Contents
Equal pay, pay equity and the Kristine Bartlett case
Government responses to the Bartlett case
Pay equity claims since the Bartlett case
Gender pay gap – are we there yet?
The gender pay gap is greater for non-Pākehā and minority women
How does New Zealand compare globally?
Time-line of equal pay since 1972
Summary
The Equal Pay Act 1972 was enacted on 20 October 1972 “to make provision for the removal and prevention of discrimination, based on the sex of the employees, in the rates of remuneration of males and females in paid employment”.[1] Although equal pay already existed for employees in the public sector,[2] private sector employers were still permitted to pay men and women at different rates for the same work.
When it was enacted, the Equal Pay Act 1972 was primarily concerned with equal pay. However, the Act took on new significance in 2013, when Kristine Bartlett and the Service and Food Workers Union Nga Ringa Tota (now E Tū) brought a pay equity claim against Terranova Homes and Care, an aged residential care provider.[3] Ms Bartlett and the union argued that care and support workers in the aged residential care sector were not receiving equal pay for work of equal value, as guaranteed by the Equal Pay Act. They claimed that this was the result of historical gender-based discrimination. The Court of Appeal upheld the claim, finding that the Equal Pay Act required pay equity, not just equal pay.[4]
Following this groundbreaking litigation, the then National-led Government established a joint working group to develop a set of principles to guide the implementation of pay equity across all sectors. As a result of the working group’s findings, the Government introduced legislation that would have formalised the process for raising pay equity claims. However, the proposed legislation was criticised by unions for making it more difficult for workers in historically female-dominated workforces to raise pay equity claims.
When the Labour-NZ First coalition government was elected in 2017, they reconvened the joint working group, and subsequently introduced new legislation on Suffrage Day, 19 September 2018. The Equal Pay Amendment Act 2020 amended the Equal Pay Act to improve the process for raising pay equity claims. The Act sets a low threshold for raising a claim and provides a simple and accessible process for progressing claims. The Act came into force on 6 November 2020.
Achieving pay equity is a key strategy for reducing the gender pay gap. New Zealand’s national gender pay gap has reduced over the past 25 years, but progress has slowed over the past five years and the gap has remained at 9 percent since 2017. Research also shows that the gender pay gap is greater for non-Pākehā and other minority women. This includes wāhine Māori, pacific women, migrant women, disabled women, older women, LGBTQIA+, and solo mothers.
The Equal Pay Act 1972
Main provisions
The Equal Pay Act 1972 (the Act) prohibits employers from paying men and women undertaking the same work at different rates.[5] As enacted, the Act was only concerned with preventing discrimination in rates of pay and did not prohibit general discrimination against women in employment.[6]
The Act was amended in 1991 to make it unlawful to provide different opportunities, conditions, or terms of employment to employees on the basis of sex.[7] However, the Act does not prohibit offering different remuneration rates based on an employee’s qualifications, experience, or skills, where there is no element of gender discrimination.[8]
Under s 4 of the Act, employers who had different rates of pay for female employees at the time of enactment were required to implement equal rates of pay for employees undertaking the same work. Section 3 set out several criteria for determining what equal pay for work of equal value would be.
For work that was exclusively or predominantly performed by women, employers were required to pay those women the same as male employees with the same, skills, responsibilities, and service, performing the work under the same conditions, and with the same degree of effort.[9] For work that was not exclusively or predominantly performed by women, employers had to consider:[10]
- whether and to what extent the work required the same, or substantially similar, degree of skill, effort, and responsibility, as that performed by male employees; and
- whether and to what extent the work was performed under the same, or substantially similar, conditions as male employees.
Background to the Act
The Equal Pay Act was enacted following a Commission of Inquiry in 1971 that considered “how best to give effect in New Zealand to the principle of equal pay for male and female employees”. The Commission was tasked with considering:
- how New Zealand could give effect to the principle of equal pay, having regard to the provisions of the Equal Remuneration Convention of the International Labour Organization.[11]
- the extent to which existing legislation, awards, or employment agreements inhibited the application of the principle of equal pay, the justification for such discrimination, and how provisions that enabled discrimination could be removed;
- the timing of the introduction of equal pay, the machinery for doing so, and the economic implications of both the timing and the mechanism; and
- the wider socio-economic implications for New Zealand.
The Commission established that women’s work in the private sector had been undervalued due to historical gender bias. It recommended introducing legislation guaranteeing equal pay for women.[12]
Amendments since 1972
The Equal Pay Act was based on the employment awards system that was in place at the time it was drafted. It was not extensively amended when the Employment Contracts Act 1991 abolished the awards system, or when the Employment Relations Act 2000 replaced the Employment Contracts Act.
Following the report of the first Joint Working Group on Pay Equity Principles in 2016,[13] the Government introduced the Employment (Pay Equity and Equal Pay) Bill 2017 (284-1). The Bill would have amended the Equal Pay Act to reflect the pay equity principles proposed by the Joint Working Group. It also set out a process for addressing pay equity claims that was based on the existing employment relations framework. However, it lapsed following the change of government in 2017.
On 19 September 2018, the new Labour-NZ First Government introduced their own amending legislation.[14] The Equal Pay Amendment Act 2020 updated the Act to reflect the current regulatory framework, as well as establishing a clear process for raising pay equity claims. The process is aligned closely with the existing bargaining framework under the Employment Relations Act 2000. It also encourages collaboration between employers and employees, as well as evidence-based decision making to address any identified inequities.
Equal pay, pay equity and the Kristine Bartlett case
When it was enacted, the Equal Pay Act was primarily concerned with equal pay, that is women and men being paid the same rate for the same work. However, s 3 also appeared to provide for pay equity, that is, men and women receiving the remuneration for work that is different but of equal value.[15]
In 2013, Kristine Bartlett and the Service and Food Workers Union Nga Ringa Tota (now E Tū) brought a case against Terranova Homes and Care on the basis of the Equal Pay Act (the Bartlett or Terranova case).[16] The union successfully argued that workers providing care to residents at an aged care home were underpaid compared to men performing work that required a similar level of skill, effort, and responsibility. This was the first time the Equal Pay Act had been used to enforce the principle of pay equity in nearly 40 years.[17]
Terranova Homes appealed to the Court of Appeal, which upheld the decision of the Employment Court.[18] In 2017, the Service and Food Workers Union Nga Ringa Tota and the government reached a negotiated settlement. The settlement was implemented through the Support Workers (Pay Equity) Settlements Act 2017, which barred the workers covered by the settlement from bringing further pay equity claims.[19]
The initial settlement was for five years and expired on 1 July 2022. The Support Workers (Pay Equity) Amendment Bill was accorded urgency on 22 June 2022 and received the Royal assent on 28 June 2022. The Bill extends the operative provisions of the Act until July 2024. The bar to bringing new claims was removed in 2020.[20]
Following the passing of legislation extending the care and support worker’s settlement, E Tū lodged another pay equity claim for these workers. They argued that the interim pay increase provided for in the legislation is insufficient given the rising cost of living, and that “[t]he pay equity claim is a crucial step in stemming the crisis the care and support sector faces”.[21]
Government responses to the Bartlett case
Following the Court of Appeal decision in the Terranova case, the then National Government initiated a programme of work to respond to pay equity claims. In 2015, they established the first Joint Working Group on Pay Equity Principles.[22] Its purpose was to develop a set of principles to guide the implementation of pay equity across all sectors.[23] The Joint Working Group reported its recommendations to the Government in June 2016.[24] These included principles to guide making, assessing, and settling pay equity claims, and a bargaining process based on the Employment Relations Act 2000.[25]
In 2017, following the report of the Joint Working Group, the Government introduced the Employment (Pay Equity and Equal Pay) Bill 2017 (284-1). The Bill would have repealed the Equal Pay Act 1972 and created a process for raising pay equity claims within the framework of the Employment Relations Act 2000.
The Bill received criticism from unions for making it more difficult for employees in traditionally female-dominated sectors to raise pay equity claims. Unions were concerned that the Bill created a hierarchy of comparator groups, which would have made it more difficult to find gender-based pay discrimination.[26] The Bill was not progressed following the 2017 election.
In 2018, the new coalition government reconvened the Joint Working Group on Pay Equity Principles.[27] The Reconvened Joint Working Group reaffirmed the principles developed in 2015–2016. They also proposed further changes to clarify and simplify the process for initiating a pay equity claim, including amending the Equal Pay Act.[28]
The Government introduced the Equal Pay Amendment Bill 2018 (103-1) on Suffrage Day, 19 September 2018. The Equal Pay Amendment Act 2020 amends the Equal Pay Act 1972 to clarify and simplify the process for raising pay equity claims, and to implement the recommendations of the Reconvened Joint Working Group on Pay Equity Principles. According to the Ministry of Business, Innovation and Employment:[29]
It allows workers to make a pay equity claim using a process aligned with New Zealand’s existing bargaining framework. By making court action a last resort, the approach lowers the bar for workers initiating a pay equity claim, and uses a collaborative process more familiar to unions and businesses.
Under the Act, employers, workers and unions negotiate in good faith, with access to mediation and dispute resolution services available if they are unable to agree.
Pay equity claims since the Bartlett case
Since the Terranova decision, other groups of employees in traditionally female-dominated work have raised pay equity claims. Settlements with vocational and disability care and support workers and with mental health and addiction support workers have now been incorporated into the Support Workers (Pay Equity) Settlements Act 2017. Settlements have also been reached with the following groups:
- Education support workers in early childhood centres and primary schools[30]
- Oranga Tamariki social workers[31]
- Teacher aides[32]
- District health board administration and clerical workers[33]
- Allied healthcare workers, including dental therapists, medical laboratory technicians, physiotherapists, and psychologists [34]
- Kaiārahi i te reo (expert advisers in te reo, mātauranga Māori, and tikanga Māori)[35]
- School administration support staff.[36]
Gender pay gap – are we there yet?
According to Stats NZ, over the past 25 years New Zealand’s national gender pay gap has reduced from 16.3 percent to 9.2 percent. However, progress has slowed over the past 5 years and the gap has remained at 9 percent since 2017.[37]
Source: Stats NZ
The gender pay gap is greater for non-Pākehā and minority women
Research shows that the gender pay gap is greater for wāhine Māori, Pacific women, other non-Pākehā and migrant women, disabled women, older women, LGBTQIA+, and solo mothers. In 2021, the gender pay gap for Pacific women compared to all men was 20.6 percent and for wāhine Māori the pay gap was 14.0 percent. The pay gap for Asian women was 12.1 percent, while for Middle Eastern, Latin American and African women, the gender pay gap was 6.9 percent, and for European women the pay gap was 5.8 percent. In 2021, the gender pay gap for disabled women was found to be 19.0 percent compared to all men. The hourly median wage for disabled women was $23.50 in June 2021, compared to $28.00 for disabled men and $29.00 for all men.[38]
Data published by Stats NZ showed that in 2022 women aged 40 to 64 years experienced a significantly larger gender pay gap than younger women. The gender pay gap is lowest for workers aged between 15 and 19. Many people in this age group earn the minimum wage, leading to a smaller discrepancy in rates of pay between young men and women.[39]
Source: Stats NZ
How does New Zealand compare globally?
According to data from the OECD, New Zealand’s gender pay gap was 6.7 percent in 2021. This is lower than many of the other countries New Zealand usually compares itself against. OECD data shows that Bulgaria, Romania, and Belgium had the smallest gender pay gap in 2021, with all three countries recording a pay gap of less than 4 percent. Japan, Israel, and Korea recorded the largest gender pay gaps of 22.1, 24.3 and 31.1 percent respectively.[40]
The OECD figure is lower than the Stats NZ figure, because they calculate it differently. The OECD defines the gender wage gap as the difference between median earnings of men and women relative to median earnings of men. The OECD data only refers to full-time employees, and in general part-time jobs are lower paid than full-time jobs. Stats NZ uses median hourly income to calculate the pay gap, which includes both part-time and full-time employees.[41]
Source: OECD
Time-line of equal pay since 1972
1972
- The Equal Pay Act 1972 grants equal pay for equal work for women working in the private sector. Equal pay for women within the public service had already been established by the Government Service Equal Pay Act 1960.
1988
- The State Sector Act 1988 makes public servants subject to the same employment laws as private sector employees. The Act requires public sector chief executives to operate personnel policies that ensure fair and proper treatment of all employees, including providing an equal employment opportunities programme, and recognition of the specific employment requirements of women.
1990
- The Employment Equity Act is passed. The Act aimed to address pay equity and inequality in employment for women, Māori, Pasifika, and workers with disabilities. It also established the Employment Equity Office. The Act was repealed by the incoming National government later that year.
1992
- The Equal Opportunities Trust (now Diversity Works) is established, on the recommendation of the Working Party on Equity in Employment, as a partnership between government and employers. Its purpose is to support organisations by providing research and training to build skills in organisations to manage an increasingly diverse workforce.
2013
- Kristine Bartlett and the Food Workers Union Nga Ringa Tota bring a claim under the Equal Pay Act 1972 on behalf of female employees at one of Terranova Homes and Care’s aged residential care facilities. The Employment Court finds that equal pay for work predominantly or exclusively performed by women is to be determined by reference to what men would be paid to do the same work, abstracting from skills, responsibilities, conditions, and degrees of effort.
2014
- The Court of Appeal upholds the decision of the Employment Court in Terranova Homes & Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2015] 2 NZLR 437, [2014] NZCA 516.
2015
- Midwives advance a pay equity claim under s 19 of the New Zealand Bill of Rights Act 1990, as they are not employees and therefore not protected by the Equal Pay Act 1972. The claim was eventually withdrawn following mediation, and a $8 million funding increase in Budget 2017. In August 2022, midwives announced they would be taking legal action to enforce the terms of the 2017 settlement.
- The first Joint Working Group on Pay Equity Principles is established in response to the Terranova Its purpose was to develop a set of principles to guide the implementation of pay equity across all sectors.
2016
- The Joint Working Group reports its recommendations to the Government. These included criteria for considering whether a claim has merit, and a process for employers and employees to follow to address pay equity.
2017
- June – The Service and Food Workers Union Nga Ringa Tota negotiates a pay equity settlement with the Government on behalf of care and support workers. The Support Workers (Pay Equity) Settlements Act 2017, which implements the settlement, receives the Royal assent on 14 June 2017.
- July – Following the report of the Joint Working Group, the Government introduces the Employment (Pay Equity and Equal Pay) Bill 2017 (284-1), which would have repealed the Equal Pay Act 1972, and created a process for raising pay equity claims within the structure of the Employment Relations Act 2000. The Bill lapses following the general election.
- July – The Ministry of Social Development and Oranga Tamariki agree to fund pay increases and provide additional training for around 1,700 contracted vocational and disability care and support workers.
2018
- January – The Joint Working Group on Pay Equity Principles is reconvened. It confirms the principles developed in 2015–2016 and proposes further changes to clarify and simplify the process for initiating a pay equity claim. They also recommend amendments to the Equal Pay Act 1972 to implement their recommendations. The Government introduces the Equal Pay Amendment Bill 2018 (103-1) on 19 September 2018.
- July – The settlement with vocational and disability care and support workers is extended to include approximately 5,000 mental health and addiction support workers.
- August – The Ministry of Education agrees to a pay equity settlement for 329 education support workers in early childhood centres and primary schools.
- September – Cabinet agrees to settle a pay equity claim for approximately 1,300 Oranga Tamariki social workers.
- December – The Waitangi Tribunal initiates the Mana Wāhine Kaupapa Inquiry. The Inquiry will hear claims alleging prejudice to wāhine Māori resulting from breaches of the Treaty of Waitangi by the Crown. This will include considering the impact of pay inequity and the gender pay gap on wāhine Māori.
2020
- May – The Ministry of Education agree to settle a pay equity claim brought by teacher aides. The settlement is estimated to affect over 22,000 teacher aids.
- August – The Equal Pay Amendment Act 2020 amends the Equal Pay Act 1972 to facilitate pay equity claims and implement the recommendations of the Reconvened Joint Working Group. The Act’s purposes are to set a low threshold for raising a pay equity claim and provide a simple and accessible process for progressing claims.
2022
- May – District health boards reach a settlement with employees in administration and clerical roles. The settlement is estimated to affect over 10,000 employees.
- June – Allied health workers agree to a pay equity settlement with district health boards. The settlement will cover healthcare workers who are not doctors or nurses, including dental therapists, medical laboratory technicians, physiotherapists, and psychologists.
- June – Kaiārahi i te reo (expert advisers in te reo, mātauranga Māori, and tikanga Māori) reach a settlement with the Ministry of Education. This is the first pay equity settlement that covers a majority Māori workforce.
- June – The Ministry of Education reaches a settlement with school administration support staff. The settlement is expected to cover over 11,000 employees.
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Disclaimer. Every effort has been made to ensure that the content of this paper is accurate, but no guarantee of accuracy can be given. |
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[1] Equal Pay Act 1972, long title.
[2] Government Service Equal Pay Act 1960.
[3] Service and Food Workers Union Nga Ringa Tota Inc and Bartlett v Terranova Homes and Care Ltd [2013] NZEmpC 157, (2013) 11 NZELR 80.
[4] Terranova Homes & Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2015] 2 NZLR 437, [2014] NZCA 516.
[5] Equal Pay Act 1972, s 2AAC.
[6] Equal Pay Act 1972 (as Enacted), s 2. A general protection against discrimination in employment based on sex was included in s 15 of the Human Rights Commission Act 1977. Sex, including gender identity, is now included in the prohibited grounds of discrimination in s 21 of the Human Rights Act 1993.
[7] Equal Pay Act 1972, s 2A.
[8] Equal Pay Act 1972, s 2(2).
[9] Equal Pay Act 1972 (as enacted), s 3(1)(b).
[10] Equal Pay Act 1972 (as enacted), s 3(1)(a).
[11] Convention (No. 100) Concerning Equal Remuneration for Men and Women Workers for Work of Equal Value 1951 165 UNTS 303 (Opened for Signature 29 June 1951, Entered into Force 23 May 1953). New Zealand Ratified the Equal Remuneration Convention on 3 June 1983.
[12] “Equal Pay in New Zealand: Report of the Commission of Enquiry" [1971] H41-I AJHR H54.
[13] Dame Patsy Reddy et al., “Recommendations of the Joint Working Group on Pay Equity Principles,” May 24, 2016, https://www.publicservice.govt.nz/assets/DirectoryFile/Recommendations-Joint-Working-Group-on-Pay-Equity-Principles-May-2016.pdf.
[14] Equal Pay Amendment Bill 2018 (101-1).
[15] Ministry of Business, Innovation and Employment, “Pay Equity - Guide to Good Practice,” February 2022, at 7, https://www.employment.govt.nz/assets/Uploads/tools-and-resources/publications/pay-equity-guide-to-good-practice.pdf.
[16] Service and Food Workers Union Nga Ringa Tota Inc and Bartlett v Terranova Homes and Care Ltd [2013] NZEmpC 157, (2013) 11 NZELR 80.
[17] In Dunedin City Council Women's Rest Room Attendants [1976] ICR 7067, the Industrial Commission considered that when determining the appropriate remuneration for female dominated workforces, regard could be had to work performed by men in other sectors. However, in New Zealand Clerical Administrative etc IAOW v Farmers Trading Co Ltd [1986] ACJ 203, the Arbitration Court held that it could only consider whether the rates in the same award discriminated on the basis of sex.
[18] Terranova Homes & Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2015] 2 NZLR 437, [2014] NZCA 516.
[19] Support Workers (Pay Equity) Settlements Act 2017, s 8.
[20] Hon Andrew Little, “Govt Makes Sure Support Workers Have Right to Take Pay-Equity Claim,” Beehive, June 21, 2022, https://www.beehive.govt.nz/release/govt-makes-sure-support-workers-have-right-take-pay-equity-claim.
[21] E Tū, “Unions Lodge Pay Equity Claim For Care And Support Workers,” Scoop, July 1, 2022, https://www.scoop.co.nz/stories/PO2207/S00008/unions-lodge-pay-equity-claim-for-care-and-support-workers.htm.
[22] Paula Bennett and Michael Woodhouse, “Working Group to Pursue Pay Equity Principles for Workplaces,” Beehive, October 21, 2015, https://www.beehive.govt.nz/release/working-group-pursue-pay-equity-principles-workplaces.
[23] Te Kawa Mataaho Public Service Commission, “Recommendations and Terms of Reference: Joint Working Group on Pay Equity,” 2022, https://www.publicservice.govt.nz/publications/joint-working-group-on-pay-equity-principles-recommendations-and-terms-of-reference/.
[24] Paula Bennett and Michael Woodhouse, “Pay Equity Working Group Reports Back,” Beehive, June 8, 2016, https://www.beehive.govt.nz/release/pay-equity-working-group-reports-back.
[25] Dame Patsy Reddy et al., “Recommendations of the Joint Working Group on Pay Equity Principles,” May 24, 2016.
[26] “Pay Equity Bill Would Have Wrecked $2bn Settlement Case - Unions,” RNZ, April 20, 2017, sec. Politics, https://www.rnz.co.nz/news/political/329177/pay-equity-bill-would-have-wrecked-$2bn-settlement-case-unions.
[27] Hon Iain Lees-Galloway and Hon Julie Anne Genter, “Joint Working Group on Pay Equity Principles Reconvened,” Beehive, January 23, 2018, https://www.beehive.govt.nz/release/joint-working-group-pay-equity-principles-reconvened.
[28] Traci Houpapa et al., “Recommendations of the Joint Working Group on Pay Equity Principles,” February 27, 2018, https://www.beehive.govt.nz/sites/default/files/2018-03/RJWG%20Pay%20Equity%20Principles%20letter%20of%20transmission%20FINAL%20.pdf.
[29] “Equal Pay Amendment Act,” Ministry of Business, Innovation and Employment, November 5, 2020, https://www.mbie.govt.nz/business-and-employment/employment-and-skills/employment-legislation-reviews/equal-pay-amendment-act/.
[30] Rt Hon Jacinda Ardern and Hon Chris Hipkins, “Historic Pay Equity Settlement for Education Support Workers,” Beehive, August 14, 2018, https://www.beehive.govt.nz/release/historic-pay-equity-settlement-education-support-workers.
[31] Hon Tracey Martin, “Pay Equity near for Oranga Tamariki Social Workers,” Beehive, September 25, 2018, https://www.beehive.govt.nz/release/pay-equity-near-oranga-tamariki-social-workers.
[32] Hon Chris Hipkins, “Historic Pay Equity Settlement Imminent for Teacher Aides,” Beehive, May 27, 2020, https://www.beehive.govt.nz/release/historic-pay-equity-settlement-imminent-teacher-aides.
[33] Hon Andrew Little, “Government Welcomes Historic Pay-Equity Deal,” Beehive, May 17, 2022, https://www.beehive.govt.nz/release/government-welcomes-historic-pay-equity-deal.
[34] PSA, “Allied Health Workers Vote To Accept Deal,” Scoop, June 28, 2022, https://www.scoop.co.nz/stories/PO2206/S00206/allied-health-workers-vote-to-accept-deal.htm.
[35] Charlotte Muru-Lanning, “A Historic Win for the Majority Wāhine Kaiārahi i Te Reo Workforce,” The Spinoff, June 22, 2022, sec. Ātea, https://thespinoff.co.nz/atea/22-06-2022/a-historic-win-for-the-majority-wahine-kaiarahi-i-te-reo-workforce.
[36] NZEI Te Riu Roa, “Pay Equity Win For School Administrators,” Scoop, June 1, 2022, https://www.scoop.co.nz/stories/BU2206/S00020/pay-equity-win-for-school-administrators.htm.
[37] Stats NZ, “Gender Pay Gap by Age Groups (Based on Median Hourly Earnings).”
[38] Ministry for Women, at 20-27.
[39] Ministry for Women, at 28.
[40] OECD Data, “Gender Wage Gap (Indicator),” 2022, https://data.oecd.org/earnwage/gender-wage-gap.htm#indicator-chart.
[41] Stats NZ, “Measuring the Gender Pay Gap.”