Employment

When one word makes a big difference

The Government's pay equity bill looks almost exactly the same as National's from before the election, but pay equity advocates say the small differences in language make huge differences in practice. Thomas Coughlan reports.

National MP Denise Lee has accused the Government of playing politics over pay equity, claiming a National analysis showed the wording of the two bills was nearly identical. But pay equity advocates said the new bill reduces the threshold for a claim from one that was impossibly high.

Lee said the bills were so similar that the Government could have amended the points on which it disagreed in select committee or using supplementary order papers.

Her member’s bill was drafted and introduced by the previous National-led government last June. It passed its first reading and went to select committee, before National was voted out and the incoming Government wiped it from the order paper.  Lee said that had the Government picked National’s bill up when it assumed office last year, it would be much further down the track.

“If the Government had supported my member’s bill, which was previously a National-led government bill, we would be six months further through the process of gaining pay equity,” she said. 

There are some precedents for that approach. In the first months of this Government, it adopted several pieces of uncontentious legislation from the previous government as its own, like the bipartisan bill to crack down on international companies shifting profits offshore.

Lee said the decision to dispense with her bill and draft new legislation was a cynical attempt to repackage the legislation for a photo opportunity to celebrate Suffrage Day. 

“If they had voted it through to select committee, they could have made changes to the bill there. Instead, they voted it down so they could have a photo-op on Suffrage Day, which is highly cynical,” she said.

Acting Minister for Women Eugenie Sage disagreed, saying National’s legislation “established a whole new regime for pay equity, equal pay, and unlawful discrimination and this would have made it harder for women to be paid fairly."

National bill “dreadful”

Pay equity campaigners disagreed with National, saying the bills were irreconcilably different and the Government was right to introduce new legislation.

Lawyer Steph Dyhrberg, who argued Kristine Bartlett’s landmark pay equity settlement for aged care workers told Newsroom the National bill was “dreadful”.

She said the earlier bill “would have achieved the exact opposite of what its purpose was", giving the present Government little choice but to implement its own legislation.

Lawyer Steph Dyhrberg says National's pay equity bill was fundamentally different. Photo: Lynn Grieveson

The two pieces of legislation are different in three key areas, as well as being fundamentally quite different pieces of law, Dyhrberg said. 

Labour’s bill amends the Equal Pay Act 1972, while National’s would have repealed the Equal Pay Act and replaced it with an entirely new law. 

Merit versus arguable

The first key distinction between the two bills is the threshold required to bring a pay equity claim against an employer. National’s bill allowed a pay equity claim to be brought against an employer if it had “merit.” 

Dyhrberg said the threshold of merit was “unreasonably high,” and would mean fewer cases could be brought. 

“It would have been a really high threshold to get over,” she said. 

E Tu Union’s John Ryall, who helped take Bartlett’s case to court, told Newsroom the merit threshold would have meant many claims fell at the first hurdle, never to be heard.  

The current Government’s bill replaces the merit threshold with the concept of “arguability”. A pay equity claim can be brought if it is arguable — a much lower threshold. 

“Arguable or arguably is a very low bar because lawyers can argue anything,” Dyhrberg said.

“It should be a low threshold to raise a claim,” she said. 

Michael Woodhouse, who introduced National’s pay equity legislation when he was Employment Relations Minister said this set the bar too low and spoke to an adversarial culture that was “anti-employer”. 

He said it would encourage parties to go to court, rather than settle disputes by facilitation. 

Comparative professions.  

The second distinction between the two bills is on the issue of comparable professions. 

A key part of establishing a pay equity claim is benchmarking the underpayment of a female-dominated profession or industry against a comparable male occupation in a male-dominated industry. 

Dyhrberg said National’s bill would reverse some of the key presumptions established in Bartlett’s pay equity case. The court said finding a comparator male pay rate from within the claimant’s industry could be problematic, given that men in female-dominated industries could be affected by historic pay discrimination as well.  

National's bill established a “hierarchy of comparators,” requiring claimants to first look within their workplace, then a similar workplace, and finally a similar industry before looking outside it. 

Dyhrberg described the hierarchy as “ludicrous”.

“If you’re in a female-dominated industry then jobs within that even done by men might be artificially suppressed,” Dyhrberg said.

Woodhouse prefers pragmatism

But Woodhouse rejected that claim, saying it was “pragmatic”. 

“It’s likely they may need to go outside their business, but what we were saying was ‘start there,’ because that’s where you’re likely to get your best comparator”, Woodhouse said. 

“The fact there is no rigour around it means there is no means for employees and employers to understand the rules of engagement when it comes to comparisons.”

The Government’s bill also loosens the requirements for proving undervaluation. National’s bill required proof that the occupation was both currently and historically undervalued. The new bill loosens that requirement to being either currently or historically undervalued.

The bills also differ on the amount of back pay that could be claimed. Eleven years after the bill becomes law, claimants can be awarded up to six years back pay. Dyhrberg says these potentially massive back pay claims will be an incentive to employers to settle claims early. 

Room for improvement

Dyhrberg said the issue of benchmarking comparable professions is an area where the bill could be improved. 

She said it showed the need for greater public disclosure of pay rates, so potential claimants could see whether they had grounds to make a claim.

A similar provision was part of 2017 member’s bill for pay equity from Green MP Jan Logie.

The Government is understood to be working on separate legislation for pay transparency.

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