and reporting to UN committees that New Zealand legislation complies with both equal pay and equal value principles. However, a test case in 2013 has clarified that equal value claims can indeed be taken under the Equal Pay Act 1972, and the Employment Court has given clear interpretation of the criteria for work done exclusively or predominantly by women (3(1)(b)).

Employment Relations Act 2000

This Act requires ‘good faith’bargaining between employers, employees and unions for individual, collective or (a very few) multi-employer wage agreements. There is no 'good employer' requirement of private sector CEOs as in the State Sector Act (see below). The Act does not itself require negotiating parties to consider or address equal pay or equal pay for work of equal value - but all employment agreements are 'instruments' covered by the Equal Pay Act's definitions.

Like the previous Employment Contracts Act, the Employment Relations Act provides personal grievance procedures for individuals alleging discrimination in pay or employment opportunity on grounds of sex (as well as against sexual harassment, unjustified dismissal or duress in regard to union membership). Three grounds of personal grievance originated in wage documents negotiated in the 1980s by occupational unions representing large memberships of women. Grounds other than sex were added from the Human Rights Act (ethnicity, marital status, etc... see below).

The employee is first required to raise the grievance with her employer, then can enlist a Department of Labour mediator. If unresolved, the case goes on to the Employment Court. Few women have taken grievances about equal pay under this Act. A few have taken the alternate route of complaint to the Human Rights Commission.

State Sector Act 1988

This Act restructured the public service and state agencies. It reorganised wage bargaining by department rather than occupation, separating off the higher grades and their salaries from collective agreements. It also replaced a code of public service conditions that women had fought for with a requirement for each department or state-funded agency (including universities) to develop an Equal Employment Opportunity programme and report on it annually. Chief Executives, answerable to Ministers, are required by the Act to be 'good employers'.

The short-lived 1990 Employment Equity Act would have extended these EEO and 'good employer' requirements to private sector companies and organisations with 100 or more employees(see History & Politics).

Human Rights Act 1993

This legislation prohibits discrimination in employment on grounds of sex, and also on grounds of marital status, religious or ethical belief, colour, race, ethnic or national origins, disability, age, political opinion, employment status, family status or sexual orientation.

It is unlawful to offer any employee:

"…less favourable terms of employment, conditions of work, superannuation or other fringe benefits, and opportunities for training, promotion, and transfer than are made available to applicants or employees of the same or substantially similar capabilities employed in the same or substantially similar circumstances on work of that description." S.22(1)(b)

The Human Rights Commission can resolve the problem through mediation or refer the case to the Employment Court. Mediated cases are publicised by the Human Rights Commission in general terms only, for educational purposes. Names, details and pay-outs are not made public.

From 1993 to 2000, 52 individual complaints were made to the Human Rights Commission about sex discrimination in employment - 16 were about pay, all but one by women. From 2001 to30 June 2013, a further 14 women made complaints to the Commission about being paid less than male colleagues who were in similar or more junior roles.

Bill of Rights Act 1990

The New Zealand Bill of Rights 1990 is about citizens' rights in relations to government. It applies to actions by 'the legislative, executive or judicial branches of the government' or 'by any person or body in the performance of any public function, power or duty'. It affirms that everyone has the right to freedom from discrimination on grounds of discrimination in the Human Rights Act. That includes pay and employment.

In 2001 an amendment to the Human Rights Act made specific reference to actions by government and its agencies, using the same terms as the Bill of Rights.