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Pay Equity

Sometimes called 'pay equity', 'equal pay for work of equal value' or 'comparable worth', the idea behind pay equity is that men and women should be paid the same for work of equal or comparable value. So women who perform work that has equal levels of skill required or responsibility involved, under the same or comparable conditions, should be paid the same as men.

In theory, women in Australia have been paid the same as men since the equal pay decisions of 1969 and 1972 in the federal Conciliation and Arbitration Commission. But even today, statistics show that women still earn less than men. Currently in the NSW public sector the most recent statistics show that women in full time work earn only 84% of what men earn, and for women in all forms of work (that includes, part time and casual workers) only 67%.*

The gap between women's and men's earnings occurs for a number of interrelated reasons, but these can most easily be described as either equal pay factors or equal opportunity factors.

Equal pay factors which contribute to the earnings gap include:

  • The undervaluation of women's skills - This is due to a range of social historical and industrial factors. Long held prejudices about women and the nature of their skills have prevented any objective assessment of women's work. The most obvious example happens where women's skills are viewed as 'natural attributes' rather than workplace skills. This particularly includes skills like caring and nurturing skills and communication skills.

  • Women's lower share of discretionary payments: - Women workers continue to receive significantly lower levels of discretionary payments compared to men. These include such things as over award payments, bonuses, service increments, commissions and profit sharing payments. To make matters worse, women tend to be concentrated in jobs and industries where there is no access to these kind of payments

Equal opportunity factors which contribute to the earnings gap include:

  • Occupational and industrial segregation - Women workers tend to be concentrated in particular occupations and industries (for example teachers, nurses, childcare workers) because of societal expectations about what is suitable work for women and in some cases, historical restrictions on what work women are legally allowed to perform

  • Access to education and training - In many cases women's work skills are not formally recognised and are developed outside the formal education and training systems. Women also tend to be concentrated in traditional areas of education and training before they enter the workforce.

  • The impact of family responsibilities - Working women usually carry a greater share of the responsibility for caring for other family member and performing unpaid work in the home than working men. This may effect their earnings because they:
    1. May not be able to work full time, take on extra responsibilities, access training and career development opportunities or work in jobs where flexible working arrangements are not available;
    2. May have broken employment patterns due to career breaks to care for children or other family members which are likely to have a negative impact on career progression;
    3. May be subject to employers' negative perceptions about the effect of family responsibilities on work performance, attitude and loyalty to the organisation which in turn may affect pay and promotional prospects.

  • Women's concentration in part time and casual employment - While the availability of part time work is important for many women (and men) with family responsibilities, women's concentration in part time and casual employment has implications for pay equity. These include:
    1. Lower levels of access to training and more limited opportunities for advancement and career development than full time workers. This may be partly due to many employers believing that part time and casual employees are not comitted to their jobs;
    2. Lower levels of unionisation and participation in unions than full time employees (Part-time, casual and women workers are benefiting most from union membership, earning up to 43% more than their non-union colleagues, according to Australian income figures released in 2002)
    3. In the case of casual employment, women have no permanency and few employment benefits.

  • Deregulation of the labour market - In Australia the centralised wage fixing system had for many years been credited with our relatively good performance in closing the gender age gap, compared to countries with more decentralised systems. Since the Howard Government's attacks on the Australian unions in the early 1990s and the widespread introduction of enterprise bargaining, the gender wage gap in Australia has widened. This is due to a combination of factors such as women having less bargaining power due to generally less aggressive personalities, less labour force experience, lower representation in full-time employment and the trade union movement, with union influence often favouring men.

Timeline on pay equity

The following timeline charts the major Australian pay equity milestones since federation:
!907 The Federal Harvester Case establishes a basic wage for males on the basis of their `breadwinner' status.
1912 In the Fruitpickers Case, the Commonwealth Conciliation and Arbitration Commission rejects an argument that the male and female basic wage be the same.
1919 The basic female wage is set at 54% of the male basic wage.
1943 The basic female wage is raised to 75% under the National Security (Female Minimum Rates) Regulation.
1958 NSW becomes the first Australian industrial jurisdiction to legislate for equal pay in the Female Rates (Amendment) Act 1958.
1969 The first Federal equal pay case establishes the principle of equal pay for equal work.
1972 The second Federal equal pay case widens the 1969 principle to equal pay for work of equal value.
1973 In NSW, the Industrial Relations Commission hands down the State Equal Pay Decision.
1985 The doctrine of `comparable worth' is rejected by the Federal Commission because of the threat posed by it to existing wage relativities and wage fixing principles.
1988 Award restructuring principles to create appropriate relativities between categories within an award are adopted in the National Wage Case.
1989 The Minimum Rates Adjustment principle is incorporated in the National Wage Case decision. It allows for minimum rates and supplementary payments to be compared to rates in other awards.
1991 The NSW Industrial Relations Act 1991 establishes a framework for enterprise-based negotiations. The legislation carries over equal pay provisions from the former Industrial Arbitration Act 1940
1993 The Commonwealth legislates for equal renumeration orders, based on ILO Convention 100.
1996 The NSW Industrial Relations Act 1996 is passed by the NSW Parliament. It updates a previous definition of equal pay to "equal remuneration for men and women doing work of equal or comparable value". The Commonwealth Workplace Relations Act 1996 is passed, which carries over the Equal Remuneration Division of the former Commonwealth legislation.
1996 NSW Pay Equity Taskforce established as part of the NSW Government's Pay Equity Strategy, to consider the undervaluation of women's skills and ways of dealing with pay equity in NSW. Major recommendation that the NSW IRC should conduct an Inquiry into Pay Equity by Ministerial reference.
1998 Pay Equity Inquiry conducted by NSW IRC (Justice Glynn). Report recommended pay inequity be dealt with via existing NSW industrial relations system by amending the NSW Industrial Relations Act & that a new equal remuneration principle should be developed.
2000 Full Bench of the NSW IRC hands down a decision in June 2000 following a Labor Council application to the Commission to implement the recommendations of Justice Glynn's report. This decision established a new wage fixation principle - the Equal Remuneration and other Conditions Principle which provides a mechanism for improving wage justice for women in occupations that have been traditionally undervalued because of gender.
2000 PSA lodges an application under the new Equal Remuneration Principle to address pay equity for public sector librarians, library technicians and archivists.
2002 PSA wins an average of 16% in wage rises in library workers test case in NSW Commission. The judgement recognises that their work is undervalued because the jobs were historically done by women and that these workers are professionals on a par with legal and scientific officers, engineers and psychologists.

Where to Now?

The PSA has been involved in fighting for pay equity for women since the 1920s when activists Jean Arnot and Millie Hoy fought for equal pay for equal work.

In 2003, there remains a gender wage gap in the NSW public sector of more than 10% for full time workers and more than 30% for all workers so there is still a long way to go.

The union is still fighting for flow ons from the library workers test case. PSA members in libraries also work in a range of agencies and universities who aren't covered by this award and the union continues to fight for commensurate wage increases for those workers.

While the PSA's case was a fantastic win for library workers and a historic milestone in the fight for pay equity, there for a number of aspects not really tested in our case - in particular the extent that an employer's 'capacity to pay' case be use as an argument against wage rises. As our employer in the state government, it is difficult for this to be an issue.

A second case under the NSW Equal Remuneration Principle has yet to be run although unions with coverage of local government workers and childcare workers are looking to run cases at the time of writing.

* NSW Public Sector Workforce profile, 2000

Sources: Women's Equity Bureau, NSW Department of Industrial Relations, Pay Equity Fact Sheets 1-3, 1996


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