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Alternative Law Journal |
Mary Rose Liverani
Mary Rose Liverani is a freelance
journalist.
In the recently completed NSW Pay Equity Inquiry, held by the NSW Industrial Relations Commission, the employer groups were arguing pay inequity simply did not exist, the Labour Council of NSW and women’s coalitions were pushing for specific gains, and the government followed its ‘mandate to eliminate over time, gender-based inequities’. But at the same time a pay equity inquiry is not a trial — and whatever the outcome, no party is expecting to win or lose entirely.
Equal pay for work of comparable value may now have the standing of a motherhood statement (the NSW Employers Federation says it supports the proposition), but it has not always been so.
Between 1907 when the federal Harvester case set a minimum wage for males based on their ‘breadwinner’ status (female rate set at 54% of the male wage in 1919) and 1958 when NSW became the first Australian industrial jurisdiction to legislate for equal pay in the Female Rates (Amendment) Act 1958, wages for working women were largely seen, by governments, unions and employers — predominantly male — as ‘adding extras’ to the family budget.
This view gradually changed as the NSW female workforce participation rate went from 31% in 1966 to 52.1% (72.7% for males) in 1995, along with an increase in the number of two-income families and of single parent families where the parent is a female. In 1969 the ‘equal pay for equal work’ principle was introduced federally, being widened in 1972 to the ‘equal pay for work of equal value’ principle and extended to NSW in 1973 (State Equal Pay Decision). Nonetheless, Treasury evidence at the recent NSW Pay Equity Inquiry presided over by Her Honour Justice Leone Glynn, suggested that while the ‘gender gap’ in male/female wages for work of comparable value could be in excess of 15%, about 2% of that might be attributed to gender discrimination.
Whatever the reason, this kind of deficiency in women’s take home pay is now a major issue for Western governments. A survey last year by the American Federation of Labor (AFL), which has 5.5 million women members, revealed that for 99% of working women, equal pay is a top concern.
The AFL claims that the wage gap between men and women is such as to cost the average 25-year-old working woman $523,000 over the course of her working life.
That is a family issue according to the AFL, because women’s wages are essential to their families. The gap can mean the loss of decent health care, tertiary education for the children, a secure retirement or simply being able to pay the household bills on time.
In Canada, the Human Rights Tribunal recently ruled that the federal government owes nearly 200,000 federal civil servants up to 13 years of back pay to wipe out the wage gap between female and male-dominated jobs in the public service. The decision, which could cost the federal government up to $4 billion in back pay and interest, is the conclusion of a 14-year struggle for pay equity by Ottawa civil servants. Reportedly the largest and longest running human rights case in North American history, its implications will be far-reaching.
Purported evidence of discriminatory gender gaps notwithstanding, New South Wales advocates Tim McDonald (Employers Federation) and Gail Gregory (NSW Labor Council) started work on the Pay Equity Inquiry, convinced that equity in NSW has already been achieved and that ‘things could just go on as they are’ (McDonald).[1]
McDonald’s view accords with his client’s major argument: ‘In relation to undervaluation in the broad we submit that there is no proof of the existence of pay inequity, gender discrimination or the undervaluation of work in female dominated industries’.
Gregory’s skepticism, on the other hand, was at odds with her advocacy. It was just a personal belief, she told me — understandable in a former union representative of the NSW Nurses Association, one of the few female dominated industries perceived to have achieved pay equity. ‘I thought everything could be set right through changes to the wage-fixing principles’, Gregory said, ‘but after 20 days of evidence I saw I was wrong. I realised this was going to be the biggest matter since the equal pay case 30 years ago. Then, the approach was “let’s just increase women’s wages by 30%”. And you came in with a one-eyed legal view. Now, you realise the issue requires a massive drawing together of the theoretical, the legal and the economic — you have to give some consideration to the capacity of industry to pay, for instance.’
Gregory went on to say that although an active unionist before turning to law, she was unfamiliar with feminist theory. She had noted with interest at the Inquiry that while the women’s groups knew very little about industrial relations, they had an impressive grasp of the theory underlying the arguments being presented.
‘That brought a new perspective to the issues’, she said: ‘some of the employer groups became more ambivalent in their attitude.’ Gregory also commended the Counsel Assisting (CA), Michael Walton, for his contribution as an inquisitor.
The CA leads the evidence in this kind of Inquiry. Usually there’s very little cross-examination but cross-examination turned out to be hugely significant in this case, especially for bringing out information from witnesses who were new to the task of describing their work, particularly in a way relevant to pay equity.
Gregory’s own cross-examination skills drew praise from a representative of the National Pay Equity Coalition (NPEC), the major women’s group at the Inquiry. ‘When Gail Gregory opened her examination of Hughes with the question, “Professor Hughes, how long were you at the World Bank?” we knew Helen Hughes’ evidence was going to take a beating’.
Transcripts show that Hughes — one of the expert witnesses called by the employers’ groups — had not (as Gail Gregory put it to Her Honour ) ‘undertaken any specific studies (on) pay equity and the effects of such adjustments or indeed in relation to comparable value or anything related to the matters currently before the Commission’. Now emeritus Professor (Economics) at the ANU and a part-time senior Fellow at the Centre for Independent Studies, Hughes revealed she was the first woman manager appointed to the famously male preserve of the World Bank. There were very few women at the Bank at that time, she said, but she had participated in a program to give women equal access to World Bank jobs and when she left, 30% of managers were women. No, there had been no occupational segregation at the Bank, she told Gregory, nor subsequently any affirmative action to increase the number of women, simply a drive to give women equal training. Her view was that pay differences reflected differences in training rather than ‘skills’. Workers developed higher earnings not by having pay inequity remedied but by ‘shifting jobs or not sticking in the one place’.
On the subject of occupational gender segregation (Australia’s having the highest incidence of this in the OECD) and the degree to which women are channelled into low-paying hairdressing, librarianship, processing, retail and clerical work as opposed to ‘self-selecting’ those industries, Hughes resisted any notion that entry to well paying male-dominated industries presented almost insuperable barriers to women.
Later, she stated that migrant women outworkers were poorly paid (below the legal minimum) because ‘their communities forbid them to learn English. As a result they do not have access to other jobs that they could easily do and they allow employers to prey on them’.
Gregory then asked her if that particular sector did not have a choice and was not paid in accordance with its value, was it possible there could be other female dominated industries where women are working (not by choice) and are not paid proper value. Hughes, however, returned to her theme that ‘the main way to reduce the earnings differential between boys and girls’ was for ‘girls to be as keen on a career as boys’, to head for higher tradejobs (plumbing, motor mechanics) and managerial positions and that raising wages in accordance with a ‘subjective’ notion of value rather than tying them to productivity increases would add to unemployment.
When the subject of outworkers was raised again she denied that their low wages represented the market at work. The market was failing, she said, because employers were not being compelled to pay the legal minimum. She agreed that ‘one of your central propositions is that women workers in NSW should not expect pay equity to deliver significant changes to remuneration’ (because gender inequity is minimal) but rejected the conclusion that remedying pay inequity would consequently not have a significant economic impact. The general tenor of Hughes’s arguments was that the market does not allow inequities in wages: you just don’t accept a lower wage if you’re offering skills of equal value. She had never accepted such a condition, she said — and if you want higher wages you increase your market value through more education and training.
As Deputy Director of Employee Relations at the Employers’ Federation of NSW, Tim McDonald was advocate for the group he said was most concerned by any possible changes to wage fixing principles in female-dominated industries. (Presumably, the Chamber of Manufacturers — Industrial — on whose behalf he also filed a submission, is less worried because gender-based wage rises impact less on male-dominated industries). But in this adversarial inquiry the onus of proof lay with the proponents of the ‘gender-based inequity requires a remedy’ argument.
McDonald was ready to counter that argument with an array of propositions. If men earn more money than women because they work much more overtime and longer hours, and women indicate they do not want to work long hours, how can this indicate gender discrimination or the undervaluation of work?
Asked McDonald: Does the 30% gap in earnings between married men and unmarried men point to an undervaluation of the work of unmarried men, or a prima facie case of pay inequity for unmarried men?
Drawing on experts for support, McDonald sought to demonstrate that it was impossible to arrive at a statistically definitive figure on the size of male–female earnings, and moreover, such differences as were discernible could be attributed to differences in age, part-time and full-time status, and differences in the time spent in the workforce.
He pointed to the impact on earnings of education, experience, investment in training and some characteristics of the firm (size, region, capital intensity, ownership type especially) and drew on academic studies that attributed a very minor role to occupational segregation in contributing to gender-based wage differentials (2%, according to one study of non-managerial earnings).
Many but not all of these generalised arguments were applicable to the specific occupations that came under review at the Inquiry, and were nominated by the ‘gender- based inequity’ parties as work of comparable value but inequitably rewarded on a discriminatory gender basis: motor mechanics earned more than hairdressers, geologists more than their comparators — librarians — cutters (male) more than trimmers (female) in the seafood processing industries and C3 level employees at AWA Plessey (electronic technicians) more than childcare workers.
The line of reasoning taken by McDonald, much of it drawing on standard economic theory, has been of such long standing and is so familiar, almost self-evident, that it has acquired the status of commonsense.
But as the women’s groups argued, commonsense fails to wrestle with the potentially discriminatory assumptions underlying ‘skilled’ work, or to ascertain whether exclusionary practices exist that limit women’s access to certain areas of work, or to assess the extent to which the domestic division of labour conditions both men and women’s access to the workforce.
Part of the Crown’s submissions to the Inquiry was the data compiled by the Women’s Equity Bureau (WEB) located within the Department of Industrial Relations. This showed, among other things, that mothers of younger children averaged the least time spent on paid work, while fathers of younger children averaged the greatest time spent on paid work and that women generally spent almost twice as much time as men on unpaid work caring for the sick.
Commonsense may also perceive that women ‘self-select’ to work in female-dominated industries in order to balance family and work responsibilities, but the NPEC holds that the domestic division of labour and inadequate childcare facilities, together with the structure and segmentation of industry compel women into those industries: their choice is illusionary.
The commonsense view of ‘skilled’ work actually overlies flawed — and gender-based — assumptions, according to the NPEC. Concepts of skill have historically been constructed to privilege men and to devalue what women do.
The nursing profession, for instance, has achieved pay equity by emphasising the technology component of its members’ skills and by downplaying the personal skills that are at the very core of nursing.
Much of the evidence presented at the Inquiry bore on the failure of classification structures and pay scales to reflect the real skills performed.
It was shown that if factory workers performed the same work as outworkers — making up a whole garment from beginning to end without supervision — they would be paid at the highest rates of their award, while outworkers who routinely performed at this high level of skill were paid at the lowest rates of all.
In male-dominated professions, classification and taxonomy were ‘scientific’ skills, but the same work, requiring precision, carefulness, breadth of knowledge, accuracy and analytical ability was downgraded to ‘clerical’ in librarianship.
The hairdressers’ award stipulates payment for cutting (technical) skills. It takes no account of customer service (interpersonal) skills. Yet an employer gave evidence that an employee lacking in customer service skills would be let go irrespective of their technical proficiency. According to the NPEC, implementation of the Structural Efficiency Principle in awards shows that while male-dominated occupations have an excess of classifications, in female-dominated occupations, skills are all lumped together in a package that is paid at the lowest rates.
Eliminating gender bias from work value assessments can be done, said the NPEC, but it requires a deliberate, comprehensive and sustained approach and this has yet to be adopted. In fact, few assessments of the value of women’s work have ever taken place.
Witnesses at the Inquiry gave evidence that although equal pay principles explicitly required proper work value assessments of women’s work to be carried out, this has been largely ignored. The implementation of equal pay in awards has been largely by consent, with male management and male union officials agreeing on the appropriate classifications and rates for women’s work and comparing them with classifications in female-dominated industries. Getting the award classifications right is important for women because a high percentage in NSW work under State awards.
Since McDonald’s clients argued that there is no pay inequity, they saw no need for mechanisms or processes to enable pay equity matters to be brought to the Commission. Consistent with that they wanted the Commission to recommend removing from the Industrial Relations Act 1996 the provision dealing with pay equity and restoring to the Anti-Discrimination Act 1977, the exemptions provided to awards and agreements. (Both these measures were presented by the Crown as among the most laudatory steps government has taken to achieve pay equity.)
McDonald claimed no evidence had been produced to isolate or delimit any gender component of pay inequity and that in the absence of such proof, further obstruction of the market’s wage determining role would increase unemployment, especially in female-dominated industries where labour is usually a high proportion of production costs.
Nor did McDonald’s economic experts accept that staggered increases would alter the final outcome. Short term or long term, everybody will be worse off if women are paid the same as men for work of comparable value: men will lose jobs, women will lose jobs, private consumption will drop as well as investment in housing; prices will rise, foreign debt will rise, national income will decline.
For women, a worse scenario is that there would be a radical loss of jobs in shops, hotels, restaurants, childcare, libraries, processing, the clothing trade and hairdressing salons.
Recommendations from the Crown, the Labor Council and the NPEC put great store by adopting the International Labour Organisation (ILO) definition of remuneration (to include over-award payments, bonuses, overtime, penalty rates, superannuation and other payments as well as non-monetary remuneration) and its provision that rates of remuneration are established without discrimination based on sex. By extension, they said, this means adopting the ILO’s definition of discrimination.
Also emphasised was the need for the Commission to define ‘value’ in a broad and flexible way, to be able to rule that an industry was gender-dominated, and to ask that awards in such industries, specifically those female-dominated industries reviewed at the Inquiry, be reopened for comprehensive equitable work value assessment.
In particular, the pro-equity parties called for a new equity pay principle to be adopted (to allow equal pay complaints to be brought before the Commission), a work value test to be devised, guidelines developed for the use of the Commission and industrial parties in considering issues that arise in the context of pay equity and a system of award review and monitoring established as provided for by s.19 of the Industrial Relations Act 1996.
A review of the awards, as envisaged by the women’s groups and the Labour Council, would seek to fully investigate and describe such matters as the work, levels of responsibility, skills, knowledge and career paths of the specific occupation.
The women’s groups emphasised that the essentially subjective nature of work value makes it crucial that assumptions and perceptions of the work be highly specified and transparent. Some pretty stringent requirements for regulating outworkers were proposed and if implemented would impact heavily on those firms whose products currently command high prices in the domestic market. One very clear message from the Inquiry is that gender equity pay for women is most effectively achieved within the union movement and the industrial relations system: the only two female-dominated industries to have gender equity are nursing and teaching.
As the pay equity advocates observed, membership of a union is not sufficient. Women need to have more influential positions in unions, more representation on industrial tribunals, in industrial relations positions in public and private companies and in employer organisations.
Reference
[The report on pay equity has now been released by the NSW Industrial Relations Commission: Ed.]
[1] All quotes are from the transcript of the hearing, or from personal interviews, unless otherwise stated.