In April 2017 the National government announced a massive pay rise for workers in the aged-care sector: two billion dollars over five years; 55,000 staff receiving a pay rise between 15 and 49 per cent; many will move from the minimum wage to a rate between $19 and $27 an hour. Socialists and trade unions rejoice that these workers, the majority of whom are women, are paid a better wage for the work they do. These are the workers whose skills and efforts are used to improve the mental, physical and spiritual wellbeing of people in their last years.
The government did not do this because it was the right thing to do. They were backed into a corner through the courageous struggle of aged-care worker Kristine Bartlett and the Service and Food Workers Union (now E tū). In 2012 Kristine Bartlett stood up for her rights and took Terranova Homes to the Employment Court on the grounds that they were in breach of the Equal Pay Act of 1972. Specifically, her case rested on section 3 (1) [b]. This section states that workers in female-dominated industries should be paid at the same rate “that would be paid to male employees with the same, or substantially similar, skills, responsibility, and service performing the work under the same, or substantially similar, conditions and with the same, or substantially similar, degrees of effort.” Bartlett argued that workers in the female-dominated aged-care sector were paid a depressed rate compared to workers doing similar work in male-dominated industries. This differentiation, Kristine Bartlett claimed, was illegal.
The Employment Court and then the Court of Appeal agreed. The courts’ decisions mean that employers in female-dominated industries can no longer fall back on the defence that they pay all their workers as little as possible irrespective of gender. Moreover, it makes explicit that the Equal Pay Act of 1972 mandates both equal pay as well as pay equity. The former is intended to redress female employees being paid less than male employees for identical work. The latter, pay equity, addresses more systemic issues such as the prevalence of lower pay rates in industries that are female-dominated. Kristine Bartlett has reinvigorated the Act and held it up to the hands of hundreds and thousands of workers in female-dominated industries who are being ripped off. This is a significant victory.
On the other side of the class divide we witnessed naked panic. BusinessNZ, an organisation of bosses big and small, saw the case as the opening of “Pandora’s box”: apocalyptic, evil, the end of civilisation. BusinessNZ desperately argued that because Terranova Homes paid the same rate of pay to male aged-care workers they were complying with the law. They wanted no spotlight put on the pay rates of female-dominated sectors. They wanted no inter-industry comparisons. Intervention in the market was anathema.
The New Zealand Labour Market
Women and men in the New Zealand labour market are heavily segregated into specific industries. Economist Prue Hyman points out that “Around half of both women and men work in occupations where at least 70 per cent of the workers are of their gender.” According to the Ministry of Women, “Women were predominantly employed in Retail Trade and Accommodation, Healthcare and Social Assistance, and Education and Training industries, while men were predominantly employed in the Manufacturing and Construction industries.” Female-dominated industries form the majority of the lowest-paid sectors in New Zealand whilst male-dominated sectors are over-represented in the highest pay rates. Prue Hyman writes, “When total weekly personal income from all sources is considered, men constituted more than two-thirds of those in the top 20 per cent ($1,190+ a week), while 60 per cent of those earning less than $201 a week were women.” The scale of industrial segregation means that one cannot determine pay equity claims by looking at the gender pay gap within an isolated sector. As Bartlett and the courts concluded we need to begin by making comparisons between female- and male-dominated industries. BusinessNZ does not want this to happen because it implicates the pay rates of half of all employed women in the country.
Within industries that are female-dominated workers are much more likely to be employed on part-time, casual and fixed-term contracts. The Council of Trade Unions recently reported that “70 per cent of fixed-term and 60 per cent of casual workers were women, predominantly in low-paid female-dominated occupations and industries, such as care-work, retail and hospitality.” These contracts tend to have low rates of pay as well as harsh working conditions. This report has huge implications for the way the gender pay gap is measured. Currently, the most commonly produced statistic is that the gender pay gap is around 13 per cent. However, as Prue Hyman points out, this statistic is based on the hourly rate of pay for full-time employees. It excludes the situation of many women around the country. Hyman offers a more damning figure, “When full- and part-time work are both included, the gap widens dramatically, to 25.2 per cent.” This is “Pandora’s box.” Kristine Bartlett threatened to set a legal precedent and procedure through which the systemic underpayment of women could be challenged.
In November 2015 the National government intervened to prevent the Employment Court from setting pay equity terms that went against the interests of employers. Since the case began in 2012 claims under the Equal Pay Act had steadily poured into the courts. Employment lawyer Peter Cullen wrote that by March 2016 at least “2,500 other people have claims in the pipeline awaiting the resolution of the Bartlett case.” The government intervened by removing Bartlett’s case from the Employment Court, splitting it in half and giving it over to two separate working groups made up of union, employer and government officials. The first group negotiated the terms of settlement for the aged-care sector. The second group would develop pay equity principles that could be applied to current and future claims. Crucially, the government was not bound by the decisions of these groups. They were given a year to develop a set of “recommendations” that the government could deliberate on and, if so minded, change.
In April this year, the government announced the outcome of this process. The first was the massive pay rise to the aged-care sector mentioned earlier. This is, of course, a life-changing victory for those 55,000 workers and we should celebrate. However, the reason that Kristine Bartlett’s case was split in half was so that the government could give a pay-rise to a strictly delineated sector with one hand and viciously slam the door on current and future pay equity claims with the other. This response comes in the form of the Draft Employment (Pay Equity and Equal Pay) Bill, 2017. The draft Bill incorporates those recommendations of the working group that serve the interests of the employers and nullifies those sections which serve the interests of workers in female-dominated industries. More than that, it introduces a raft of additional measures that amount to a significant attack on equal pay and pay equity. Kristine Bartlett’s success would have been impossible under the proposed legislation. The PSA, the CTU, NZEI and the Pay Equity Coalition have all condemned the Bill and demand that it be “fundamentally reviewed.” PSA national secretary Erin Polaczuk writes, “It is very disappointing that just two days after the jubilant celebrations by care and support workers, the Government has released proposals to slam the door on future claimants.” Meanwhile, Kirk Hope of BusinessNZ, last seen drinking very expensive wine on “The Real Housewives of Auckland,” celebrated the Bill and championed its “consensus-based outcomes.”
The Pay Equity Bill
The draft Pay Equity Bill would amend the Employment Relations Act 2000 and repeal and replace the Equal Pay Act 1972. The primary function of the Bill is to put a big lock on Pandora’s box by preventing comparisons between female- and male-dominated industries. Whilst the bill introduces a wide range of barriers and obstacles, it is clause 23 that stands out. Clause 23 introduces a set of steps that workers must go through if they wish to compare themselves to workers outside of their immediate workplace or industry. The ruling of the courts in the Bartlett case, and the recommendation of the Joint Working Group, was that the most appropriate male comparators will be found outside of female-dominated sectors. In other words, pay equity claims should begin at inter-industry level comparisons. Clause 23 (2) upends this logic and states “Comparators that are most closely related to the employer’s business must be selected.” Clause 23 then lists a hierarchy of comparators that force employees wanting to make pay equity claims to prove: 1) that a comparator within their employer’s business is inappropriate; 2) that a comparator from a similar business is inappropriate; 3) that a comparator from within the same industry or sector is inappropriate. Only once the employee has jumped through these hoops can the question of inter-industry comparisons even be broached. In this way, the bill is able to acknowledge the existence of pay inequity and then demand that claimants go through a costly and lengthy process to prove that the problem exists.
If the law began with inter-industry comparisons, the court’s ruling would require businesses to make their gender pay rates transparent. By contrast, the draft Bill shifts the burden of proof on to the employee and gives no provisions for workers to gain access to industrial pay rate information. The difficulty here is that over the last forty years the National Party has done all it can to suppress this information. Whilst some progress has been made in the public sector, information about pay rates in the private sector is almost completely inaccessible. In the immediate aftermath of their 2008 election victory, the National Party swiftly disestablished the Department of Labour’s Pay and Employment Equity Unit (PEEU). Economist Prue Hyman writes, the unit was abolished “along with plans to investigate pay in female-dominated occupations where the reviews had identified gender inequalities.” In May 2017, not long after Bill English had hypocritically congratulated Kristine Bartlett and the aged-care workers, the National Party, Act and United Future voted down Green Party MP Jan Logie’s proposal that businesses must publish the pay rates of their male and female employees. Without access to the exact gender pay rates across their own and numerous other businesses workers will find it difficult to progress through the hierarchy of comparators and make successful claims.
Clause 23 and the hierarchy of comparators is the central pillar of the draft Bill. Yet numerous other parts coalesce to form a swarm of daggers stabbing the backs of underpaid women workers. For instance, the Equal Pay Act of 1972 would be completely replaced. As the draft Bill currently stands the EPA offers far more support for women workers making claims for pay equity. The proposed legislation intends to attacks the decades-long struggle of workers, trade unionists, feminists and socialists who fought for the EPA through the 60s and 70s. All existing claims under the Equal Pay Act would be transferred to the terms of the new legislation. There are thousands of Kristine Bartlett’s currently in the courts who are set to be silenced by this Bill. Secondly, instead of resolving equal pay claims in the courts, all current and future claims would be dealt with in the workplace through the framework of “good faith” bargaining. Whilst workers can never rely upon the court system as a strategy to win their rights, in the current industrial relations climate using the legal system has proved a surprisingly useful tactic for making immediate gains.
In 2017, employers have the upper-hand over workers. Union membership is at a one hundred year low of just twenty per cent of the workforce, and in recent times the National Party has pushed through legislation that explicitly undermines the ability of workers to engage in the very process that equal pay claims will be channelled through. Take, for instance, the Employment Amendment Bill of 2015 which gives employers the right to end negotiations without an agreement being struck. The employer must simply appear to be acting in “good faith” regardless of whether they intend to reach an agreement or not. What are the chances that underpaid and underemployed workers, on precarious part-time contracts, in industries with low rates of unionisation, will be confident enough to challenge the boss over equal pay through this new legislation? Kristine Bartlett’s case was exhilarating because she was able to put the government on the back foot through a sound interpretation of the Equal Pay Act in an era in which trade union struggle is weak. The government has emphatically responded and shut the door on the possibility of progress any time soon.
How do we win equal pay?
The struggle for equal pay and pay equity must take on a long-term perspective and consider trade union struggle as its primary weapon. The gender pay gap in New Zealand was smallest in the early 1970s during a period of heightened trade union militancy. Internationally, as Prue Hyman argues, “the evidence shows that the greater the extent of collective and centralised bargaining, the narrower the gender wage gaps and the higher the minimum wage.” Trade unions in New Zealand have equal pay front and centre in their lists of demands, and the future looks bright with women forming the majority of total union membership at 57 per cent. Women workers form the overwhelming majority in several of the biggest unions: the PSA, NZEI and the NZNO. Socialist activist Shomi Yoon writes, “Women workers – from the Meatworkers’ Union to the primary teachers in the NZEI – are in the vanguard of the contemporary working class.” It will take a concerted and long-term effort from women in the unions to force employers into abiding by equal pay. The response of the National Party and the apocalyptic language of BusinessNZ indicates that the bourgeoisie have a serious material interest in maintaining unequal pay. They will not give it up without a fight.
The fight for equal pay needs to be led by the rank and file of the workers’ movement. The real strength of women resides neither in the courts nor the trade union bureaucracy but in their ability to take strike action, with men taking action in solidarity. As long as there is no social or economic force to hold the government to account they will exercise their power to repeal and rewrite progressive laws. Secondly, workers cannot rely on the trade union bureaucracy. The trade union bureaucracy is structurally inclined to seek compromise and to take up seats with the boss at the table. Their raison d’etre is to mediate between capital and labour. Yet, as we saw in Kristine Bartlett’s case, the formation of the Joint Working Groups, made up of government, employer and trade union bureaucrats, was a fatal blow. We need to build a confident rank and file union movement that can force the government’s hand not shake it. There can be no “consensus based outcomes” when it comes to equal pay.