Government gutting Equal Pay Act, says NZCTU
The New Zealand government is moving to amend the Equal Pay Act, aiming to make the process of raising and resolving pay equity claims more robust, sustainable, and cost-effective, Workplace Relations and Safety Minister Brooke van Velden (pictured left) announced.
“It is clear the current act is not working as intended, and amendments made by the previous government in 2020 have created issues,” Van Velden said.
“Claims have been able to progress without strong evidence of undervaluation and there have been very broad claims where it is difficult to tell whether differences in pay are due to sex-based discrimination or other factors.”
New thresholds and evidence requirements introduced
The proposed changes will raise the bar for initiating claims under the Equal Pay Act, including:
- Increasing the female workforce threshold from 60% to 70% sustained over 10 years.
- Requiring reasonable grounds and evidence of historical and current undervaluation.
- Providing clearer rules on using male comparators with similar skill and responsibility levels.
- Allowing employers to meet obligations in fiscally sustainable ways, such as phased settlements.
International comparison and rising costs prompt changes
Van Velden defended the overhaul by comparing New Zealand’s pay equity framework with overseas models.
“New Zealand’s pay equity regime is an outlier internationally,” she said.
“The act allows employees and unions to bargain a pay equity settlement with multiple employers. In most countries we compare ourselves to, people raise pay equity claims against their own employer only.”
Van Velden noted the financial burden of current claims, mostly concentrated in the public sector, which now cost the Crown $1.78 billion annually.
“These changes will mean the pay equity claim process is workable and sustainable... and we need to ensure the process to raise and resolve claims is robust,” she said. “The changes I am proposing will significantly reduce costs to the Crown.”
Pay equity claims to reset under new legislation
The legislation, introduced to Parliament under urgency, includes discontinuation of current claims, with future claims subject to the new criteria. Review clauses in past settlements will become unenforceable, and settled claims may only be raised again after 10 years, provided they meet the amended conditions.
The revised Equal Pay Act will come into effect the day after receiving Royal assent.
NZCTU condemns equal pay changes as an attack on women’s rights
The New Zealand Council of Trade Unions (NZCTU) has condemned the government’s proposals, calling them a major setback for working women and gender pay justice.
“It is shameful that the government is cancelling pay equity for hundreds of thousands of working women in order to balance the budget,” said NZCTU Secretary Melissa Ansell-Bridges (pictured right).
“These changes will gut the Equal Pay Act and lock in gender discrimination and inequity for years to come.”
NZCTU: Government is undoing years of progress
NZCTU argued that the changes are not just about blocking new claims, but also about undermining existing pay equity settlements by cancelling their review clauses.
“This is not just about cancelling current claims, which would be bad enough, but the changes will also retrospectively rip up existing settlements by removing the review clauses. This will mean that those workers will soon lose the value of their claims,” Ansell-Bridges said.
“This government seems determined to undo all the progress that working women have made on achieving equal pay. They disestablished the Pay Equity Taskforce, pulled funding for settlements, and are now gutting the act.”
Changes rushed through without proper scrutiny, says NZCTU
The union also criticised the government’s decision to push the amendments through Parliament under urgency, bypassing the usual consultative process.
“It is totally unacceptable that Brooke van Velden is intending to push these changes through Parliament in two days under urgency, bypassing democratic scrutiny and due process,” Ansell-Bridges said.
“This minister is once again demonstrating her contempt for working people and a total disregard for workers’ rights, fair pay and good work.”
