Wallflower at pay equity party

By PAULA OLIVER

Business and employer groups are upset that a taskforce that will make crucial pay equity policy recommendations to the Government does not include any private sector representatives.

They say that the taskforce, established by Labour Minister Margaret Wilson, will have flow-on effects for private business - and it is therefore wrong to have it stacked with union representatives.

The taskforce will report to the Government by the end of this year on how to progress pay equity between women and men in the public service, the public health sector and the education sector.

Its establishment is confirmation that pay equity legislation of some kind is on the Government's agenda.

But the pay equity issue is very much a political hot potato.

Closing the gap between women's and men's pay packets was tried in 1989, when the then Labour Government introduced union-backed legislation promoting equal pay for work of equal value.

The move included a process of job evaluation, and the possibility that a nurse's work could be compared to that of a police officer - or a builder to a cafe worker.

It was founded on statistics which showed that women's pay lagged significantly behind men's, and that the gap was not closing very quickly.

But the initiative, pushed by then Labour Minister Helen Clark, came to an abrupt halt when the National Government repealed it in 1990. Now pay equity is back on the radar screen.

The establishment of the taskforce comes after a pay-equity discussion paper from the Ministry of Women's Affairs attracted 83 submissions, mostly in favour of new legislation.

Pay equity was defined as women getting the same pay as men for doing a comparable job - one involving comparable skills, years of training, responsibility, effort and working conditions.

The taskforce's job will be to analyse how factors influencing pay and employment equity apply in the public sector. It will develop a five-year plan of action to address them.

Chaired by Retirement Commissioner Diana Crossan, it contains the chief executives of the Department of Labour, Ministry of Women's Affairs and the State Services Commission, and is rounded out with three, possibly four, nominees from the Council of Trade Unions.

Business New Zealand executive director Anne Knowles says that the pay-equity proposals for the public sector would have an automatic flow-on effect for those doing the same work in the private sector.

Citing the example of nurses and teachers, Knowles said that a pay increase for a public hospital nurse would have a profound impact on the ability of a private nursing home to stay in business. Similarly, private schools.

"This proposal will clearly impact on the private sector - the minister acknowledges as much by calling it a 'model' for other sectors," Knowles said. "This public sector committee will impose significant costs on private companies though it in no way represents them."

A spokeswoman for Margaret Wilson said that the taskforce contained members with private sector experience.

Groups such as Business New Zealand would get their say when the Government was in a position to look at the proposals.

"The people on the taskforce are a competent group of people and they've been chosen for the skills they bring. One of the criticisms is that there are too many union representatives - but these are representatives of the actual workforces which are being affected. That's why they're there."

The taskforce's job is a big one.

It was easier to develop pay equity legislation in 1989 because a national award system existed.

The Employment Contracts Act eroded that, and much of the work done for the 1989 legislation appears useless in the present environment.

"I don't think it's a case of going back to the methodology of 10 years ago," CTU president Ross Wilson said. "That's really the purpose of this taskforce process to some extent, to identify ways that inequity can be addressed in the context of a still pretty decentralised labour market system."

Wilson said he hoped that the public sector initiatives did flow through to the private sector.

He said it was clear that there was a pay gap between women and men, and it was something that employers should be concerned about.

"We subscribe to some fairly core International Labour Organisation conventions that have at their heart the elimination of pay discrimination."

A huge amount of pay equity research exists internationally, and it appears likely that the taskforce will take a close look at recent work in Britain for inspiration.

There, an Equal Pay Taskforce made up of senior private and public sector figures, employers and trade unions, reported to the British Government in 2001. It found that unequal pay was unjust, and that there were three key reasons for it: discrimination in pay, occupational segregation and the impact of family responsibilities.

It proposed a five-pronged, multi-level approach to eliminate the pay gap over eight years.

PSA national secretary and soon-to-be taskforce member Lynn Middleton pointed to the British work when asked if there were examples she would like to see New Zealand investigate.

The PSA has come up with a broad framework that it is putting forward, taking in a lift to the minimum wage, changes to the Employment Relations Act, promoting affordable childcare, and setting up an advisory service for pay equity.

Its wide approach is supported by other unions.

Middleton said that any new legislation had to reflect that the labour market was much more complex and sophisticated than it was in 1991.

But she agreed that at the heart of new pay equity legislation there needed to be job evaluation. The question of how that is achieved is not an easy one.

In 1991 the Department of Labour and the State Services Commission produced a document entitled "Equity at Work: An Approach to Gender Neutral Job Evaluation". It was an instructional document to help employers conduct evaluations.

It ensured that human skills and emotional demands were considered, and suggested a process where a job was rated using 14 factors with five levels each. It said employee organisations such as unions must be consulted.

After conducting an interview with employees or getting questionnaires filled in, a graph was mapped of overall female and male pay.

If there was a gap between the lines, the theory was that this proved a need to address pay inequity.

No one yet knows how evaluations will work in the future - that is the job of the taskforce to consider.

The British taskforce made a strong recommendation that Britain's Equal Pay Act be amended to require employers to carry out regular equal-pay reviews.

It said they should be audited by a national office or external auditor, and a report issued on the adequacy of the review.

Middleton also agreed that pay equity legislation was reliant on knowing what others were earning.

"We shouldn't be frightened of that. I would say that if you are asked to sign a privacy clause, you should be suspicious.

"It's different if you wish to keep it private. But until we start talking about it, and having open and transparent pay scales and systems, then unfortunately there is evidence that discrimination occurs."

Business New Zealand is adamant that pay equity legislation would inhibit business growth and the economy.

It argued in a submission to the Ministry of Women's Affairs that labour market dynamics made pay differentials unavoidable.

For example, if a zookeeper was harder to find than a childcare worker, it was inevitable that the zookeeper would be enticed with higher wages - no matter how comparable the jobs were.

Knowles said that the focus should be on equal employment opportunities for everyone.

"To try and reintroduce the failed policies of the past shows a lack of recognition of commercial reality, and will only harm the economy."

Other employer groups and the Business Roundtable argued that legislation would artificially raise wages and distort the labour market.

The taskforce will formulate an action plan over the next two months and report to the Government by the end of the year.