Ponder this question: a graduate applying for pilot training with a major airline was asked what he would do if, after a long-haul flight to Sydney, he met the captain wearing a dress in the hotel bar. What would you do?

The answer to the riddle is ‘buy her a drink’. This lateral thinking riddle challenges our pre-conceptions. Most people would immediately think that the captain was a male wearing a dress. This details how gendered thoughts subconsciously colour our minds.

What is Pay Inequity?

Pay inequity is a phenomenon that many women across New Zealand are forced to confront every day as they work in areas that are devalued by gender stereotypes. Our current government has recently undertaken analysis to propose a new Bill to make the process to pay equity easier for women to achieve. The introduction of this Bill will have impacts on employment law, employers, employees and society at large as it aims to target underlying gender issues. So, from an employment law perspective, what is the purpose behind it? What will the process entail? What have been some critiques of the Bill?

Pay equity is short hand for the assertion that women and men should receive the same pay for work that provides the same value to employers. New Zealander of the Year Kristine Bartlett’s case – Service and Food Workers Union Nga Ringa Tota Inc v Terranova Homes and Care Ltd – highlights the issue that New Zealand faces with employment and gender. The union’s argument was that female employees were being paid at a lower rate than they would be if the aged care industry wasn’t female dominated. The Court agreed after comparing aged care workers to workers in other sectors that are similar but not dominated by female workers. This is what is known as using comparators. When delving into the nature of aged care work, it is evident that the role requires a complex set of skills and emotional strength that should not be taken for granted. It was determined that the employees should be adequately remunerated for their work.

Processes and Critique

In response to Terranova, the former National government announced the introduction of the Employment (Pay Equity and Equal Pay) Bill to target pay equity specifically. Women and their employers in female-dominated industries will be guided by the law to work through a pay equity claim. The proposed Bill aims to preserve the relationship between employees and employers by facilitating internal negotiations. A process is also provided for if negotiations break down. By promoting internal resolution to establish a pay equity claim the law is advancing to establish equality of the sexes on the ground.

One critique of the initial Employment (Pay Equity and Equal Pay) Bill was of the hierarchy of comparators used. The Reconvened Joint Working Group (RJWG) formed by the current government provided support for the purpose of the Bill but recommended a different process in response to this critique.

The use of comparators was a large focus in the Terranova case. Comparators are a tool to determine pay inequity through a male/female comparison. The original Bill created a hierarchy of comparators using those in the same or similar industry first, then extending to different industries if no other comparator was appropriate. Importantly, comparators will not be valid if they have been impacted by gender inequality.

The RJWG recommended that no process or criteria for comparators should be included. Negotiations should be left to the principle of good faith as stipulated by the Employment Relations Act 2000. The limited guidance proposed allows employers and employees the flexibility to negotiate and work out what is best for them. However, without any instruction, it could leave employees and employers in the dark when trying to determine an adequate comparator. For the good-faith bargaining principles to function effectively, the parties must be able to go into negotiations on equal footing. There are also questions surrounding evidence used and guidance for an authority that might have to determine issues if these negotiations do break down. By removing guidelines, it might make negotiations between parties harder, which is against the purpose of the proposed Bill.

The Employment Lawyer’s Perspective

If we return to our pilot riddle, the issue of pay inequity can only be resolved when we realise that there is a social issue bred into our society. Once we acknowledge this, things can develop to allow equal footing for men and women. Law is a vehicle for change. From an employment lawyer’s view, the proposed law aims to facilitate this societal change through guiding employees and employers to come to resolutions themselves. However, there needs to be a balance between guidance and flexibility.