The publication of recent statistics on wage inequality has confirmed the persistence of an ever-present gap between men’s and women’s pay in New Zealand. To many, this may seem like a rather puzzling phenomenon considering our Equal Pay Act was implemented over 40 years ago. On closer examination, this situation can partially be pinned on the legislative protection being weakened by the relevant authorities, allowing historical discrimination to continue to penetrate gender pay levels today. While it took until recently to present a competent challenge to these inequalities continuing in New Zealand, the Employment Court responded positively and looked to interpret the law in a way that will hopefully work towards eliminating gender-based pay differences. Understanding the cause of the pay gap and taking positive steps to eliminate it can lead to greatly beneficial results not only societally, but for your workplace as well.

“Equitable and equal payment also serves to increase staff morale, productivity and overall business performance for the employer’s organisation.”

The statistics of inequality

Taking into account all other measurable factors, women still earn at least 10 per cent less than men. This is a problem that starts at the beginning of employment, with studies showing that, 4 years after graduating, women earn on average $4,380 less than men with the same qualifications. There has also been shown to be a 6 per cent gender pay gap in graduate starting salaries, increasing to 17 per cent after 5 years. Organisations within the public sector also contain some of the largest pay disparities in New Zealand. Worryingly, these statistics are adjusted to allow for differences such as skills, qualifications and experience, meaning this inequality cannot be attributed to any specific, rational reason. Quite simply, females are being paid significantly less, to do similar work, resulting in systematic and enduring inequality for women.

Equal Pay Act 1972

While it was celebrated as a significant legislative achievement at the time of its enactment, unfortunately, a narrow interpretation of the Equal Pay Act resulted in it failing to fulfil its initial potential. The Act ended up merely ensuring that the same rate was guaranteed for both sexes in a specific job. What the Act failed to do practically was to address the historical undervaluation of predominantly female industries. The prevalent and enduring earnings gap between sexes can perhaps be explained by the association of ‘women’s work’ with certain industries (such as cooking, cleaning and childcare). These industries, which require a similar amount of skill as comparative male-dominated industries, have a lot less value placed on them as they were traditionally unpaid work performed in the household.

The issue of this systematic inequity seems to be directly addressed in section 3(1)(b) of the Act, stating “for work which is exclusively or predominantly performed by female employees, the rate of remuneration that would be paid to male employees 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.”

Strangely, once pay equality was achieved through the removal of gender-differentiated pay rates, the relevant authorities seemed to regard the Act as having done its job, ignoring the pay equity provisions that were clearly intended to hold great importance. Section 3(1)(b) was limited to only ensuring equal pay between male and female employees within the same job, while addressing the systematic undervaluing of certain sectors was deemed to be outside of the scope of the Act.

Pay inequity and Bartlett

With previous rejections of arguments comparing men and women in different roles, the issue of pay equity or ‘equal pay for work of equal value’ remained largely dormant until the recent case of Service and Food Workers Union Inc and Bartlett v Terranova Homes and Care Ltd. This landmark decision has hopefully steered the Equal Pay Act back on track through the use of plain old statutory interpretation and an analysis consistent with contemporary human rights approaches.

Kristine Bartlett was a rest home caregiver employed by Terranova. She brought the case arguing that her employers were breaching the Act. The basis of her claim was that, in comparison to comparable roles performed predominantly by males, the work performed by caregivers (which is low paid and dominated by over 90 per cent women) was undervalued. Terranova argued the same narrow interpretation of the Act that had been followed previously, saying that, as four men were employed in the same role as Bartlett and paid the same amount, there was no discrimination. They submitted that there was no requirement under section 3(1)(b) of the Act to make comparisons with pay rates in other occupations or industries.

The Court found for Bartlett, refusing to apply a narrow interpretation of the Act through considering its original purpose to eliminate gender-based discrimination in pay rates as well as using an interpretation of the legislation in line with today’s developments in human rights law. The Court determined that it was clear that section 3(1)(b) required comparison with a hypothetical male whose pay was unaffected by gender bias working in a comparable role requiring a similar amount of effort, skill and experience rather than to only compare pay rates with males actually working in the same job type.

Terranova also argued that it would be too difficult to undertake a comparison exercise in determining the appropriate pay rate of caregivers and it would be unaffordable for their business. The Chief Judge noted the same unaffordability argument was once used to defend slavery, stating this short-term price to pay was acceptable for the long-term social good. The Court also held that there is a significant amount of expertise and information available to make such comparative pay equity assessments, and this was not an issue.

Implementing equality in the workplace

Adopting methods to ensure pay equality and equity in a workplace produces many desirable outcomes. Beyond upholding the principles of fairness and justice, the societal and economic benefits as well as the positive results produced for the employer are notable. Closing the pay gap serves to place women on a level playing field and can help them to achieve greater economic independence and less reliance on welfare benefits. Equitable and equal payment also serves to increase staff morale, productivity and overall business performance for the employer’s organisation. These benefits permeate through to the economy and New Zealand society as a whole, increasing and diversifying the national workforce and improving the pool of available employees.

Awareness is a significant factor in helping to resolve the gender pay gap prevalent within our workplaces. The Employment New Zealand website has several tools and guides to help evaluate jobs and remove any gender bias that an organisation may unintentionally have within their processes.