Changing the law and making it mandatory for employers to report on the pay gap at their workplaces may be necessary if equal pay is to become a reality, writes Linda Clark.
There is an honour call of hard working women who have lobbied, struggled and fought for equal pay.
Challis Cooper, Margaret Long, Grace du Faur, Connie Purdue, and Rita King were all members of the Council for Equal Pay and Opportunity (CEPO) in the 1950s and 60s, and all ground-breaking advocates of the simple concept that women and men who do the same work should be paid the same. It was a radical idea. Back then women were not expected (or often allowed) to work after marriage.
We can only imagine their sense of triumph when in 1972 the Government introduced the Equal Pay Act (EPA). Then, in 1977 the Human Rights Commission Act was introduced, outlawing discrimination in the workplace on the grounds of gender. CEPO disbanded its district committees and put its council into recess. Job done.
Yet fast forward almost half a century and men are still being paid more than women; StatsNZ says the average gender pay gap in New Zealand is 9.1% (with evidence suggesting the gap could in fact be as large as 18.5 percent for employees and 32 percent for CEs) and it’s not improving. Readers may or may not be surprised to hear that these figures don’t take ethnicity into account. The pay gap between Pākehā men and Māori, Pacific, and Asian workers is higher still: 9.3, 19.5 and 12.8 percent respectively. Despite this, the EPA makes no provision for achieving pay equality, let alone equity, between Pākehā and non-Pākehā groups. This legislative blind spot likely reflects the largely Pākehā makeup of first-wave feminism.
The inevitable conclusion is that, as welcome as the EPA undoubtedly was and is, it has not achieved the ultimate objective. It’s been amended and refined and, still, it has not been effective at closing this important gap. So what will?
Section 2 of the EPA defines equal pay as ‘a rate of remuneration for work in which there is no element of differentiation between male employees and female employees based on the sex of the employee’. To identify whether there is an element of differentiation, work is compared on measures of skill, effort, responsibility and work conditions. Work that is exclusively or predominantly carried out by women, must be remunerated at a rate ‘that would be paid to male employees’. But which male employees? A man performing the same role in the same workplace, or a hypothetical man from outside the industry performing work with the same or substantially similar skill, effort, responsibility and work conditions?
This ambiguity means that since its inception the EPA has been a vehicle for pay equality but not pay equity and that distinction has been an important handbrake on women’s wages. In the first five years of its life, review committees recognised that, despite the average female wage increasing by 8.5 percent, remuneration in female-dominated industries remained too low to attract men to the jobs. Wages in those jobs were still suppressed by gender.
In the1980s, the Clerical Workers Union, 30,000 members strong and approximately 90 percent female, tried to take this head on - filing a claim under the EPA on the basis that their wage award (under the Industrial Conciliation and Arbitration Act 1894 in force at the time) was a ‘depressed female rate’ and not in accordance with the Act.
The Union argued wage rates under the Clerical Workers Award were lower than rates payable under other awards covering work of equal value (such as the Building and Related Industries Tradesmen and Other Workers Award). The discrepancy, it argued, was because the majority of clerical workers were female, but the majority of tradies were male.
The Court declined to arbitrate because the EPA, it said, limited its jurisdiction to claims of gender discrimination within the same award – meaning women and men in the same workplace or trade. It could compare apples with apples, but not apples with pears.
It took decades more and another trailblazer, aged care worker Kristine Bartlett, before any real progress was made. In Terranova Homes & Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc (Terranova), Kristine and her union claimed that because caregivers are predominantly women the standard rates of pay are lower than they would be if the workforce was predominantly male.
The Court of Appeal agreed, re-reading the EPA to effectively permit cross-industry comparisons of pay under the Act. It determined that equal pay for women for work predominantly done by women could be determined by reference to what men would be paid to do the same work. Recognising that systemic undervaluation of some kinds of work was a reality, the Court of Appeal accepted that comparisons of pay rates with men 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’ was allowable.
Terranova resulted in a $2 billion pay settlement for caregivers and changed the way the EPA was to be applied. The equal pay for work of equal value concept was enshrined into statute in 2020. The new section 2AAC of the EPA allows for inter-industry comparisons to determine pay rates and provides an explicit route for employees (or unions) to bring pay equity claims against employers.
But still the pay gap survives, which in turn means lower lifetime earnings for most women and all the disadvantage that accompanies that, particularly for women living alone or raising children alone. For non-Pākehā male workers (also the victims of a systemic pay gap) the EPA offers no assistance at all.
The original campaigners for the EPA would have wanted the law to keep pace with the changing roles of women and the low paid. But the EPA’s scope is limited (ultimately), penalties for breaching it are low, the recent equity remedies are reactive and require organisation and motivation. You have to be really committed and stubborn enough to pursue a claim. Most low paid workers have other priorities. And then there’s human nature; some behaviours are unconsciously hard-wired and corrosive.
Take the workers at Google. Highly educated, with skills that are in demand, yet women employees, now taking class actions for breaches of California’s equal pay laws, cite one of the reasons for their lower pay was the company’s practice of asking job applicants about their salary expectations. The female applicants routinely talked their rates down, the male applicants talked them up. Google relied on those expectations as a starting point, meaning male recruits inevitably started at a pay advantage.
If the same thing happens in New Zealand workplaces there is no lever in law to require employers to make adjustments to ensure female employees catch up with their male counterparts or make sure they are equitably paid. Some do, of course. Good causes always have champions. But to close the gap properly will require more and if the law hasn’t worked so far – despite the fact that discrimination by gender and/or race in employment is unlawful – then further law change is required.
Elsewhere, in Australia, the UK, USA, and Denmark, employers are required to collect and report data on the pay gap at their workplaces.
Such transparency imposes a responsibility on company directors and allows prospective employees and customers to make their own judgments about certain brands and employers.
The lack of any mandatory reporting regime here means New Zealand is lagging behind. Which begs the question, who’s paying for that?
This article was commissioned by the Mind The Gap Campaign. www.mindthegap.nz
