Narrowing the gender pay gap
As noted in the previous chapter, the gender pay gap is a significant
contributing factor to achieving economic security for women in retirement as
it impedes accumulation of wealth and superannuation over a lifetime. This
chapter discusses measures to address the gender pay gap across industries
where female dominated sectors have historically been lower paid compared to
male dominated industries. The second part of the chapter discusses various
measures to narrow the gender pay gap within organisations. These measures
include gender reporting and developing gender pay strategies, including
setting targets for women in leadership roles.
Equal pay for work of equal value
As noted in the previous chapter, industrial and occupational
segregation is one of several major factors contributing to the gender pay gap.
Historically, female dominated sectors, like health care and teaching, have not
been rewarded as favourably as more male dominated sectors.
The Workplace Gender Equality Agency (WGEA) explained pay equity as follows:
Pay equity is achieved when women and men receive equal pay
for work of equal or comparable value. This means that women and men performing
the same role at the same performance standard are paid the same amount. It
also means that women and men performing different work of equal or comparable
value are paid equitably.
Fair Work Act 2009
The Australian Services Union (ASU) noted that legislative changes introducing
equal remuneration for work of equal or comparable value into the Fair Work
Act 2009 achieved some success in ameliorating unequal pay.
Under the Fair Work Act:
The Fair Work Commission can make an equal remuneration order
requiring that certain employees be provided equal remuneration for work of
equal or comparable value. An application for an equal remuneration order can
be made by an affected employee, a union which is entitled to represent an
affected employee or the Sex Discrimination Commissioner.
Once an equal remuneration order has been made, it will prevail
over a modern award, enterprise agreement, a Fair Work Commission order or any
other industrial instrument if it is more beneficial than these instruments.
An employer that contravenes an equal remuneration order can be
liable for a penalty.
To date, the ASU has run the only successful case in the federal
jurisdiction under the Fair Work Act.
The ASU noted that under the previous legislation, of the '17 or so cases',
none had been successful.
In the view of the Australian Council of Social Service (ACOSS):
The Fair Work Act 2009 introduced changes that
enhanced the ability of Fair Work Australia to make orders that provide for pay
equity between male and female employees. The Act now refers to a right to
equal pay for work of comparable value as well as equal value. The case for
community sector workers was the first test of these new provisions.
ACOSS described the decision on the successful ASU Equal Remuneration
Order as a 'key milestone in addressing unequal pay for women'. It stated
further that the decision was:
a milestone/great step towards ensuring viable, effective social
services by requiring appropriate levels of pay for the staff we depend upon to
deliver those services; and
the first step in addressing the historical undervaluing of
community sector workers.
The ASU stressed the importance of maintaining a legislative framework
to ensure equal pay. It also noted that:
...it is perhaps more important that the legislative framework
is accessible and not unnecessarily burdensome for applicant workers and
unions. The ASU's Equal Pay Case established that the value that is placed on
work is related to gender and the market, without regulation, is not a
sufficient way to regulate work in caring and other female dominated sectors.
Pay inequalities are imbedded in the way we think about work, efficiency and
profit and are often dismissed and legitimised by referring to the market as
The ASU contended that the legislation provides an adversarial system
requiring a party or parties to make an application to the Fair Work
Commission. It informed the committee that the success of its case came at
significant cost, effort and preparation.
The House of Representatives Standing Committee on Employment and Workplace
Relations 2009 report, Making it Fair: Pay equity and associated issues
related to increasing female participation in the workforce, observed that
equal remuneration orders 'rely on an applicant(s) initiating proceedings and
any equal remuneration order applies only to those applicants'. In other words,
according to the report 'an equal remuneration order does not amend the
industrial instrument for all employees engaged under its terms.' The ASU
agreed with the observation made by the Chair, Ms Sharryn Jackson MP, that:
It is true that the Fair Work Act does widen the scope for
applications to be taken at the federal level for equal pay for work of
comparable value. However, the experience of similar provisions in some state
Industrial Relations legislation still demonstrate relatively few cases have
been dealt with. All cases have been adversarial, lengthy and often costly.
I am convinced that an alternative mechanism that allows for
a non-adversarial consideration of the undervaluing of women's work and a
comprehensive scheme to correct undervaluation across industries is more
efficient and preferable.
Ms Linda White, ASU, suggested that there may be scope for the Fair Work
Commission to examine modern award base rates to determine whether they are
comparable for work of equal or comparable value.
Pay Equity Unit
The ASU noted that the Making it Fair report made a number of
comprehensive and detailed recommendations, and while some of the
recommendations have been implemented, such as the creation of the Pay Equity
Unit, the 'majority of the recommendations that were unanimously supported at
the time still require action from government'.
The Fair Work Commission established the Pay Equity Unit, which commenced
operation on 1 July 2013. This unit was established to undertake pay equity
related research and provide information to inform matters relating to pay
equity under the Fair Work Act, including:
annual minimum wage reviews;
four-yearly reviews of modern awards; and
equal remuneration cases.
Work value approach to equal
With regard to gender pay equity determinations, members of the
Association of Industrial Relations Academics of Australia and New Zealand
(AIRAANZ) supported a work value approach, rather than making comparisons
between men's and women's work, to address pay inequity through tribunals. It
...there have been attempts through provisions in national
legislation and industrial cases [to] address pay inequity between men and
women. Unfortunately there has been a tendency to rely upon direct comparisons
between men's and women's work to establish gender-based discrimination. These
approaches have meant that they have not been effective in tackling gender
based pay inequality in a systematic fashion. This (male comparator) logic has
been reinforced in the recent Childcare Equal Remuneration Decision, 2015. The
Members see merit in providing more explicit guidance for the tribunals to move
away from male comparators in their deliberations and to rely instead upon more
complex analysis of work value.
In its submission to the Post Implementation Review of the Fair Work
Act, the Australian Human Rights Commission recommended that the provisions
be amended to clarify 'that there is no requirement for a male comparator to be
identified in order to make an equal remuneration order'.
The committee considers that addressing gender pay equity is a necessary
part of closing the pay gap. The historical undervaluing of 'women's work' in
female dominated industries and sectors will not be rectified without
intervention. The committee is concerned that the ASU's equal pay case has been
the only successful case under the current legislation. The ASU's experience in
bringing forward its case was foreshadowed in the Making it Fair report,
namely that the adversarial nature of the process is overly lengthy and
resource intensive. The committee considers that the Equal Remuneration Orders
under the Fair Work Act should be reviewed to examine how the system can be
improved to ensure the mechanisms for bringing forward equal pay cases are
accessible and not overly burdensome for applicants.
The committee recommends that the Australian Government review the Fair
Work Act 2009 to determine the effectiveness of Equal Remuneration Orders
in addressing gender pay equity, and consequently in closing the gender pay
gap. The review should consider alternative mechanisms to allow for a less
adversarial consideration of the undervaluing of women's work.
Narrowing the gender pay gap within organisations
This section discusses measures to address the gender pay gap within
Gender reporting and gender pay
Ms Yolanda Beattie, Mercer, argued that organisations should be
encouraged to disclose information around gender pay gaps. She stated:
Transparency is very powerful and sunlight is a very powerful
disinfectant. As we create more transparency about what companies are doing,
market forces, arguably, are the best way to then influence how companies
Inkling Women is an organisation that works with other Australian
organisations to increase the representation of women in leadership positions.
Dr Gemma Munroe, Inkling Women, noted:
We have worked with hundreds of organisations and we have
only found one organisation where, after conducting a pay audit, it was found
that women were being paid more than men—and I think they were being paid 0.8
per cent more. In other examples that we have seen, men have been paid
significantly more than women.
A number of submissions supported the work of the WGEA and noted the
importance of gender reporting and data collection in addressing the gender pay
The WGEA is a statutory agency created by the Workplace Gender Equality
Act 2012, which replaced the Equal Opportunity for Women in the Workplace Act
1999. The role of the WGEA is to promote and improve gender equality in the
workplace. The WGEA provides advice and assistance to employers in relation to
the gender pay gap, gender composition of the workforce, employer policies and
strategies relating to gender equality.
In addition, submissions urged current and future governments to ensure
that the WGEA is adequately resourced.
Women in Super outlined the importance of gender reporting in tracking
progress. It stated:
The collation and analysis of data from employers will enable
us to understand where to focus efforts and how we are progressing over time so
that issues in the system can be addressed.
The Workplace Gender Equality Act 2012 requires non-public sector
employers with 100 or more employees to report to the WGEA annually against six
standardised gender equality indicators:
gender composition of the workforce;
gender composition of governing bodies of relevant employers;
equal remuneration between women and men;
availability and utility of employment terms, conditions and
practices relating to flexible working arrangements for employees and to
working arrangements supporting employees with family or caring
consultation with employees on issues concerning gender equality
in the workplace; and
any other matters specified by the Minister—sex-based harassment
Under the Workplace Gender Equality Act 2012, there will be new
reporting requirements for 2016. Relevant employers will be required to provide
data about the number of appointments, promotions and resignations by manager, non-manager
and gender. Reporting on promotions and resignations must also include employment
status—part-time, full-time or casual. Employers will also be required to
provide information about employees leaving the workforce following parental
leave in order to examine the effect of parenthood on workforce retention.
With regards to the new reporting requirements, Ms Beattie, Mercer,
That is data that most companies never look at, and we will
be forced to look at it through that legislation for the first time this year.
Whilst time will tell, I do think that that will start creating a mandatory
legislated evidence base that, hopefully, will cause CFOs [Chief Financial
Officers] who have to sign off on that report to start thinking, 'What is this
costing and what are we going to do about it?'
Unions NSW argued that there is limited data on additional
superannuation contributions and the inclusion of mandatory reporting
requirements, including gender breakdowns of superannuation payments, should
also be considered.
Policy and strategy
The WGEA's 2014–15 data showed an increase in the percentage of
employers with a gender equality strategy from 18.3 per cent in 2013–14 to 20.6 per cent
in 2014–15. The data also showed increases in the proportion of employers
conducting gender pay gap analyses, introducing policies or strategies for
flexible working and supporting employees experiencing domestic violence.
The WGEA requirements include reporting on whether organisations have
policies or strategies in place to address the gender pay gap. The WGEA
explained the distinction between policies and strategies addressing gender
inequity in the workplace:
From our perspective, we see many organisations that have a
policy in place around a particular workplace issue such as flexible work
arrangements, but the organisation will often lack a strategy. The strategy
will actually drive the policy. From our perspective, we would like to see
organisations have both a policy and a strategy that is going to drive and seek
outcomes from that policy, rather than just having a policy there available
that often is not utilised by the workforce.
The WGEA explained the difference between gender equality policies and
strategies as follows:
A policy on a particular area of employment includes relevant
underlying principles and practices applied across the employment lifecycle to
support and improve the desired outcomes in the workplace. It provides an
overall framework for responsibility and accountability and may include
A strategy defines a range of objectives in a particular area
of endeavour and the underlying business rationale. Typically, it also
indicates how these objectives will be realised, and provides an assessment of
risks and success factors. Developing specific project plans for discrete
initiatives also provides the detail of how the strategy is executed. Without a
strategy, it is either difficult or impossible to gauge whether day-to-day
activity and investment are helping the organisation effectively progress
towards the desired end-goal.
The WGEA provided the example of PricewaterhouseCoopers' (PwC) response
to a recently conducted gender pay equity audit of their organisation, in which
PwC publically disclosed an organisation-wide gender pay gap of 11.4 per cent
in favour of males. PwC attributed the gender pay gap to a range of factors
such as the low representation of women in senior positions, including the 18
per cent share of partnerships held by women. As a result of the audit, PwC has
adopted a target for a minimum of 40 per cent women and 40 per cent men making
up future partner intakes, and resolved to be stringent in their annual
Mercer proposed directing additional resources to the WGEA to enable it
to work with businesses to effect faster and better change. It stated:
Some organisations like Google, LinkedIn and other Silicon
Valley companies have begun to share their data. More recently professional
services companies such as PWC, Ernst & Young and KPMG have followed suit.
These companies recognise that an honest assessment of the gender equity issue
is the essential first step in solving it. The Australian Government, through
the Workplace Gender Equality Agency, can work with businesses to support those
willing to go above minimum legislative requirements by providing hands on
assistance on the optimal ways to manage their organisation's gender equity and
gain real business benefits from driving change.
Women in Super outlined the importance of ensuring gender equality
policies are not just reported on but actively implemented by organisations. It
...86 per cent of OECD countries have a regular measure of
performance of gender equality policies and a majority of countries also have
regular reporting requirement to parliament. Yet only a few countries have
integrated gender equality requirement into managers' performance and
accountability despite the acknowledgment that policies are only as good as
their implementation and effective implementation requires 'soft' and 'hard'
The Australian Council of Trade Unions (ACTU) argued that the low number
of organisations undertaking gender pay gap analysis reflected a need for
broader engagement across all organisations.
Women's Information and Referral Exchange (WIRE) supported the WGEA's
role in encouraging businesses to make gender equity and gender pay equity a
part of good business practice, through awareness, incentives and demonstrated
Industry Super Australia observed that the WGEA reporting framework
relies on a proactive response from employers. It noted that although organisations
are required to report on the existence of policies and strategies, they are
not necessarily penalised if they do not have them.
Ms Libby Lyons, WGEA, noted that the agency was very conscious of the
burden that its reporting requirements already have on organisations. She
There is a lot of data that they have to provide us, and it
is often difficult for them to gather it all together, particularly for smaller
organisations that do not have a lot of resources dedicated to these sorts of
things. We are ever conscious of that.
Rather than increase the reporting burden on organisations, the WGEA
encourages organisations to apply for an Employer of Choice for Gender Equality
citation as a means to promote employer best practice. In order to be eligible
for the citation, organisations must demonstrate best practice in the area of
taking a strategic and systematic approach to workplace gender equality.
Ms Lyons stated:
In order to receive one of those citations—and there were 92
organisations last year—you have to provide more detailed information around
these issues of policies, strategies, actions and leaders leading the way in
terms of what they are doing to address gender equality. Encouraging more and
more organisations to apply for that I think is one way of addressing these
issues without requiring an extra burden on organisations.
Pay secrecy in employment contracts
One proposal put to the committee to address the gender pay gap was to
improve transparency regarding wages within organisations.
Ms Veronica Black, Finance Sector Union, observed:
If people are very clear on who is being paid what for doing
what job, that makes a difference. There is a massive culture of secrecy in the
finance industry. People are explicitly told that they are not to discuss pay
outcomes with their colleagues, and you will have two people sitting side by
side doing the same job on very, very different pay arrangements. As long as
that secrecy continues, then you continue to see those kinds of issues. I think
that, once it is out in the open and people are clear that they are being
treated in an unfavourable way compared to others, it is harder for
organisations to continue to justify paying people so differently when it is as
clear and out there as that.
The committee notes that Education and Employment Legislation Committee
is currently conducting an inquiry into the Fair Work Amendment (Gender Pay
Gap) Bill 2015, a private senators' bill which would amend the Fair Work Act
2009 'to remove restrictions on employees' rights to disclose the amount
of, or information about, their pay or earnings'.
The committee notes the WGEA's submission to the inquiry into the Fair
Work Amendment (Gender Pay Gap) Bill 2015 considers that while greater pay
transparency may contribute to an environment where women are better equipped
with information when undertaking pay negotiations, 'there is no hard evidence
linking the removal of legal prohibitions on employees discussing their pay to lower
gender pay gaps'. The WGEA considered the 'best way to address gender pay gaps
is for organisations to analyse and take remedial action to address gender pay
The committee notes the evidence that pay secrecy arrangements are commonplace
in some sectors and could pose a barrier to pay equity. The committee does not
see any compelling reason for employers to impose these restrictions on
Women in leadership roles
As noted in the previous chapter, women continue to be under-represented
in senior leadership roles. Inkling Women observed that gender discrimination
in the workplace continues to be one of the reasons for the underrepresentation
of women in leadership positions. It noted:
Gender discrimination in workplaces remains widespread. It is
also often subtle, unnamed, unnoticed by many men and women, and commonly
unintentional. Nonetheless, workplace cultures that persistently, if subtly,
devalue the contributions of women or exclude the participation of women contribute
to the attrition of women from the workplace and particularly from the pathway
to seniority and higher pay. A sense of exclusion from important networks, both
formal and informal, is reported by professional women.
Recent analysis by the WGEA and the Bankwest Curtin Economics supports
the argument that increasing female representation on boards may help to
address the gender pay gap. The research found that 'a greater representation
of women on boards is associated with significant reductions in gender pay
gaps, even after taking account of other factors that are likely to influence
pay gaps at an organisational level'.
Targets and quotas
Some submissions expressed the view that introducing quotas or targets
may improve the current levels of female representation in senior leadership
roles. The National Australia Bank suggested that consideration should be given
to setting gender targets and the publishing of the gender composition of
listed company and public sector executive management and boards.
Dr Gemma Munroe, Inkling Women, stated:
We would suggest that, in most organisations, if you have
that critical figure of 40 per cent of women in leadership roles—our view is
that 60 per cent would be better, but the research shows that there
are actually 30 per cent of women in leadership roles—productivity, performance
and customer satisfaction increases as does innovation, decision making,
profitability and market share. We believe we need to move towards quotas in
business and government.
Even so, Inkling Women observed that:
Neither a target nor quota can overcome the underlying
barriers to gender equity in isolation. However they are powerful signals and
commitments that continuing gender disparity is not acceptable, and will
catalyse the necessary actions to ensure a pipeline of high-potential women is
maintained and developed into a pool of high-performing women to compete for
senior and leadership roles.
The WGEA provides guidelines for setting and meeting targets to increase
gender diversity in the workplace. The WGEA supports setting voluntary targets
rather than quotas:
These targets allow employers to set goals which are
realistic taking into account their particular circumstances and the industry
in which they operate. Setting targets is a common business practice and so
easily understood and applied. We know from those who are already well down
this track that targets work. It is important, of course, that targets are
rigorous, that the necessary infrastructure is put in place to underpin their
achievement and that managers are held accountable for outcomes.
Underrepresentation of women in leadership roles is also evident in the
Australian Public Service (APS). The Community and Public Sector Union (CPSU)
informed the committee that while women make up 58 per cent of the APS
workforce overall, at more senior levels (from Executive Level 2 to Senior
Executive Service) the majority of employees are men. It also noted:
The average classification for a woman is APS4 whereas for a
man it is APS6. In the APS we also have the complication of different pay
arrangements for different agencies across the APS. What we have found over
some time in that area is that women working at the same classification level
as a man are more likely to be in lower paying agencies.
In March 2016, the Australian Public Service Commission announced that
it would be launching a gender equality strategy for the APS to address this
Closing the gender pay gap, which has remained largely unchanged over the
last two decades, will require a concerted and sustained effort. The committee
commends the many Australian organisations that have taken proactive measures
to address the gender pay gap, by conducting gender pay audits, developing
gender pay strategies and setting targets for women in leadership roles. The
committee believes that there is still much work to be done, noting only about
20 per cent of organisations reported to the WGEA that they had introduced
strategies to address the gender pay gap. The committee stresses the importance
of ongoing monitoring and analysis in order to track progress on addressing the
gender pay gap, and the importance of the ongoing work of the WGEA in providing
tools and incentives to assist organisations.
The committee recommends that the Australian Government continue
to support the work of the Workplace Gender Equality Agency and ensure that is
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