New Zealand Law Society - Select committee reports back on Equal Pay Amendment Bill

Select committee reports back on Equal Pay Amendment Bill

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The Education and Workforce Committee has released a report after examining the Equal Pay Amendment Bill and recommends that it be passed with amendments. The bill was introduced on 19 September 2018 by Workplace Relations and Safety Minister Iain Lees-Galloway.

The purpose of the bill is to improve the process for raising and progressing pay equity claims, and to eliminate and prevent discrimination on the basis of sex in the remuneration and employment terms and conditions for work done within female-dominated jobs.

The bill will amend the Equal Pay Act 1972 to establish a bargaining process for pay equity claims, while still retaining the existing processes for equal pay and unlawful discrimination claims.

The Act will come into force the day after it receives the Royal assent.

Committee recommendations – Key provisions

Clause 7 inserts a new section 2AAC to prohibit an employer from differentiating, on the basis of sex, between the rates of remuneration for employees.  An employer would need to compare remuneration for work that is predominantly performed by female workers with remuneration for work that would be paid to male employees whose work shares similar criteria.

Clause 9 inserts a new section 2B to clarify legal avenues available to employees who consider they have a pay equity issue. As introduced the bill, if a claimant raised a personal grievance under the Employment Relations Act, they would be barred from pursuing a claim under the Equal Pay Act or the Human Rights Act 1993.

The committee recommends amending the proposed new sections 2B(1)(c) and 2B(5) (clause 9) so that an employee would only be barred from the other legal avenues if they had applied to the Authority for a resolution of a personal grievance.

Pay Equity Claims

Clause 18 inserts new sections 13A to 13ZF to set out the process for pay equity claims.

Threshold for who may raise a claim

As the bill does not explain the threshold for “is predominantly performed by female employees” the committee recommends inserting a new section 13C(2A) to clarify that this means work which has been carried out by approximately 60% female workers.

Restrictions on who may make a claim

The committee recommends replacing proposed section 13C(4) with new sections 13C(4) to 13C(6) to clarify that an employer choosing to extend the terms of a settlement to other employees must offer all of the terms of the settlement to employees who qualify for them if they wish to bar future pay equity claims by those employees.

Employer must form view as to whether pay equity claim is arguable

Default timeframe

As introduced in new section 35F an employer would have 65 days to decide whether a claim was arguable. For consistency across the bill, the committee suggests expressing the maximum period in working days rather than calendar days.

Employer’s right to extend time to decide whether claim is arguable

For most employers, 45 working days would be long enough to decide whether they consider a pay equity claim arguable. However, a small number of employers may need more time. The committee recommends inserting new section 13F(3A) and (3B) to allow employers to extend the time (for genuine reasons).

Pay equity bargaining process

When parties have established that a pay equity claim is arguable, the bill would provide a bargaining regime to resolve the pay equity dispute.

Matters to be assessed when resolving pay equity issue

The policy intent of the bill is for parties to pay equity bargaining to assess whether work is currently undervalued. Proposed new section 13L(1) also refers to the parties determining whether work has been historically undervalued. The committee considers historical undervaluation as a factor to consider when determining whether a pay equity claim is arguable. For clarity new section 13L(1) should be amended to remove the reference to determining whether the employee’s work was historically undervalued.

Settling pay equity claims

Review process required

The bill as introduced does not expressly require a settlement determined by the Authority to contain a review process. The committee says a new section 13N(1)(b)(ii)(B) should be inserted to require that the Authority’s determinations include a review process if parties have not agreed on one.

Copy of settlement agreement to be delivered to government department

The bill as introduced does not require parties to forward a settlement agreement to a third party. Therefore, the committee recommends inserting new section 13NA, so that pay equity settlement agreements are delivered to the chief executive of the responsible government department.


Under proposed new section 13R, any party to a pay equity claim could refer issues to the Authority for facilitation to assist in resolving the claim. Proposed section 13R(2) provides a non-exhaustive list of issues that may be referred to the Authority for facilitation, which includes a dispute about whether a pay equity claim is arguable (proposed section 13R(2)(a)).

As the arguable threshold is intended to be a low to proceed to bargaining, the committee says it does not see facilitation as a mandatory step for resolving disputes before accessing a determination and therefore recommends amending proposed new section 13R to require all parties’ agreement to refer a dispute about whether a pay equity claim is arguable to the Authority for facilitation.