Observation (CEACR) - adopted 2020, published 109th ILC session (2021)

Equal Remuneration Convention, 1951 (No. 100) - New Zealand (Ratification: 1983)

The Committee takes note of the supplementary information provided by the Government following the decision adopted by the Governing Body at its 338th Session (June 2020). The Committee proceeded with the examination of the application of the Convention on the basis of the supplementary information received from the Government this year, as well as on the basis of the information at its disposal in 2019.

The Committee notes the observations of Business New Zealand and the New Zealand Council of Trade Unions (NZCTU) communicated with the Government’s reports.

Article 1(b) of the Convention. Work of equal value. Legislative developments. The Committee previously noted that the Employment Relations Act (ERA) 2000, the Human Rights Act (HRA) 1993, and the Equal Pay Act (EPA) 1972, do not fully reflect the principle of the Convention, since they limit the requirement for equal remuneration for men and women to the same or substantially similar work. It however noted that, following the 2014 landmark decision of the New Zealand Court of Appeal (Terranova Homes & Care Ltd v. Service and Food Workers’ Union Nga Ringa Tota Inc. (CA631/2013[2014]NZCA516) of 28 October 2014), which concluded that the EPA was not limited to providing for equal pay for the same or similar work, a tripartite Joint Working Group (JWG) was established in 2015 to develop pay equity principles. It previously noted that, following the recommendations made by the JWG, an Employment (Pay Equity and Equal Pay) Bill was introduced to Parliament on 26 July 2017, with the purpose of eliminating and preventing discrimination on the basis of gender in remuneration and other terms and conditions of employment. The Committee previously raised a number of concerns regarding the provisions of the Bill and asked the Government to take steps to ensure that any new legislation fully reflected the principle of the Convention.

The Committee notes the Government’s indication, in its report, that the above mentioned Bill subsequently lapsed. The Government indicates that it reconvened the JWG (called the RJWG) in December 2017, which recommended that the pay equity principles be implemented by amending the existing EPA rather than creating a new Act. Following the recommendations made by the RJWG, the Government introduced the Equal Pay Amendment Bill on September 2018. The NZCTU indicates that it raised a number of concerns regarding the amendments but that, in its view, the provisions of the Bill were broad enough to accommodate the concept of “work of equal value”. The Government also states that the Bill seek to accommodate the concept of “work of equal value”. The Committee welcomes the adoption of the Equal Pay Amendment Act 2020 (2020 No. 45) which entered into force on 6 November 2020. It notes more particularly that the Act provides that an employer must ensure that: (1) there is no differentiation, on the basis of sex, between the rates of remuneration offered and afforded by the employer to employees of the employer who perform the same, or substantially similar, work (section 2AAC(a)); and (2) there is no differentiation, on the basis of sex, between the rates of remuneration offered and afforded by the employer for work that is exclusively or predominantly performed by female employees and the rate of remuneration that would be paid to male employees who have the same, or substantially similar, skills, responsibility, and experience; and who work under the same, or substantially similar, conditions, and with the same, or substantially similar, degrees of effort (section 2AAC(b)). The Act defines work that is or was “predominantly performed by females employees” as work that is currently, or that was historically, performed by a workforce of which approximately 60 per cent or more members are female (section 13F(2)).

The Committee notes that the Equal Pay Amendment Act 2020 further: (1) distinguishes between an equal pay claim (in case of alleged violation of section 2AAC(a)), a pay equity claim (in case of alleged violation of section 2AAC(b)) and an unlawful discrimination claim (in case of discrimination based on sex regarding other terms and conditions of employment than remuneration, pursuant to section 2A; (2)> offers the employee who may allege one of these three kinds of claims a choice of proceedings between a claim under the EPA, a complaint under the HRA 1993 or an application to the Authority for resolution of a personal grievance under the ERA 2000 (section 2B); while (3) providing that in case of a pay equity claim, instead of having to go through the courts, employees can use a more simple and accessible pay equity bargaining process which may lead to a pay equity settlement. The Committee notes that pay equity claims can be raised by an individual employee, a union on behalf of one or more employees, or multiple unions acting jointly on behalf of the members of each union, and that union-raised claims can be raised with multiple employers. Copies of pay equity settlements shall be delivered to the Ministry of Business, Innovation and Employment (MBIE) for statistical and analytical purposes (sections 13A to 13ZZG). In that regard, the Committee notes that, in Business New Zealand’s view, this is a better course to take than having the parties follow the litigation path which has too often resulted in a long drawn out process and if, in time, the plaintiffs are successful, damaging consequences for employers.

While acknowledging the efforts made by the Government to introduce in its national legislation new provisions defining “pay equity” and providing for a simplified pay equity bargaining process, the Committee notes that the Government did not seize this opportunity to take into consideration the concerns previously expressed by the Committee. Noting the Government’s statement that the Equal Pay Amendment Act 2020 reflects the principle of the Convention, the Committee wishes to draw the Government’s attention to the fact that the Act continues to restrict equal rates of remuneration to: (1) “the same, or substantially similar, work” (both in the case of an equal pay claim and a pay equity claim, e.g. sections 2AAC(a), 13B, 13E, 13ZE) ; or (2) “the same, or substantially similar, skills, responsibility, and experience” and “work under the same, or substantially similar, conditions, and with the same, or substantially similar, degrees of effort” (e.g. sections 2AAC(b) and 13ZE). It further notes that the provisions of the Act limit the scope of comparison to “the employer of the employee” (for an equal pay claim, section 2AAC(a)) or to “another employee of the same employer” (for a pay equity claim, section 13B), except when a union raises a multi-employer pay equity claim (sections 13B and 13E(3)). While noting the Government’s statement that it will publish guidance for interpreting the meaning of “substantially similar” skills, responsibilities, working conditions and/or degrees of effort, the Committee is bound to repeat that the concept of “work of equal value” that lies at the heart of the Convention permits a broad scope of comparison, including but going beyond equal remuneration for “equal”, “the same” or “similar” work, and also encompasses work that is of an entirely different nature which is nevertheless of equal value. It follows that the jobs to be compared on the basis of objective factors (such as skills, efforts, responsibilities, conditions of work, etc.) may involve different types of skills, responsibilities or conditions of work, that can nevertheless be of equal value in its totality. As such, the principle of the Convention is not equivalent to the concept of “pay equity” as enshrined in the Equal Amendment Act 2020, nor is it reflected fully in the provision relating to “equal pay for the same, or substantially similar work” or for “the same, or substantially similar” skills, responsibilities, working conditions and/or degrees of effort. Furthermore, the Committee recalls that the application of the principle of equal remuneration for men and women for work of equal value should not be limited to comparisons between men and women in the same company, as it allows for a much broader comparison to be made between jobs performed by men and women in different places or enterprises, or between different employers (see General Survey on the fundamental Conventions, 2012, paragraphs 676–679 and 697-698). Finally, the Committee notes that, in Business New Zealand’s view, the aim of the Convention at the time of its adoption was to ensure that women received the same pay as men, and not that they should be paid what was paid to men doing some entirely different job. Business New Zealand adds that rates of pay are far better left to the market to determine. In that regard, the Committee wishes to recall that while “value” is not defined in the Convention, it refers to the worth of a job for the purpose of computing remuneration. “Value” in the context of the Convention indicates that something other than market forces should be used to ensure the application of the principle, as market forces may be inherently gender-based (see the 2012 General Survey, paragraph 674). The Committee therefore asks the Government to provide information on any steps taken or envisaged to give full legislative expression to the principle of the Convention with a view to ensuring that when determining whether two jobs are of equal value: (i) the overall value of the job is considered without limiting the comparison to «the same or substantially similar» work, conditions, skills, responsibility, experience and/or degrees of effort, and the definition allows for jobs of an entirely different nature to be compared free from gender bias; and (ii) the scope of comparison goes beyond the same company. It asks the Government to provide information on the application of the Equal Pay Amendment Act 2020 in practice, including on the number and nature of pay equality settlements agreed on, as well as a copy of the guidance provided by the Government for interpreting the Act. The Committee also asks the Government to provide information on any judicial or administrative decisions relating to the principle of the Convention, as well as on the manner in which it is ensured that when applying the Equal Pay Act, the Employment Relations Act and the Human Rights Act, the broader concept of work of equal value enshrined in the Convention is taken into account.

Occupational gender segregation and pay equity settlements in the public sector. The Committee previously noted the need for measures to address the undervaluation of work performed by women in the care sector, as well as in other sectors which predominantly employ women, including special education support and social work. The Committee takes note of the adoption of the Public Service Act 2020 (2020 No. 40), and notes more particularly that sections 80 to 84 of the Act, as amended by the Equal Pay Amendment Act 2020, regulate pay equity claims and the pay equity bargaining process in the public service. In that regard, it notes the NZCTU’s indication that it supports the introduction of pay equity claims in the public sector and is involved in tripartite arrangements to oversee and assist in resolving these claims. As regards pay equity settlements in the public sector, the Committee previously noted that the Care and Support Workers (Pay Equity) Settlement Act 2017 specifies minimum hourly wage rates payable by employers with a view to redress past undervaluation of care and support work, which is mainly carried out by women. It notes the Government’s statement that, as a result of the settlement which applies to more than 55,000 workers, home care and disability sector workers received pay rises of between 15 and 50 per cent depending on their qualifications and experience. It further notes that, while mental health and addiction support workers were excluded from the settlement, the Government together with trade unions and employers agreed in July 2018 to extend the settlement to those workers, who are predominantly women. In that regard, the Committee notes that the Support Workers (Pay Equity) Settlements Amendment Act 2020 came into force on 7 August 2020, now covering mental health and addiction support workers. Regarding pay equity claims lodged by the education support workers employed by the Ministry of Education, and by the statutory social workers employed by the Ministry of Children, the Committee notes the Government’s statement that both pay equity claims were settled in 2018 for these workers who have been subject to historic gender-based undervaluation, thus agreeing on an increase of their minimum hourly rate. The Committee welcomes the pay equity settlements reached in public sector occupations which predominantly employ women. It notes that the Government adds that seven pay equity claims from three unions are ongoing, covering approximately 62,000 employees in four occupational groups in the public health sector (District Health Boards – DHB) where women are predominantly employed, namely nursing, midwifery, clerical and allied health and technical roles. It notes that according to the DHB Employed Workforce Quarterly Review, at the end of 2018, women represented about 89 per cent of DHB nurses; 78 per cent of corporate, clerical and other staff; and 81 per cent of DHB allied and scientific staff. The Committee notes that Business New Zealand again highlights that most women seeking pay equity settlements work in the public sector, among others as nurses or teachers, where the issue does not relate to discrimination but funding availability. Business New Zealand adds that some jobs are less well-paid than others but that this will always be the case and often reflects the nature of the industry, and that arbitrary increases, through pay equity settlements with no increase in productivity, have inevitable adverse effects: some employees lose their jobs and some businesses shut, because the increase is unaffordable. The Committee notes that the Government disagrees with the suggestion that pay equity settlements represent general wage claims, rather than pay equity claims. With regard to measures to address occupational gender segregation and its impact on the gender pay gap, the Committee refers to its comments under the Discrimination (Employment and Occupation) Convention, 1958 (No. 111). In light of the absence of legislation fully reflecting the principle of the Convention, the Committee asks the Government to provide information on the measures taken to ensure that pay equity settlements address the issue of undervaluation of work performed by women in line with the principle of equal remuneration between men and women for work of equal value. It further asks the Government to provide information on the pending pay equity claims in the public sector, in particular in the health sector. The Committee also asks the Government to indicate any other measures taken to address the undervaluation of work performed by women in sectors in which they are predominantly employed.

The Committee is raising other matters in a request addressed directly to the Government.