Many years ago, Women’s Rights Party Co-leader Jill Ovens had a button that said “Equal Pay for Mother’s Day”.

“How relevant is that this week!” she says.

Women’s Rights Party members are concerned about the impact on women of changes to pay equity legislation under urgency last week. An estimated 150,000 women workers whose pay equity claims have been extinguished are now in limbo. Many of these claims will not be able to restart under the new pay equity regime.

As we celebrate Mother’s Day today [Sunday, 11 May] we acknowledge that our mother’s work and contributions to society, whether paid or unpaid, have been systematically undervalued over a very long time.

“Work typically done by women, continues to be undervalued, and this contributes to the on-going sex-based pay gap,” Ms Ovens says.

She says the 14 pay equity settlements to date, mostly in the core public sector and the education and health sectors, have made a big difference in the pay of women workers, and of men working in women-dominated sectors.

Low paid workers such as teacher aides and care and support workers now have more money in their pay packets to feed, clothe, and house their families.

But the settlements created pay disparities with those employed in organisations largely dependent on government funding, like Plunket, hospices, medical laboratories, and community organisations employing social workers.

Many of the 33 pay equity claims that have been extinguished, pending the Governor General’s assent to the new Pay Equity legislation, were to address pay parity with nurses and social workers who are directly employed in public sector agencies like Health NZ and Oranga Tamariki whose pay equity settlements were settled some time ago.

“This is where market forces come in as it becomes impossible for non-government organisations to attract and retain staff if they are not being funded to pay the same rates,” Ms Ovens says.

As a negotiator for MERAS, the midwives’ union, Ms Ovens says she was aware of the struggle of private birthing centres to pay midwives and nurses the same rates as those directly-employed by Health NZ, even though birthing centres are highly dependent on Health NZ funding. A pay equity claim for midwives employed by private birthing centres is among those cancelled this week.

Long lasting effect on women

The Women’s Rights Party says that cutting back on pay equity for women workers will have a long-lasting effect. A major source of the disadvantage women face in retirement is inequity in retirement savings because women earn less than men on average over their working life (this is called the “pay gap penalty”).

Women are also disadvantaged by unpaid responsibilities caring for children, family members with disabilities, and their elders (this is called the “mothering penalty”).

According to the Institute of Economic Research (NZIER), the average KiwiSaver balance for women is 25% lower than the average balance for men across all age groups,

The NZIER reports that at 65 years old, a woman working full-time and earning the median wage, will have the equivalent of at least three years less retirement income in her KiwiSaver account than a man her age; a meaningful difference as women tend to live longer than men.

Ms Ovens says Health NZ, New Zealand’s largest single employer of women, contributes the minimum statutory 3% KiwiSaver employer contribution to its women-dominated workforces – nurses, midwives, clerical workers, cleaners and food services workers. But the historically male-dominated doctors and dentists are paid a 6% employer contribution on much higher salaries.

Police also have a healthy employer contribution to KiwiSaver, as do many other male-dominated occupations.

“This is why we argued in the midwives’ claim that KiwiSaver contributions should be taken into account in comparing work covered by the claim with the comparators,” Ms Ovens says.

To help with understanding pay equity, here are two fact sheets with more information.

Fact Sheet 1: Pay Equity history

Despite its name, the Equal Pay Act 1972 (passed by a National Government), did allow for pay equity, i.e. equal pay for work of equal value, as the NZ Court of Appeal found in 2014 in the Terranova Homes and Care case taken by the Service and Food Workers Union in the name of aged care worker Kristine Bartlett.

Subsequently the National Government of the day passed legislation approving an interim settlement for care and support workers across the country who would be acknowledged for the work they were doing and properly rewarded.

The legislation also approved principles of pay equity and the establishment of a Joint Working Party of employers, unions and government.

The Joint Working Party came up with processes that would mean those in women-dominated occupations, including men in those occupations, would not have to go all the way to the Court of Appeal to get a settlement.

Ms Ovens says it should be stressed that while redress to employment jurisdictions was still possible, the process that was recommended involved employers and unions working together to achieve a negotiated outcome.

The then National Government attempted to bring in amendments to the Equal Pay Act in 2017 to reflect the outcomes of the Joint Working Party, but these amendments were defeated.

In 2020, the then Labour Government introduced amendments on similar lines as National's 2017 previous amendments, after much criticism by National MPs for the length of time it was taking. This was supported enthusiastically by MPs on both sides of the House.

The 2020 Equal Pay Act Amendments aimed to provide a “simple and accessible process to progress a pay equity claim”. There were duties on the parties (unions and employers) to “act in good faith towards each other” and to use “best endeavours” to reach an agreement.

In fact, the requirements were rigorous. For example, unions had to contact all those covered by the union-raised claim to see if they wanted to opt out, and they could not charge a fee to non-union workers who had agreed to be part of the process.

There were also requirements around claims involving multiple employers that allowed for an employer to opt out of the multi-employer process for “genuine reasons” based on “reasonable grounds”.  There would then be a separate process for that employer.

A Pay Equity Taskforce was set up within the State Services Commission (now the Public Sector Commission) which developed tools and benchmarks to be signed off by the parties along the way. This was disestablished soon after the 2023 Election. 

Fact Sheet 2: Our response to the case for a reset of the pay equity legislation

1. The Government is saying the costs to the Crown have been considerable as most claims have been in the public sector.

However, that shows the extent of the sex-based discrimination in public sector pay.

2. The fiscal costs of two large unresolved claims (teachers and care and support workers) are significant.

This has given rise to suggestions that the timing of the legislation and its progress under urgency could be seen as a cynical move to show a surplus in the upcoming Budget.

The Government is saying that addressing the pay gap for women in the public sector will mean trade-offs in terms of service provision in other areas. This is why pay equity needs to be addressed as a separate Budget item. Why should women workers continue to suffer lower pay than men in comparable occupations?

3. The Government has said that the claims currently underway will be able to be reinitiated under the new legislation.

However, the new threshold of 70% women in an occupation covered by a claim (up from 60%) rules out secondary teachers, 63% of whom are women, and probation officers, 68% of whom are women. It may be that other women-dominated occupational groups will be unable to pursue pay equity claims as a result.

4. The government says the threshold for accepting a pay equity claim is too low.

In deciding whether it is “arguable” that work covered by a pay equity claim is currently undervalued or has historically been undervalued, the 2020 Equal Pay Act Amendments suggested that the origins and history of the work, including wage setting processes, may be considered, as well as any social, cultural, or historical factors.

Characterisation of the work as “women’s work”, with skills or qualities overlooked in pay setting could also be included. The skills that Kristine Bartlett possessed as an aged care worker with 12 years’ experience had been considered to be of less value than those of the gardener because caring for our elders was not considered as physically demanding as pruning the bushes.

The midwives pay equity claim was lodged before the 2020 legislation and a detailed case for the “merit” of the claim was made, which included all of the above. However, the argument against having to prove the merit of the claim is that this is putting the cart before the horse because it pre-empts the pay equity process.

5. The government says there was not enough guidance on the selection of male comparators.

Selection of potential comparators is agreed by the parties. In the case of the Nurses and Midwives claims, the criteria for selecting the comparators was based on factors such as the number of employees in the potential comparator occupation, whether there was a Collective Agreement in place so there could be a full examination of pay rates, and whether training or educational requirements were comparable.

The employers of the potential male comparator groups also needed to agree to be part of the process as they would need to release their workers for the interview part of the process, and to release information to the parties to the pay equity claim.

Some potential comparators were discarded by the parties after a rigorous process of interviewing role holders, evaluating the evidence against agreed factors, and further analysis and negotiation between the parties as to the extent of the sex-based discrimination.

It should be noted that it is because of the amount of evidence that has been collected, and the amount of resource involved, that the same male comparators have be used in other pay equity claims with the agreement of their employer.

6. The government wants to limit comparators to the same employer or sector.

Limiting male comparators to a single employer or a single industry or sector rules out many, if not most, women-dominated industries and sectors as there may be virtually no potential male-dominated comparators within the employer or sector.

In the case of the midwives employed by Health NZ, the only possible male comparators within the health sector were limited by the fact that almost all occupations in the health sector are women-dominated.

The unions argued for GPs as a potential comparator as they had been used as a comparator in the self-employed Lead Maternity Carer (LMC) midwives High Court case. The then Director-General of Health Ashley Bloomfield unilaterally ruled out GPs.

Another potential comparator was employed dentists. The parties went all through the pay equity process, including interviews with role holders, and at the end of the process of evaluating the respective roles against the agreed factors, they were the closest comparator. However, the cost of addressing the gap between employed midwives and dentists was so great that Health NZ ruled out the dentists.

The only other potential comparator was Nurse Practitioners, but they were ruled out as they were subject to another pay equity claim; that of the Nurses.

It should be noted that the pay equity process does not require an exact match on all factors. Some potential male comparators might score highly on the degree of exposure to hazards, noise levels, and other factors that may impact the working environment, for example. Work typically performed by women might score highly on interpersonal skills and emotional demands, or fine physical skills. Exposure to hazards may be applicable in both the claimants and the comparators.

It also doesn’t mean the same pay is due. For example, if the work of the women-dominated occupation is evaluated at 80% of the male comparator, then the pay adjustment would be 80% of what the male comparators are paid.

The other point to note is that men performing work in a women-dominated occupation also suffer from the same sex-based discrimination as the women they work alongside.

7. The government wants to add more prescription to comparison methodology.

The intention is to separate out market factors that affect pay, but are not related to sex-based discrimination.  Skills shortages are one such market factor, but these could be directly linked to the comparatively low pay of work typically performed by women because that work is undervalued. Nurses, midwives, teachers are among workforces that have been on the skills shortage list for decades.

The other change is to only assess whether the workforce has experienced sex-based undervaluation since the work became predominantly performed by women.

It is well known that the more women who enter a profession or occupation, the less value is put on the work by society and by employers, and the pay will reflect that. This is surely an example of blatant sex-based discrimination.

On the other hand, kindergarten and primary school teachers have always been predominantly women, as have nurses and midwives. The fact that these occupational groups have historically been subject to sex-based undervaluation, which continues to this day, does not diminish their claim that this is discriminatory.        

8. Remove the ability for a settlement to include a review clause and to limit when claims can be re-issued to 10 years.

The intention is to determine whether concerns about pay are related to the re-emergence of sex-based undervaluation or other market forces.

The problem is when the comparators negotiate a pay hike after the extent of the undervaluation in relation to one or more comparators has been calculated and agreed between the parties. This will disrupt the calculation of the undervaluation. How can we be sure that ratcheting up pay rates for male-dominated occupations is not related to the re-emergence of sex-based undervaluation?

Extending the re-issuing of reviews to 10 years seems on the face of it to be arbitrary. It means, for example, that care and support workers will not be eligible for a review until 2027, and midwives will not be eligible for a review until 2033.

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