Gender pay equity, wage fixation and industrial relations reform in Australia. One step forward and two steps backwards?

Published date16 November 2007
Pages4-19
DOIhttps://doi.org/10.1108/01425450810835383
Date16 November 2007
AuthorMichael Lyons,Meg Smith
Subject MatterHR & organizational behaviour
Gender pay equity, wage fixation
and industrial relations reform
in Australia
One step forward and two steps backwards?
Michael Lyons and Meg Smith
Group Researching Organisations, Work, Employment and Skills,
University of Western Sydney, Sydney, Australia
Abstract
Purpose – The purpose of this paper is to discuss the impact on the new federal wage fixing system
on gender pay equity in Australia.
Design/methodology/approach – The article is divided into four parts. The first section briefly
examines the policy approach to the issue of gender pay equity in other Anglophone counties and the
history of pay (in)equity under the Australian tribunal based industrial relations system. The second
section overviews the recent developments at the State level in Australia focused on gender pay equity.
The third section discusses recent cases in State wage fixing systems in Australia designed to remedy
the gender based undervaluation of children’s services employees. The fourth and final section
discusses the implications of the new “national” workplace relations laws in the context of gender pay
equity in Australia.
Findings – The capacity of State tribunals to continue to apply gender free wage determinations is
under threat because of the federal government’s 2006 “reforms” to the Australian industrial relations
and wage fixation systems.
Originality/value – The commissioned case studies and inquiries demonstrate that governments
and State Labor governments in particular – have placed the issue of the gender earnings gap on the
policy agenda.
Keywords Gender, Equal pay,Australia, Industrial relations, Economicreform
Paper type Case study
The issue of gender pay equity is a vexed one for policy makers, trade unions,
employers and women in paid work. Many countries and legal jurisdictions have since
the 1970s progressively implemented measures to overcome instances of pay inequity
where women are remunerated at a lower level than men performing the sam e duties.
However, notable differences still exist between the overall earnings of women and
men. While these differences can be party explained by the occupational locations of
women and men in the respective labour markets, the industrial relations and wage
fixation system and “masculine” concepts of skill are equally influential (Whitehouse,
2003). In the Australian context, recent developments at the State (provincial) level
have sought to address the issue of gender pay equity with a series of case studies,
inquiries, legislative amendments and changes to the way industrial tr ibunals assess
pay and conditions of employment in the process of making minimum wage industrial
awards. Institutional arrangements in Australia were historically distinctive from
those evident in international jurisdictions because of their location in labour law as
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0142-5455.htm
ER
30,1
4
Received 5 June 2006
Revised 3 April 2007
Accepted 3 April 2007
Employee Relations
Vol. 30 No. 1, 2008
pp. 4-19
qEmerald Group Publishing Limited
0142-5455
DOI 10.1108/01425450810835383
opposed to human rights legislation. However, these institutional arrangements are
now under threat from changes made to the Australian system of wage fixation by the
federal government’s “Work Choices” regime. The new federal workplace relations
statute effectively ends the tribunal based wage determination system by focusing on
agreement making at the workplace or individual level. Consequently the recent
innovations in gender pay equity adopted by State industrial tribunals are curtailed, as
allegations of unequal pay can only remedied at the individual and not collective
level and only if direct sex discrimination is found.
This article discusses the impact on the new federal wage fixing system on gender
pay equity in Australia, and is divided into four parts. The first section briefly
examines the policy approach to the issue of gender pay equity in other Anglophone
counties and the history of pay (in)equity under the Australian tribunal based
industrial relations system. The second section overviews the recent developments at
the State level in Australia focused on gender pay equity. The third section discusses
recent cases in State wage fixing systems in Australia designed to remedy the gender
based undervaluation of children’s services employees. The fourth and final section
discusses the implications of the new “national” workplace relations laws in the
context of gender pay equity in Australia.
Concept of gender pay equity
A consistent finding in more recent research studies is that female domination of a
workforce reduces relative pay. A review of the Australian studies examining the
relationship between rates of pay and gender by Kidd and Ferko (2001, p. 71) notes that
the evidence points to a gap of up to 20 per cent between the earnings of men and
women, even when both sexes have “similar productivity-related chara cteristics”.
Their own analysis also found “gender discrimination” in wage outcomes (Kidd and
Ferko, 2001, p. 86). A study by Kidd and Shannon (2002) projecting the size of the
gender wage gap in Australia to the year 2031 found that only minor changes in gender
pay differences would result despite projecting “substantial” increases in both labour
force participation and labour market experience of women.
At face value gender pay equity is a simple equation: men and women should
receive equal remuneration for work of equal value. Yet both sides of that equation
involve complex issues of measurement. The first component of that equation – equal
remuneration – involves reviewing a variety of different employment form s and wage
measures, spanning issues of full-time and part-time hours of work and the inclusion or
otherwise of overtime and indirect forms of remuneration. The second component of
the equation – equal value – leads to similarly vexed discussions as to what
constitutes “work value”, and how it should be measured. Should the valuation of
“female” work (i.e. female dominated occupations and industries) require a compar ison
to “male” work, or can an abstract standard be applied to address the “undervaluation”
of women’s work on its own terms. For example, job evaluations can result in
inconsistent conclusions due to the influence of the particular evaluator, and thus lack
objectivity, reinforcing existing biases (Gilbert, 2005, p. 9; Weiler, 2000, pp. 597-599).
Over the last three decades Australian policy has approached this issue with labour
law measures, an approach that has provided for collective remedies as pay increases
were granted through a centralised, tribunal based, industry level industrial award
system, with increases in award wages being granted on an industry basis. This
Gender pay
equity
5

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