Clause 3 sets out the purposes of the Bill. There are 4 purposes—

• to provide for—

  • the elimination of existing sex discrimination in remuneration and other terms and conditions of employment; and

  • the prevention of future sex discrimination in remuneration and other terms and conditions of employment:

• to promote enduring settlement of pay equity claims:

• to set out the processes by which employees may make claims relating to sex discrimination:

• to re-enact, in an up-to-date and accessible form, the Equal Pay Act 1972.

Clause 4 sets out an overview of the Bill. The substantive part of the Bill is Part 2, which is divided into 4 subparts that deal with the following matters:

• subpart 1 establishes that employers have a duty not to discriminate on the basis of sex in remuneration or other terms and conditions of employment, and provides for claims of 2 kinds—

  • equal pay claims and unlawful discrimination (non-remuneration) claims; and

  • pay equity claims:

• subpart 2 sets out the process for employees to make an equal pay claim or an unlawful discrimination (non-remuneration) claim:

• subpart 3 sets out the process for employees to make a pay equity claim:

• subpart 4 deals with enforcement-related matters, and provides for offences, penalties, and regulations.

Clause 5 is the interpretation provision. Many expressions used in the Bill are defined in the Employment Relations Act 2000 and have the same meaning as in that Act. Other terms that are novel in this Bill are defined, including equal pay claim, merit, pay equity claim, and unlawful discrimination (non-remuneration) claim.

Clause 6 and Schedule 1 provide for transitional, savings, and related provisions (see the explanation of Schedule 1).

Clause 7 provides that the Bill binds the Crown.

Clause 8 establishes an employer’s duty not to discriminate between employees based on sex. The duty is described in 2 paragraphs as follows:

• clause 8(1)(a) applies to employees who perform the same, or substantially similar, work. In this situation an employer must not discriminate on the basis of sex in either remuneration or any other terms or conditions of employment. This is the same as the duty imposed by sections 2A and 3(3) of the Equal Pay Act 1972:

• clause 8(1)(b) applies to employees who perform work that is exclusively or predominantly performed by female employees. In this situation an employer must ensure that the remuneration paid for that work contains no element of sex-based differentiation.

Clause 8(3) elaborates on the meaning of sex-based differentiation. It provides that a rate of remuneration has an element of sex-based differentiation if it is less than the rate of remuneration that would be paid to male employees—

• with the same, or substantially similar, skills, responsibilities, and experience; and

• performing work under the same, or substantially similar, conditions; and

• performing work that involves the same, or substantially similar, degrees of effort.

Clause 9 describes the types of claim that can be made if an employee considers they have been discriminated against on the grounds of sex. A claim of discrimination under clause 8(1)(a) is called an equal pay claim if it relates to remuneration, or an unlawful discrimination (non-remuneration) claim if it relates to other terms and conditions of employment. A claim under clause 8(1)(b) is called a pay equity claim.

The processes for making and determining claims are set out in subparts 2 and 3 and differ depending on the type of claim as follows:

• subpart 2 applies to equal pay claims and unlawful discrimination (non-remuneration) claims:

• subpart 3 applies to pay equity claims.

Clause 10 provides that an employee cannot make both a complaint under the Human Rights Act 1993 and an equal pay, unlawful discrimination (non-remuneration), or pay equity claim, in relation to the same matter. This continues the equivalent restriction in section 2A(2) of the Equal Pay Act 1972 insofar as equal pay and unlawful discrimination (non-remuneration) claims are concerned, and provides for the same choice of proceeding to be made in the case of pay equity claims.

Clause 11 describes the process for making an equal pay claim or an unlawful discrimination (non-remuneration) claim. An equal pay claim is treated as a claim for the recovery of wages under the Employment Relations Act 2000. An unlawful discrimination (non-remuneration) claim is treated as a personal grievance claim of sex discrimination under section 103 of that Act.

Clause 12 establishes a 6-year limitation period for equal pay claims. It means that remuneration that relates to a period more than 6 years before a claim is filed cannot be recovered. This continues the equivalent restriction in section 13(3) of the Equal Pay Act 1972.

Clause 13 sets out the criteria to be applied when considering claims under clause 11. It provides that the Employment Relations Authority (the Authority) or the Employment Court (the court) must consider the following factors when determining whether work is the same, or substantially similar:

• whether the work calls for the same, or substantially similar, skills, degrees of skill, effort, experience, and responsibility from male and female employees; and

• whether the conditions under which the work is to be performed are the same, or substantially similar, for male and female employees.

These criteria are based on the criteria set out in section 3(1) of the Equal Pay Act 1972.

Clause 14(1) provides that 1 or more employees may make a pay equity claim if they consider that the claim has merit.

Clause 14(2) further sets out what it means for a claim to have merit. A claim has merit if—

• the claim relates to work that is predominantly performed by female employees; and

• there are reasonable grounds to believe that the work has been historically undervalued (for 1 or more of the reasons in subclause (3)); and

• there are reasonable grounds to believe that the work continues to be undervalued, taking into account all relevant matters (including the reasons set out in subclause (4)).

Clause 14(3) provides further reasons for historical undervaluation of work, which are—

• the origins and history of the work, including the manner in which wages have been set:

• any social, cultural, or historical factors:

• characterisation of the work as women’s work:

• that the nature of the work requires an employee to use skills or qualities that have been—

  • generally associated with women; and

  • regarded as not requiring monetary compensation.

Clause 14(4) provides further reasons for continued undervaluation of work, which are—

• features of the relevant labour market, industry, sector, or occupation (including a dominant source of funding, lack of effective bargaining, the market share of the employer, a lack of competition from other employers, and any other feature of the relevant labour market, industry, sector, or occupation); and

• failure by the parties to properly assess or consider the remuneration that should be paid to properly account for the work.

Clause 14(5) defines relevant labour market for the purposes of clause 14(4). The relevant labour market is that part of the labour market that comprises all workers who are substitutable because their work involves—

• the same, or substantially similar, skills and responsibilities; and

• experience under the same, or substantially similar, conditions; and

• the same, or substantially similar, degrees of effort.

Clause 14(6) states that a claim does not have merit if it relates to work that is covered by an existing pay equity claim settlement to which the employee is a party (unless the Authority or court determines otherwise).

Clause 15 sets out the process for making a pay equity claim, including a requirement that the claim must be in writing and must set out the factors that the employee relies on as evidence that the claim has merit.

Clause 16 provides that an employer who receives a pay equity claim must—

• acknowledge receipt of the claim within 5 working days; and

• give notice of the claim to all of the employer’s other employees who perform work that is the same as, or substantially similar to, the work performed by the claimant. The notice must be given as soon as is reasonably practicable and not later than 20 working days after the employer receives the claim. (This does not apply if the employer has already given notice of another claim that relates to the work.)

Clause 17 provides that an employer who receives a pay equity claim must decide whether, in the employer’s view, it has merit. The decision must be made and the claimant must be notified of the decision as soon as is reasonably practicable, and not later than 90 days after the employer receives the claim. However, the employer may extend the time limit for making the decision if the employer has genuine reasons, based on reasonable grounds, for doing so.

If the employer decides the claim does not have merit, the notice to the employee must set out the reasons for that decision and provide information about the steps the employee may take to challenge it.

If the employer decides the claim does have merit, the notice to the employee must provide information about the pay equity bargaining process.

If an employer fails, within 90 days of receiving the claim, to give notice to an employee who has made a pay equity claim (either of the employer’s decision or extending the time limit), the employer is deemed to have accepted that the pay equity claim has merit. In addition, if the employer gives notice of an extension of the time limit without having genuine reasons, based on reasonable grounds, the employee’s claim is deemed to have merit.

Clause 18 provides that the provisions relating to the pay equity bargaining process apply to a pay equity claim in the following 2 circumstances:

• if the employer decides the claim has merit:

• if the Authority or the court determines the claim has merit.

Clause 19 relates to the consolidation of claims by employees of the same employer, as follows:

• if an employer receives multiple claims that relate to the same, or substantially similar, work, the employer must treat those claims as 1 claim (unless the employer has genuine reasons, based on reasonable grounds, not to do so). The employer must notify all claimants of one another’s names and addresses for service (except where a claimant has requested confidentiality). If a claimant has nominated a person to act as their representative, the name and address for service of that representative must be provided to other claimants.

• the claimants must seek to reach agreement as to how the consolidated claim will be progressed, including who will represent them and how decisions will be made. If they cannot agree, any of them may apply to the Authority for a direction.

Clause 20 relates to the consolidation of similar claims against multiple employers, as follows:

• if multiple employers receive pay equity claims from employees who perform the same, or substantially similar, work, those employers may consolidate the claims for the purposes of the pay equity bargaining process. In that case, the employers must agree who will represent them and how decisions relating to the claim will be made.

• the employers must provide to each of their employees who has made a claim—

  • the name of every other employer that is a party to the consolidated claim; and

  • the name and address for service of the nominated representative of each of those other employers.

• at the conclusion of the pay equity bargaining process, each employer must enter into a separate pay equity claim settlement with their employees.

Clause 21 requires the parties to a pay equity bargaining process to act in good faith, in accordance with section 4 of the Employment Relations Act 2000.

Clause 22 requires the parties to a pay equity claim to provide information to one another that is reasonably necessary to support the claims or responses to claims, if that information is requested in writing. It also enables confidential information to be provided, instead, to an independent reviewer.

Clause 23 sets out the matters that must be assessed for the purposes of pay equity bargaining. They are—

• the nature of the work to which the claim relates and the nature of comparable work (including the skills required, responsibilities imposed, working conditions, terms and conditions, degree of effort, and level of experience required to perform the work):

• the remuneration paid to persons who perform the work:

• the remuneration paid to persons who perform comparable work.

The clause provides that the assessment must be undertaken objectively and without assumptions based on sex, and must recognise the importance of skills, responsibilities, effort, and conditions that have traditionally been overlooked or undervalued in female-dominated work.

Clause 24 sets out how appropriate comparators must be identified for the purposes of assessing a pay equity claim. Clause 24(1) provides that comparable work is work that is the same as, or similar to, the work to which the claim relates. It may include—

• work performed by male comparators that is the same as, or substantially similar to, the work to which the claim relates, in circumstances in which the male comparators’ work is not predominantly performed by female employees; or

• work performed by male comparators that is different to the work to which the claim relates, if the comparator’s work involves the same, or substantially similar, skills and experience, responsibilities, working conditions, or degrees of effort; or

• work performed by any other comparators that the parties or the Authority consider useful and relevant, including comparators who perform work that has previously been the subject of a pay equity settlement.

Clause 24(3) establishes a hierarchy for selecting appropriate comparators. Comparators that are most closely related to the employer’s business must be selected on the following basis:

• if 1 or more appropriate comparators exist within the employer’s business, that comparator or those comparators must be selected for the assessment:

• if no appropriate comparator exists within the employer’s business, 1 or more comparators from similar businesses must be selected for the assessment:

• if neither of the above applies, appropriate comparators from within the same industry or sector must be selected for the assessment:

• comparators from a different industry or sector may only be selected for the assessment if no other appropriate comparators exist.

However, clause 24(4) clarifies that a male comparator may not be used if the work performed by that male comparator is work that is predominantly performed by women and there are reasonable grounds to believe it has been historically undervalued and continues to be undervalued.

Clause 25 sets out when a pay equity claim is settled. In particular, it provides for written agreement as to remuneration and a review process.

Clause 25(2) provides that an employer may not reduce any of an employee’s terms and conditions of employment for the purpose of settling a pay equity claim made by that employee.

Clause 26 describes the relationship between pay equity claims and collective bargaining. It states that—

• entry into a collective agreement does not settle or extinguish an unsettled pay equity claim; and

• the existence of an unsettled pay equity claim is not a justification for failure to conclude collective bargaining.

Clause 27 provides that the parties to a pay equity claim may refer any issue relating to that claim to mediation services. The provisions of the Employment Relations Act 2000 that relate to mediation apply to pay equity claim issues that are referred for mediation.

Clauses 28 to 36 provides for the parties to a pay equity claim to refer any issue relating to the claim to the Authority for facilitation. The clauses are based on sections 50A to 50I of the Employment Relations Act 2000 (being the provisions that govern facilitated bargaining for collective agreements).

Clause 28 provides that the purpose of the facilitation provisions is to provide a process for the parties to seek help from the Authority to resolve difficulties they are having in relation to a pay equity claim. It also provides that the provisions do not prevent the parties seeking assistance from another person to resolve their difficulties.

Clause 29 sets out the process to refer an issue relating to a pay equity claim to the Authority. It gives the following examples of the sorts of issues that could be referred:

• a dispute about whether a claim has merit:

• a dispute about whether work is comparable work:

• a dispute about whether proposed remuneration no longer discriminates on pay equity grounds.

Clause 30 sets out the circumstances in which the Authority may accept a reference for facilitation. They are—

• when the Authority is satisfied that its expertise may be useful to resolve the issue; and

• when 1 or both of the following grounds exist:

  • a party has failed to comply with the duty of good faith, in a way that is serious and sustained and has undermined the progress of the claim:

  • sufficient efforts (including mediation) have failed to resolve an issue relating to the claim.

Clause 30(3) sets limits on the circumstances in which the Authority may accept a subsequent reference for facilitation in relation to the same pay equity claim.

Clause 31 provides that a member of the Authority who accepts a reference for facilitation must not then be a member of the Authority who facilitates resolution of the issue.

Clause 32 sets out the process to be followed during facilitation. The key aspects are that—

• facilitation is conducted in private:

• the process is determined by the Authority:

• pay equity bargaining continues during facilitation, subject to the process determined by the Authority:

• the Authority is not acting as an investigative body during facilitation:

• the provision of facilitation may not be questioned in proceedings on the ground that the nature and content of the facilitation, or the manner in which it was provided, were inappropriate.

Clause 33 provides that statements made by the parties during facilitation are not admissible against that party in proceedings under the Bill or the Employment Relations Act 2000. It also provides that public statements about facilitation may only be made in good faith and must be limited to the process of facilitation or the progress being made.

Clause 34 provides that proposals made by a party, or positions reached by the parties, during facilitation are not binding after the facilitation ends. However, this is subject to any agreement between the parties.

Clause 35 enables the Authority to make a recommendation about any matter relating to a pay equity claim. Recommendations are not binding but must be considered by the parties. Examples of the sorts of recommendations that the Authority might make are recommendations as to—

• whether a claim has merit:

• the process the parties should follow to reach agreement:

• terms and conditions of employment (including remuneration) that would no longer discriminate on pay equity grounds.

Recommendations may be publicly notified.

Clause 36 requires the parties to a facilitation to deal with the Authority in good faith.

Clause 37 provides that a party to a pay equity claim may apply to the Authority or the court for determination of any matter that relates to the claim. Examples of the sorts of determinations that may be sought from the Authority or the court are—

• a determination as to whether a claim has merit:

• a determination fixing terms and conditions of employment (including remuneration) that do not discriminate on pay equity grounds.

Before considering an application for a determination, the Authority or the court must first consider whether an attempt has been made to resolve the difficulties by mediation or facilitation, and the Authority or the court may direct the parties to try those options. If any of the grounds in clause 30(2) exist (which relate to a serious and sustained failure to comply with the duty of good faith and failure to make sufficient efforts to resolve the claim), the Authority or the court must direct that facilitation be used before investigating, unless the Authority or court considers facilitation will not help, is not in the public interest, will undermine the urgency of the process, or is otherwise impractical or inappropriate.

Clause 37(3) relates to applications for a determination that a claim has merit despite clause 14(6) (which provides that claims that relate to work that is covered by an existing settlement do not have merit unless the Authority or court determines otherwise). When determining applications of this kind, the Authority or court must have regard to the existing pay equity claim settlement and make an order only if it is satisfied that there are exceptional circumstances.

Clause 38 provides that if the Authority or the court determines that a pay equity claim has merit, the parties must enter into the pay equity bargaining process.

Clause 39 relates to applications to the Authority to fix terms and conditions of employment. It provides that if the Authority has not already directed the parties to try to resolve the difficulties by mediation, it must do so, or recommend another process that the parties must follow. The Authority may accept an application for a determination to fix terms and conditions only if the parties have first tried mediation, or another process recommended by the Authority, and the Authority is satisfied that all other reasonable alternatives for settling the claim have been exhausted.

Clause 40 establishes a limitation period for equal pay claims in cases where the Authority fixes terms and conditions of employment. It has the effect that the Authority cannot issue a determination awarding arrears of wages under section 131 of the Employment Relations Act 2000 in respect of a period that is earlier than the date on which an employee’s pay equity claim is delivered to an employer. (This does not prevent the parties to a pay equity claim from reaching a negotiated settlement that includes back pay to a date before the date on which the employee’s pay equity claim was delivered to the employer.)

Clause 41 obliges employers to keep certain records in respect of pay equity claims.

Clause 42 provides that an employer must not treat adversely an employee who makes a claim under the Bill. The provision is based on equivalent provisions in the Employment Relations Act 2000 and the Shop Trading Hours Act 1990. Such an employee who considers that they have been adversely treated may bring a personal grievance claim against their employer.

Clause 43 sets penalties for failure to comply with specified duties in the Bill. The penalty for a breach of 1 of the following duties is a maximum penalty of $10,000 for an individual or $20,000 for a body corporate:

• the duty under clause 8(1)(a) to not discriminate on the basis of sex between employees who perform the same, or substantially similar, work in remuneration (equal pay) or any other terms or conditions of employment (unlawful discrimination (non-remuneration)):

• the duty on employers who decide a pay equity claim has merit to enter into pay equity bargaining:

• the duty to act in good faith during facilitation:

• the duty on employers to keep records relating to pay equity claims:

• the duty not to adversely treat an employee who has made a claim.

Clause 44 establishes a process for employees of the education service to make pay equity claims to the State Services Commissioner, and provides for the State Services Commissioner to have the rights, duties, and obligations of an employer in the process of settling the claim. It also provides for any pay equity claim settlement agreement reached with the Commissioner to be binding on affected employers in the education service, and for those employers to be represented in the pay equity bargaining process.

Clause 45 empowers the making of regulations to prescribe matters that must be taken into account—

• when considering or determining whether a pay equity claim has merit:

• when assessing a pay equity claim:

• when identifying appropriate comparators.

Clauses 46 to 48 make amendments to sections 100A and 100C of the Employment Relations Act 2000. Those sections currently enable the Minister to approve codes of employment practice to provide guidance on the application of the provisions of that Act.

The amendments in clause 47 empower the Minister to also approve codes of employment practice to provide guidance on the application of this Bill (once enacted) and other Acts specified in section 223(1) of the Employment Relations Act 2000 (being the Holidays Act 2003, the Home and Community Support (Payment for Travel Between Clients) Settlement Act 2016, the Minimum Wage Act 1983, the Parental Leave and Employment Protection Act 1987, the Volunteers Employment Protection Act 1973, and the Wages Protection Act 1983), or any regulations made under them.

A new section 100A(5) is also added that provides that a code of employment practice is not a legislative instrument but is a disallowable instrument for the purposes of the Legislation Act 2012.

Clause 48 provides that the Authority or a court may have regard to a code of employment practice as evidence of compliance with the provisions of the enactment to which it relates, and may rely on the code in determining compliance with those provisions.

Clause 49 and Schedule 2 make consequential amendments to the Employment Relations Act 2000.

Clause 50 repeals the Equal Pay Act 1972 and the Government Service Equal Pay Act 1960.

Schedule 1 sets out transitional provisions. In particular,—

• clause 1 defines an Equal Pay Act claim as meaning any claim (whether or not formally commenced by an application) that alleges a breach of a provision in the Equal Pay Act 1972:

• clause 2 provides that, after the Bill commences,—

  • no new claims may be made under the Equal Pay Act 1972; but

  • new claims may be made under this Bill that relate to conduct that would have breached the Equal Pay Act 1972:

• clause 3 relates to Equal Pay Act claims that have been filed in the Authority or a court when the Bill comes into force and that are awaiting determination. Those claims are all discontinued, but they may be recommenced under the provisions of the Bill.

• clause 4 sets out the following limitation provisions that apply if a claim is discontinued and recommenced:

  • in the case of equal pay claims, the 6-year limitation period that applied at the date on which the claimant’s original claim was filed is preserved for the purposes of the recommenced claim:

  • in the case of pay equity claims, however, any determination that fixes terms and conditions of employment must not provide for recovery of an amount in respect of any loss or damage that occurred before either:

    • the date on which the original claim was filed, if that date was before 1 February 2018; or

    • the date on which the Bill comes into force, if the original date of filing was on or after 1 February 2018.

• clause 5 provides that any Equal Pay Act claim that has been determined before the date the Bill comes into force may be appealed under the provisions of the Equal Pay Act 1972:

• clause 6 applies if, before the Bill commences, the parties to a pay equity claim have entered into a written pay equity bargaining agreement that includes an assessment of the matters in clause 23 of the Bill. It provides that any determination that fixes terms and conditions of employment must not provide for recovery of an amount in respect of any loss or damage that occurred before—

  • the date on which the parties entered into the written agreement, if that date was before 1 February 2018; or

  • the date on which the Bill comes into force, if the written agreement was entered into on or after 1 February 2018.

  The clause also enables any pay equity bargaining that takes place before the Bill comes into force to be taken into account when the Authority is considering whether sufficient efforts have been made to resolve an issue in the context of an application for facilitation or for a determination:

• clause 7 provides for certain written settlement agreements that are entered into before the Bill commences to be treated as existing pay equity claim settlements for the purposes of clause 14(6) (being the clause that establishes a presumption that a claim does not have merit if it is subject to an existing pay equity claim settlement).

Schedule 2 makes consequential amendments to the Employment Relations Act 2000.