On 24 November 2016, the Government announced it will change the law to make it easier for women to file pay equity claims with their employers, rather than having to go through the courts.

In October 2015, the Government established a Joint Working Group to develop and recommend pay equity principles for female-dominated workforces where work may have been systematically undervalued. This was set up predominantly in response to a landmark case stemming from an aged-care equal pay case, Service and Food Workers Union Nga Ringa Tota Inc v Terranova Homes and Care Ltd [2013] NZEmpC 157, (2013) 10 NZELC 79–034. In this case, a rest home worker was successful in her argument that she could bring an equal pay claim based on the assertion that workers in the rest-home industry were underpaid because they were mostly women. The Court of Appeal indicated that the next stage of the proceedings should be the setting out of such principles under the Equal Pay Act 1972, and the Supreme Court declined leave to appeal on the basis that until this has been completed, and considered by the Court of Appeal in full, then any application for leave was premature. In the meantime, negotiations between the aged-care sector, Government and unions commenced because of the potential widespread ramifications such a case would have.

The Joint Working Group provided its recommendations in May 2016, and State Services Minister Paula Bennett said the Government has accepted all the recommendations and will update the Equal Pay Act 1972 and amend the Employment Relations Act 2000.

While the Joint Working Group reported back with a number of recommendations, the key ones include:

  • Principles to provide guidance to employers and employees in identifying, assessing and resolving pay equity claims; and
  • A process for employers and employees to follow and address pay equity, including a bargaining process based on the existing Employment Relations Act framework.

Duncan Cotterill anticipates the recommendation for a bargaining process in particular, will create new challenges for employers, particularly in more unionised sectors, although it is difficult to analyse without specific details of the changes. The Government says it expects to introduce a Bill in 2017 to implement these changes. Interestingly, the Joint Working Group was unable to agree on recommendations to clarify how to choose an appropriate job for comparison when making a pay equity claim. This is something the Government has said will be addressed and added to the Bill to ensure the claims process is clear for all parties.

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