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<< Return to previous page | House of Representatives Standing Committee on Employment and Workplace Relations Navigation: Contents | Next Page Preliminary PagesForewordPay equity or the lack of it was one of the issues that sparked my interest in politics and social justice. As a young woman I was outraged that someone could or would be paid less for their work because of their gender. It angers me that over 30 years later, despite some progress, this is still the case. Commissioner Dominica Whelan who chaired the Victorian Government’s Pay Equity Working Party in 2004-2005, wrote a paper in 2005 about the future of pay equity in Victoria. Her opening paragraphs ring true today; “WHERE WE ARE ‘In 1972 the Australian Conciliation and Arbitration Commission granted men and women the same minimum wage. In theory, then, women in Australia have finally achieved the right to equal pay. In practice, the principle of ‘equal pay for equal work’ is still ‘abstract justice’ rather then ‘practical politics’. Many factors, such as the segregation of women into female-only occupations, the application of the principle to the minimum wage and not to over award payments, and discrimination in education and job training, have contributed to the fact that for many women equal pay is just not a reality. That is the opening paragraph of a paper which I gave to an Australian Political Economy Conference in 1978. In the last 28 years we have defined the causes of wage inequity more precisely. We have measured the gender pay gap against a whole range of variables. We have accounted for the different factors that contribute to the reality that women are still being paid less than men. We have satisfied ourselves that accounting for all those factors discrimination still lies at the root of wage inequality. But in some ways, after the initial gains (the wage gap narrowed by about 17 per cent between 1969 and 1976) we have made little progress in making equal pay a reality for many women.” Sadly, the average industry gender pay gap still stands around 17% today with some industries like finance and insurance at 31.9% and in Western Australia at 35.7% even under boom conditions. Many of the submissions to the Inquiry highlighted the concern that many Australians are unaware of the existence of a “pay gap” between men and women’s earnings. The Diversity Council of Australia with the Equal Opportunity for Women in the Workplace Agency (“EOWA”) undertook polling research to assess community awareness of pay equity and presented the findings to the Inquiry. That research found that most Australians do not know what pay equity means but while they were aware that a pay gap between men and women’s earnings exists, did not know what the size of the gap is. Most believe steps should be taken to close the gap between men and women’s earnings when they were made aware. Based on the submissions we received, I believe there is strong community support for taking action to address gender pay inequity. Australian women have much to celebrate. They have achieved high public office. Women are Chief Executive Officers, business leaders, community leaders; they are Nobel Laureates, academics; they are Parliamentarians, Local Councillors, sporting legends as well as mothers, sisters and partners. Australian women have more choices about their lives, their studies, their careers, their families and how they chose to live them than ever before. However, whilst women hold the offices of Deputy Prime Minister, Governor General and the current Premier of Queensland we have a very long way to go before our parliaments are truly representative of our community. Since Federation, of the 1,059 people elected to the House of Representatives only 77 have been women. Forty of the current 150 members of the House are women—only 26.7 per cent. In the business sector women represent less than 2 per cent of our CEOs and Chair only 2 per cent of our top 200 ASX companies. Indeed in the 2008 Australian Census of Women’s Leadership conducted by the Equal Opportunity for Women in the Workplace Agency, women went backwards on most of the key indicators compared to the 2006 census survey. The Australian workforce is highly gender segmented, women predominate in 4 or 5 industries and occupations. Women are more likely to be employed in low paying jobs with little or no career pathways. They are more likely to be employed as casuals and part time workers. They are more likely to have interrupted work patterns and breaks in their paid employment. Women have not fared as well as men in enterprise bargaining or individual contracts. They appear to be employed in workplaces or situations where they have little bargaining power. Women are more likely to be dependent on pensions as they age because of the great disparity in the accumulation of superannuation and retirement monies compared to men. Women miss out on the opportunity to accumulate superannuation because of interruptions to paid employment for family reasons (to have and care for children) compounded by lower pay. It was remarkable from the evidence before the Committee how prevalent pay inequity is. It was evident in all industries and it was experienced by working women at all skill levels. Indeed there was evidence of professional women being paid less than their male counterparts for doing the same work in the same firm. It is also clear from the evidence presented to the Inquiry that the gender pay gap in Australia has grown, especially since 1992. We have gone backwards. This is not good enough and the time to act is now. Some will say that we should wait – for what I am not sure, divine intervention? It is 40 years since equal pay was granted by the Australian Conciliation and Arbitration Commission. Haven’t Australian women been waiting long enough? Some will say that it will be costly to government and business to make pay fair, that we can’t afford it – I’m not sure how this position can be justified. How can Australian women continue to afford it? It is not alright to let this injustice continue and to become further entrenched. Given the link between productivity and pay equity – how can Australia not afford it? Some will want to focus on education campaigns promoting community and business awareness of pay inequity without imposing change or offering a mechanism to achieve pay equity. We have had over a decade of precisely that policy approach and the evidence is unequivocal, the pay gap has widened. From the outset of the Committee’s Inquiry we agreed that we needed to go beyond past reports because we wanted substance to our recommendations, to recommend legislative reform if that was required, to use best practise examples that worked and to build on successful initiatives in states, territories and individual workplaces and internationally. We have heard from many witnesses and received many submissions. Australia should take a pro-active approach to address the gender pay gap. We need to plan for pay equity and deal with the barriers to women’s participation in the workforce. Increasing women’s participation in the workforce will lead to increases in productivity for the nation. The Australian Government’s decision to deliver Paid Parental Leave in this year’s budget was a welcome reform and will benefit working women and their families. It is one example of a policy reform that will help break down the barriers to greater workforce participation by women. There was a great deal of evidence presented that went to the situation of women employed in the aged care sector. Whilst the recommendations of this report do not specifically address this industry it is clear that action needs to be taken to improve wages and conditions. The scheme suggested will establish a system that will facilitate fairer outcomes for those whose work is undervalued. I am aware of the dependence on the Australian government for the funding of this sector. I urge the responsible Ministers (including the Minister for Finance) to look at how we can responsibly increase the funding for wages in this sector. At the heart of the gender pay gap is the failure to truly value traditional women’s work – paid or unpaid. We do not count women’s unpaid work – domestic responsibilities, child rearing or caring in our gross domestic product or major economic indicators. Whether it’s cleaning, catering or caring it is essential work. t is critical to the well being of our community. As humans we value caring and nurturing, we implicitly understand how it affects our well being. To continue to undervalue women’s work is simply not just. It is difficult to think of any other policy equivalent that clearly disadvantages a particular class of Australians that we do not rush to correct. This report sets out a scheme to act to close the gender pay gap. It includes proposed amendments to the Fair Work Act 2009, greater powers for the Sex Discrimination Commissioner to act on wage discrimination and the establishment of a specialist Pay Equity Unit within Fair Work Australia with a broad mandate for change. We have called for change in other policy areas such as the removal of the $450 per month earnings requirement in compulsory superannuation and the implementation of comprehensive portability of employment entitlements legislation. We have also recommended that the Australian Government lead by example acting on pay inequity within the Australian Public Service as well as applying pay equity principles in all its administrative approaches. Finally we acknowledge there are significant gaps in the data available for collection and research into pay equity and other issues affecting women’s participation in the workforce. In particular we have recommended the introduction of an Australian Industrial Relations Survey. This improved data is necessary for more effective and strategic policy decision making. We have avoided creating new obligations for small and medium enterprises as we recognise the burden that red tape has on this sector. The majority of these recommendations are unanimous. Some are opposed by Opposition Members of the Committee. For example Opposition members of the Committee have not supported the recommendations for amendments to the Fair Work Act 2009 contained in Chapter 5. It is true that the Fair Work Act does widen the scope for applications to be taken at the federal level for equal pay for work of comparable value. However, the experience of similar provisions in some state Industrial Relations legislation still demonstrate relatively few cases have been dealt with. All cases have been adversarial, lengthy and often costly. A better system is needed and the suggested changes in this Report will address this. The Minister has also recently announced that the Australian Government will be a participant in an important pay equity test case for employees in the social and community services sector. I applaud this decision. However I am convinced that an alternative mechanism that allows for a non adversarial consideration of the undervaluing of women’s work and a comprehensive scheme to correct undervaluation across industries is more efficient and preferable. I want to thank the Members of the Committee and especially the Committee Secretariat for their hard work and participation in the Inquiry. It has been a long but worthwhile journey for all of us. For me, the spark still burns and it burns brighter. I urge the Government to implement the recommendations of the Report and right the wrong of pay inequity.
Ms Sharryn Jackson MP
Membership of the Committee
Committee Secretariat
Terms of reference
That the Committee inquire into and report on the causes of any potential disadvantages in relation to women's participation in the workforce including, but not limited to: n The adequacy of current data to reliably monitor employment changes that may impact on pay equity issues; n The need for education and information among employers, employees and trade unions in relation to pay equity issues; n Current structural arrangements in the negotiation of wages that may impact disproportionately on women; n The adequacy of recent and current equal remuneration provisions in state and federal workplace relations legislation; n The adequacy of current arrangements to ensure fair access to training and promotion for women who have taken maternity leave and/or returned to work part time and/or sought flexible work hours; and n The need for further legislative reform to address pay equity in Australia.
List of abbreviations
List of recommendations5 - Industrial relations legislative reformsRecommendation 1That for the removal of any doubt, the definition of equal remuneration for work of equal or comparable value in the Fair Work Act 2009 be supplemented with a signpost note confirming that the concept of equal remuneration includes the valuation of dissimilar work of equal or comparable value. Recommendation 2That the Fair Work Act 2009 be amended to broaden the definition of remuneration to include direct or indirect payments, whether in cash or in kind. Recommendation 3That the section 3 of the Fair Work Act 2009 be amended to state that equal remuneration for men and women employees for work of equal or comparable value is an explicit object of the Act. Recommendation 4That the President of Fair Work Australia, by promulgation, enunciate an equal remuneration principle and set out how this principle is to be applied (e.g. work evaluation, comparisons across industries including similar and dissimilar work) in all contexts. Recommendation 5That the Government establish a discretionary fund to be administered by the Attorney General for the provision of funding on application for the pursuit of cases in relation to remuneration orders. Recommendation 6That Fair Work Australia investigates the feasibility of advisory classification and remuneration benchmarks to provide advice to employees and employers. Recommendation 7That s. 156(4) be amended to include: (d) evidence that the work, skill and responsibility required or the conditions under which the work is done have been historically undervalued on a gender basis. Recommendation 8That s. 157 be amended to ensure consistency with s. 156 and include a definition of ‘work value reasons’ defined as: … reasons justifying the amount that employees should be paid for doing a particular kind of work, being reasons related to any of the following: (a) the nature of the work; (b) the level of skill or responsibility involved in doing the work; (c) the conditions under which the work is done [S 156(4)]. (d) evidence that the work, skill and responsibility required or the conditions under which the work is done have been historically undervalued. Recommendation 9That the Government: n elevate pay equity to be a clear objective of modern awards; n expand scope of variation and amendment of awards on work value grounds to explicitly include pay equity, applying a gender neutral work valuation’ require Fair Work Australia to be satisfied that the award satisfies pay equity criteria. Recommendation 10That s. 134 of the Fair Work Act 2009 be amended so as to require that an award must provide for equal remuneration for men and women employees for work of equal or comparable value. Recommendation 11That the Australian Industrial Relations Commission report to the Committee prior to the finalisation of the awards in the awards modernisation process in relation to how pay equity principles have been achieved. Recommendation 12That Fair Work Australia report to the Parliament within the annual reporting process on any changes to the awards after 1 January 2010 that may have the potential to impact on pay equity. Recommendation 13That s. 65 of the Fair Work Act be amended to require that individual flexibility arrangements are lodged with Fair Work Australia. Recommendation 14That the National Employment Standards Division 3 (13) in relation to requests for flexible working arrangements be amended to include all employees. Recommendation 15That the Fair Work Act 2009 be amended: n to impose a legal obligation on the parties in a negotiation of a single or multi enterprise agreement that the negotiation and the agreement must include bargaining to achieve pay equity as defined by the Act; and n to require that Fair Work Australia must not approve an enterprise agreement unless the agreement is necessary to achieve pay equity or implements pay equity. Recommendation 16That Fair Work Australia ensure that where a significant proportion of an organisation’s employees are from a non-English speaking background, that the explanation of the terms of an employment agreement have been explained in the employee’s own language. Recommendation 17That the Australian Government place on the COAG agenda the consideration of the introduction of complementary legislation in relation to all equal remuneration matters dealt with by Fair Work Australia in each jurisdiction. Recommendation 18That section 582 of Fair Work Act 2009 be amended to require the President of Fair Work Australia to state explicitly the appropriate equal remuneration principle and to give detailed direction on how equal remuneration is to be handled. 6 - Anti-discrimination legislationRecommendation 19That the Sex Discrimination Act 1984 be amended to enable the Sex Discrimination Commissioner to commence self initiated complaints for alleged breaches of the Sex Discrimination Act, without requiring individual complaint and including the ability to enter negotiations, reach settlements, agree enforceable undertakings and issue compliance notices. Recommendation 20That the Sex Discrimination Act 1984 be amended to enable the Australian Human Rights Commission to commence legal action in the Federal Magistrates Court or Federal Court for a breach of the Sex Discrimination Act. Recommendation 21That the Sex Discrimination Act 1984 be amended to make it mandatory for employers who are repeat offenders discriminating on the basis of pregnancy or carer’s responsibility to be required to attend counselling or an approved training course. 7 - Pay Equity UnitRecommendation 22
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