The path to pay equity – Equal remuneration orders do not require a gender-discriminatory reason

What is an equal remuneration order?

Section 320 of the FW Act empowers the FWC to make any order it considers appropriate to ensure that there will be equal remuneration for people of all genders performing work of equal or comparable value.

An equal remuneration order provides for such increases in rates of remuneration as the FWC considers appropriate to ensure that employees are equally paid for the same work.

All decisions involving substantive gender pay equity matters and matters relating to the making of equal remuneration orders are made by ‘Expert Panels’ of the FWC, constituted of a majority of members who have sufficient knowledge of, or experience in, matters of gender pay equity.

What does the FWC take into account when making an equal remuneration order?

In December 2022, as part of the package of changes to the FW Act introduced under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth), amendments were made to give the existing equal remuneration provisions ‘more bite’.

Importantly, as part of this raft of reforms, there is now greater guidance on the way in which the FWC must consider equal remuneration cases. The FWC’s consideration of whether there is equal remuneration for work of equal or comparable value may now take into account:

(a) whether there has been historical gender-based undervaluation of the work under consideration;

(b) comparisons within and between occupations and industries to establish whether the work has been undervalued on the basis of gender; and

(c) any fair work instrument or State industrial instruments.

This consideration is not limited to similar work and does not require a comparison with a historically male-dominated occupation or industry.²

Lessons to be learned from the decision

Ultimately, the Expert Panel could not make an order in the Applicant’s favour as she was not a current employee.

Despite this, the Expert Panel appears to suggest that had circumstances been different, the Expert Panel may have otherwise been satisfied on the facts that, during the Applicant’s employment with the company, she was not equally remunerated for her work when compared with her male co-workers.

In this regard, the Expert Panel observed that the:³

(a) Docklands kitchen at which the Applicant had worked engaged five chefs – four male and one female. Three of the four male chefs at the Docklands kitchen were engaged on significantly higher salaries than the Applicant;

(b) Applicant performed work of at least equal value to that of the three male chefs who were paid higher salaries. The Applicant and the three higher-paid chefs all held the same position, all worked in the same environment and were all classified at Level 6 under the Hospitality Industry (General) Award 2020; and

(c) Company did not identify any work value-related reason for the higher salaries paid to the three higher-paid male chefs. While a decision may have been made to reward them for their length of prior service, there was no suggestion that these three employees had any higher level of skill or responsibility than the Applicant. In this regard, the Expert Panel noted that it is “not necessary for rates of pay to have been established for a gender-discriminatory reason in order to obtain an equal remuneration order under s 302.”

The decision is a useful reminder to employers of the importance of maintaining a close eye on pay data and critically assessing whether there is any evidence of pay inequality, noting that an equal remuneration order may be made even in the absence of malicious intention or gender-discrimination.