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hanges to the pay equity laws that were passed under urgency just before the budget announcement last year have been described as a "flagrant and significant abuse of power" by a group of former female MPs from across the political spectrum. The group formed an unofficial “Select Committee” to scrutinise the controversial law change and the way it was undertaken. This finding should come as no surprise - the law change was clearly rushed through Parliament under urgency and without scrutiny with the object of freeing up “billions of dollars” for the 2025 Budget.
In New Zealand, the select committee process is a key part of lawmaking where between five to twelve MPs from various parties scrutinise bills, examine policy, and hear public submissions, usually after a bill's first reading. Committees typically have six months to gather evidence, seek official advice, suggest amendments to the legislation, and report back to the House.
At the time the Prime Minister admitted that the changes to pay equity laws would save the government “billions of dollars” but he said that this was not the motivation for changing the legislation. "It's got nothing to do with the Budget, this is about making sure we have a piece of legislation that is incredibly workable, and not as complex as it has been" he said.
This is not supported by the background to the amendments. Back in 2017 the then National-led government passed a forerunner to the current legislation for the health sector only, the Care and Support Workers (Pay Equity) Settlement Act. In 2018, when it was in opposition, National supported the Labour government’s new Equal Pay Act, as well as the Equal Pay Amendment Act in 2020. Those changes were then said to be designed to extend a pay equity process to all occupations and create a clearer pathway for making pay equity claims.
Further, for the Prime Minister’s reasoning to have credibility, these significant changes to the law should have gone through the normal select committee process, without all the secrecy, and hopefully with a mandate from their party voters at the last election.
A major argument for the amendments was the use of comparisons used in pay-equity claims. Much misunderstanding was used to support this. Minister Brooke van Velden said "You have librarians who've been comparing themselves to transport engineers", We have admin and clerical staff at Health New Zealand comparing themselves to mechanical engineers", “Social workers had compared themselves to air traffic controllers”. These cherry picked sound bites are great to support the government’s contention that the comparators were distorting pay equity outcomes. These sound bites do not capture the deep analysis that goes into establishing suitable comparators to establish a pay equity claim.
Importantly, the Committee found no evidence to support the Government’s suggestion that ‘claims have been able to progress without strong evidence of undervaluation.’ The report said that prior to the amendments New Zealand had a world leading human rights vehicle, with a robust pay equity assessment methodology with incredible research integrity, ethical practice, detailed planning, and built as a cooperative inquiry - full of checks and balances. The Committee found that it could not be “gamed”.
So why does it matter? Clearly there has been an acceptance in the recent past from both major parties that pay equity issues are real and worth addressing. It is based on the worthwhile premise that there should be equal pay for equal work. To eliminate discrimination based on gender in the workplace, most New Zealanders would agree that a person working in the same role, with similar experience, and with similar performance should in principle be paid the same. Women in the role should not be discriminated against and paid a lower rate.
The more insidious discrimination is harder to address. It has resulted in occupations that have been undervalued and underpaid based on whether they have been male or female dominated. Achieving pay equity is complex and needs to ensure that jobs that are different but of equal value are paid similarly, as a way to achieving gender equality. The recent legislation changes simply make it harder to establish pay inequity.
So what it has meant? Overnight the amendments cancelled 33 claims from female-dominated workforces which had been seeking to prove they were underpaid in comparison to similar male-dominated industries. The amendments also significantly raised the threshold for future claims. Female-dominated workforces which are generally considered to be underpaid in comparison to those dominated by men will continue to be undervalued. Those claims were in some of our most valued occupations - Plunket nurses, community midwives, hospice nurses and health care assistants, primary care nurses, nurses in residential care. In making the amendments the government also raised the bar for future claims to be successful.
The leader of the Act Party was more forthright in his thoughts on the amendments "I actually think that Brooke van Velden has saved the taxpayer billions, she's saved the Budget for the government and she has made pay equity workable for New Zealand women, men and everyone who wants a fair go in this country". Even if you strongly disagree with the Deputy Prime Minister, you may at least respect him for being upfront about his position.
But New Zealanders should be worried for two reasons. Firstly, some of our most valued occupations that have been historically dominated by women will continue to be underpaid for the work they do, compared to occupations that have historically been male dominated. Secondly, that previously hard won recognition by both major political parties of the importance of pay equity was stripped away by retrospective legislation, passed overnight under urgency, with no political mandate other than to save money. Read more.....