Equal Pay Amendment Bill

Tēnā koe, Mr Chair. Tēnā koutou e Te Whare. It’s a real privilege to be here to discuss, in particular, Supplementary Order Paper (SOP) 548 to the Equal Pay Amendment Bill. That will be the focus of my remarks right now, but I just want to start by saying, as Minister for Women, my role is to advocate for all women and girls in Aotearoa New Zealand, and this bill, and the amendments in the Supplementary Order Paper, represent a step forward for gender equity in the labour market.

The Government is committed to building an inclusive economy, particularly in the response to COVID-19. It’s very important that we maintain a focus on achieving gender equity and recognising the intersectional factors that are leading to substantial pay gaps, particularly for non-European women. The pay equity framework in this bill encourages collaboration and evidence-based decision-making to address pay inequity. Supplementary Order Paper 548 further enables this vision by aligning the bill more closely with the bargaining system in the Employment Relations Act (ERA). We have been making significant progress towards eliminating the gender pay gap in the core public sector this term—a priority for this Government—with several pay equity settlements finalised and in progress, and it’s now time to ensure that pay equity can be realised across all of New Zealand and the economy.

I want to briefly talk about the process we’ve been through to get to this point today, and then I’ll outline a few changes in the SOP that I believe will particularly benefit women and employees in occupations that have been subject to systematic undervaluation due to gender discrimination.

Following the select committee report back, our social partners, the Council of Trade Unions and BusinessNZ, approached us with the view that the pay equity bargaining framework should align more clearly with the framework for collective and individual bargaining under the Employment Relations Act. The Government agreed that closer alignment with existing employment bargaining practices would improve the pay equity process. So Cabinet then agreed to make these changes to the bill that will align the pay equity process further with the current bargaining practice that businesses, unions, and employees are all already familiar with.

So some key changes include enabling unions to raise pay equity claims on behalf of their members, and these claims will also cover employees who are not union members but are performing the same or substantially similar work. This is good for women because unions have expertise in resolving pay inequity, they have a stronger voice than one individual claimant, and this should lead to more robust settlements that fully correct pay inequity while allowing individuals who are not members to have a voice in the settlement.

💬 Secondly: requiring employers to offer any pay equity settlement negotiated by a union to other affected employees. So these changes recognise that pay equity is an issue of systematic sex-based discrimination, which affects both union and non-union members. So, where a union settlement has addressed sex-based undervaluation in the remuneration for the work, it should be offered to other employees, all employees, performing that work. The bill will also continue to allow employees to bargain individually for pay equity where there is no union or where employees choose not to be represented by a union. These changes are more consistent with the approach taken to collective bargaining under the ERA and in international law.

We’re also enabling unions to raise single claims across multiple employers where the work is substantially similar. Several submitters asked for a more balanced employer and employee voice in the multi-employer consolidation of pay equity claims. This aligns more closely with multi-employer bargaining processes under the ERA, and this is good for women and employers because settlements can be reached with multiple employers concurrently, reducing the risk of multiple different settlements being reached for the same or similar work. For both employees and employers, it makes sense to have consistent pay rates and to reduce the costs of concluding multiple settlements within occupations.

We’ve also made some key changes to time frames for the progression of each stage of the process, and I could probably go into detail on that throughout this debate. We are ensuring that, during the assessment phase of the pay equity processes, parties will assess the nature of the work, terms and conditions of the work, and remuneration of the work that is the subject of the claim and those of one or more comparator occupations, the comparator occupations being the more male-dominated occupations, although it could also be other female-dominated occupations that have also been through a pay equity process. This is good for women, because relevant evidence will be taken into account to remove the undervaluation of the work, and it will also enable those existing resources and tools to be used so that claims can be resolved quickly.

We’ve clarified that a pay equity claim will be settled when parties have agreed remuneration that they consider corrects pay inequity. This is not necessarily just a pay rate or salary but can include elements such as annual leave or superannuation and anything else the parties mutually agree. We’ve also made sure that settlements must also include a commitment to regularly ensure pay equity has been maintained, and this is really important because our goal is to correct this systemic, longstanding gender-based or sex-based discrimination and, after a settlement has been made, we don’t want it to stop there. We don’t want it to lose that progress over time. So it’s important that we continue to review, that we have a process in place that employees and employers understand, just to make sure that we’re eliminating inequity over the long term, which is what this bill is about. There are also protections against unfair individual bargaining, similar to those provided for in the ERA.

These changes are reflected in Supplementary Order Paper 548, presented to you today. It has taken time to improve the bill, and we’ve done so at the request of our social partners. It is worth getting it right. A robust and accessible pay equity process will be a critical tool in helping to reduce the gender pay gap across the economy. This bill is an important milestone, but we still have more work to do, and it’s great that there are so many individuals and organisations working towards achieving pay equity for all women in Aotearoa.

Thank you, Mr Chair. I’d just like to thank the Minister in the chair, the Hon Julie Anne Genter, for being available for our questions. Obviously, there’s a relatively significant Supplementary Order Paper (SOP)—548—that has been made available for us, that I’ve got some specific questions to ask the Minister about. They’re quite technical; so I hope that she doesn’t mind that I’ve written them down. I’m going to read them out because I don’t want to get it wrong.

I want to specifically talk about new section 13DB. It sets out the requirements for a union raising a pay equity claim. These requirements are almost the same as the requirements for an individual raising a claim, but there is one additional requirement; that is, a claim that’s raised by one or more unions with multiple employers must include a brief explanation of how the work performed by the employees covered by the claim is considered to be the same or substantially similar. So my question is: does this explanation have to be taken as fact? What if the employers reject the premise that the work is the same or substantially the same? And if they reject that premise, can it be the basis for an employer deciding that the claim is not arguable?

💬 Hon Julie Anne Genter: Do you want to take another—

Oh, I’ll carry on in that case. Just a broader point for the Minister, while she’s getting some advice potentially: the SOP also provides for large multi-employer multi-union claims to be made. This is a far more general question. So these pay equity claims to date have generally been made when the State’s been the employer, but I guess I want to question the Minister on how manageable she thinks these claims will be when they have to apply to private sector claims, particularly occupations that are largely employed by a large number of small businesses—how she thinks that will be manageable.

I thank the member for her questions. With respect to the first one, as long as one party considers the comparator to be relevant it can be used. So I don’t believe both parties need to consider it. As long as one or both parties consider the comparator relevant, it can be used as part of a process. But, ultimately, it is a bargaining approach, and the final outcome will depend on what both parties get to, looking at one or more comparators. And I would say that, in most cases that I’ve seen undertaken so far, there has been more than one comparator used. So, usually, a settlement wouldn’t hinge on just one comparator, at least not in my experience.

With respect to the second question, my feeling is that allowing a more consolidated approach with multiple employers will be better for achieving pay equity, and I think it will be more manageable for businesses who have employees who are employed in similar or, you know, the same work, for them to be able to work together in this process. It will mean they just have to go through it once, that they’ve got the support of other businesses who are in the same position, and I think that ultimately that’s going to be a much more practical way to get good pay equity outcomes across the economy than if every individual small business had to deal with claims.

I want to ask the Minister some questions—well, a specific question relating to Supplementary Order Paper (SOP) 548. That SOP does, in many ways, change the bill that emerged from select committee. I sat on the Education and Workforce Committee, which analysed the Equal Pay Amendment Bill. I think we did some good work together. We took a lot of advice from officials and changes were made to this bill. So I am somewhat surprised at how significant this SOP is, and I would appreciate some background as to why such significant changes were required. It seems to me that one of the themes of the changes is about providing for union involvement and union joining of claims, but I’d invite the Minister to comment on that. But, most specifically, I’m interested in the removal, in terms of matters to be assessed.

If we go to proposed new section 13L, on page 35 of the SOP, we have the removal of what was going to be the ability for those involved in a pay equity claim to settle following an alternative process. So that is, there was an allowance within the bill that parties to a pay equity claim could enter a written agreement setting out an alternative process for agreeing to settle that claim. If you think about that in a practical sense, it’s not impossible to imagine an employer having a claim come before them; the employee and the employer sharing a view that the process set out in this bill is very heavy, is cumbersome, involves multiple steps, and that they may themselves say, “Well, let’s simplify things. Let’s think of an alternative way of doing it.” It is possible that those two parties could agree on a simpler way of doing things. This section of the bill had simply provided that they could enter a written agreement to do this in an alternative and, one would presume, simpler way.

So that was in the bill that emerged from select committee. This SOP specifically removes that. It seems to me like an extremely inflexible approach. Why wouldn’t we allow employers and employees or unions to agree on a different process to follow if they believe that it would be a quicker and more efficient way of reaching a resolution? Our goal here with this bill is to have pay equity claims fairly addressed, and it doesn’t seem to me that that section is a barrier to that. In fact, it could expedite it. So I’d invite the Minister’s comments.

Thank you for the questions. In response to the first, as I laid out in my opening statements, there were substantial changes made following the select committee process due to requests from our two key social partners: the New Zealand Council of Trade Unions and BusinessNZ. Now, I want to acknowledge the work of the select committee. I think the select committee did a very good job, but the view was taken following that by the social partners that it would make a lot more sense to have the bill more aligned with the Employment Relations Act, and that’s why we took the time to make those substantive changes, but in very close consultation with BusinessNZ and the New Zealand Council of Trade Unions.

In response to the second question, I have a lot of sympathy for the view that an alternative process would just allow more flexibility; however, after much discussion, the reason that it was removed is because there was the potential for it to undermine the very process that we’re setting out, and potentially an unscrupulous employer might approach a small group of employees and propose a different process that was not as robust, that would not achieve the good pay equity claims, and then would make it more difficult for the women or the people working in those jobs to achieve good pay equity outcomes. So what has been done is—and we have looked at this—there are a lot of ways in which the process can be streamlined and the work that’s done can be built upon throughout the bargaining process so that, once certain pay equity claims have been taken, other workforces in a similar position can take what has been learned from a settlement and apply it to their own claim.

This is not a bill I envisaged taking a call on, and I don’t have any problem with the parameters of the bill. I think the idea and the ideals of it are excellent. The thing that amazes me is that the Supplementary Order Paper is double the size of the bill. I don’t understand that, for a start.

The other thing I want to say is that, where I come from, I think equal work for equal pay is absolutely how the world should work, and I watch down on the farm, where you get the odd shearer that comes along who will get paid $3.20 a sheep or whatever it is, whatever they are, whoever they are, and I think that’s how it should be. The thing that absolutely amazes me and I want to ask the Minister about is what we are doing at half past 11 on whatever night it is—Thursday night, I think it is—dragging a whole lot of staff out in the middle of the night to discuss a bill that is, in my view, of significant importance. Now, whatever the economics of it are is irrelevant; the fact is that this is an important bill, and I’ve never seen the final of the Super 12 or the Cricket World Cup played in the middle of the night with no one watching it and no one listening to it.

So we’ve got this piece of legislation that’s probably quite important in the terms of New Zealand Inc. and we’re debating it at 25 past 11 on a Thursday night. That’s my question, Minister: what on earth are we doing with a piece of legislation that we think’s important, sticking it through the House with no one in the world listening to it but us and no one in the world taking any notice of what we say but us, at 25 past 11 at night? Thank you.

Thank you. I just want to thank the Minister for her really good, detailed answers. I’ve got another quite technical one, sorry. Now, new section 13FF is around the affected employers automatically covered by union claims. My interpretation of this is that there could be a case where employees have raised and/or settled a pay equity claim with an employer, which would’ve involved every affected employee being notified of the claim with an option to join it, and then, at some point in the future, a union could raise a claim against the same employer relating to the same work. Is that a correct interpretation? Am I right in assuming that? And why is the system set up so that an employer could have two consecutive claims laid—if that is the correct interpretation?

💬 Hon Julie Anne Genter: Sorry, just checking that.

Does anyone want to take a call? Otherwise, I can put the question.

I do think it’s in the interests of the good flow and exchange of information that’s been occurring in this committee stage that we make sure the Minister in the chair, the Hon Julie Anne Genter, has an opportunity to address the question put by Erica Stanford.

My question about the Supplementary Order Paper (SOP) and the discussions that have led to it relates to the question of which claims the Minister is actually predicting will be made under this bill when it’s passed, because I anticipate that, in the conversations that have been had with the social partners, with the union and with BusinessNZ, there has been discussion about how this will apply in practice. Earlier, my colleague asked, “Well, how will this work if it’s cutting across multiple small businesses?” Is this more likely to be claims that are made to the Government, to major employers? Has there been any discussion of which claims are likely to occur over the next 12 months, over the next 24 months? Is there a sense in any way that those have been tested against this process? Has there been a discussion about how this might work practically, because, of course, we haven’t had the opportunity that a select committee process would normally provide to have submitters say, “Well, this is how we think that process would work for us when it comes to this SOP.”?

So, what I’m testing here is: has this SOP been tested in the practical reality of some of the likely claims that could occur? And, if the Minister could give us some sense of what those claims might be and why this approach will work, I think that would be particularly useful in informing members about the robustness of the process outlined.

Thanks for the questions. In response to the first question, from Erica Stanford, my understanding is that it will be highly unlikely that an employer would face a subsequent claim. So, the way that this has been set up, a union raises a claim against an employer about a particular group of employees who do substantially similar work. Those that are members of the union and those who are not members of the union are automatically included in the claim.

It would be possible for employees to opt out at several different stages of the process if for some reason they felt that they didn’t want to be part of it. We felt that was really important because you can’t really compel people to be a part of this union process if they don’t want to be. In that case, they could potentially raise their own individual claim with the employer, but I think it would be highly unlikely because—yes, I think it would be unlikely. There is the possibility for that to happen, but I think it’s very, very unlikely and the way this has been set up is to kind of facilitate workers who are all in one type of work to be able to progress through the process together and to get the benefits of the settlement together, which is what, effectively, happened with the care and support workers. Although that was through a completely different process that was through the courts, it was extended to—in fact, the majority of the workers, I believe, who received the benefits of the settlement were not members of the union that raised the claim.

In response to Nicola Willis’ question, this process laid out in the Supplementary Order Paper has already actively been tested. For the last two years, the Government has been engaging in a number of pay equity claims with public sector employees, and these are claims that have been raised by unions, and it is very much working through this process; so, in a way, the legislation is mirroring the process we’ve already been testing. As for what would be likely future claims, I think that question would be best directed to the unions.

The Minister for Women has, of course, outlined public sector claims that have been processed over the past couple of years and has suggested that they are a model for how these might progress in future. I think my colleague earlier outlined the essence of my question, which is: what about where it’s not quite so simple as having the one State employer, which is quite a defining feature of some of the claims that have progressed in recent times? What about occupations that are dispersed over multiple employers in the private sector—essentially, a more complicated scenario—and will this model apply so readily in those instances? Again, are there instances that have been considered by advisers and by the Government in developing this process that envisage a non-State employer in the bargaining process?

I wouldn’t say that all of the claims that we’re currently working through that relate to public sector employees are simple or straightforward or just have one employer. You know, particularly within the health workforce, there are a number of different employers; so, you know, there are DHBs and there’s been a multi-employer pay equity claim that the unions are working on—and I’m just struggling to recall exactly what stage that’s at—clerical and admin, which spans across many, many different employers.

So I do think this process is world leading. The goal of it is to have a non-adversarial approach so that pay equity doesn’t have to be litigated in the courts necessarily. It’s to set out the kind of framework which makes it very clear and transparent what the expectations around the process are. And I think that we will continue to learn as we move through this about what works and what doesn’t. But I do think that it’s going to be a kind of living process. I think the aims of it are very, very good and so far we’ve seen some good outcomes, but I expect we’ll be seeing a lot more in the next few years.

For Ian McKelvie’s question—I forgot to address that. Well, you know, I wouldn’t say it’s ideal, from my perspective, to be the Minister in the chair at 11.30 p.m. on—yes, this is still Thursday, still Thursday this week. This is an important piece of legislation. That’s why it’s so important to us that the Government makes progress on this, particularly when there is support across the House, and that’s how we’ve ended up where we’ve ended up.

I raise a point of order, Mr Chair. I seek leave of the House to apologise to the Minister. I’ve had three texts telling me people are listening to what went on in the House!

CHAIRPERSON (Adrian Rurawhe): I don’t think we need to have leave of the House to do that, but I’m sure the committee of the whole House thanks you. Are there any more?

The question was put that the amendments set out on Supplementary Order Paper 548 in the name of the Hon Iain Lees-Galloway to Part 1 be agreed to.