Observation (CEACR) - adopted 2017, published 107th ILC session (2018)

Equal Remuneration Convention, 1951 (No. 100) - New Zealand (Ratification: 1983)

The Committee notes the observations by the New Zealand Council of Trade Unions (NZCTU) and Business New Zealand (Business NZ), submitted by the Government with its report.

Article 1(b) of the Convention. Work of equal value. The Committee refers to its previous comments in which it has been drawing the Government’s attention to the fact that the Employment Relations Act (ERA) 2000, the Human Rights Act (HRA) 1993, and the Equal Pay Act (EPA) 1972, do not fully reflect the principle of the Convention, since they limit the requirement for equal remuneration for men and women to the same and substantially similar work. In its previous observation, the Committee noted that the New Zealand Court of Appeal, in Terranova Homes & Care Ltd v. Service and Food Workers’ Union Nga Ringa Tota Inc. (CA631/2013[2014]NZCA516 of 28 October 2014), reached the conclusion that the EPA was not limited to providing for equal pay for the same or similar work. The Court held that, for comparing work exclusively or predominantly performed by women, it may be relevant to consider evidence of wages paid by other employers and in other sectors, and take into account any evidence of systemic undervaluation of the work concerned. Following the judgment by the Court of Appeal, the Employment Court was then expected to state general principles to be observed for implementing equal pay with a view to providing guidance for parties in negotiations, as provided for in section 9 of the EPA.

The Committee notes the Government’s indication that all pay equity claims under the EPA are currently on hold as a result of the agreement reached in October 2015 between the Government and the social partners on the establishment of a Joint Working Group (JWG) to “develop principles for dealing with claims of equal pay for work of equal value” under the EPA. The Committee notes that the JWG has formulated a set of recommendations, which are under consideration by the Government. According to NZCTU’s observations, these recommendations would eventually lead to amendments of the EPA and the ERA. The Committee notes that indeed an Employment (Pay Equity and Equal Pay) Bill was introduced to Parliament on 26 July 2017, with the purpose of eliminating and preventing discrimination on the basis of gender in remuneration and other terms and conditions of employment. The Bill distinguishes between equal pay claims or unlawful discrimination (non-remuneration) claims (section 11). It notes that pay equity claims relate to work predominantly performed by women when there are reasonable grounds to believe that the work has been historically undervalued and continues to be subject to systemic sex-based undervaluation (section 14(1) and (2)). The Committee notes that the Bill continues to restrict “equal pay claims” to “the same, or substantially similar, work” (sections 8(1)(a) and 9(1)(a) and 9(2)), and that “pay equity claims” relate to elements of sex-based differentiation in the rates of remuneration if the rate is less than that which would be paid to men employees “with the same, or substantially similar skills, responsibilities, and experience; and performing work under the same, or substantially similar, conditions; and performing work that involves the same, or substantially similar, degrees of effort” (sections 8(1)(b) and 8(3) and sections 9(1)(c) and 9(3)).

The Committee wishes to highlight once again that the concept of “work of equal value” that lies at the heart of the Convention permits a broad scope of comparison, including but going beyond equal remuneration for “equal” the “same” or “similar” work, and also encompasses work that is of an entirely different nature which is nevertheless of equal value. It follows that the jobs to be compared on the basis of objective factors (such as skills, efforts, responsibilities, conditions of work, etc.) may involve different types of skills, responsibilities or conditions of work, that can nevertheless be of equal value in its totality. As such, the principle of the Convention is not equivalent to the concept of “pay equity” as enshrined in the Bill, nor is it reflected fully in the provision relating to “equal pay for the same, or substantially similar work”. The Committee asks the Government to provide information on any developments related to the endorsement of the recommendations elaborated by the JWG and any follow-up actions, including possible amendments of the current legislation with a view to giving full expression to the principle of equal remuneration between men and women for work of equal value. In this context, the Committee asks the Government to take steps to ensure that the revised legislation, including the EPA, will fully reflect the principle of the Convention. The Committee also reiterates its request to the Government to provide information on how it is ensured that when applying the ERA 2000, and the HRA 1993, the broader concept of work of equal value enshrined in the Convention is taken into account. The Government is also asked to continue to provide information on any other judicial or administrative decisions relating to the principle of the Convention.

Occupational segregation and gender pay gap. In its previous observation, the Committee noted the need for measures to address the undervaluation of work performed by women in the care sector, as well as in other sectors which predominantly employ women, including special education support and social work. The Committee notes from the observations submitted by the NZCTU that, building on the judgment of the Court of Appeal mentioned above, unions representing care and support workers in the health and disability sector have submitted more than 2,500 individual equal pay claims to the Employment Court under the EPA. The Committee notes that, in 2015, the Government authorized the Ministry of Health to start negotiations with the concerned actors to address the equal pay claims pending in the Employment Court and, in 2017, an agreement was reached between the parties. The Committee notes, in particular, that the Care and Support Workers (Pay Equity) Settlement Act 2017 specifies minimum hourly wage rates payable by employers to care and support workers, and requires employers to provide assistance to care and support workers to attain qualifications. The Committee also notes the Government’s indication that, in 2014, the Ministry of Health entered into negotiations with the home and community support sector, the district health boards and the unions in order to address claims concerning travel issues and, in particular, travel between clients, which affect pay levels. The negotiations have resulted in a settlement allowing all care and support workers in the home and community support sector to be paid for travel time and mileage, and in the adoption of the Home and Community Support (Payment for Travel between Clients) Settlement Act 2016. The Committee notes, in particular, that the settlement requires also looking into the transition of the workforce into a regularized workforce with guaranteed hours and appropriate training for qualifications, among other things. The Committee notes that NZCTU further refers to equal pay claims lodged by the union representing education support workers employed by the Ministry of Education, and by the public sector union – the Public Service Association (PSA) – on behalf of social workers working in Child Youth and Family Services. The NZCTU also indicates that negotiations have been ongoing for some time with union representatives of the clerical workers in the public health sector in the South Island District Health Board, but they have failed to make any progress. The Committee notes the observations submitted by the Business NZ, which recalls that care work was part of the job re-evaluation exercise carried out when the EPA was introduced in 1972 and highlights that the low pay level in this sector “is not so much a matter of undervaluation as of funding availability”, as there is a need to take into account users’ ability to meet the costs of the services concerned. With regard to measures to address occupational gender segregation and its impact on the gender pay gap, the Committee also refers to its comments under the Discrimination (Employment and Occupation) Convention, 1958 (No. 111). The Committee wishes to draw the Government’s attention to the fact that, while the Convention is flexible regarding the measures to be used and the timing in achieving its objective, it allows no compromise in the objective to be pursued (General Survey on the fundamental Conventions, 2012, paragraph 670). While welcoming the settlements reached, the Committee, with a view to ensuring that wage settlements agreements address the issue of undervaluation of work performed by women in line with the principle of the Convention, asks the Government to provide information on the job evaluation methods used in the context of these settlements, and on the outcome of the pending equal pay cases submitted on behalf of the education support workers, social workers and clerical workers. The Committee also asks the Government to indicate any other measures taken to address the undervaluation of work performed by women in sectors in which they are predominantly employed.

Article 3. Job evaluation in the private sector. Referring to its previous observation, the Committee notes the Government’s indication that no assessment has so far been undertaken on the use made by the private and public sectors of the pay and employment equity tools and resources available. In this regard, the Committee notes the information provided by Business NZ that many private sector employers make use of the various tools available, including the factor-based Hay assessment system. Business NZ indicates that these evaluations focus on the enterprise since evaluations across organizations risk undermining competition. The Committee also notes the NZCTU’s view that stronger support from the Government is needed, including relevant training, in order to promote the use of the available pay and employment equity tools, as has been recommended by the JWG. The Committee recalls that where women are more heavily concentrated in certain sectors or occupations, there is a risk that the possibilities of comparison at the enterprise level or establishment level will be insufficient. Furthermore, the Committee also stresses the importance of ensuring that whatever methods are used for objective job evaluation, they are free from gender bias, and that the selection of factors for comparison, the weighing of such factors and the actual comparison carried out are not discriminatory, either directly or indirectly (General Survey, 2012, paragraphs 698, 700–701). The Committee asks the Government to indicate any measures taken or envisaged with a view to promoting the use of objective job evaluation methods that are free from gender bias, including targeted training on the use of existing pay and employment equity tools and resources for workers and employers and their organizations in the private sector, and awareness-raising initiatives on the concept of “work of equal value”.

The Committee is raising other matters in a request addressed directly to the Government.