Part 1 (clauses 4 to 49) amends the principal Act.

Clause 4 (female-dominated) amends section 2 by—

• inserting a new definition of predominantly performed by female employees (relocating the definition from section 13F). The effect of the changes to the definition for the purposes of pay equity claims are that—

  • the relevant work is performed by a workforce that is at least 70% female (increasing this percentage from approximately 60%); and

  • the work has been performed by a workforce of that kind for at least 10 consecutive years before a claim is raised; and

• making a minor amendment to the definition of pay equity claim settlement.

Clause 5 makes a minor amendment to section 2B.

Clause 6 replaces section 13A, which sets out the purpose of Part 4 of the principal Act. That purpose will be to provide a process that facilitates the resolution of pay equity claims where there is evidence of systemic sex-based undervaluation of work that is predominantly performed by female employees.

Clause 7 (comparators) amends section 13B (interpretation) by inserting a definition of appropriate comparator to support the assessment of pay equity claims.

Clause 8 makes a minor amendment to section 13D.

Clause 9 (threshold, evidence) inserts new section 13DA before section 13E. The new section prefaces section 13E by providing that a pay equity claim may be raised if it meets all requirements set out in section 13E and there is evidence that the claim has merit. The effective changes are as follows:

• the change of threshold from “is arguable” to “has merit”. The Bill contains consequential changes to several other provisions of the principal Act:

• the change from the subjective test, based on what the claimant considers, to an objective requirement that there be evidence that the new threshold is met.

Clause 10 (10-year bar) amends section 13E by replacing subsection (6), with the effect that there is now an amended test to be met before a person who is covered by a previous pay equity claim settlement may raise a new claim in relation to the same work: it must be at least 10 years since the past settlement.

Clause 11 (threshold, female-dominated) replaces section 13F. While current section 13F defines “is arguable” as the threshold to be met by pay equity claims, new section 13F defines “has merit” for that purpose. Besides this change of threshold, new section 13F requires that the claimed undervaluation of work must be based on reasonable grounds and must be both historical and continuing (rather than either historical or current).

Clause 12 (evidence) amends section 13H, which describes what a pay equity claim raised by an individual employee must contain. The amendments require the claimant to give any information about their work that is prescribed by regulations and to include evidence that supports the merit elements of the claim.

Clause 13 (scope, evidence) amends section 13I, which describes what a pay equity claim raised by 1 or more unions must contain. The amendments require the claimant to explain how the work performed by employees covered by the claim is the same or substantially similar (and to provide supporting evidence, including any evidence required by regulations) and to include evidence that supports the merit elements of the claim.

Clause 14 (threshold, scope) amends section 13K by changing the joint decisions to be made by employers in a multi-employer claim. They must now decide on a claim’s merit (rather than whether the claim is arguable) and on whether the employees covered by the claim perform work that is the same or substantially similar.

Clause 15 (opt out, determinations) amends section 13L, which allows an employer to opt out of a multi-employer claim. The effect of the amendment is that an employer may opt out without having to provide reasons, based on reasonable grounds, for doing so. In addition, the employer’s decision to opt out cannot be challenged by another party applying to the Authority for a determination. (In a related amendment, new section 13ZY prohibits the Authority from making a determination in relation to an employer’s decision to opt out.)

Clause 16 makes a consequential amendment to section 13N.

Clause 17 (evidence, scope) amends section 13O, which concerns how parties to a union-raised claim request consent to consolidate claims. The effect of the amendment is that a request must be accompanied by evidence (including any evidence required by regulations) that the employees who are covered by the claims perform work that is the same or substantially similar.

Clause 18 makes a minor amendment to section 13P.

Clause 19 (section 13E compliance, threshold) replaces the cross-heading above section 13Q to cover new sections 13PA and 13PB as well as section 13Q.

Clause 20 (section 13E compliance, threshold) inserts new sections 13PA and 13PB which, combined with section 13Q, are concerned with the decisions an employer must make in relation to a claim and with the timing of those decisions:

• new section 13PA requires employers to make decisions under new section 13PB (section 13E compliance) and section 13Q (threshold) within 60 working days of receiving a pay equity claim (increased from the 45 working days currently provided in section 13Q(1) for a decision on a claim’s merit) or by a date extended under section 13R:

• new section 13PB (section 13E compliance) requires employers to decide whether a claim meets the requirements of section 13E and to notify the claimant of a negative decision. The new section also—

  • provides that the notice of decision has the effect of discontinuing the claim:

  • provides that the discontinuance does not prevent the parties from agreeing to reverse the decision, the claimant from applying to the Authority for a determination, or a new claim from being raised:

  • provides for the effects of the parties agreeing to reverse the employer’s decision, which are that the claim is no longer discontinued and a new time limit for an employer’s decision about whether the claim has merit.

Clause 21 (threshold) amends section 13Q: having made a decision under new section 13PB in favour of the claim, the employer must decide whether, in the employer’s view, the claim has merit (currently, “is arguable”). References to the timing of the decision are removed, as timing is now addressed in new section 13PA, except that the deemed acceptance of a claim on failure to give timely notice now allows for the modification of the relevant time limit by the discontinuance and resumption of a claim under section 13PB(5) and (6). (The content of the employer’s notice of decision is provided for in section 13S.)

Clause 22 (section 13E compliance, threshold) makes consequential amendments to section 13R, which provides for extensions of the time limit for decisions under new section 13PB and section 13Q.

Clause 23 (threshold) amends section 13S, which concerns an employer’s obligation to notify the claimant of the employer’s decision about whether a pay equity claim has merit (currently, “is arguable”). In relation to notification of a negative decision, the amendments also—

• provide that the notice of decision has the effect of discontinuing the claim:

• provide that the discontinuance does not prevent the parties from agreeing to reverse the decision, the claimant from applying to the Authority for a determination, or a new claim from being raised:

• provide for the effect of the parties agreeing to reverse the employer’s decision, which is that the claim is no longer discontinued.

Clause 24 (section 13E compliance) amends section 13T, which concerns decision-making and notification obligations of employers involved in a multi-employer pay equity process. Under the amended section, the decisions to be made and notified include a joint decision, under new section 13PB, about whether the claim meets the requirements of section 13E.

Clause 25 to 28 make consequential amendments to sections 13U, 13V, 13Y, and 13ZB.

Clause 29 (comparators, female-dominated, scope) replaces sections 13ZD and 13ZE with the following new provisions:

• new sections 13ZD, 13ZE, and 13ZEA (comparators, female-dominated), which correspond to the current 2 provisions:

• new section 13ZEB and cross-heading (scope).

Currently, sections 13ZD and 13ZE provide for how parties assess a claim in order to determine whether the relevant work has been subject to sex-based undervaluation. The new corresponding provisions differ from the current provisions as follows:

• new section 13ZD requires the same matters to be assessed as current section 13ZD, but also—

  • clarifies the requirement to avoid assumptions in the assessment process; and

  • requires the assessment to focus on the work to which the claim relates only since that work came to be performed by a workforce that is at least 70% female:

• new sections 13ZE and 13ZEA differ from current section 13ZE by—

  • providing a hierarchy of comparator selection to ensure that the comparators selected are most closely related to the employer; and

  • providing that a workforce that is too small to allow a meaningful comparison may not be selected as a comparator; and

  • providing that, if the employer decides that there are no appropriate comparators available, they must give notice to the claimant. The amendments also—

    • provide that the notice of decision has the effect of discontinuing the claim:

    • provide that the discontinuance does not prevent the parties from agreeing to reverse the decision, the claimant from applying to the Authority for a determination, or a new claim from being raised:

    • provide for the effect of the parties agreeing to reverse the employer’s decision, which is that the claim is no longer discontinued.

This clause also inserts new section 13ZEB (and cross-heading) to—

• provide that an employer who is assessing a claim may give notice that, in the employer’s view, the employees covered by a claim do not all perform work that is the same or substantially similar:

• provide that the employer may do so regardless of their decision on this subject under new section 13PB:

• provide that the notice may not be given if the Authority has determined that all the employees covered by the claim perform work that is the same or substantially similar:

• provide that the notice of decision has the effect of discontinuing the claim:

• provide that the discontinuance does not prevent the parties from agreeing to reverse the decision, the claimant from applying to the Authority for a determination, or a new claim from being raised:

• provide for the effect of the parties agreeing to reverse the employer’s decision, which is that the claim is no longer discontinued.

Clause 30 (phasing, review, determinations) amends section 13ZH, which provides for the party agreements and Authority determinations that settle a pay equity claim. The amendments—

• provide that—

  • agreed remuneration may be introduced on settlement or in agreed phases (over a maximum period of 3 years from the date of settlement); and

  • determinations relating to agreed remuneration must address timing (whether remuneration will be increased at settlement or in specified phases) and determinations that fix remuneration must specify 3 annual phases of equal amounts or proportions starting at the date of settlement; and

• remove all references to the review of a settlement and prohibit agreements from including a process for review.

Clause 31 makes a consequential amendment to section 13ZK.

Clause 32 amends section 13ZL, which concerns an employer offering other employees the benefit of a pay equity claim settlement with a union, by clarifying that the terms and conditions to be offered may include remuneration for past work if agreed by the parties.

Clause 33 (review) makes a consequential amendment to section 13ZN, deleting the reference to a review of a settlement.

Clause 34 (threshold, section 13E compliance, 10-year bar, comparators, phasing) amends section 13ZO, which allows the parties to refer issues to mediation, by amending the listed examples to—

• change a reference to an arguable claim to refer a claim that has merit:

• add disputes about whether a claim meets all section 13E requirements and about the phasing in of increased remuneration agreed by the parties:

• remove disputes as to whether exceptional circumstances exist for the purposes of raising a claim within 10 years of a settled claim.

Clause 35 (threshold, section 13E compliance, comparators, phasing) amends section 13ZQ, which allows the parties to refer issues for facilitation, by amending the listed examples—

• changing a reference to an arguable claim to refer to a claim that has merit:

• adding disputes about whether a claim meets all section 13E requirements and about the phasing in of increased remuneration agreed by the parties:

• providing that a referral of the issue of fixing remuneration includes the issue of specifying phases for increased remuneration:

• removing disputes as to whether exceptional circumstances exist for the purposes of raising a claim within 10 years of a settled claim.

Clause 36 (threshold, section 13E compliance) amends the references that the Authority may receive under section 13ZR after already acting as a facilitator, by changing a reference to an arguable claim to a claim that has merit and by adding a reference about whether a claim meets all requirements set out in section 13E.

Clause 37 (threshold, section 13E compliance, phasing) amends section 13ZW, which describes the recommendations the Authority may make in relation to facilitated issues, by amending the listed examples to—

• change a reference to an arguable claim to refer to a claim that has merit:

• add recommendations about whether a claim meets all section 13E requirements and about the phasing of increased remuneration agreed by the parties (and matters the Authority must consider in relation to phasing):

• provide that an Authority recommendation on remuneration must specify that the remuneration will be increased in 3 annual phases of equal amounts or proportions starting at settlement.

Clause 38 (determinations, threshold, section 13E compliance, phasing) replaces section 13ZY, which allows the parties to apply to the Authority for a determination on matters relating to a pay equity claim. The ways in which new section 13ZY differs from the current provision include the following:

• references to an arguable claim are replaced by references to a claim that has merit:

• the new section includes determinations about an employer’s decisions under new section 13PB, about selection of appropriate comparators, and about the phasing of increased remuneration agreed by the parties (and the matters the Authority must consider):

• the new section requires the Authority, when fixing remuneration, to specify that remuneration will be increased in 3 annual phases of equal amounts or proportions for its introduction, starting at settlement:

• the new section prohibits determinations in relation to an employer’s decision to opt out of a multi-employer claim or in relation to the selection of employees covered by a previously settled claim as appropriate comparators, and determinations that include remuneration for past work or a review process.

Clause 39 (determinations, phasing) amends section 13ZZ, which requires a union to notify employees covered by a claim of the union’s intention to apply for a determination fixing remuneration. The amendment requires the notification to include that fixed remuneration will be increased in 3 annual phases of equal amounts or proportions starting at settlement.

Clause 40 (determinations, section 13E compliance, threshold, scope, comparators) replaces section 13ZZA with new sections 13ZZA to 13ZZAD. Current section 13ZZA requires parties to enter into the pay equity bargaining process if the Authority or court determines that a claim is arguable. The new provisions—

• apply to all claims that are discontinued by an employer giving notice of a decision. Those decisions are the following:

  • a decision under new section 13PB that a claim does not meet all section 13E requirements:

  • a decision under section 13Q (notified under section 13S) that a claim does not have merit:

  • a decision under new section 13ZEA that no appropriate comparators are available for selection for use in assessing a claim:

  • a decision under new section 13ZEB that the employees covered by a claim do not all perform work that is the same or substantially similar; and

• provide for the following effects of alternative determinations in relation to those decisions:

  • if a determination affirms the decision, the claim remains discontinued:

  • if a determination reverses the decision, the claim is no longer discontinued and its processes must be resumed:

  • in the case of the reversal of a section 13PB decision under new section 13PB, new section 13ZZAA also provides a new time limit for an employer’s decision about whether the claim has merit.

Clause 41 (determinations) amends section 13ZZB, which sets out the process for the Authority making a determination that fixes remuneration. New section 13ZZB(2)(b) requires the Authority to consider only whether all other reasonable alternatives for settling the claim have been exhausted (removing the current alternative ground that a reasonable period has elapsed within which the parties have used their best endeavours to identify and use other reasonable means of settling the claim).

Clause 42 makes a consequential amendment to section 13ZZC.

Clause 43 (determinations) repeals sections 13ZZD and 13ZZE, which currently allow the Authority, when fixing remuneration, to provide for the recovery of remuneration for past work.

Clause 45 makes consequential amendments to section 13ZZG.

Clause 46 (scope, comparators, determinations) amends section 18 by imposing a penalty on an employer who does not resume the bargaining process as required when the Authority or the court has determined that 1 or more appropriate comparators are available for selection for use in assessing a claim (see new section 13ZZAC) or that all employees covered by a claim perform work that is the same or substantially similar (see new section 13ZZAD).

Clause 47 amends section 19, which authorises the making of regulations under the principal Act. The amendment replaces section 19(1) and (1A) with a standardised provision that authorises regulations that provide for—

• anything the principal Act says may or must be provided for by regulations:

• anything incidental that is necessary for carrying out the principal Act or giving it full effect.

Clause 48 inserts a new Part into Schedule 1 of the principal Act (which contains transitional, savings, and related provisions).

Clause 49 makes a consequential amendment to Schedule 2 of the principal Act.

Part 2 (clauses 50 to 55) makes consequential amendments to 2 other Acts.

Clause 50 identifies the Employment Relations Act 2000 as the principal Act for the purposes of clauses 51 and 52.

Clause 51 amends section 33 of the Employment Relations Act 2000, which requires parties to collective bargaining to conclude a collective agreement unless there is a genuine reason, based on reasonable grounds, not to. At present, section 33(2)(d) provides that the existence of a requirement to review a pay equity claim settlement is not a genuine reason not to complete a collective agreement. That provision is repealed: it is redundant because this Act removes those review processes from pay equity claim settlements.

Clause 52 makes minor consequential amendments to section 161 of the Employment Relations Act 2000.

Clause 53 identifies the Public Service Act 2020 as the principal Act for the purposes of clauses 54 and 55.

Clauses 54 and 55 make consequential amendments to sections 82 and 83A of the Public Service Act 2020.

The Schedule amends Schedule 1 of the principal Act, by inserting Part 2 (clauses 7 to 10) as follows:

• clause 7 contains definitions to support new Part 2 of Schedule 1 of the principal Act:

• clause 8 provides that, on the commencement of the Bill (the commencement date), pay equity claims raised but not settled before that date are discontinued (existing claims). However, those claims may be raised as new claims under Part 4 of the principal Act as amended. The clause also provides that proceedings before the Authority or in the court in relation to existing claims may not be commenced on or after the commencement date and are discontinued if commenced before the commencement date. Appeals against or challenges to determined matters may proceed, but they are subject to the discontinuance of the claims they relate to:

• clause 9 applies to pay equity claims relating to pay equity claim settlements reached before the commencement date. New claims relating to the same work as the settlement and to any or all of the employers covered by the settlement cannot be raised within 10 years after the settlement, unless the Authority or the court determines on or after that date that a claim may be raised:

• clause 10 applies to a clause in a pay equity claim settlement reached before the commencement date that specifies a process for the review of the employee’s remuneration to ensure that pay equity is maintained. Clause 10 provides that—

  • the review clause has no effect; and

  • proceedings may not be commenced to the extent that they concern that review clause; and

  • any proceedings commenced before the commencement date are, to the extent that they concern that review clause, discontinued.