Resolving employment problems
Taking action on unfair pay
Pay equity
What is pay equity?
“Pay equity” is about people getting paid the same for doing different work of equal value. This is different to “equal pay” which means getting the same pay for the same kind of work.
For example, there are different kinds of work that are entirely or mostly done by women which get valued less than if they were done by men. Over time, this results in certain areas of work, like cleaning, administration and nursing, getting paid less because they’ve been treated as “women’s work”. This affects anyone working in these areas (regardless of their gender), as well as their whānau and community.
The Equal Pay Amendment Act 2020 sets out the process to take collective action over pay equity disputes. The new law sets out a process for negotiating a pay increase with your employer that follows pay equity principles.
Pay equity example: The TerraNova case
TerraNova Homes and Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2014] NZSC 196
In 2013, the Service and Food Workers Union filed a claim in the Employment Court against their employer, TerraNova Homes and Care Limited, on behalf of a care worker.
The Union argued that a caregiver’s pay is less than what would be paid to a male with the same skill set in a different occupation. Their argument was that workers in the rest home industry were underpaid because they were mostly women. If the rest home workers were mostly men, then they would be paid more.
Their argument was heard all the way up to the Supreme Court and the courts found that the Equal Pay Act 1972 required equal pay for men and women doing different work of the same value (pay equity).
The union then went through the pay equity claim process with their employer that resulted in a pay rise for rest home workers.
What is a pay equity claim?
A pay equity claim is the process for negotiating a pay increase with your employer based on pay equity principles. The process is similar to New Zealand’s existing collective bargaining process. Collective bargaining is when workers, through their unions, negotiate with their employers to decide their terms of employment, pay, benefits, hours, leave and more.
Who can make a claim?
An employee (or group of employees who have similar roles in the same industry) can bring a claim with the help of a union or lawyer if they believe they have an arguable claim.
A claim is arguable if:
- it relates to work that is predominantly performed by female employees, and
- the work is currently or historically undervalued.
If you want more information on how to make a pay equity claim, you can contact your union or get legal advice from a Community Law Centre.
What are the outcomes of a pay equity claim?
Equal Pay Act 1972, ss 13W, 13ZH
A pay equity outcome could be a pay increase, a change in any terms and conditions of employment, and a pay equity review process. Instead, the outcome may be an agreement that pay inequality doesn’t exist. If a union was involved in the process, a settlement would apply to all employees represented by the union. The settlement will also be offered to employees who are not members of the union.
