Women are paid the same as men for equal work

THE president of the ACTU has described it as a "milestone in seeking wage justice for women in all lines of work across Australia".

The NSW secretary of the Australian Services Union says that, for the first time in 30 years, gender discrimination has been accepted in a case fighting against low wages.

They are referring to the equal remuneration case, handed down by Fair Work Australia last Monday. Covering non-government social and community services workers employed in mainly not-for-profit organisations, the decision in fact does not nominate any specific pay rises and calls for another round of submissions, particularly on the issue of funding.

A careful reading of the decision suggests the term milestone may be a bit heroic at this stage. FWA found the arguments made, and the material presented, did not present a compelling case that the pay discrepancies observed between SACS workers and similar workers in the public sector were, in fact, the result of gender differences.

Equal remuneration orders under the Fair Work Act are based on the principle of equal remuneration for work of equal or comparable value. The inclusion of comparable value is new to this statute. Unhelpfully and tautologically, the Act states that "equal remuneration for work of equal or comparable value means equal remuneration for men and women workers for work of equal or comparable value".

It is at least clear that we are dealing with gender differences in remuneration.

It should also be noted that under the act it is not necessary to prove different remuneration levels have been established on a discriminatory basis. Using this section of the act, the unions' submission is simple: SACS workers are overwhelmingly female (86 per cent); their work is undervalued; their work is undervalued because they are overwhelmingly female.

Therefore, FWA should order a (sizeable) adjustment to their rates of pay based on the principle of equal remuneration.

One of the problems with this argument is that the group with which the SACS workers are being compared is also overwhelmingly female. That is, the vast majority of those working in similar occupations in the public sector is also female.

This much is accepted by FWA. Quoting from the decision: "The fact that there are differences in general rates of remuneration between one workforce and another workforce made up predominantly of women may suggest that factors other than gender have contributed to the differences."

The decision then goes on to point out that public sector workers benefit from being part of larger bargaining units that include men. It also notes that, "the wage comparisons advanced have not involved a male comparator group".

The decision issued by FWA is actually very hard to follow. It seems to say that it is not about gender, but then it says it is.

At one point, it concludes: "to the extent that the gap is gender-based, we should take action to correct it", suggesting considerable uncertainty. But then, further on, it states unequivocally that, "we consider gender has been important in creating the gap between pay in the SACS industry and pay in comparable state and local government employment".

The decision has some other curious aspects. For example, SACS workers enjoy much more generous salary packaging arrangements than public sector workers. But according to FWA, it "would not be appropriate to regard the possible benefits of salary packaging as equivalent to remuneration".

This is just daft: salary packaging clearly confers real advantages on recipients that are the equivalent of cash.

Based on research using data from the Household, Income and Labour Dynamics in Australia survey, we also know that when award-dependent workers are considered as a group, there is no gender pay gap.

In other words, award rates of pay for males and females are effectively equal. Were female award rates of pay to be lifted significantly, we might find submissions being made on behalf of men employed in male-intensive sectors, whose work would now look undervalued.

There is no doubting that the issues with which this decision is grappling are difficult. There are no clear principles that govern the determination of non-market rates of pay and the capacity, or perhaps the willingness, of governments to pay must be a consideration. But as David Gregory of the Australian Chamber of Commerce and Industry has pointed out, "The tribunal has worryingly left the door open to comparisons of public and private sector wage rates in the name of gender equity."

The fact FWA has effectively reserved its decision to a later date and requires additional information on the costings of various proposals is important.

The potentially adverse consequences of handing down unfunded pay rises are, indeed, mentioned in the decision.

We will have to wait and see how this plays out. At a minimum, the tribunal is likely to recommend a phasing in of any pay rises. But the real danger is the precedent this decision sets, based on faulty analysis of the reasons for pay differences that are unrelated to gender.

The fact a group of female workers is paid less than another group of "carefully selected" workers does not necessarily mean the principle of equal remuneration is violated.