Challenging the gender pay gap

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by Lauren Hodson

The gender pay gap in Australia currently sits at a staggering 17.3% in base remuneration (in favour of men), which increases to 22.4% when looking at total remuneration.[1] This equates to approximately $16,183 p/a and $26,527 p/a respectively.

Disappointingly, Western Australia tops the charts with the largest gender pay gap in Australia at 22.5%,[2] more than 2% higher than the next biggest gap: the Northern Territory.

With gender equality firmly in the spotlight following the #MeToo movement, we will likely see increased attention on the gender pay gap.  Employers paying employees disproportionately lower wages than other employees on the basis of gender will be vulnerable to legal claims.

Below, we take a look at the legal framework in respect of equal remuneration.

Equal remuneration order

Under section 302(3)(b) of the Fair Work Act 2009 (FW Act) the Fair Work Commission (Commission) has the ability to grant an ‘equal remuneration order’. If the Commission finds unequal remuneration is due to gender difference, the Commission may grant an order to rectify the disparity. To grant this order, the Commission must evaluate a range of factors comparing two groups/individuals, which:

“(1) perform work of equal or comparable value;

(2) are of the opposite gender; and

(3) are unequally remunerated.”[3]

Earlier this year, the Commission delivered a decision under section 302(3)(b) of the FW Act, on application by United Voice and the Australian Education Union.[4]

The application related to the children’s services and early childhood education industry and sought to compare predominantly female employees covered by the Children’s Services Award, to predominantly male employees covered by the Manufacturing and Associated Industries and Occupations Award 2010.

Although the Commission ultimately found that ‘the comparator groups simply do not perform work of equal or comparable value in the first place’, it noted that it is not impossible, but very difficult, to compare two groups that are ‘large, diverse, and involve significantly different work under a range of different conditions.’ However, the Commission noted numerous provisions under which this application would be better brought; all of which are provisions about altering an Award and not to do with gender inequities.

Equal remuneration orders can be sought by affected individuals, unions or the Sex Discrimination Commissioner. Where an order is granted, to the extent that it is inconsistent with a term of a modern award, enterprise agreement or Commission order, the term that is more beneficial to the employee will apply.[5] Any contravention of the equal remuneration order may result in penalties.[6]

General protections claim

Paying a particular employee (or group of employees) less than others on the basis of gender, will likely constitute adverse action taken on discriminatory grounds; falling foul of an employee’s general protections outlined in section 351 of the FW Act.

General protections claims are on the rise, with a 30% increase in applications lodged over the past 3 years.[7] Employers found to have breached an employee’s general protections may, in addition to being liable to compensate the relevant employee, be liable to pay penalties.[8]

Sex Discrimination Act 1984 (Cth) (‘SDA’) and Equal Opportunity Act 1984 (WA) (‘EOA’)

It is also unlawful under federal and state anti-discrimination legislation to discriminate against someone (either directly or indirectly) on the basis of their gender in the context of employment.[9]

Direct discrimination may occur where one employee with the same qualifications and experience as another employee of a different gender, are doing the same job but the first employee is paid more based on their gender. Indirect discrimination may occur where an employer offers the ability to earn bonuses only to full-time employees, in a workplace where female employees work on a predominantly part time basis.

In the case of a breach of the SDA, complainants can lodge a complaint with the Australian Human Rights Commission under section 46P of the Australian Human Rights Commission Act 1986.  Breaches of the EOA are pursued via complaint to the Equal Opportunity Commissioner under section 83 of the EOA.

Workplace Gender Equality Act 2012

Any non-public sector employer who employs at least 100 employees has reporting obligations under the Workplace Gender Equality Act 2012. They are required to report to the Workplace Gender Equality Agency (WGEA) on matters relating to workplace gender equality including the remuneration of males and females in the organisation. Under section 19D of the same Act, if the employer fails to comply with the Act they may be named in the Agency report or by other electronic means. Refer to the WGEA website for more information on reporting obligations.

[1] Workplace Gender Equality Agency, Australia’s gender equality scorecard: Key findings from the Workplace Gender Equality Agency’s 2016-17 reporting data (November 2017), 8.

[2] Workplace Gender Equality Agency, Australia’s gender pay gap statistics (February 2018), 1.

[3] Application by United Voice and the Australian Education Union [2018] FWCFB 177.

[4] Application by United Voice and the Australian Education Union [2018] FWCFB 177.

[5] Fair Work Act 2009, s 306.

[6] Fair Work Act 2009, s 305.

[7] Fair Work Commission Annual Report: Access to Justice – 2016 – 2017

[8] FW Act s351

[9] Sex Discrimination Act 1984 (Cth) s 14; Equal Opportunity Act 1984 (WA) s 11