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The Problem of Underpaying or Undervaluing Women in New Zealand

Gender pay gap in Australia has continually been an economic, political and social issue. Despite it not being a direct discrimination gender pay gap is a problematic issue for a number of reasons. Gender pay gap puts women in more complex economic situation as well as their freedom. It also leads to loss of human capital thus leading to loss of investments and also affects the overall economic growth of the country thus limiting its competitive ability in the global scale (Brokin, 2011).

According to ABC (2017) working women are receiving a significantly lower payment compared to men working at the same level.  Australia gender equality scorecard shows that women receive a 23 percent less pay compared to their men co-workers working at the same capacity. The intriguing issue about this gap is whether women do the same amount of work as their male colleagues. The gap is even bigger for those in the managerial positions as it stands at 26.5% in 2017. Despite the current information that the pay gap in Australia is slowly improving, the Fair Work Commission act of slashing penalty rates is affecting is affecting working women than men in Australia. The gap also widens for those approaching their retirement. Approximately half of the women age between 55 and 64 years had wages less than $ 94,050 and 30% had less than $53,760. While their male colleagues at the same age earned $154,300 and $83,050 respectively (Bently et al. 2015). The gap in remuneration has had a negative impact on women especially those in high management levels. In the recent years corporations have been put under increased pressure to increase the number of women on their boards. However in business corporations are still few compared to men. The inclusion of women in the boards has increasingly led to improved remuneration and working conditions of women.

Gender pay gap is defined as the percentage difference between the full-time earnings of working men and women usually expressed as the percentage of male earnings. Calculations are done to reflect the pay equity issues (CEVEP, 2014). The Working Gender Equity Agency (WGEA) data is used in calculating gender pay gaps and form these calculations the gaps between the earnings of both men and women can be identified in regard to their occupations, industry, management categories or the whole workforce. However, some of the gaps in payment cannot be termed as discrimination as they are explained by different ways of working between men and women. Industries they work, skills possessed as well as the level of experience. However, in most cases gender pay gaps reflect biases within the work place, where certain categories of employees are highly preferred than others and receive special treatments and even better wages than their fellow colleagues working at the same level.

One of the impacts or gender gap pay is that it leads to inequality in the workplace thus leading to reduced workforce participation. In the New Zealand women have taken the initiative to advance their education and workforce participation, however, gender payment gap in the labor market remains a prevalent issue. According to ABS (2015) in 2015 the full-time gender pay-gap was at 18% thus women earn 82% of the salaries earned by the working men. WGEA (2015) explains that for women to equal the salaries of their male colleagues in Australia they have to work for extra 65 days each year.

Factors Influencing Gender Pay Gaps

Despite taking the initiative to improve and advance their employability women in Australia are still not getting the expected opportunities in the economic and political; sectors of the country (Junor et al. 2009).  Currently, a number of women in the universities in Australia is higher than the number of men but despite their increased investment in human capital women are still not getting a considerable share of the labor market this is both a political and social justice issue that need to be looked into (Mahoney, 2011). There have been efforts focused on creating awareness on the value of human capital and at the same time trying to address the issue in the labor market with an aim of increasing productivity, participation, and push for a greater economic activity and prosperity that will benefit all the people in Australia. This has led to increased efforts aimed at reducing the gender pay gap in Australia as well as reducing factors that may lead to sexual discrimination. This has called for the participation of all involved parties including the government, business corporations, business leaders and the workforce so as to drive for a social cultural and generational change (McGrath-Champ & Jefferson 2013).

Despite paying much attention to increased efforts to promote awareness of gender pay inequity little change have been noticed overtime which indicates that much has to be done to change the situation to ensure fairness in the labor market. According to a report KPMG (2009), gender pay gaps in Australia have a potential of causing a considerable economic impacts by considering the contribution towards economic development through their participation. In this report, KPMG also explained that the hourly gap pay gap of $ 1.70 approximately 35% is likely to be attributed to by sex discrimination. The study further suggested that providing flexible working conditions for women by reducing their working time due to their care-giving responsibilities, as this would lead to greater economic participation and could possibly reduce the gap between the male and female earnings.

Gibb et al (2009) gave two explanations as to why there is gap in the earnings between men and women the two explanations include differences in levels of work-related and non-work related factors which include education, working hours, employment history. The outlined factors were said to be shaped by gender difference the nature and scope of participation in the labor market.  The second explanation the gap in earnings occur since women earn less than men in a similar circumstances and suggested that this would be attributed to  by discriminatory practices which mitigated against female earnings and promote better payment for men. The following are the reasons for continued earning gap in New Zealand:

  • The length of working hours- women have the care-giving responsibility which interrupts their career from time to time which takes part of their time in the workforce. Societal attitude, the level of involvement in part-time work and also women are likely to work out of their specialized careers (Hensen & Yeabsley, 2012).
  • The majority of the women are employed in a part-time job rather than full-time jobs. According to the Ministry for Women (2015) women work for less the 30 hours per week and they make up almost 75% of the part-time workers.
  • Occupational segregation, most of the women are involved in clerical and administrative roles and roles related to community services which  have lower earning potential compared to the male-dominated careers. Also there is limited vertical mobility in women dominated careers.
  • Unavailability of flexible work, flexible working conditions encourage parents to participate in the workforce (Heathrose Research Ltd, 2011).  Lack of work flexibility hinder the participation of women in the labor market.

A methodology that can be used in drafting Draft Bill (Equal Pay and Employment Equity)

Equal pay and employment equity has been a policy issue in New Zealand since World war. Over the years the number of women getting into the labor force has been increasing steadily and many people have been concerned with why women continue to earn less compared to men despite them having equal or even better working skills. This has led to an increased perception of inequality in the labor market in regard to gender and it has been as an unfair treatment of women. Following these concerns the issue of equal pay and equal employment was considered as a political policy agenda in the 1960’s since then a number of jurisdictions have been enacted in New Zealand as well as in other countries across the globe and various policy approaches have been adapted however, inequality between male and female have increased over the years. A new approach has to be taken to ensure that the issue is mitigated since the traditional approaches which mainly focused on the elimination of gender discrimination to attain equality in the labor market have not led to any significant changes. A draft bill should consider declaring equality to as a right to every individual regardless of their gender (Hall. P 2007). The right to equality is a law which is related to any kind of discrimination. In developing an equal pay and equal employment draft it would be appropriate to include the positive right to equality in the statutory framework (Fredman, 2008).

A Methodology That Can Be Used in Drafting Draft Bill (Equal Pay and Employment Equity)

Equality plays and important role in linking both the positive and the negative human rights duties, the concept if equality has brought a clear distinction between the negative and positive duties. It will be difficult to promote equality and eliminate discrimination and social exclusion without positive duty aimed at promoting equality.

According to Perfect (2011) in developing draft it would be important to consider the factors that lead to existence of pay gender pay gap. This would help in ensuring that ways of addressing the issues. For instance, one of the factors that is hindering women form taking part in the labor market is lack of flexible working conditions. In drafting the bill it would be important to consider this issue and find how it can be solved to ensure that there is flexibility in the labor market so as to encourage women to take part in the work force. The bill should also consider affirmative actions that can be taken to ensure that gender discrimination in the work force is prohibited. Some of the affirmative actions that can be taken include, prohibiting employers from discriminating employees on the bases of gender in remuneration and other terms and conditions related to the employment. Another positive action that can be taken to ensure equal pay and equal employment is by providing channels through which employees can voice their claims related to gender discrimination in their jobs, the draft should consider establishing processes that can be followed to settle different types of claims including the equity pay claim and lastly, the draft should consider establishing minimum and maximum percentage of member forming various management boards in regard to gender to ensure equity in participation in the workforce management. Including women in the management of the organizations would give them with a good opportunity to push for the changes in the labor issues related to gender equality.

Many policies have been formulated over the years but their execution has been ineffective, draft should also consider and include practical implementation plans to ensure that developed draft implemented and make a significant impact over the issue. The implementation of the draft will need a framework that will focus on ensuring commitment of all stakeholder and show them the need to explore new practices that will have the best impact to the right of equality in the labor market (Cornish, 2009)

Several countries such as Canada, Australia, United Kingdom and even New Zealand have seen the need to adapt a new approach that incorporates human rights frameworks and the concept of equality. According to Cornish (2009), the process of acquiring justice for women will at least require pro-active laws that promote equal pay for work and value laws and other laws and policies that aim at promoting equality at work.

How the proposed pay equity draft would impact terms of employment

The decision of the court of appeal in October 2014 in the case between Terranova and Food Workers Union supported the Equal Pay Act 1972 which marked the beginning of an equal pay regime. This decision meant that the aim of Equal Pay Act was to ensure that people doing the same job should receive the same pay regardless of their gender and pay equity which means that workers should receive same payment for work of equal value (Whakatutuki, 2017). The concept of equal pay points out that women and men doing the same job should receive equal remuneration, for instance, a woman working as an engineer should receive the same payment as a man who is also working as an engineer. The concept of equity pay on the other hand, asserts that there should be no difference men and women should receive same earnings for dong different jobs that have an equal value

The formulation of the Pay Equity Bill is a significance action that will help the country achieves its goal of bridging the gender pay gap and ensuring that female dominated industries provide fair remuneration. The draft was welcomed by the Non-profit business sector in New Zealand since the legislation would have a significant impact in the labor market and to all the stakeholders (Dunn, 2016).

The existing Equal Pay Act has been unable to provide significant changes in the workforce and there the new draft seems to being a sense of hope in the pursuit of fair and equal remuneration for both men and women in the labor market. This will eliminate inequality that have been the labor market for quite a long time.

Despite the positive impact that the bill is expect to have in New Zealand some people think that the bill will put more barriers for women seeking fair pay. Some argue that if the new bill had been in place Terranova could not have won the case. Thus they think that the case will make it harder for women to pursue cases related to gender underpayment.

The bill proposes the likelihood of The Employment Relations Authority (ERA) establishing wage rate so as to ensure that there is equity in remuneration even in occupations that have been regarded as women jobs for a long time. Thus it provides an opportunity to women to claim any case of inequality in their occupations such as the Terranova case. The Bill will be effective in all New Zealand workplace. The bill will provide the following resolutions to pay equity claims:

  • It provides the opportunity for any employee to make a pay equity claim regardless of their gender.
  • The claim made must reach the employer within the shortest time possible that is, it should not go beyond 90 days. so that the employer can see if it has “merit”
  • The following factors determines the “merit of the business”
  1. It must be a role played by women
  2. It must have reasonable evidence to prove that the work has been undermined or undervalued for  a long time due to a number of reasons which may include socio-cultural factors related to the origin of the work and the characterization of the work as “Women’s work”
  3. There must be enough evidence to show that the work is undervalued even in the current society.
  4. Once the employer agrees that the claim has merits this opens the opportunity for both parties to get into a pay equity bargaining process. The bargaining process can be facilitated through mediation and if necessary the Employment Relations Act should framework can be adapted in the facilitation of collective bargaining process.
  5. In case a dispute emerges in the bargaining process then the issue may be referred to the ERA. The Authority has the power to set the required remuneration in such a situation.

What are the likely impacts that the bill will have on the employers and the employees?

The bill if enacted will have a huge impact on the employers who have employers working in occupation traditionally regarded as female roles that usually are low paying. The employers are aware that there will be possibilities of paying equity claims. The bill however, could face scrutiny in the Parliament but in enacted would have a significant impact in a broad range of industries in New Zealand (Dunn, 2016). .


The issue of equal pay has not only need affecting New Zealand but also other countries around the world. Previous studies have mainly focused on this concept in terms of pay gap. This has been regarded as the difference between the earnings of men and women. The pay gap is usually expressed in terms of the ratio of women earnings to men earnings. To achieve this there is need to establish effective frameworks that will ensure that equality in the labour market is achieved in New Zealand.


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Borkin, P. 2011. Closing the Gender Gap: Plenty of Potential Economic Upside. Auckland: Goldman Sachs.

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Cornish, M., 2009. In a paper New Governance Approaches to Closing the Gender Pay Gap: Perspectives from Canada International Labour Law and Social Security XIX World Congress, Sydney, Australia

Dunn, K. 2016. Employment law update. Russel Mcveagh. Available at:

Gibb, S. J., Fergusson, D. M., & Horwood, L. J. 2009. Sources of the Gender Wage Gap in a New Zealand Birth Cohort. Australian Journal of Labour Economics. Vol 12. No.3. pp281–298.

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Junor, A., Hampson, I., & Smith, M. 2009. Valuing Skills: Helping Mainstream Gender Equity in the New Zealand State Sector. Public Policy and Administration. Vol 24 No. 2, pp 195–211.

Jefferson, T. and Preston, A. (2012), Labour Markets and Wages in Australia in 2011, Journal of Industrial Relations. Vol 54, No. 293-311.

KPMG, 2016.  Update Report prepared for Diversity Council Australia (DCA) and the Workplace Gender Equality Agency (WGEA). Available at:

Lyons, L. 2016. Gender Equity insights: Inside Australia Gender Pay Gap. WGEA Gender Equity Series.

Mahoney, P. (2011). What do men and women earn after their tertiary education? (Tertiary education occasional paper 2011/02). Wellington: Ministry of Education

McGrath-Champ, S., & Jefferson, T. (2013). Gender and pay equity in a global knowledge organisation. The Economic and Labour Relations Review. Vol 24 No,1, pp  97–123.

Ministry for Women. 2015. Gender Pay Gap. Retrieved May 8, 2015, from

Perfect, D. 2011. Gender pay gaps. Manchester: Equality and Human Rights Commission.

Whakatutuki, H. Draft employment (pay equity and equity pay) Bill: Commentary document for public consultation. Ministry of Business Innovation and Employment.

Workplace Gender Equality Agency [WGEA] (2012), WGE Act at a glance, viewed 16 February 2013 Available at:

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