Lees-Galloway IainEQUAL PAY AMENDMENT BILLFirst ReadingHon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): I move That the Equal Pay Amendment Bill be now read a first time. I nominate the Education and Workforce Committee to consider the bill.I am honoured to be speaking to the first reading of this significant bill which makes history for women's pay a mere 125 years since women gained the right to vote in New Zealand. The bill amends the Equal Pay Act 1972 to expressly provide for a pay equity regime that allows parties to negotiate pay equity settlements. This bill is a vital step in addressing decades of discrimination which has led to lower pay in many female-dominated industries despite having similar working conditions and skill requirements to comparable male-dominated industries. This Government believes that a pay equity regime must be just and accessible. I believe that not only will this bill benefit women whose work has been subject to gender discrimination but it also has the potential to benefit their families and future generations of women.I would firstly like to acknowledge the tremendous work of Kristine Bartlett who together with her union E tū brought the landmark Terranova case which resulted in the Care and Support Workers (Pay Equity) Settlement Act 2017. That case demonstrated that the Equal Pay Act 1972 applied not only to cases of equal pay which is the same pay for the same work but also to pay equity which is the same pay for work of equal value. The courage and perseverance of Kristine and her union resulted in a settlement to address gender-based undervaluation in the aged-care sector. They made legal history and breathed new life into a statute that was thought moribund.I would like to acknowledge the work of the Joint Working Group—and the reconvened joint working group—on Pay Equity Principles. The joint working group was formed in 2015 to recommend principles to the Government for the implementation of a pay equity regime in response to the Terranova case. The previous Government decided it would be better for these principles to be decided by a broad-based group of workers employers and experts than to be left to the courts to decide. It was the right thing to do and they deserve credit for making that call. The joint working group recommended a process for making a pay equity claim within the existing bargaining framework of the Employment Relations Act 2000. By using New Zealand's existing bargaining framework we will permit employers and workers to negotiate in good faith and to have access to mediation and resolution services.By making court action a last resort we will lower the bar for initiating a pay equity claim. We believe good-faith bargaining offers the best opportunity to build productive relationships through a collaborative process. Pushing parties into an adversarial court process in the first instance is not a way to build good employment relationships. Having started well by convening the joint working group the previous Government stumbled when they introduced the Employment (Pay Equity and Equal Pay) Bill in 2017 which set unnecessary hurdles for employees making pay equity claims including a high threshold for claimants to meet in order to raise a claim. They also ignored the joint working group's recommendation to amend the existing Equal Pay Act 1972 and instead created a whole new Act.This Government is committed to a fairer deal for women. We withdrew the previous Government's bill and reconvened the joint working group in December 2017 to make further recommendations on determining the merit of a claim as a pay equity claim how to select appropriate comparators when assessing the work that is subject to a pay equity claim and the legislative vehicle. The reconvened joint working group recommended lowering the threshold for a claim and to make no changes to the principles on comparators effectively determining that the hierarchy of comparators in the previous Government's bill was unnecessary. It also recommended that these principles be implemented by amending the Equal Pay Act 1972.The coalition Government accepted the recommendations of the reconvened Joint Working Group on Pay Equity Principles and we have been working to amend the Equal Pay Act in a way that expressly provides for a just and accessible pay equity regime within this important piece of legislation. This bill aims to keep the equal pay and unlawful discrimination provisions from the Equal Pay Act as intact as possible and only makes minimal workability changes to these provisions. The intention is not to change existing rights and we would welcome feedback on this in the select committee process.In terms of pay equity the bill uses the existing Employment Relations Act 2000 bargaining process as a framework for parties to address pay equity issues provides employees with the right to raise a pay equity claim with their employers in the first instance and provides access to dispute resolution services such as mediation and facilitation if parties cannot agree at any stage of the process. The bill moves away from forcing parties directly to the courts and instead puts negotiation at the forefront of the pay equity regime.Litigation can be costly time-consuming and can create a barrier that may discourage employees from raising a claim. This bill uses our existing employment bargaining framework to enable parties to come to a settlement that provides for pay equity while still retaining the right of recourse to the Employment Relations Authority or courts through the dispute resolution process. For an employee to raise a pay equity claim with their employer they no longer have to prove that their claim has merit. Instead they simply have to show that their claim is arguable as a pay equity claim. A pay equity claim is arguable if the claim relates to work that is predominantly performed by female employees and it is arguable that the work is currently undervalued or has been historically undervalued.If an employer decides that the pay equity claim is arguable parties must proceed to bargaining. However the bill is clear that although an employer may agree a claim is arguable this does not mean that there is a pay equity issue or that there will be a pay equity settlement. Pay equity bargaining must ordinarily involve an assessment of the nature and remuneration of the work and of comparable work and must be undertaken free from assumptions based on gender. During the bargaining process the work is assessed against the work of appropriate comparators. Appropriate comparators include work performed by male-dominated comparators that involves the same or substantially some of the work; work performed by male-dominated comparators that involves the same or substantially similar skills and experience responsibilities working conditions or degrees of effort; or any other comparator that the parties or the authority consider useful and relevant.The previous Government's bill included a hierarchy of comparators that mandated which comparator groups employees had to refer to first. Claimants had to first consider comparators within their organisation before being able to consider comparator groups within their own industry or sector. This made the process more onerous for employees and set hoops for them to jump through. We believe in making this process as easy as possible for employers and employees to manage. Under this bill there is no mandated group of comparators that employers and employees must use first. Instead they are free from the outset to refer to whichever comparators best fit their claim. During bargaining parties can agree to whatever terms and conditions they wish. However they can apply to the authority for determination on matters that they cannot agree on.In bargaining parties are free to discuss and reach agreement on back-pay as part of their pay equity bargaining. If back-pay is considered and parties are unable to agree the dispute resolution process is available. At the end of the process the authority or the court will be able to make a determination on back-pay. Let me be clear about this point: this bill does not create the right to claim back-pay. That right has existed ever since the courts determined that the Equal Pay Act applies to pay equity claims.The way in which back-pay will be determined by the authority or court for pay equity under this legislation is different from the process for determining arrears for equal pay. This reflects that pay equity is the result of systemic gender-based undervaluation of female-dominated jobs. This is something that cannot be directly attributed to the actions of a single employer. However increasing awareness about pay equity issues puts employers on notice about the possibility of pay equity issues within their workforce and creates a responsibility for employers to take action to address it. The treatment of back-pay for pay equity claims therefore balances the structural origins of pay equity with the responsibility of employers to address pay equity issues.Under the bill in the first five years after the law is passed which is when we expect most pay equity claims to be settled back-pay is available back to the date the claim was raised with the employer. This gives employers a chance to investigate whether there is a pay equity issue. After that point back-pay can be awarded back to the five-year anniversary of the legislation coming into force which in some cases may be an earlier date than the date the claim was raised to incentivise employers to look at and address pay equity issues earlier. The authority and courts are also able to exercise discretion in awarding back-pay and the bill sets out factors that they must take into account. These factors allow the authority to look at the circumstances of each claim and to tailor its approach accordingly.This bill is the next step in the great march of history towards a more equal and more just society. It will have significant benefits for all of society and I'd like to thank our coalition and confidence and supply partners for working with us on this bill. In particular I would like to thank the Minister for Women for working with me on this important work. It is an honour to commend this bill to the House.