Pay Equity

As a Federal election year, 2019 is likely to see ongoing comment on the equity and equality of pay as the two major political parties seek to identify workplace support for policies somewhat different in character.

Pay equity, in principle, should reflect the equivalence of pay comparability having regard to position accountability at the first level, hours worked and effectiveness at another level.  Pay equity challenges are likely to arise in the 2019 year where workforces, represented by unions and others, seek to align pay outcomes by addressing multiple occupations where there is a noticeable differential in pay levels advocating change in the belief that there is no difference in work value.

Emerging arguments may also be influenced by the gender balance of occupations and the equivalence of pre-employment training as well as continuing professional development.  Such arguments are unlikely to focus on the capacity of different industry sectors to pay or source the funds essential to meet employment costs.  We believe it is unlikely that those advocating change will discriminate between the for profit, not-for-profit or the government sector.  They are also unlikely to consider the proximity of the employment opportunity to the residency of the employed individuals or other circumstances which influence the time taken by employees to participate in employment relevant to their training and expertise or lifestyle expectations.

Recent comment in this context has arisen in academic circles where there has been criticism about entry standards required to undertake three and four-year degrees which reflect, potentially, supply and demand not prerequisite educational attainments. University admission may also be  creating a misalignment between aspirations and high school accomplishments of those preparing for tertiary training.

A collective perspective being put in some quarters is that all training at university leading to a Bachelor’s degree, which generally takes three or four years to achieve, produces employees able to offer equivalent contributions and undertake work of equivalent value.  This proposition should be subject to careful review given that it assumes that all occupations require similar entry standards and intellect before commencing tertiary training and delivers graduates of equivalent quality and capacity.

One of the fundamental constructs in behavioural science is the acknowledgement that there are individual differences across every human attribute.  A proposition which assumes these differences are limited appears to be taking a position which is not plausible.

Traditionally, there has also been a view expressed that many occupations require particular physical attributes and strength which nominally favour male workers.  We observe there are emerging academic studies asserting that many undefined or less observable attributes or skills which differentiate male and female employees are not given due consideration in the determination of work value and, as a consequence, pay equity.

We believe that these issues may well gain wider government and community support over the next five to ten years as they are considered through “non-traditional” lenses.

In an environment of modest wage growth, we anticipate that well-represented workforces in the least well-paid occupations, or those where there is a gender dominance in relation to workforce participation may be subject to a pay equity and work value review. Such reviews may not be driven by prevailing pay levels or work value determinations but rather to untried, untested and potentially inappropriate criteria to leverage remuneration.

A number of industry sectors would struggle to meet the outcome if pay equivalence was predicated on factors not traditionally considered in work value and did not account for an industry’s or employer’s capacity to meet pay increases. Outcomes could also be detrimental to one gender over another if determinations changed access to employment opportunity.