Federal Election 2019 – key workplace issues 02: Gender pay gap

With a Federal Election looming large, the major parties have commenced their sales pitch to the Australian public. Unsurprisingly, issues around employment and industrial relations are set to be a key battleground in who forms the next Government. This article explores the parties' respective positions on addressing the gender pay gap in Australia, what they plan to do, and how they plan to do it.

History of a gendered wage

The Harvester Case in 1907 was the first real consideration of what constitutes a "fair and reasonable" wage for workers, and is generally seen as the starting point for considering the history of setting wages in Australia. It was Justice Higgins' view that a "fair and reasonable" wage should allow an unskilled labourer to support a wife and children in "frugal comfort". The factors set out in this decision have long been the basis of submissions about fixing an appropriate minimum wage.

From this came the Fruit Pickers Case, in 1912 where Justice Higgins was asked to consider how the Harvester principles applied to women. In this case, Justice Higgins determined that women working in predominantly female industries were not entitled to a wage calculated in the manner of the Harvester Case, as most females were not required to support a family, and set the "fair and reasonable" female wage as a percentage of a male's wage. Arguably, this was one of the key factors in establishing a gender pay gap in Australia that has been compressed with time.

The issues

The policies seem to focus on four key issues relating to the gender pay gap: reporting on wage statistics, government funded paid parental leave, superannuation and equal remuneration.

Reporting on wage statistics

The Coalition has committed  $8 million to WGEA to upgrade its systems to improve reporting on gender equality. It says this funding will enable public sector employers to report on their pay gaps for the first time, which will grow WGEA's sample size from 40 to 75% of the Australian workforce.

Labor has also committed to increased reporting, which will involve annual reporting on the pay gap, requiring big business to report on their pay gap publicly and prohibiting pay secrecy clauses. It is currently unclear as to the manner in which Labor will implement these, however it would likely require legislative change.

Government-funded paid parental leave (PPL)

PPL is provided to eligible parents under the Paid Parental Leave Act 2010 (Cth) (PPL Act). The maximum amount of PPL available is currently 18 weeks. Both major parties have indicated their intention to amend the PPL Act in various ways.

The Coalition have indicated their intention to import a level of flexibility in when PPL may be taken by an eligible parent. Their proposal would allow parents to break the available 18 weeks into two blocks: an initial block of 12 weeks to be taken with the first 12 months of birth or adoption, with the remaining six weeks being able to be taken at a later time, within two years of the birth or adoption. Such a change would allow parents to return to work quicker, while remaining eligible to use the balance of their entitlement at a later date.

Labor has also indicated its desire for eligible parents to receive 26 weeks' of paid parental leave, which they identify as the internationally recognised best-practice benchmark. It is unclear at this stage the manner in which it will bring this about, but it has indicated that it will likely be achieved through a combination of government and employer contributions.

The target of 26 weeks has also been set by the Greens meaning that, depending on the balance of power following the election, it is possible that such an amendment may be made sooner rather than later.

Superannuation

The Coalition has promised to continue to roll out a number of superannuation initiatives which it says will particularly benefit women. More specifically, Labor and the Greens have pledged to pay superannuation on government-funded PPL, and abolish the minimum threshold for compulsory employer superannuation contributions.  Labor has also promised to initiate an expert review to examine how the superannuation system works to affect the balances of women, and what can be done to improve this.

Equal remuneration

There have been two high-profile equal remuneration cases in the last 10 years: one relating to the social and community services sector, which was successful,  and one to the childcare sector, which is ongoing.

The key issues coming out of these cases has been whether there should be  set of criteria or principles agreed to guide future equal remuneration applications, or whether the broad test in the Fair Work Act 2009 (Cth) as it stands is sufficient.

Labor favours the first approach, and has promised to legislate principles of equal remuneration, which it says will be drawn from the case law that exists following the social and community service equal remuneration order. The Commission will be supported in this task by a Pay Equity Panel comprising of experts on the subject. The Coalition is yet to address this issue but it is likely they will resist legislating such principles, arguing instead that each application should be considered on its own merits in accordance with the principles of case law.

Related Insights

• Federal Election 2019 – key workplace issues 01: Minimum wages and penalty rates 
• Federal Election 2019 – key workplace issues 03: Labour hire and sham contracting