Lees-Galloway IainEQUAL PAY AMENDMENT BILLSecond ReadingHon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): I move That the Equal Pay Amendment Bill be now read a second time.I'd like to thank the members of the Education and Workforce Committee for their hard work and support of this bill. I'd also like to thank all of the people who made submissions on the bill especially those who shared deeply personal accounts of how pay inequity has affected their lives. This Government is committed to building an inclusive economy and to do so we must address inequities in pay for female-dominated work. We propose to enact world-leading legislation that sets out a fair and practical process for employees to investigate whether their work is undervalued due to systemic gender-based discrimination.This bill will make it easier for employees to raise a pay equity claim through an accessible process aligned with New Zealand's existing bargaining framework. The bill will enable employers and workers to negotiate in good faith to come to a pay equity settlement while still retaining the right of recourse to the Employment Relations Authority or court through the dispute resolution process.The select committee received close to 600 submissions on the bill from a range of individuals and organisations. The high level of public engagement shows just how important the issue of pay equity is to New Zealanders. Most submitters were supportive of the bill particularly the low threshold for raising claims the lack of hierarchy of comparators and the incorporation of the pay equity regime into the existing Equal Pay Act. The committee listened to those submissions and has recommended that the bill proceed with a number of amendments which I support.A key amendment that the committee recommended was to define the meaning of predominantly performed by female employees". The bill as originally introduced did not state what "predominantly" meant and the committee was concerned that without guidance the parties or courts could interpret "predominantly" to mean a higher threshold than intended. The committee has recommended clarifying that "predominantly performed by female employees" means "work that is currently or has historically been performed by a workforce of which approximately 60% or more members are female." This definition aligns with the pay equity principles proposed by the joint working group and the reconvened joint working group which include that the threshold to enter into pay equity bargaining should be a low one.A number of submitters raised concerns about the dispute resolution process in the bill. In particular submitters were concerned about the many steps in dispute resolution and the potential for disputes to become long and drawn out placing a burden on the resources of both parties. The bill originally required parties in most instances to go through mediation and then facilitation before they could apply to the Employment Relations Authority for a determination. There will be some instances where facilitation is useful in resolving disputes but it may not be useful in all circumstances. The committee has therefore chosen to remove mandatory facilitation for deciding whether a claim is arguable. If parties cannot agree on arguable then they can go directly from mediation to seeking a determination by the Employment Relations Authority. This change will ensure parties don't unnecessarily spend time and resources deciding on whether to enter into pay equity bargaining especially if they recognise that facilitation is unlikely to result in agreement.For other matters that arise during bargaining except where fixing remuneration the committee has recommended that facilitation only be used where the authority or court considers it would be helpful. The requirement to go through the full range of dispute resolution steps including facilitation has been retained before the authority can fix remuneration to ensure the parties have every opportunity to agree on the terms of settlement themselves.The committee received many submissions containing a variety of views as to what the limitation period for back-pay should be. The provisions in the bill balance the systemic nature of pay inequity with the responsibility of employers to address a pay equity issue as soon as they are made aware of it. Parties can agree to any amount of back-pay during bargaining including settling without back-pay. However if parties cannot agree the authority or court may make a determination on back-pay taking into account certain discretionary factors as part of a determination fixing remuneration. In general the amount of back-pay that courts will be able to award will depend on the time it takes for parties to deal with the claim.We introduced this bill to make it easier for workers to make a pay equity claim using a more simple and accessible process aligned to New Zealand's existing bargaining framework. Following the select committee report back our social partners the Council of Trade Unions and Business New Zealand approached us with the view that the pay equity bargaining framework should align more closely with the framework for collective and individual bargaining under the Employment Relations Act. I agree that closer alignment with existing employment bargaining practises will make the pay equity process better for all parties involved. Good-faith bargaining offers the best opportunity to build productive employment relationships through a collaborative process. The bargaining framework provides opportunities for parties to agree to address wider workforce issues alongside pay equity claims if they wish.Through a Supplementary Order Paper I plan to make additional changes to the bill to further align pay equity bargaining with existing bargaining processes while maintaining distinctions where necessary. Working through these changes took time but we wanted to get it right. Such changes include enabling unions to raise pay equity claims and allowing union and individual pay equity claims to progress separately. This will enable parties to negotiate claims more easily similar to the way they've been doing claims in the State sector. The bill will continue to allow employees to bargain individually for pay equity where there is no union or where employees choose not to be represented by a union.We also plan a number of tweaks to streamline and clarify the process. I understand that the transitional provisions were discussed by the committee at some length. Under the original provisions pay equity claims that had formally commenced in the authority or court under the Equal Pay Act but had not yet been determined were discontinued and transitioned to the new regime. We recognise that there will now be claims that have made substantial progress by the time the bill is enacted which was not foreseen when the transitional provisions were first drafted. Therefore we also propose to make changes to allow those claims which will be in the process of being heard by the Employment Relations Authority or court at the time of enactment to continue undisturbed by the bill.This Government has made an investment of $1 million to assist parties in navigating the pay equity claims process. This money includes funding for the Ministry of Business Innovation and Employment to develop online tools and resources which will improve people's understanding of the pay equity regime by providing detailed guidance about the different steps in the bill. This will help to reduce disputes improve bargaining efficiency and lead to more enduring pay equity agreements.I acknowledge the ongoing work of unions and agencies to progress pay equity claims in the State sector using the joint working group principles on which this bill is based. The time we have spent working on this bill has not slowed the progress of those claims. I'd also like to thank the Minister for Women and our social partners for working with me on this important legislation. It has taken time to improve the bill but it is certainly worth getting it right. A robust and accessible pay equity process will be a critical tool in reducing the gender pay gap across the economy. I commend this bill to the House."