The Matildas Effect – Gender Equality: What are the current requirements and why is it important?

The labor government made a number of election promises in the last federal election, one of which was to ensure workplace equality for men and women with respect to pay. The government committed to close the gender pay gap and improve workplace participation by women.

The Matildas have shown us that a group of female sports people can inspire a nation and gender is irrelevant. However, the cruel fact remains most of the players earn far less than their male counter-parts.

As a woman who has spent her last 30 years working, I find it concerning that in 2023, we are still discussing this issue and need to have legislation to ensure that everyone, whether they are male or female get paid the same, if they do the same work. Unfortunately, it still appears that the words of Golda Meir, the former Prime Minister of Israel in the early 1970’s, remain true today:

 “To be successful, a woman has to be much better at her job than a man.”

— Golda Meir, former Prime Minister of Israel

However, it does appear that there is now a general acceptance that women should receive the same pay and rights at work as men. As such, the changes brought about by the recent amendments by the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Act 2023, to the Workplace Gender Equality Act 2012 (Cth), go some way in achieving this.

Since 2012, private sector employers with more than 100 employees have been required to report annually to the Workplace Gender Equality Agency (WGEA). The reforms included in the amended legislation and accompanying  Workplace Gender Equality (Gender Equality Standards) Instrument 2023 and the Workplace Gender Equality (Matters in relation to Gender Equality Indicators) Instrument 2023, aim to accelerate workplace gender equality in Australia by strengthening the reporting requirements for private sector employers.

The amendments are directed at closing the gap in the data collected from employers so as to ensure the true state of gender inequality in Australia is measured, rather than general trends as was the case previously. In the circumstances, the amended legislation will require that from 1 April 2024, employers report the following:

• Employee age by year of birth;
• The employee’s primary location of work;
• The remuneration of the Chief Executive Officer (CEO), head of business or equivalent; and
• Whether superannuation is paid by the employer when an employee is on parental leave.

These new requirements are in addition to the existing requirements to report on six gender equity indicators being:

1. The gender composition of the workplace;
2. The gender composition of the employer governing bodies;
3. Equal remuneration between the sexes;
4. The availability and utility of flexible working arrangement terms and practices;
5. The working arrangements that support employees with carer responsibilities; and
6. Consultation with employees on gender equality and discrimination and harassment on the basis of sex.

There is also now a requirement to report on a number of mandatory questions dealing with the provisions in the employer’s policies and strategies regarding the prevention and response to issues of equality, the provision of training and its frequency, leadership statements or communication demonstrating commitment to equality, prevention and response. The mandatory questions also cover information regarding sexual harassment risk management and the support available to staff.

Reporting is mandatory, and as outlined above has expanded the reporting requirements on the prevention and response to sexual harassment, and sex discrimination.

The amending legislation also makes reporting and thus the formulation of questions on the following matters mandatory from 2024:

• The provisions set out in any policy/strategy, including accountabilities for:
  • preventing and responding;
  • the provision of training, its frequency, and its content;
  • the disclosure processes and management of disclosures; and
  • leadership statements or communication to demonstrate commitment to prevention and response.
• Information about sexual harassment risk management;
• Information about the prevalence data organisations currently collect; and
• Supports available for staff.

One of the long-standing issues with the prior reporting requirements was that it was effectively a ‘tick the box exercise’ by HR departments to ensure compliance. The new rules require that employers provide the WGEA Executive Summary Report and Industry Benchmark Report to the Board, in addition to sharing the report with employees and shareholders/members. The employer is now required to report the date on which the previous report was shared with the relevant stakeholders. These reports are currently provided to each employer’s CEO and there has not been any requirement that the CEO takes the matter further.

There have been changes to the reporting regarding casual and part-time employees, such that employers are now required to report actual earnings and hours rather than full-time equivalent salary. Instead of reporting the proportion of employees who took parental leave, and/or who ceased employment during or at the end of the leave period, the requirement now is to report the actual number of employees who took leave and/or left during or after the parental leave period.

Policy Requirements for larger Employers

From 2024, employers with 500 or more employees will be required to have policies and strategies for each of the six gender equality indicators being:

1. Gender composition of the workforce;
2. Gender composition of the organisation’s governing bodies;
3. Equal remuneration between men and women;
4. Availability and utility of employment terms, flexible working arrangements and support for family and carer responsibilities;
5. Consultation with employees on gender equality in the workplace; and
6. Sexual harassment and sex discrimination.

Changes to publishing of data

In addition to the current data published on pay gaps at a national, industry and occupation level, the WGEA will now also publish pay gap information on individual named employers. This is a significant change, as currently this information is provided to individual organisations confidentiality. From early 2024, specific data about organisations will be published publicly. This is intended to have a significant deterrent and amelioratory effect, as it will allow organisations to be publicly compared and shamed if they are not doing enough to ensure gender equality. To that end, from early 2024, WGEA will publish employer gender pay gaps by median and remuneration quartiles. However, future reporting, when the CEO, head of business and casual manager reporting is required, the data will be published by mean, median and employer remuneration quartiles as well as the actual remuneration of the CEO, head of business and casual manager.

WGEA will publish employer gender pay gaps and workforce composition data by quartiles. WGEA will provide data on the full-time equivalent gender pay gap for the following parts of the business:

• The top 25% earners;
• The upper middle quartile;
• The lower middle quartile; and
• The bottom quartile.

The published report will also state the proportion of men and women in each quartile.

It should be noted that the reporting requirements only capture the reporting of employee data, and as such does not include partners, contractors and other workplace participants who are not employees.

In addition to the changes to the reporting regime, the recent amendments regarding the prevention of sexual harassment at work, the creation of a positive duty on employers to prevent sexual harassment and the increased focus on these issues, will hopefully accelerate female equality and participation in the workforce.

“A woman is human. She is not better, wiser, stronger, more intelligent, more creative, or more responsible than a man. Likewise, she is never less. Equality is a given.”

— Vera Nazarian

 What should employers do?

Given the recent changes in this area and the new reporting requirements we recommend that employers take the following steps:

• Ensure they are aware of the reporting requirements;
• Develop the appropriate questions to ensure reporting can be done appropriately;
• Review your training, education and consultation frameworks and materials;
• Develop and enhance appropriate training and workplace policies to ensure the organization is compliant; and
• Raise the matter at executive and board level.

The world is changing at an ever-increasing rate and soon many roles will be replaced by machines and artificial intelligence. Our people and what they bring to the workplace and society in general is of utmost importance, and it is incumbent upon us all to ensure everyone has a fair go and is treated equally in all respects. I will leave the last words on this issue to two people with far more business experience than I.

• “Society as a whole benefits immeasurably from a climate in which all persons, regardless of race or gender, may have the opportunity to earn respect, responsibility, advancement, and remuneration based on ability.” — Sandra Day O’Connor.

• “Equal pay isn’t just a women’s issue; when women get equal pay, their family incomes rise, and the whole family benefits.” —  Mike Honda

If you wish to discuss any aspect of this client alert or require specialist advice or assistance in relation to an employment law matter, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.