Recommendations and Terms of Reference: Joint Working Group on Pay Equity

The purpose of the Joint Working Group was set up to recommend principles to Government that provided practical guidance to employers and employees in implementing pay equity.

Recommendations have now been made and are currently being considered by ministers.

Recommendations of the Joint Working Group on Pay Equity Principles(PDF, 2 MB)

The Joint Working Group included employer, union and government representatives.

‘Pay equity’ is the principle that women and men should receive the same remuneration for doing jobs that are different, but of equal value.

These documents record the recommendations made by the Joint Working Group to Ministers in May 2016.

The terms of reference records the parties’ agreement to the objectives, parameters and scope of the work, and the process the Joint Working Group used to develop the principles.

Purpose

1. The purpose of the Joint Working Group is to recommend principles to Government that provide practical guidance to employers and employees in implementing pay equity.
2. This document records the parties’ agreement to the objectives, parameters and scope of the work, and the process the Joint Working Group will use to develop these principles.

Background

3. The recent Court of Appeal decision in Terranova v Service and Food Workers Union (SFWU) and Bartlett (the Terranova Case) has held that in female-dominated work the Equal Pay Act 1972 requires equal pay for work of equal value (pay equity), not simply the same pay for the same work.  This is a change to the way the Act has been understood to apply in the past.
4. Rather than relying on the Courts to address pay equity matters, the Government’s preferred response to this change is to determine pay equity principles that can be supported by employers (both private and public sector) and unions.
5. To achieve this, Government has established a Joint Working Group including employer, union and government representatives to develop and recommend pay equity principles. If Government accepts the recommendations of the Joint Working Group, the principles will need to be given force in legislation.

Objectives

1. To recommend pay equity principles to the Government by the end of March 2016 that will:
   1. guide the implementation of pay equity for both public and private sector employers, employees and unions, and
   2. provide practical and specific guidance on:
   3. how and in what circumstances matters of pay equity may be raised
   4. the processes for progressing pay equity matters, including how jobs can be valued
   5. the kind and nature of evidence that may assist the process
   6. possible outcomes of pay equity matters.

Parameters and Scope

1. The Joint Working Group is asked to recommend principles that are:
   1. Consistent with the Equal Pay Act and Court of Appeal decision in the Terranova Case “that is, “that equal pay for work predominantly or exclusively performed by women, is to be determined by reference to what men would be paid to do the same work abstracting from skills, responsibility, conditions and degrees of effort, as well as from any systemic undervaluation of the work derived from current or historical or structural gender discrimination”
   2. Consistent with New Zealand’s existing employment framework, legislation, roles and institutions
   3. Supportive of a well-functioning labour market.
2. The focus of the Joint Working Group’s discussion is limited to matters of pay equity. Other matters potentially contributing to any gender pay gap (such as career progression, access to training opportunities, and flexible working arrangements) are outside the scope of the Joint Working Group. 
3. Considering specific pay equity claims is outside the scope of the Joint Working Group.

Rules of Engagement

10. The parties agree to work in parallel with the care and support worker negotiations in the health sector to ensure that each process is informed by the other.
11. The parties agree that all other pay equity claims under the Equal Pay Act will be placed on hold for the duration of Joint Working Group discussions or until 1 April 2016 (whichever is the earlier date).
12. The parties agree that they will:
    1. work together in good faith, balancing the interests of all parties
    2. hold Joint Working Group discussions in confidence and on a without prejudice basis
    3. agree any external communications at each meeting.
13. If the parties are unable to reach agreement on recommendations, the Joint Working Group will develop a briefing for Government that outlines:
    1. The areas where the parties have reached agreed recommendations, and
    2. The areas of difference.

Approach

Crown facilitator

14. Government has appointed Dame Patsy Reddy to facilitate Joint Working Group discussions.
15. The Crown facilitator is an independent/neutral party in Joint Working Group discussions. Their purpose is to facilitate the parties to reach jointly agreed recommendations to Government.

Joint Working Group

16. To enable an effective joint process and discussion the parties will keep membership of the Joint Working Group tight. The parties agree there will be up to four government, six union and four employer representatives. 
17. The parties agree that consistency of attendees will be important for the Joint Working Group to achieve its objectives, and will ensure that representatives will not be changed unless this is unavoidable.  If any change in representatives is required, the party concerned will ensure the new attendee/s have been well briefed on previous discussions and progress.
18. The parties will each ensure that their constituents/stakeholders are informed and have appropriate opportunity to have input into development of the principles, through the parties’ internal governance arrangements.

Parties

19. The Government will be represented in Joint Working Group discussions by senior officials from MBIE and SSC (representing the interests of the State sector and the wider economy).
20. The union parties will be led by the New Zealand Council of Trade Unions (NZCTU). Other representatives will come from the Public Service Association (PSA), E tū, FIRST Union, the New Zealand Nurses Organisation (NZNO) and the New Zealand Educational Institute (NZEI).
21. Employers will be led by Business New Zealand and other representatives will come from (to be confirmed).

Meetings

22. The Joint Working Group will determine a schedule of meetings as required to develop recommended principles within the timeframe outlined below.
23. The State Services Commission will make practical meeting arrangements (venue, catering etc) as required by the Joint Working Group.

Support

24. The State Services Commission will provide secretariat support to the Joint Working Group.
25. The Ministry for Business Innovation and Employment will provide information and research that the Joint Working Group identifies is required to facilitate its discussions.
26. Funding for agreed external research will be provided by SSC and MBIE.

Timeframes and Reporting

Timeframes

27. It is anticipated that the Joint Working Group will:
    1. commence discussions in the week of 26 October 2015, and
    2. make their recommendations to Ministers in the week of 28 March 2016.

Reporting

28. Each party will be responsible for reporting to their constituents/stakeholders, in accordance with any messaging agreed during Joint Working Group discussions and as required by their internal governance mechanisms.  In doing so, the parties agree to honour the confidentiality of the Joint Working Group discussions.
29. The Government representatives will report to a Senior Officials Group, who will provide regular progress reports to ministers.