Reasons Behind the Gender Pay Gap (Australia)

Despite long established legislation and community standards, women are still far from equal to men in the workforce. Women working full-time earn 18% less than men. On average they also earn $1million less over the course of their lives compared to male counterparts. Labour laws have had a large influence in the size of the gender pay gap (GPG). The wage-fixing principles in the 1970s, has granted immediate collective remedies from industry-wide, award application. However awards are losing prominence with the rise of neoliberalism; and women with lower bargaining power become disadvantaged. This area of law has also had successful attempts of combating the undervaluation of female-dominated industries, although these standards have not been fully developed. On the other hand, anti-discrimination law has had a more limited impact on gender pay equity (GPE). It has mainly expelled the formal barriers that restricted women’s access to the public arena; however they are expected to conform to existing practices. Due to weak substantive provisions, and the judiciary’s unwillingness to alter existing systems, there has been less than desirable change to systemic discrimination. Today, the pay gap is largely attributed to the undervaluation of ‘feminised’ work, the influence of women’s primary caring role on career progression, and the managerial glass-ceiling effect.
I THE SDA’S CONTRIBUTIONS TO GENDER PAY EQUITY Anti-discrimination laws have had a limited impact on GPE, since the liberal legal system have not been designed to change social structures, but merely to/ allows women to participate in existing arenas. The Sex Discrimination Act 1984 (Cth) and its equivalent state laws have managed to dispel formal barriers to equality, but largely fails to accommodate women’s differences from men. The Acts attempts to achieve equality through the prohibition of two defined forms of discrimination – direct discrimination (DD) is confined to facilitating equality of opportunity, whilst indirect discrimination (IDD) allows some movement towards equality in substance by targeting a restricted range of systemic unfair treatment. However due to the conceptual complexity and evidentiary difficulties of an IDD claim, most cases have been framed as DD. This primary commitment to formal equality is inadequate. Women cannot always conform to male standards and they are punished once they deviate from established norms. In Purvis, it was held that there is no DD treatment if an act is based on a characteristic or manifestation of a ground, provided that these are borne by the person. Women can thus be treated like other deviants, and treatment is only unlawful if it is applied inconsistently. This system affords women protection so long as they can conform to existing practices. DD arguably only covers blanket exclusions and prejudicial assumptions; although this is not a small area, it does not ensure equality of outcome or resource. In addition, the legislations have poor capacity to tackle systemic discrimination as a result of weak substantive provisions and conservative judicial interpretation. The ability of IDD to challenge disadvantaging practices is seriously blunted by the fact that the court can find these procedures lawful if held reasonable. Countries such as the United States and United Kingdom, upon which Australian anti-discrimination laws are based, have stronger laws. In the US there is a requirement of ‘business necessity’ whilst the UK necessitates ‘a proportionate means of achieving a legitimate aim’. The less onerous Australian standard assigns very wide responsibility to the judiciary to determine whether a disadvantageous practice is lawful. This open texture has allowed the courts in many instances to transmit conservative interpretations which preserve the status quo. The judiciary’s tendency to adopt narrow analyses may reflect an ignorance of the impacts of exclusion and disadvantage, given their relatively privileged social positions. The Act’s treatment of systemic disadvantage has been limited and inconsistent.
II Labour Law’s Contributions to Gender Pay Equity The right to equal pay was first entrenched in federal labour law through the adoption of the 1969 and 1972 equal pay principles by Australia’s/n federal industrial tribunal. Due to Australia’s unique system of wage determination, the application of these principles had substantially narrowed the gap between men and women’s pay. Prior to these developments women’s wages were usually set as a proportion of men’s, under the compulsory conciliation and arbitration system of wage-fixing; on the assumption that women were not ‘breadwinners’. In 1969, this institutionalized sex discrimination in wage determination officially came to an end when the federal industrial tribunal implemented the principle of ‘equal pay for equal work’ in wage-setting. This measure had a limited impact, given that it only applied to instances where ‘work performed by men and women was of the same or a like nature’. This narrow interpretation of equal pay only benefited women with identical jobs as men, leaving female-dominated industries unaffected. Nevertheless, 18 percent of women in the workforce enjoyed equal pay through the industry-wide application of the measures. These limitations were partially addressed in the 1972 National Wage Case, resulting in the new principle of ‘equal pay for work of equal value’. Under this standard, the tribunal can contrast different classifications of work within and across awards to determine work value; taking into consideration the skills, qualifications and conditions associated with the work. However, determinations of work value gave higher favour to masculinised areas of work, and functions linked with predominantly female industries were underappreciated. This concept of work value withstood challenge in the 1986 comparable worth proceedings. The collective, industry-wide remedies that trickled through awards led to an increase in the GPE ratio from 64 per cent in 1967 to 80.1 per cent in 1980. However equality is limited and rests on an implicit male standard. In addition, the scheme did not allow claims by individuals for a single workplace. The GPG has also been influenced by the neoliberal direction of industrial relations policy. Since 1993, the Federal Government has focused on the deregulation of the labour market, favouring enterprise over industry award settlements. The equal pay wage fixing principles were no longer connected with the primary method of wage determination; as pay increases were primarily gained from enterprise bargaining, whilst industry awards largely acted as safety nets adjustments. This process disadvantaged workers with lower skills and bargaining power. Difficulties with measuring productivity in service industries meant that women concentrated in these areas faced problems in productivity-based bargaining. In addition, the uneven and weak state regulation of non-standard casual work, left women, who predominantly do such work, particularly vulnerable after successive phases of neoliberal reform. Due to these developments, the GPG ratio had only increased 4.9 percent from 1980 to 2008. The decline of the institutional and legal structure that had provided women some protection has locked pay inequities. However, in recent years labour law has placed an emphasis on the undervaluation of ‘feminised’ work in labour law. The Industrial Relations Commissions in New South Wales and Queensland have established undervaluation as the threshold for making an equal remuneration claim. Undervaluation can be proven by showing that current rates of pay are inconsistent with the tribunal’s assessments of work value. The test did not regularly turn to a male standard. The Queensland tribunal particularly note factors which may have influenced the valuation of women’s work, such as occupational segregation and the over-representation of women in casual or part-time work. These advances had instituted significant gain wage gains for dental assistants, childcare workers and librarians. However these positive developments were contained when the Federal Government ‘covered the field’ in 2005, replacing them with ineffective principles that hinged on proof of discrimination. However the advent of the Fair Work Act 2009 (Cth) may reaffirm commitments to a test of undervaluation. The successful application of unions in the social, community and disability sector has led to substantial wage gains, upon recognition by the tribunal of an undervaluation of feminised work. Although proof of discrimination is no longer required, the tribunal has refused to adopt a clear remuneration principle, and has insisted that its powers to issue orders are discretionary. The recent measures to tackle female undervaluation may be transient and its current foundations are unsecured.
III FACTORS INFLUENCING GENDER PAY INEQUITY The GPG is partly the result of women taking work that accommodates their familial obligations, instead of career-enhancing work that match their skills and experience. The dramatic increase in women’s workforce participation in the last fifty years has not been offset by an increased contribution by men in the household, and women continue to be disproportionately burdened with family caring responsibilities. In 2002, an Australian Bureau of Statistics (ABS) survey revealed that of employees who took a break after the birth of their youngest child, six per cent of men took longer than six weeks, compared to around 93 per cent of women. National time use studies show that the number of unpaid hours that men and women devote has not changed notably; with women being found to have contributed 65 percent and 64 percent of household activities in 1992 and 1997 respectively. As a result of women’s primary caregiver role, they are pushed into compromising between paid and unpaid duties. In 1999, it was found that for families with both parents employed, 70 per cent of mothers exercised flexible working arrangements such as flexible working hours, permanent part time work and working at home, to give adequate time for child-rearing. Women have continuously been over-represented in part-time employment, with three-quarters of all part-timers being women in August 2011. However, these arrangements limit women’s ability to excel in the labour market given that most quality positions are structured for ‘ideal workers’ that can operate under full-time hours and without familial pressures. Flexible part-time work often cripples career advancement and most are precarious casual jobs that severely lack the benefits associated with standard employment (such as leave benefits, training, and higher remuneration). Women are generally penalised in the workforce for acting as non-standard workers. The persistence of the GPG can also be attributed to the existing undervaluation of work provided in female-dominated occupations. ‘Feminised’ work is associated with lower remuneration relative to male-dominated occupations. Wooden (1999) indicated that upon controlling for individual and job characteristics, the higher concentration of females in an occupation had a significant negative influence on general earnings. It found that the unequal remuneration of male and female-dominated occupations had created a gender earnings differential of around 4 percent, or one-third of the gender wage differential. This low appreciation of feminine tasks is a serious issue given that women’s employment remain highly concentrated in clerical, sales and service jobs. The comparative worth policy being implemented in recent years may effectively tackle this issue; although at present there are still a significant number of occupations that have yet to benefit from its application. The undervaluation of work undertaken in female-concentrated occupations contributes to the gender pay gap; and the comparable worth principle must be implemented more widely to overcome this problem. Another factor which contributes to the gender earnings gap is the particularly sharp pay inequity between men and women in management. Women are underrepresented in top management and a glass-ceiling phenomenon operates which block the climb from middle to senior management. A recent study found that 65 and 90 percent of the gender pay gap (of 27 percent) in the sample cannot be associated with managerial characteristics and is potentially caused by discrimination. It was also found that unlike men, the financial returns to experience fall in the latter years for female managers.Women’s inability to break through upper management worsens the pay inequality between the sexes.
CONCLUSION
Since the 1970s, considerable progress has been achieved for women’s rights. Australia’s distinct system of wage-setting has garnered substantial collective benefits for women. However this system is now in decline and women are insufficiently protected in today’s deregulating markets. Anti-discrimination laws have proved disappointing given its limited coverage to equality based on same treatment as men. There have only been modest changes to systemic discrimination due to weak substantive provisions and a lack of judicial will. In order to further combat GPE, there remains a need to deal with the undervaluation of ‘feminised’ work, the lack of flexibility in good quality positions, and the bar that inhibits women from progressing to higher positions of management.
BIBLIOGRAPHY
1. Articles
Adams, K. Lee, ‘Defining Away Discrimination’ (2006) 19 Australian Journal of Labour Law 263.
Baxter, Janeen, and Chesters, Jenny, ‘Perceptions of Work-Family Balance: How Effective are Family-Friendly Policies?’ (2011) 14 Australian Journal of Labour Economics 139.
Broohim, Ray and Sharp, Rhonda, ‘The Changing Male Breadwinner Model in Australia: a New Gender Order?’ (2004) 15 Labour and Industry 1.
Broomhill, Ray and Sharp, Rhonda, ‘The Changing Male Breadwinner Model in Australia: A New Gender Order?’ (2004) 15 Labour and Industry 1.
Burrow, Sharan, ‘ An Unequal World’ (2004) 10 UNSW Law Journal Forum 38.
Campbell, Iain, ‘Casual Employment, Labour Regulation and Australian Trade Unions’ (1996) 38 Journal of Industrial Relations 571.
Campbell, Iain, ‘Casual Work and Casualisation: How Does Australia Compare?’ (2004) 15 Labour and Industry 85.
Chapman, Ana, ‘Corporate Restructuring and Discrimination’ (1998) 11 Australian Journal of Labour Law 1.
Charlesworth, Sara, ‘Striking the Balance or Tipping the Scales?: The HREOC Women, Men, Work and Family Discussion Paper’(2005) 18 Australian Journal of Labour Law 313.
Charlesworth, Sara, Strazdins, Lyndall, O’Brien, Lean and Sims, Sharryn, ‘Parents’ Jobs in Australia: Work Hours Polarisation and the Consequences for Job Quality and Gender Equality’ (2011) 14 Australian Journal of Labour Economics 35.
Chesters, Jenny, Baxter, Janeen and Western, Mark, ‘Paid and Unpaid Work in Australian Households: Trends in the Gender Division of Labour, 1986-2005’ (2009) 12 Australian Journal of Labour Economics 89.
Doussa, The Hon Jon von QC and Lenehan, Craig, ‘Barbequed or Burned? Flexibility in Work Arrangements and the Sex Discrimination Act’(2010) 10 UNSW Law Journal Forum 43.
Frazer, Andrew, ‘Anti-Discrimination Law at Mid-life Crisis’ (2011) 24 Australian Journal of Labour Law 75.
Gaze, Beth,‘Context and Interpretation in Anti-Discrimination’(2002) 26 Melbourne University Law Review 325.
Gaze, Beth, ‘The Sex Discrimination Act After Twenty Years: Achievements, Disappointments, Disillusionment and Alternatives’ (2004) 27 UNSW Law Journal 914.
Gaze, Beth, ‘Twenty Years of the Sex Discrimination Act: Assessing its Achievements’ (2005) 30 Alternative Law Journal 3.
Graycar, Reg, and Morgan, Jenny, ‘Thinking About Equality’ (2004) 27 UNSW Law Journal 833.
Harbridge, Raymond and Walsh, Pat, ‘Globalisation and Labour Market Deregulation in Australia and New Zealand: Different Approaches, Similar Outcomes’ (2002) 24 Employee Relations 423.
Harrison, Jane, ‘How Segregated are Australian Workplaces? Evidence from the Australian Industrial Relations Survey’ (2004) 7 Australian Journal of Labour Economics 329.
Hunter, Rosemary, ‘Mirage of the Shrinking State’(2002) 16 The Australian Feminist Law Journal 53.
Judge, Timothy and Livingston, Beth, ‘Is the Gap More than Gender? A Longitudinal Analysis of Gender, Gender Role Orientation and Earnings’ (2008) 93 Journal of Applied Psychology 994.
Knowles, Fiona, ‘Misdirection of Indirect Discrimination’ (2004) 17 Australian Journal of Labour Law 1.
Lyons, Michael and Smith, Meg, ‘Gender Pay Equity, Wage Fixation and Industrial Relations Reform in Australia: One Step forward, Two Steps Backwards?’ (2007) 30 Employee Relations 4, 7.
Major, Brenda, McFarlin, Dean and Gagnon, Diana, ‘Overworked and Underpaid: On the Nature of Gender Differences in Personal Entitlement’ (1984) 47 Journal of Social and Personality Psychology 1399.
Preston, Alison and Whitehouse, Gillian, ‘Gender Differences in Occupation of Employment within Australia’ (2004) 7 Australian Journal of Labour Economics 309.
Redman, Ronnit, ‘Litigating for gender equality: The amicus curiae role of the Sex Discrimination Commissioner’ (2004) 10 UNSW Law Journal Forum 15.
Rees, Neil, Lindsay, Katherine and Rice, Simon, Australian Anti-Discrimination Law: Text, Cases and Materials (The Federation Press, 2008).
Rubery, Jill, ‘Performance- Related Pay and the Prospects for Gender Pay Equity’ (1995) 32 Journal of Management Studies 637
Smith, Belinda, ‘Not The Baby And The Bathwater: Regulatory Reform For Equality Laws To Address Work-Family Conflict’(2006) 28 Sydney Law Review 689.
Smith, Belinda, ‘From Wardley to Purvis – How Far has Australian Anti-Discrimination Law Come in 30 years?’(2008) 28 Australian Journal of Labour Law 3.
Smith, Belinda, ‘It’s About Time – For A New Regulatory Approach to Equality’(2008) 36 Federal Law Review 117.
Smith, Belinda, ‘Fair and Equal in the World of Work: Two Significant Federal Developments in Australian Discrimination Law’ (2010) 23 Australian Journal of Labour Law 199.
Smith, Meg, ‘Limits and Possibilities: Rights-based Discourses in Australian Gender Pay Equity Reform 1969-2007’ (2009) 18 Gender, Work and Organization 180.
Smith, Meg and Stewart, Andrew, ‘A New Dawn for Pay Equity? Developing an Equal Remuneration Principle under the Fair Work Act’ (2010) 23 Australian Journal of Labour Law 152.
Smith, Meg, ‘Gender Equity: The Commission’s Legacy and the Challenge for Fair Work Australia’ (2011) 53 Journal of Industrial Relations 647.
Watson, Ian, ‘Decomposing the Gender Pay Gap in the Australian Managerial Labour Market’ (2010) 13 Australian Journal of Labour Economics 49.
Whitehouse, Gillian, ‘Pay Equity Prospects’ (2005) 13 Frontline 12.
Wooden, Mark, ‘Gender Pay Equity and Comparable Worth in Australia: A Reassessment’ (1999) 32 The Australian Economic Review 157.

2. Case Law
Equal Pay Case 1969 (1969) 127 CAR 1142.
Equal Remuneration Case [2011] FWAFB 2700.
Kelly v TPG Internet Pty Ltd [2003] FMCA 584.
New South Wales v Amery (2006) 80 ALJR 753.
Purvis v New South Wales (Dept of Education and Training) (2003) 217 CLR 92.
Victoria v Schou (No 2) (2004) 8 VR 120.

3. Other Sources
Australian Bureau of Statistics, Australian Social Trends, Dec 2011 (2011) Australian Bureau of Statistics < http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features30Dec+2011 > at 25 April 2012, cat. no. 4102.0

Australian Council of Trade Unions, Campaign: Equal Pay and Better Jobs for Women (2012) Australian Council of Trade Unions <http://www.actu.org.au/Campaigns/EqualPay/default.aspx> at 30 April 2012.

HREOC, Striking the Balance: Women, Men Work and Family. Discussion Paper 2005, Sex
Discrimination Unit, HREOC, Canberra, 2005.

Romeyn, Jane , Archer, Shannon-Kate , Leung, Elizabeth , ‘Review of Equal Remuneration Principles’ (Research Report No 5, Fair Work Australia, Commonwealth of Australia, 2011).

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[ 1 ]. Australian Council of Trade Unions, Campaign: Equal Pay and Better Jobs for Women (2012) Australian Council of Trade Unions < http://www.actu.org.au/Campaigns/EqualPay/default.aspx> at 30 April 2012.
[ 2 ]. Ibid.
[ 3 ]. Belinda Smith, ‘From Wardley to Purvis – How Far has Australian Anti-Discrimination Law Come in 30 years?’(2008) 28 Australian Journal of Labour Law 3, 6.
[ 4 ]. Ray Graycar and Jenny Morgan, ‘Thinking About Equality’ (2004) 10 UNSW Law Journal Forum 5, 5-6.
[ 5 ]. Purvis v New South Wales (Dept of Education and Training) (2003) 217 CLR 92, 93 [11].
[ 6 ]. Beth Gaze, ‘The Sex Discrimination Act After Twenty Years: Achievements, Disappointments, Disillusionment and Alternatives’ (2004) 27 UNSW Law Journal 914, 917.
[ 7 ]. Neil Rees, Katherine Lindsay and Simon Rice, Australian Anti-Discrimination Law: Text, Cases and Materials (The Federation Press, 2008), 140 [4.3.29]
[ 8 ]. Ibid.
[ 9 ]. New South Wales v Amery (2006) 80 ALJR 753; Victoria v Schou (No 2) (2004) 8 VR 120; Kelly v TPG Internet Pty Ltd [2003] FMCA 584.
[ 10 ]. Beth Gaze,‘Context and Interpretation in Anti-Discrimination’(2002) 26 Melbourne University Law Review 325, 337.
[ 11 ]. Meg Smith, ‘Limits and Possibilities: Rights-based Discourses in Australian Gender Pay Equity Reform 1969-2007’ (2009) 18 Gender, Work and Organization 180, 187.
[ 12 ]. Michael Lyons and Meg Smith, ‘Gender Pay Equity, Wage Fixation and Industrial Relations Reform in Australia: One Step forward, Two Steps Backwards?’ (2007) 30 Employee Relations 4, 7.
[ 13 ]. Equal Pay Case 1969 (1969) 127 CAR 1142, at 1158.
[ 14 ]. Jane Romeyn, Shannon-Kate Archer, Elizabeth Leung, ‘Review of Equal Remuneration Principles’ (Research Report No 5, Fair Work Australia, Commonwealth of Australia, 2011) 8.
[ 15 ]. Meg Smith, ‘Gender Equity: The Commission’s Legacy and the Challenge for Fair Work Australia’ (2011) 53 Journal of Industrial Relations 647, 650.
[ 16 ]. Ibid.
[ 17 ]. Ibid.
[ 18 ]. Meg Smith (2009) above n 16, 189.
[ 19 ]. Ibid.
[ 20 ]. Ibid.
[ 21 ]. Ibid 188.
[ 22 ]. Ibid.
[ 23 ]. Meg Smith (2011) above n 20, 652.
[ 24 ]. Ibid 652-653.
[ 25 ]. Ibid 653.
[ 26 ]. Ibid 654.
[ 27 ]. Ibid 653.
[ 28 ]. Meg Smith and Andrew Stewart, ‘A New Dawn for Pay Equity? Developing an Equal Remuneration Principle under the Fair Work Act’ (2010) 23 Australian Journal of Labour Law 152, 154.
[ 29 ]. Meg Smith (2009) above n 16, 192.
[ 30 ]. Ibid.
[ 31 ]. Ibid 193.
[ 32 ]. Ibid 192.
[ 33 ]. Ibid 193.
[ 34 ]. Meg Smith (2011) above n 20, 657.
[ 35 ]. Australian Bureau of Statistics, Australian Social Trends, Dec 2011 (2011) Australian Bureau of Statistics < http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features30Dec+2011 > at 25 April 2012, cat. no. 4102.0
[ 36 ]. HREOC, Striking the Balance: Women, Men Work and Family. Discussion Paper 2005, Sex
Discrimination Unit, HREOC, Canberra, 2005, 20.
[ 37 ]. Ray Broohim and Rhonda Sharp, ‘The Changing Male Breadwinner Model in Australia: a New Gender Order?’ (2004) 15 Labour and Industry 1, 13.
[ 38 ]. HREOC, above n 5.
[ 39 ]. ABS, above n 4.
[ 40 ]. The Hon Jon von Doussa QC and Craig Lenehan, ‘Barbequed or Burned? Flexibility in Work Arrangements and the Sex Discrimination Act’(2010) 10 UNSW Law Journal Forum 43, 43-44.
[ 41 ]. HREOC, above n 5, 22.
[ 42 ]. Ibid.
[ 43 ]. Iain Campbell, ‘Casual Employment, Labour Regulation and Australian Trade Unions’ (1996) 38 Journal of Industrial Relations 571, 574; Iain Campbell, ‘Casual Work and Casualisation: How Does Australia Compare?’ (2004) 15 Labour and Industry 85, 89-93.
[ 44 ]. Mark Wooden, ‘Gender Pay Equity and Comparable Worth in Australia: A Reassessment’ (1999) 32 The Australian Economic Review 157, 165.
[ 45 ]. Ibid 166.
[ 46 ]. Alison Preston and Gillian Whitehouse, ‘Gender Differences in Occupation of Employment within Australia’ (2004) 7 Australian Journal of Labour Economics 309, 315.
[ 47 ]. Ian Watson, ‘Decomposing the Gender Pay Gap in the Australian Managerial Labour Market’ (2010) 13 Australian Journal of Labour Economics 49, 52.
[ 48 ]. Ibid 69.
[ 49 ]. Ibid 70.

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