Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Equal Pay Standard Bill 2018

Bill home page  


Download WordDownload Word


Download PDFDownload PDF

2016-2017-2018

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

Equal Pay Standard Bill 2018

 

 

 

EXPLANATORY MEMORANDUM

and

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

 

 

 

 

 

 

Circulated by authority of

Andrew Wilkie MP

 

 

 

Equal Pay Standard Bill 2018

 

OUTLINE

 

This bill seeks to address the gender pay gap in Australia, emulating world-first amendments to Iceland’s Equal Status of Women and Men Act in 2017. It provides for a mechanism whereby employers that employ 25 or more people must obtain certification that they are paying men and women equally. The bill seeks to establish a stand-alone scheme for equal pay certification that will operate in addition to all current statutory requirements, including the Workplace Gender Equality Act 2012 , the Fair Work Act 2009 and the Sex Discrimination Act 1994 .

 

The bill requires the Minister to develop an equal pay standard that requires that gender is not a consideration in requiring when individuals receive different wages; requires the Minister to determine that particular bodies are certification bodies that can issue certification certificates ; requires employers (including the Commonwealth and Commonwealth authorities) that employ more than 25 people to obtain a certification certificate that says they are compliant with the equal pay standard; and allows the Minister to give a direction to an employer to take action to comply with the equal pay standard if they do not do so, with a penalty provision if the employer does not comply with the direction.

 

FINANCIAL IMPACT

 

The bill will have no financial impact.

 

NOTES ON CLAUSES

 

Part 1: Preliminary

 

1: Short title

 

1.       This clause is a formal provision and specifies the short title of the Act as the Equal Pay Standard Act 2018.

 

2: Commencement

 

2.       This clause provides for the commencement of the Act three months after it receives Royal Assent. This is to allow time for aspects of the Act to be put in place, such as the development of an equal pay standard and the appointment of certification bodies.

 

3: Simplified outline of this Act

 

3.       This clause provides a simplified outline of the Act.

 

4: Definitions

 

4.       This clause provides definitions of a number of terms used in the Act.

5.       Relevant employer is defined as being an employer who employs or usually employs more than 25 individuals who is a constitutional corporation, the Commonwealth, a Commonwealth authority or a body corporate incorporated in a Territory. It also includes a person who, in connection with constitutional trade or commerce or an activity carried on by the person in a Territory, employs or usually employs more than 25 individuals.

6.       The phrase “employs, or usually employs” means that employers whose total staff numbers may on occasions fall below 25 individuals are still covered by the requirements in this Act.

7.       Certifying functions is defined as including assessing whether a relevant employer is complying with the equal pay standard, and giving certificates of compliance to relevant employers who comply with the equal pay standard. These certifying functions are required to be performed by certifying bodies, which are determined in section 10.

 

5: Act binds the Crown

 

8.       This clause specifies that the Act binds the Crown. It does not make the Crown liable to be prosecuted for an offence, but does make an authority of the Crown liable.

 

Part 2: Equal pay standard

 

6: Equal pay standard

 

1.       Section 6 of the Act enables the equal pay standard to be created.

2.       It requires the Minister to create an equal pay standard which must require, that if individuals receive different wages, the difference must be based on relevant considerations that do not include gender. It may include other requirements, but it must include this at a minimum.

3.       Section 6(3) requires the Minister to consult with organisations representing employers, employees and small business when developing the equal pay standard.

 

Part 3: Requirement for certification certificates relating to equal pay standard

 

7: Relevant employers must have a certification certificate

 

1.       Section 7(1) requires a relevant employer (within the definition in section 4) to have a certification certificate.

2.       This requirement phases in for smaller businesses. Employers with a workforce of over 250 must obtain a certificate by 1 January 2020; between 150 and 249 by 1 January 2021; between 90 and 149 by 1 January 2022; and between 25 and 89 by 1 January 2023.

 

8: Minister may direct a relevant employer to take action to comply with equal pay standard

 

3.       Section 8 allows the Minister to give a notice in writing to an employer who is required by section 7 to have a certification certificate but does not.

4.       The notice may direct the employer to take such actions as the Minister is satisfied are reasonably necessary to ensure the employer complies with the equal pay standard. It must specify the time by which, or the period during which, the employer must comply.

5.       Section 8(3) creates an offence for not complying with a direction under this section. The penalty is 50 penalty units (currently $10,500). Section 4B of the Crimes Act 1914 allows a penalty to be increased by five times in the case of a body corporate, making for a maximum penalty of $52,500.

6.       Section 8(4) specifies that section 4K of the Crimes Act 1914 does not apply to this offence, which is consistent with the intention for the direction by the Minister to be for a specific timeframe.

 

9: Review of decisions to give directions

 

7.       Section 9 allows employers to appeal to the Administrative Appeals Tribunal against a direction by the Minister under section 8.

 

Part 4: Certification certificates

 

10: Certification bodies

 

1.       Section 10 allows the Minister to a make a determination that a specified body is a certification body. This is a body that is responsible for certifying whether an employer complies with the equal pay standard and issuing certification certificates (it might include, for example, an auditing body).

2.       Section 10(2) requires the Minister to only determine that a body is a certification body if satisfied the body will carry out its certifying functions (within the meaning of section 4) competently and impartially.

 

11: Certification bodies may give certification certificates to relevant employers

 

3.       Section 11(1) allows a certification body to give a certification certificate to an employer. This must only be done if the employer applies for a certificate and if the certification body is satisfied the employer complies with the equal pay standard.

4.       Section 11(2) and 11(3) require a certification certificate to be revoked if the employer is no longer compliant with the equal pay standard, and for the Minister to be notified when this occurs.

5.       Section 11(4) specifies that a certification certificate is only valid for 12 months (unless it is revoked earlier), meaning that employers have to reapply for certification at that time. 



STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Equal Pay Standard Bill 2018

 

This bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

Overview of the bill

 

This bill seeks to address the gender pay gap in Australia, emulating world-first amendments to Iceland’s Equal Status of Women and Men Act in 2017. It provides for a mechanism whereby employers that employ 25 or more people must obtain certification that they are paying men and women equally. The bill seeks to establish a stand-alone scheme for equal pay certification that will operate in addition to all current statutory requirements, including the Workplace Gender Equality Act 2012 , the Fair Work Act 2009 and the Sex Discrimination Act 1994 .

 

Human rights implications

 

This bill engages positively with a number of human rights, including Article 3 of the International Covenant on Civil and Political Rights (ICCPR) (equality between men and women), Article 26 of the ICCPR (freedom from discrimination), Article 3 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) (equality between men and women) and Article 7 of the ICESCR (fair wages, equal remuneration and equal opportunity for promotion).

 

Conclusion

 

This bill is compatible with human rights because it strengthens human rights.

 

 

 

 

Andrew Wilkie MP