A win for women

Accordingly to the Ministry for Women, in 2019, the national gender pay gap – the gap between men’s and women’s hourly pay – was 9.3 percent. Against that backdrop, on 22 July 2020, Parliament passed the Equal Pay Amendment Bill, which will amend the Equal Pay Act 1972. The amendments come into force in three months. If employers, employees or unions want advice on the changes, please contact us.

What is changing?

Since 1972, New Zealand law has required both equal pay (the same pay for the same work) and pay equity (the same pay for work of same value). This has not changed. However, prior to the amendments, a determination of what constitutes work of the same value could only be made by the Employment Relations Authority or the Court. Importantly, the amendments lower the bar to raise a pay equity claim and create a pay equity bargaining process for dealing with claims. This process is not entirely new, it is based on the existing collective bargaining framework, and will be familiar to unions and employers of unionised work forces.

What does the pay equity bargaining process look like?

An employee of an employer, or a group of employees who perform the same, or substantially similar, work for an employer, may raise a pay equity claim if they consider that the claim is “arguable.” Within 45 working days of receiving the claim, the employer must respond to the claim confirming whether the employer agrees there is an arguable pay equity issue, or whether the employer considers the claim is inarguable (with supporting information provided). The parties to a pay equity claim are required to bargain the claim in good faith and may refer the claim to mediation services for resolution. The parties may also refer the claim for facilitation or determination in the Employment Relations Authority, however that is viewed as a last resort. A diagram of the process can be found here.

Click here to see how the gender pay gap varies by occupation, industry, and other factors.

Disclaimer:  The information contained in this article is current at the date of publishing and is of a general nature.  It should be used as a guide only and not as a substitute for obtaining legal advice.  Specific legal advice should be sought where required.