Consideration of the need for a new principle and general concepts
43 Every person has a basic human right to be treated equally and fairly in the sense that the person should not be dealt with on the basis of irrelevant considerations such as the person's sex, race, or age, and with a right not to be discriminated against by reference to such considerations: see, for example, Kinley (ed) Human Rights in Australian Law , Federation Press, Sydney, 1988, and particularly the papers by Kinley, MacDermott, Bailey and Devereux, and Eastman and Ronalds. This right is reflected in various statutory provisions in New South Wales. The fixing of a rate of pay for, or the payment of a wage or salary to, a woman where that rate of pay, salary or wage has been fixed differently because of the woman's sex is presumptively an infringement of her human rights and inconsistent with the provisions of the 1996 Act.
44 The right of women to equal treatment irrespective of their gender generally and specifically in relation to the question of equal pay is also recognised, essentially for the purpose of the protection of the right, by a variety of international covenants: for example, the Universal Declaration of Human Rights 1948, the International Covenant on Civil and Political Rights (ICCPR), the International Covenant on Economic Social and Cultural Rights (ICESCR), the Equal Remuneration Convention 1951 (ILO Convention No. 100) and the Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW). Those instruments are usefully discussed in MacDermott "Labour Law and Human Rights" in Kinley (ed.) Human Rights in Australian Law at pages 194 - 196 and 203.
45 The statutory provisions which are particularly relevant for our consideration in the present proceedings (ss3(f), 19(3)(e), 21(1)(b), 23 and 169 of the Act) are provisions which exemplify human rights and human rights concepts and which protect or enforce such rights. Both the High Court and the Human Rights and Equal Opportunities Commission have emphasised the special responsibility of courts and tribunals, in construing such legislation, to take account of and give effect to the statutory purpose whether found in a statutory object or otherwise: see, for example, Street v Queensland Bar Association (1989) 168 CLR 461 at 487; Waters v Public Transport Corporation (1991) 173 CLR 349 at 359; and X v McHugh (Auditor-General for the State of Tasmania) (1994) 56 IR 248 at 256 - 257. Reference may be made to the consideration of a number of those statutory provisions in the State Personal/Carer's Leave Case 1998 (1998) 84 IR 416 at 434 and Principles for Review of Awards 1998 (1998) 85 IR 38 at 50 - 51.
46 As the historical material demonstrates, past awards in the State jurisdiction contained both remuneration and other conditions of employment which were directly or indirectly discriminatory against female employees on account of their sex. There were also cases of awards which discriminated against male employees, more usually in the conditions of employment fixed by those awards for male employees.
47 As a result of a number of developments, including the 1973 State Equal Pay Case, steps subsequently taken by award parties to remove discriminatory award provisions by agreement and, more recently, as the result of reviews of awards conducted by the Commission under s19, directly discriminatory award provisions are increasingly difficult to find. Indirectly discriminatory provisions are, of course, more difficult to detect on the face of an award. Nevertheless, it cannot be doubted that efforts to remove such award provisions have been and continue to be made. Those steps accord with the requirements of s169 of the Act, which obliges the Commission to have regard to the principles contained in the Anti-Discrimination Act 1977 in carrying out its functions.
48 In the Act, the legislature has emphasised also the importance of awards providing for equal remuneration and other conditions of employment for men and women doing work of equal or comparable value. This appears from the objects of the Act, as well as from the provision made therefor in ss19, 21 and 23.
49 The written submissions filed by the parties and the way in which this case was opened amply demonstrated the differences of opinion which existed between the parties as to the work which the relevant provisions of the Act have to do; and, just as importantly, how the Commission should go about doing it. That difference of opinion arose not only from the parties' different approaches to the construction of the Act but also from two other matters. The first was the different views held by the respective parties as to the continuation of discrimination against women workers in some industries, occupations and workplaces and whether such discrimination continues to be reflected in the awards of this Commission. The second was the different views held by the parties as to the size of, and reasons for, the continued existence of a gap in earnings as between men and women workers and how the awards of this Commission perpetuate this gap. It was this second matter to which attention was directed at the hearing.
50 As these proceedings developed, and more particularly as the parties made their final submissions, it became clear that the issue before the Commission was no longer whether it should insert in the Commission's Wage Fixing Principles an Equal Remuneration principle but rather what should be the terms of the principle. That qualitative shift in the nature of the proceedings arose essentially from the agreement between the parties and the interveners that an Equal Remuneration principle should be included in the State Wage Case principles. We have reached the view that it is appropriate in this case to adopt the consent of the parties in that respect. This is an approach which Full Benches of this Commission and its predecessor have adopted on a number of occasions: see, for example, State Personal/Carer's Leave Case 1998 (1998) 84 IR 416. In this case, we have been satisfied that in accordance with ss50 and 51 of the Act the existing Wage Fixing Principles should be amended by the adoption of a new Equal Remuneration and Other Conditions principle and that the existing Equal Pay principle should be rescinded.
51 The evidence, however, highlighted the differences of opinion held by various economists, particularly in the explanations they advanced for the continued existence in Australia of a gap in earnings as between men and women workers. The evidence demonstrated that such a gap exists in many countries, with Australia having a smaller earnings gap than in many others. Whilst there are many ways in which the gap has been sought to be explained, it was common ground between the expert witnesses in this case that although the gap was not of itself evidence of any inequity there was part of it which could not be explained due to currently available data and economic hypotheses.
52 Whilst views about the unexplained gap in the earnings of men and women differed widely, there was some common ground between those who gave evidence. This included that the size of the gap has reduced over the years; that after 1973 it was affected by the results of the 1973 State Equal Pay Case decision; that the rate of reduction in the size of the gap has slowed down in more recent times; and that the size of the gap is larger in industries and occupations where the proportion of females employed is higher. It was the evidence of Professor Gregory, for example, that the result of the 1973 State Equal Pay Case had been to remove instances of very large and significant discrimination so that what remained related to localised pay gaps as between men and women workers in particular industries or occupations.
53 All of these witnesses agreed that an explanation for some part of the gap, albeit their views differed as to how much, might well be the sex of the workers in question. Mr Dennis, for instance, even though he could not be certain given problems with the accuracy of available data, expressed the view in evidence that part of the unexplained gap was due to employers discriminating in how they paid female employees.
54 A matter referred to by various of the expert witnesses was the reliability of data on which economic theories were based and the present inability to measure various aspects which comprised the gap. Professor Wooden discussed the problems of measuring the influence of employees' differing skills and Mr Cox dealt with the problems of measuring productivity.
55 The Labor Council, in its final submission, stated it was content to rely upon the views expressed by Professor Wooden (called by the Employers' Federation) to the following effect:
'(i) The "femaleness" of an industry or occupations operates to reduce the average earnings of workers in that industry or occupation. That is, the higher the proportion of female workers there is, the lower the pay is likely to be.
(ii) The average wage gap between male and female non-managerial workers, after the carrying out of a "regression analysis" designed to eliminate that part of the gap which can be explained by non-gender related factors, is about 2% in favour of male workers.
(iii) The average wage gap between almost totally male dominated occupations and almost totally female dominated occupations is at least about 6% (Professor Wooden's evidence was that he had revised upwards his estimate as to this).'
56 Underpinning the application brought in this case was the notion that one explanation for some part of the gender gap in earnings in Australia is that some work on which predominantly women are employed has been undervalued for a variety of historical and other reasons and that such undervaluation is reflected in awards of this Commission. Those reasons included factors such as systemic discrimination against women; award parties failing to properly implement the 1973 State Equal Pay Case ; their failure to properly pursue work value and other claims in awards applying to female dominated occupations, including in relation to training matters; and undervaluation of female skills and gender biased assumptions operating to have a negative influence on a proper valuation of female work in accordance with the Commission 's existing Work Value principle (views strongly advanced in the evidence of Ms Bennett, for instance).
57 These proceedings were concerned, therefore, with an application brought by the Labor Council, supported by all other parties, to have this Commission establish principles for application in individual or particular proceedings in which it is sought to demonstrate that award rates of pay or other conditions of employment contain an element of undervaluation having regard to the gender of the workers in question. By the conclusion of the hearing there was no real contest between them that the Commission might hear and determine such claims under s10 of the Act. Nor was there any disagreement between the parties that there is at present no obstacle to such claims being advanced under the Special Case principle, although there was concern that that was not the most appropriate means by which such cases should be considered.
58 It is important to emphasise this point. This case was not really concerned with any difficulty perceived in parties demonstrating that an award does not provide 'equal remuneration and other conditions for men and women doing work of equal or comparable value' in respect of the work to which the award applies. Rather, as explained in the Labor Council's written submissions, it was concerned to establish a principle under which claims sought to be advanced in relation to undervaluation of work performed by women can be addressed uniformly on a case-by-case basis through an analysis of the particular facts applying in each case.
59 It was envisaged that such claims could involve consideration of a variety of matters, including, in some but not all cases, comparisons with the rates of pay and conditions applying to other workers in male dominated classifications or occupations to whom the award in question does not apply. Such rates and conditions might be fixed by other awards or industrial instruments to which the Act or the Workplace Relations Act 1996 (Cth) apply (described as 'comparator awards') or even by common law contracts of employment on an overaward basis.
60 As we have already noted, whilst there was considerable debate between the parties as to whether such comparisons would be appropriate or indeed permissible, it was at least common ground that such claims are available to be now considered in accordance with the s10 and the Special Case principle. The employer parties were of the initial view that there was no need to alter the principles to make particular provision for such claims but, as the hearing advanced, they too came to the view that it would be desirable for such a principle to be established.
61 This occurred in part from a conclusion which the parties had reached about the existing Equal Pay principle. There was little disagreement that when that principle was established in the 1973 State Equal Pay Case it was given effect in cases advanced before the Commission by the award parties and that problems with its implementation had been dealt with by the Commission in later cases: see, for example, Universities (Equal Pay) Case [1980] AR (NSW) 616 and Motor Transport Female Salaried Officers Award [1975] AR (NSW) 837.
62 The general view, however, was that the principle had been largely overlooked by those award parties in more recent years, with the Labor Council submitting that "the industrial parties have virtually forgotten about the existence of the principle". In those circumstances it was thought desirable to update the principle in the context of the present 1996 Act and to bring it together with the Commission's other Wage Fixing Principles so that it could not be overlooked in the future. That was considered to be the preferred course rather than leaving undervaluation claims to be processed under the Special Case principle. Professor McCallum described this as a need to 'rebadge' the principle and to bring it up to date.
63 That this common view developed is undoubtedly an important matter. The Commission has often observed that agreement reached by industrial parties is a significant matter which the Commission will take into account in considering cases advanced before it. Such agreement cannot, however, be determinative of any application, especially in a case such as this where much depends upon the proper construction of the Act and on the terms of the principle which the parties propose to give effect to the statute as properly construed. We will return to those aspects later.
64 We have concluded that it is appropriate to adopt a principle, albeit not one in the terms proposed by the various parties, which deals with the issue of equal remuneration. We have done so for a number of reasons. The first is the considerations we have earlier referred to. That is, the significance both in policy terms and the requirements of the Act, such as ss3(f) and 169 thereof reflecting as they do important human rights, and that wage fixing principles in relation to the question of equal pay reflect the priority, importance and the failure hitherto of some awards to address appropriately the issue of equal pay for equal or comparable work. We consider that, provided necessary safeguards are built into the principle, an Equal Remuneration and Other Conditions principle should be inserted into the Commission's Wage Fixing Principles. We do not consider that the principles urged upon us appropriately reflect the evidence or provide a proper method for the Commission to address these matters.
65 Although the parties adopted different positions at one point as to the use to which the Pay Equity Inquiry might be put, there was finally a large degree of commonality in their respective approaches to that Report. The common ground was that the Full Bench was entitled to have regard to the Report and the findings contained therein; it was not, however, bound by the Report or those findings. Further, it was accepted that in a number of respects the Commission should carefully weigh the material put to her Honour before it acted upon any particular part of the Report or recommendations arising therefrom. In general terms, we accept that common position. The fact and nature of the Pay Equity Inquiry provides a wealth of information, material and considered recommendations which do indeed provide an appropriate starting point for our consideration of the material before us. It reflects a comprehensive and diverse body of evidence, representing a range of informed opinion and collected data which facilitated the Full Bench's ability to deal with the important questions before it.
66 The next important consideration is the limited nature of the questions that are to be decided in these proceedings, to which we referred earlier. Although those questions are limited in scope, they are nevertheless of great significance to the future of the proper determination of rates of pay, especially for women employees, as well as for the integrity of the Commission's Wage Fixing Principles.
67 The issues before the Commission were limited to, firstly, whether an Equal Remuneration principle should be inserted into the Commission's Wage Fixing Principles and, secondly, if so, the terms of that principle. In deciding each of these questions it is important to stress the nature of the inquiry now before the Commission. To the extent that that inquiry involves the determination of issues of fact, that is to be approached in the traditional and usual manner of fact finding before courts and tribunals. That is, the determination of such issues is on the basis of the traditional test of finding 'on the balance of probabilities': see Malec v J C Hutton Pty Limited (1990) 169 CLR 438 at 642 - 643. It is not necessary to make findings on the basis of notions of absolute certainty. Such an approach to fact finding, which seemed to be pressed upon us at various stages of the proceedings, if not by the advocates then at least suggested by some of the witnesses, represents a significant misunderstanding of the nature of the role of courts and tribunals in the common law system of adjudication.
68 Another important consideration is the nature of the debate contained within the evidence before us. As we have already noted, the Commission has had a range of evidence from many eminent witnesses in the fields of economics (particularly labour economics) and also labour and industrial law. Although there has been a degree of disagreement, in some respects quite sharp disagreement, particularly in the economic evidence, nevertheless a degree of common ground emerged in the evidence which led to the parties' eventual joint submission that it is appropriate for the Commission to establish a principle which addresses in a direct fashion the problems discerned. For example, Professor Wooden agreed that in situations where it was demonstrated a person had a wage fixed at a lower level than appropriate because of discrimination on account of sex a "market failure" was thereby demonstrated. He, like other witnesses, accepted that such a market failure should be addressed by an appropriate case-by-case approach.
69 We conclude that the evidence demonstrated, in a macro economic sense, that there is some disparity between the wages earned by women and those earned by men. Although it is difficult to identify in a precise way the areas in which such disparity occurs, it is more likely than not it does so in relation to the fixing of wages for women employed in female dominated industries or callings.
70 We take the view, however, that the principle made as the result of these proceedings, which will permit such disparities in wages to be addressed, should be such as to be integrated within the Wage Fixing Principles as a whole in order that they can operate in a consistent manner one with the other. This requires that claims be rigorously tested to ensure that there is no, or no more than unavoidably negligible, double counting in the wage fixing process and that any increase in the wages of affected employees occurs in such a way as not to unduly impact upon employment in affected areas. This is of concern because, on the evidence, any unemployment flowing from claims advanced under the new principle would seem likely to occur in areas in which the majority of employees are women.
71 The principle is also designed to ensure there are no artificial barriers created to a proper assessment of wages on a gender neutral basis. We consider this will be achieved if the only criterion for a revaluation of the work and its work value is that it be demonstrated the rate of payment hitherto fixed does not represent a proper valuation of the work and that any failure is related to factors associated with the sex of those performing the work. By way of illustration only, this may be demonstrated in cases where a majority of the employees in the relevant field, industry or calling are women workers, a notion approached in the case as areas of employment where female employees represent at least 60 per cent of the workforce. It is unnecessary to form a concluded view as a general proposition about this, given the evidence which demonstrated that pay disparity between men and women workers increased as the number of female employees increased in a particular workforce. On the evidence, it seems improbable that any case could be established at any lower percentage.
72 We emphasise that we do not envisage the principle will permit or encourage the taking of preliminary points or issues in any proceedings under the principle. Such an approach would be inconsistent with the approach discussed in Nagle (T/as WD and JL Nagle & Sons) v Tilberg [1993] 51 IR 8 and is to be discouraged. We take the view that there is very limited scope for the taking of preliminary points or the raising of preliminary arguments in relation to such cases. The proposed principle is intended to be expressed in wide terms to ensure that if there is demonstrated a case of gender affected wage fixation and a consequent wage disparity then the identified disparity may be remedied under the principle.
73 It must, however, be recognised that the corollary of this approach is that if a case mounted under the principle does not cogently demonstrate the factual ingredients required by the principle then the case will fail. Although the applicant in the proceedings may have been shielded to a large extent from preliminary issues and interlocutory decisions, there is nevertheless a risk that unless the applicant shows a clear and demonstrated case of gender related wage disparity a detailed and perhaps lengthy case will fail.
74 The other important safeguards that the principle should incorporate are clear. Like the Work Value principle, there must be a case-by-case approach. This does not need to be separately stated in the principle because it follows from the nature of the principle itself. However, it is appropriate in the light of our concerns that there be no adverse effect as to employment, particularly as to the employment of women, flowing from the introduction of the new principle and that adequate safeguards be built into it to deal with such matters. The principle will therefore allow respondents to such proceedings to raise such matters. Again, they should not be raised as preliminary or interlocutory issues but rather as to the way in which wage increases, if any, should be awarded or phased in. Any need for phasing should, of course, be addressed by evidence in the proceedings. We stress that these safeguards are not being inserted in the principle for any reason other than their express purpose. They are not to be taken, or assumed to be related to, any intention to act as a disincentive to the bringing of appropriate claims since that would be contrary to the human rights considerations we have earlier identified as an important consideration in our conclusion.
Legislative framework
75 We turn then to the legislative basis for the principle which we propose to establish. As we have noted, the parties were initially at significant odds with each other as to the proper construction of the Act, particularly as to the meaning and purpose of ss19, 21 and 23. Whilst those differences were reduced in the parties' continuing discussions, issues which remained to be determined by the Commission affect both the question of the need for, and content of, any principle which might be established.
76 The parties directed the bulk of their attention to the construction of ss21 and 23. Relatively little attention was paid to the work of s 19, although the various principles the parties proposed were designed to apply also to that provision. It is trite, but necessary in these circumstances, to observe that the questions of statutory construction arising in this case cannot be determined by a consideration of the directly relevant provisions in isolation from the Act as a whole. So approached, it soon becomes apparent that the three sections in question have quite different work to do.
77 Sections 21 and 23 appear in Div 2 - Particular conditions of employment in awards of Pt 1 - Awards of Ch 2 - Employment of the Act. They provide:
'21 Conditions to be provided in awards on application