Equal Pay Amendments Now in Force!

In July this year, Parliament unanimously agreed to changes to the Equal Pay Act 1972, which come into force today, 6 November 2020.

The changes are designed to clarify the obligations on employers to prevent gender discrimination in the workforce with a particular focus on terms and conditions of work done within female-dominated industries. The changes also introduce a new pay equity bargaining process for employees or their union(s) to raise ‘pay equity claims’.

The Act already enshrined the principles of ‘equal pay’ i.e. equal pay for the same work; and ‘pay equity’ i.e. the same pay for work of equal value; and these principles still stand. However, as there is still a large discrepancy between men and women’s hourly average pay and a determination of what constitutes work of the same value could previously only be made by the Court or Employment Relations Authority, these changes were introduced to lower the threshold for workers initiating a pay equity claim, and requires a collaborative process to resolve these claims.

A pay equity claim can be raised by an individual employee, a group of employees or by a union and it is also possible for multiple unions to claim together against one or multiple employers. Claimants must raise pay equity claims in writing and must briefly set out the information relied on in support of the claim being ‘arguable’. A pay equity claim is ‘arguable’ if it relates to work that is or was predominantly (defined as “approximately 60% or more”) performed by female employees, and it is ‘arguable’ that the work is currently undervalued or has been historically undervalued. For roles in female dominated industries where comparison to male employees is difficult, one of the criteria now used is that the comparison is with male employees in jobs that ‘have the same, or substantially similar, skills, responsibility and experience’.

Once an employer has received a pay equity claim, they must respond as soon as is reasonably practicable, but no later than 45 working days following receipt, unless the deadline is extended. If the employer does not respond to a pay equity claim within the 45 day window, they are “deemed to have accepted that a pay equity claim is arguable”.

If the employer agrees the pay equity claim is ‘arguable’, the claim moves to the pay equity bargaining process, although this decision does not pre-empt the outcome or require the employer to accept the pay equity claim. If the employer does not agree the claim is arguable, the parties move to mediation or refer the issue to the Employment Relations Authority for facilitation or a determination, although this should be a last resort.

If you are an employer and you receive a pay equity claim or you are an employee thinking of raising a pay equity claim, we strongly recommend seeking legal advice. Our experienced Employment Law team at Wakefields Lawyers would be delighted to assist. You can get in contact with us by emailing info@wakefieldslaw.com or calling 0800 LEGAL 1.