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New Equal Remuneration Priniciple

On 30 June 2000, the NSW Industrial Relations Commission made a new Equal Remuneration and Other Conditions principle (view the decision). Unions will now be able to seek variations to awards by establishing that the rates in the award are undervalued on a gender basis.

The new principle follows a recommendation of her Honour Justice Glynn of the Commission, in the NSW Pay Equity Inquiry that a new principle to address undervaluation be made.

Accepting evidence of undervaluation based on sex and noting the significant human rights framework of the Industrial Relations Act 1996, the Commission agreed to rescind the existing 1973 Equal Pay Principle and establish the Equal Remuneration and Other Conditions Principle.

The new principle:

• allows for fresh assessments of the value of work and the rates of pay in an award where the current rate is undervalued on a gender basis;
• does not require applicants to prove discrimination;
• ensures that the reassessment of the value of work is gender-neutral;
• does not require comparisons to be made, but where they are used they can be made across dissimilar work and across enterprises;
• is limited to awards, although account can be taken actual rates paid where they reflect the value of work;
• provides a range of measures to remedy gender-related undervaluation; and
• includes a range of economic safeguards.

The Commission will also issue a practice direction requiring parties to consent awards to file an affidavit setting out why they believe that the proposed award provides for equal remuneration and other conditions of employment for men and women doing work of equal or comparable value.

Key aspects of the new principle

Applications to rectify gender based undervaluation

Applications can be made to re-assess work and re-evaluate the work value of an award, on the basis that:

• the rate of pay does not represent a proper valuation of the work; and
• that the undervaluation is related to the sex of those performing the work (see para 71 and paragraph 15(a) of the new principle).

This test does not require a finding of discrimination, although where there is discrimination, this may also be evidence of undervaluation (see para 153).

The Commission said that the principle is designed to avoid the raising of preliminary matters designed to strike out applications. However, each case will be assessed on a factual basis and the absence of evidence of undervaluation on a gender basis will be fatal to a claim (see paras 72-73).

The Commission notes, that while each case is to be based on its merits, it is unlikely that occupations and industries that do not have 60% female (or male) domination are unlikely to satisfy the criteria (see para 71).

In assessing any gender-based undervaluation the Commission will consider the history of the award (see paragraph 15(e) of the new principle.

The evidentiary burden in any case falls on the applicant (para 150).

Work value assessments to be gender-neutral

Re-assessments under the principle will use the Commission's traditional work value criteria - assessing the work, skill and responsibility required and conditions under which work is performed.

Assessments are to be approached on a gender-neutral basis (see paragraph 15 (a) and (b) of new principle).

Comparators may be used but are not necessary

Comparisons with other occupations and industries may be used to demonstrate undervaluation on a gender basis, but are not necessary.

Where comparisons are used they may be made across and within awards. Where comparisons are used, rates in awards reflecting labour market attraction, retention or productivity are not to be considered (see para 154 and paragraph 15(c) of the new principle).

The Commission accepts that it is possible to bring evidence of overaward payments, where they reflect the value of work rather than labour market factors (para 151). However, the Commission stresses that such comparisons would require significant and cogent evidence (see para 139-140).

The Commission will not increase rates based on overawards paid to another classification where this may lead to leap frogging in wages (see para 154).

Economic and employment impact

Significant safeguards to protect employment are incorporated. The Commission will consider changes in wage relativities both within the award and against external classifications.

Any changes to awards may be phased in and absorbed against any overaward payments, and there is to be no reconsideration of work value adjustments already awarded by other wage fixing principles.
The Commission must also to consider the state of the NSW economy, the impact on employers and employment in the industry affected (paragraphs 15 (f), (I), (j) and (m) of the new principle).

Remedies

A broad range of remedies is provided including increasing rates, changes to conditions of employment, new career paths or changes in incremental scales.

Remedies can also be limited to groups of employees, by creating new classifications rather than increasing rates for the whole classifications (paragraphs 15(h) and (k) of the new principle.

Summary of Findings and Recommendations of the Pay Equity Inquiry

You can download the full text of the Summary of Findings and Recommendations of the Pay Equity Inquiry in Adobe PDF Format .   

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