Pay equity claims

The recent journey of pay equity

In 2012, a pay equity claim was raised by the Service and Food Workers Union on behalf of support worker Kristine Bartlett. The claim was against the TerraNova aged residential care company.

The claim argued there was systematic undervaluation of care and support work because it is mostly done by women. This was the first claim of its kind and the Employment Relations Authority (ERA), Employment Court and Court of Appeal had to decide whether such a pay equity claim could be brought under the Equal Pay Act.

In 2015 the Court of Appeal ruled that equal pay under the Equal Pay Act included equal pay for work of equal value (pay equity), not simply the same pay for the same work.

Since this landmark decision, and the following settlement of the care and support workers case, the Government has been committed to removing and preventing gender-based discrimination in the remuneration and employment terms and conditions for work done within female-dominated jobs.

State sector pay equity claims

Since the Kristine Bartlett case, a number of unions have filed pay equity claims in the ERA and court, or have raised claims with State sector employers in collective bargaining.

Other State sector education-related claims include:

  • Ministry-employed support workers’ pay equity claim (settlement was reached in 2018)
  • Teacher aide pay equity claim (underway)
  • Administrative support and Kaiārahi pay equity claim (terms of reference being drafted)
  • Early childhood education teachers and educators employed in early childhood education and care (ECE) centres, and support staff employed in kindergartens (underway)

Due to the number of claims increasing, the State Services Commission (SSC) and the New Zealand Council for Trade Unions (NZCTU) agreed to jointly oversee State sector pay equity claims. In early 2017, they agreed Terms of Reference to help agencies and unions to work through pay equity claims in the State sector.

Pay equity principles

A Joint Working Group was set up to create a set of pay equity principles to guide the raising and resolving of pay equity claims. These principles are based on good faith, in line with New Zealand’s employment relations framework.

More information about the work that the State Service Commission is doing around elimating the gender pay gap in the Public Service can be found on the State Services Commission website (external link) .

The pay equity principles are listed below:

Raising a claim

Principle 1

Any employee or group of employees can make a claim.

Principle 2

The process to raise a claim as a pay equity claim should be simple and accessible to all parties.

To determine whether to proceed with the claim as a pay equity claim the work must be predominantly performed by women.

In addition it should be arguable that:

The work is currently or has been historically undervalued due to, for example:

  • Any relevant origins and history of the work and the wage setting for it
  • Any social, cultural or historical factors which may have led to undervaluing or devaluing of the work and the remuneration paid for it
  • There is or has been some characterisation of the work as “women’s work”
  • Any social, cultural or historical phenomena whereby women are considered to have “natural” or “inherent” qualities not required to be accounted for in wages paid.

Consideration may also be given to whether gender-based systemic undervaluation has affected the remuneration for the work due to:

  • Features of the market, industry or sector or occupation which may have resulted in continued undervaluation of the work, including but not limited to:a dominant source of funding across the market, industry or sectorthe lack of effective bargaining
  • The failure by the parties to properly assess or consider the remuneration that should be paid to properly account for the nature of the work, the levels or responsibility associated with the work, the conditions under which the work is performed, and the degree of effort required to perform the work
  • Areas where remuneration for this work may have been affected by any occupational segregation and/or any occupational segmentation 
  • Any other relevant features

Agreeing to proceed with a pay equity claim does not in and of itself predetermine a pay equity outcome.

Assessing the claim

Principle 3

A thorough assessment of the skills, responsibilities, conditions of work and degrees of effort of the work done by the women must be undertaken.

Principle 4

The assessment must be objective and free of assumptions based on gender.

Principle 5

Current views, conclusions or assessments are not to be assumed to be free of assumptions based on gender.

Principle 6

Any assessment must fully recognise the importance of skills, responsibilities, effort and conditions that are commonly overlooked or undervalued in female dominated work such as social and communication skills, responsibility for the wellbeing of others, emotional effort, cultural knowledge and sensitivity.

Principle 7

To establish equal pay, there should be an examination of:

  • the work being performed and the remuneration paid to those performing the work, and
  • the work performed by, and remuneration paid to, appropriate comparators

Principle 8

An examination of the work being performed and that of appropriate comparators requires the identification and examination of:

  • The skills required
  • The responsibilities imposed by the work
  • The conditions of work
  • The degree of effort in performing the work
  • The experience of employees
  • Any other relevant work features

Principle 9

An examination of the work and remuneration of appropriate comparators may include:

  • male comparators performing work which is the same as or similar to the work at issue in circumstances in which the male comparators’ work is not predominantly performed by females; and/or
  • male comparators who perform different work all of which, or aspects of which, involve skills and/or responsibilities and/or conditions and/or degrees of effort which are the same or substantially similar to the work being examined; and
  • any other useful and relevant comparators

Principle 10

The work may have been historically undervalued because of:

  • any relevant origins and history of the work and the wage setting for it 
  • any social, cultural or historical factors which may have led to undervaluing or devaluing of the work and the remuneration paid for it
  • there is or has been some characterisation or labelling of the work as “women’s work”
  • any social, cultural or historical phenomena whereby women are considered to have “natural” or “inherent” qualities not required to be accounted for in wages paid

Principle 11

A male whose remuneration is itself distorted by systemic undervaluation of “women’s work” is not an appropriate comparator.

Settling the claim

Principle 12

Equal pay is remuneration (including but not limited to time wages, overtime payments and allowances) which has no element of gender-based differentiation.

Principle 13

Equal pay must be free from any systemic undervaluation, that is, undervaluation derived from the effects of current, historical or structural gender-based differentiation.

Principle 14

In establishing equal pay, other conditions of employment cannot be reduced.

Principle 15

The process of establishing equal pay should be orderly, efficient, kept within reasonable bounds and not needlessly prolonged.

Principle 16

Any equal pay established must be reviewed and kept current.

The pay equity claim process

The pay equity process was created to show the steps involved in a claim that work alongside the principles.

The stages are:

  1. Raising a claim
  2. Assessing a claim
  3. Settling a claim.

The process in more detail

Once an employer has accepted that a pay equity claim is arguable, it is recommended that the parties develop and sign their own Terms of Reference at the start of the pay equity bargaining process.

This should include:

  • the scope of the work done by the claimants
  • how they will assess their work
  • how much claimants and comparators are paid
  • how the everyone will work together to engage, solve problems and share information

What is a comparator?

When talking about a pay equity claim, a comparator is a person who is doing work of a similar value, but in a role that is mostly performed by the opposite gender.

The groups should then move through the Principles process to carry out a gender-neutral assessment that includes:

  • the claimants’ work
  • identification and agreement of appropriate comparators
  • assessment of the comparators’ work
  • comparison of the work and remuneration of both claimants and comparators

The main purpose for the assessment is to find out whether the claimant is being paid less than the comparator because of their gender.

If the assessment process confirms this, then the parties move into negotiating a settlement that establishes equivalent rates of pay for the claimant.

Any agreement should be recorded in writing, and may need to be ratified (agreed to) by union members if the claim has been raised by a union.

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