Observation (CEACR) - adopted 1998, published 87th ILC session (1999)

The Committee notes the detailed information supplied by the Government in its report and attached documentation. The Committee also notes the comments of the New Zealand Employers' Federation (NZEF) and the New Zealand Council of Trade Unions (NZCTU), as well as the Government's response to those comments.

1. Legislative protection. The Committee notes that the pay gap has not narrowed since 1994 (see paragraph 8 for discussion on pay gap). In its report, the Government acknowledges that the problem of earnings differentials between men and women cannot be addressed simply by legislative prescription, but requires a wide range of positive activities which impact on the attitudes and behaviour of society as a whole. It is the Committee's view that, for progress to be made in the promotion of this Convention, it is essential that a comprehensive approach be taken to ensuring and promoting equality of opportunity and treatment in a wider context. It thus notes with interest the references in the Government's report to various initiatives it has undertaken to promote the principles of equal remuneration and equal employment opportunity, to increase the participation of women in the workforce and to reduce occupational segregation. The Committee nevertheless points out that, where legislation forms part of a comprehensive approach toward the elimination of gender-based salary discrimination, it is crucial that such legislation be effective and ensure the application of the principle of equal remuneration for men and women workers for work of equal value, within the meaning of Article 1 of the Convention.

2. In its comments, the New Zealand Council of Trade Unions (NZCTU) points to a constellation of factors which, it believes, renders the legislative framework ineffective and inadequate. The NZCTU indicates that the Equal Pay Act 1972 (EPA), the Employment Contracts Act 1991 (ECA) and the Human Rights Act 1993 (HRA) do not comply with the requirements of the Convention in that they fail to recognize the concept of equal pay for work of equal value; they provide no scope for cross-contractual complaints; and their application is limited to cases where employees work for the same employer. It refers to the 1986 Clerical Workers' Union decision, in which the New Zealand High Court interpreted the EPA narrowly, so that rates of pay under the Clerical Workers' Award could not be compared with rates under the Building Trades Award. According to the NZCTU, section 28 of the ECA codified the principle established in the Clerical Workers Union case that employees must hold "substantially similar" employment as a condition precedent to making an equal pay claim. The Committee notes that the HRA also reflects a "substantially similar" employment requirement in its definition of discrimination. It recalls that the 1994 Ministry of Women's Affairs Report on the Effectiveness of the Equal Pay Act raised similar concerns regarding limitations of the scope of the legislation.

3. The New Zealand Employers' Federation (NZEF), on the other hand, is of the view that the EPA is not too limited and that existing pay differentials are not based on gender. In its comments, the NZEF takes the position that the language of Article 1(b) of the Convention is not intended to permit broad wage comparisons and that allowing such comparisons would effectively amount to state intervention in the wage negotiation process. The NZEF posits that determining the value of work on an across-enterprise basis is a subjective process which can lead to distortions in wages and pay rates. For this reason, rates of remuneration in New Zealand are set for the individual enterprise and may vary based on individual ability or on the nature of the work.

4. The NZCTU maintains that the EPA has failed to redress pay discrimination in New Zealand, largely due to the impact of the ECA. It points out that, during the implementation period of the EPA, the gender pay gap began to close, but that, since 1991, progress toward equal pay has plateaued. It recalls that the structure of the EPA was predicated upon the uniform pay system created by collective awards and agreements and that the enactment of the ECA has negatively impacted the position of women in the New Zealand labour market by its shift towards a multiplicity of individual contracts containing alternative pay systems. In contrast to the position taken by the NZEF, the NZCTU points out the potential for gender pay discrimination in both performance and competency-based pay systems.

5. The Government expresses its disagreement with the NZCTU's statements, indicating that the ECA has not marginalized the position of women in the labour market. It believes that the EPA and related legislation meet the requirements of the Convention. The Government points out that the EPA was amended in 1991 to reflect the new industrial relations framework heralded by the enactment of the ECA. The Government also states that cross-contractual complaints may in fact be brought under the EPA, the HRA and the ECA.

6. The Committee must recall that the principle of equal remuneration within the meaning of Article 1 of the Convention refers to equal remuneration for work of equal value. As the Committee noted in its General Survey on equal remuneration, ILO, 1986, the ILO standards go beyond a reference to the "same" or "similar" work, choosing instead the "value" of the work as the point of comparison. (See 1986 General Survey, at paragraphs 19-23, 52-70 and 138-152.) With respect to the scope of comparison, the Committee reiterates its view that the reach of the comparison should be as wide as allowed by the level at which wage policies, systems and structures are coordinated, taking into account also the degree to which wages fixed independently in different enterprises may be based on common factors unrelated to sex (see 1986 General Survey at paragraph 72). The Committee expresses its hope that the equal remuneration legislation currently in force in New Zealand will be applied in such a manner as to give full effect to the provisions of the Convention and asks the Government to indicate the measures taken to ensure the observance and application in practice of the policy contained in Article 2 of the Convention, such as the issuance of guidelines for use in job evaluations and contract negotiations. The Committee also requests the Government to indicate whether any judicial or administrative tribunals have interpreted the equal remuneration laws as permitting cross-contractual complaints and to provide copies of any such decisions.

7. Complaint procedures and enforcement. The NZTCU states that there are currently no effective remedies for equal pay violations in New Zealand. It refers to the low number of equal pay complaints brought in New Zealand, which suggests either that individuals know too little about their right to equal pay, or that pursuing available remedies for pay discrimination is simply too difficult. The NZCTU also expresses concern that the Labour Inspectorate, which received no equal pay complaints, is not playing an investigatory role. In the NZEF's view, current complaint procedures are entirely adequate to ensure that, where pay discrimination is claimed and is established, any genuine grievance can be properly addressed. The Government indicates that employees who feel they have been discriminated against in relation to their remuneration have access to three avenues for redress: (1) they may bring a personal grievance to the Employment Tribunal under the ECA; (2) they may make a complaint to the Human Rights Commission under the HRA; or (3) they may bring a complaint to the Labour Inspectorate, who may be able to resolve the situation informally, or through action in the Employment Tribunal under the EPA. The Government report refers to four equal pay complaints brought during the reporting period, out of a total of 54 complaints of sex discrimination in employment. It also highlights the active information-providing role now played by the Labour Inspectorate as well as the establishment of the EEO (Equal Employment Opportunity) Trust and the EEO Contestable Fund. The Committee notes the educational element of the activities cited by the Government and their importance; however it must also emphasize the importance of effective enforcement mechanisms. It requests the Government to continue to supply information regarding equal pay complaints brought under the EPA, the HRA and the ECA. Noting the EEO Trust and the EEO Contestable Fund, the Government is asked to indicate what initiatives it has established to involve workers' organizations within the meaning of Article 4 of the Convention.

8. Size of pay gap. The Government acknowledges in its report that the gender pay gap decreased over most of the 1984-94 period, but that no further narrowing of the gap has occurred since 1994. It indicates that factors related to women's lower participation in the workforce and their higher concentration in specific industries and occupations are key to understanding the problem of gender-related earnings differentials. Data provided by the Government from Statistics, New Zealand's quarterly employment survey, showed that the average hourly pay gap between males and females remained relatively constant at between 80.5 per cent and 81.5 per cent during the period from February 1996 to November 1997. Additional data supplied by the Government from Statistics, New Zealand's household economic survey, showed that the ratio of female to male earnings has fluctuated between 82.4 per cent and 87.5 per cent from 1994 to the present. The Government indicates that some of the reduction in the gender pay gap over the late 1980s and early 1990s was due to a convergence in the average productivity-related characteristics of male and female employees, as well as greater convergence in their educational qualifications, mean age and full-time/part-time mix. The Government states that the remaining part of the reduction in the pay gap is not presently well understood. It indicates that it is continuing its research into this problem and refers to further work being coordinated by the Ministry of Women's Affairs on the gender pay gap, employment and remuneration in home-care work and performance-related remuneration systems. The Committee would be grateful if the Government would provide copies of these studies as soon as they are available. Further, the Committee asks the Government to provide it with information on the outcome of its ongoing research into the interrelationships between worker characteristics and earnings, which it anticipates will contribute to a better understanding of the relationships between earnings, gender, and other worker characteristics.