Te Kawa Mataaho Public Service Commission | Pay Equity Settlement Agreement
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MANDATORY
November 2020
Gráinne Moss and Erin Polaczuk signing the settlement agreement
for the Oranga Tamariki social workers pay equity claim
Pay Equity in the State Sector: Tools and Resources
Template | Pay Equity Settlement Agreement
Te Kawa Mataaho Public Service Commission | Pay Equity Settlement Agreement
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Contents
Purpose 3
Supporting notes for the Pay Equity Settlement Agreement template 3
Template content 3
Describing the coverage of the claim 3
Overview for all parties 3
Employer overview 3
Interpretation 4
Notes for Settlement Agreement background 4
Pay Equity Settlement Agreement template 5
Introduction 5
Background 5
Agreed terms of settlement 6
1. Purpose and application of this Settlement Agreement 6
2. Settlement Agreement detail 6
3. Implementation 7
4. Review 7
5. Union mandate 7
6. Good Faith 7
7. Costs 7
8. Counterparts and entire agreement 8
9. Legal advice 8
Signatories 8
These tools and resources do not constitute legal advice. Parties must seek their own legal
advice in respect of this template and how it applies to the pay equity claim being raised.
Email pay.equity@publicservice.govt.nz
if you would like a Word version of this document.
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Purpose
This template is for parties to use when they have concluded pay equity bargaining. Its purpose is to
record the Settlement Agreement reached.
The template can be adapted to reflect the circumstances of the pay equity claim being settled. It sets
out elements that fulfil the requirements of the Equal Pay Act 1972
(the Act), and provides for the
inclusion of clauses that reflect the detail of the settlement, including how it will be implemented and
maintained.
Supporting notes for the Pay Equity Settlement Agreement
template
The [sections in purple] can be typed over to enter the details of the particular claim.
The Settlement Agreement should be signed by the relevant parties’ authorised representatives in
accordance with their authorisations. The Settlement Agreement should also clearly provide for the
effective date.
Template content
This Settlement Agreement template provides minimum content to usefully record the processes
followed and agreements reached by the parties. The parties may agree to include further detail as
they see fit.
Describing the coverage of the claim
There are different requirements for describing the coverage of a claim within a settlement agreement
depending on whether the claim was raised by union/s or raised by an individual employee.
A settlement agreement for a claim raised by an individual employee must state their occupation and
position, while a settlement agreement for a claim raised by a union must include a brief description
of the work.
For this reason, when describing the claim coverage this template provides the options [occupation
/position /description of work]. Please select the option/s that best suit/s your Pay Equity Claim.
Overview for all parties
This template is a guide for parties when they have concluded pay equity bargaining and records the
Settlement Agreement between the parties.
This template is not legal advice and should be adapted to reflect the circumstances of the particular
pay equity claim being settled.
Employer overview
All agencies using this template must seek legal advice to ensure the drafting of this Settlement
Agreement accords with the circumstances of the pay equity claim being settled before it is
presented to the union/representative and before it is signed.
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State sector employers must discuss a draft Settlement Agreement with the Central Agency Pay
Equity Governance Group (Governance Group), as required by Cabinet.
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Contact your Gender Pay Taskforce contact at Te Kawa Mataaho Public Service Commission (the
Commission) pay.equity@publicservice.govt.nz
for more information about the Governance Group
process and requirements.
As soon as practicable after settlement is reached, you should submit the signed Settlement
Agreement to the Chief Executive of the Ministry of Business, Innovation and Employment in
accordance with section 13ZK of the Act. The Settlement Agreement will not be used other than for
statistical or analytical purposes. You should also send a copy of the Settlement Agreement to your
Gender Pay Taskforce contact at the Commission. Do not include the first six pages of notes for this
document when submitting the Settlement Agreement.
Interpretation
In this Settlement Agreement, unless the context otherwise requires:
(a) pay equity claim (in lower case) means a claim that an employer or group of employers is in
breach of section 2AAC(b) of the Act.
(b) Pay Equity Claim (in upper case) means the Pay Equity Claim for
[occupation/position/description of work] lodged by [individual claimant/union] with the
Chief Executive/s of the [employer] on [date].
(c) Remuneration has the meaning given to it under section 2(1) of the Act.
(d) All amounts are expressed as gross amounts and are subject to the Income Tax Act 2007.
(e) The singular includes the plural and vice versa.
Notes for Settlement Agreement background
Clause B
Here you insert any form of agreement reached between the parties, commonly referred to as a
Bargaining Process Agreement (or a Terms of Reference). This is mandatory for employers in the State
sector and is considered a best practice step for other parties.
A pay equity process agreement is mandatory for multi-employer pay equity claims (the Act, section
13K(2)).
Clause E
Parties must fulfil the processes set out under the Act:
• comparators must be appropriate and fit for purpose - defined in section 13ZE of the Act
• parties must ensure that an appropriate, full assessment is undertaken - this must satisfy
section 13ZD of the Act (matters to be assessed).
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The Framework for the Governance and Oversight of State Sector Pay Equity Claims (the Framework) was endorsed by
Cabinet in December 2019 [CAB-MIN-19-0678 refers] and requires State sector employers to engage with the Governance
Group at six key milestones throughout the pay equity claim process.
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Pay Equity Settlement Agreement Template
Introduction
This Pay Equity Settlement Agreement (Settlement Agreement) records the agreements reached
between the Chief Executive of [employer] and the [individual claimant, union] (together, parties) to
address the [occupation/position/description of work] Pay Equity Claim.
As a consequence of signing this Settlement Agreement any relevant Collective and Individual
Employment Agreements are automatically varied in accordance with section 13ZM of the Act.
Background
A. On [date], the [individual claimant/union/s] raised a Pay Equity Claim for [occupation/ position/
description of work] with the Chief Executive/s of the [employer/s] (the Pay Equity Claim).
B. On [date], an agreement was reached between the parties, to assess the Pay Equity Claim. On
[date] the parties signed a Pay Equity Bargaining Process Agreement to govern the resolution of
the Pay Equity Claim.
C. On [date], the [names of parties] working group (Working Group) was established and [pay equity
bargaining process was agreed and recorded] to systematically assess and resolve the Pay Equity
Claim.
D. A brief summary of the work assessment process for the claimant and for the comparators is
detailed below.
[Briefly summarise the assessment process used to assess the work of the claimants and comparators,
including the work assessment methodology used.]
E. The comparator occupations
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listed below were used to assess and resolve the Pay Equity
Claim.
Comparator Groups
[Comparator 1 name]
[Comparator 2 name]
[Comparator 3 name]
[Comparator 4 name]
F. The parties have agreed the Pay Equity Claim is settled and that the remuneration provided for
in this Settlement Agreement does not differentiate on the basis of sex in the manner set out in
section 2AAC(b) of the Act.
G. On [date], following negotiation, the parties agreed in principle to settle the Pay Equity Claim
and offer this agreement to proposed settlement employees for consideration and ratification.
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Section 13ZH(3)(b)(viii) states that parties must set out a review process in the Settlement Agreement. Parties can agree
any process to undertake a review. Parties can agree to reassess comparators as part of a review process, but this is
optional. If they agree to do so the use of a particular comparator occupation in this claim process does not mean parties
must use the same comparators in subsequent review processes.
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Agreed terms of settlement
1. Purpose and application of this Settlement Agreement
1.1 The purpose of this Settlement Agreement is to:
(a) settle the Pay Equity Claim and record the agreed outcome of settlement negotiations in
writing to fulfil the requirements of sections 2AAC(b) and 13ZH(3) of the Act; and
(b) record the process for reviewing and maintaining pay equity
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for the
[occupation/position/description of work]; and
(c) detail the frequency of those reviews, which must be aligned with any applicable collective
bargaining rounds or if no collective bargaining round applies, at least every 3 years; and
(d) include a summary of the method used to assess the Pay Equity Claim and a description of
the comparators that were considered by the parties; and
(e) provide certainty for the parties that this Settlement Agreement is a full and final
settlement of all matters relating to the Pay Equity Claim of the
[occupation/position/description of work] from the date this Settlement Agreement comes
into force (Section 13ZH of the Act).
1.2 If the parties to this Settlement Agreement are an employer and a union, the Settlement
Agreement will apply to employees who are covered by the union-raised claim and who did not
opt out of the claim under section 13Y(2) of the claim.
1.3 Additionally, all employees employed by [employer] who were not covered by the union-raised
claim, but who perform the same, or substantially similar work as the work to which the
settlement relates (affected employee), will be offered the full benefit of this Settlement
Agreement, in accordance with clause 13ZL of the Act.
2. Settlement Agreement detail
Include the following clauses (to reflect what parties have agreed)
2.1 Remuneration
The parties have reached agreement on remuneration for [occupation/position/description of
work].The parties agree that the rates of remuneration for [occupation/position/description of
work] do not differentiate between male and female employees in the manner set out in section
2AAC(b) of the Act.
2.2 Translation to new remuneration
[Insert detail about any translation process to the remuneration]. This will need to be clear
about how any remuneration system, or range will operate if one is introduced as part of the
settlement.
2.3 Allowances
The parties have agreed on the introduction/increase of the following allowances [name and
detail of allowance] (For example, see Teacher Aide Pay Equity Settlement Agreement Tiaki
allowance schedule 6)
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All claims, including if fixed by determination, should include a process for review (section 13ZH(1)(b) of the Act).
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2.4 Changes to pattern or nature of work
The parties have agreed to the following changes to the pattern/nature of work [detail any
agreed change] (For example, see Teacher Aide Pay Equity Settlement Agreement Variation of
hours clauses 3.2 and 3.3)
2.5 Professional development/career pathways
The parties have agreed to the following changes to the professional development/career pathway of
[detail workforce and any changes needed] (For example, see Oranga Tamariki Terms-of-Settlement-
for-SW-Pay-Equity-Claim social work supported practice step sections 2.4 and 2.5).
2.6 Any other agreement
[Detail any other agreements here] (Example further work to be undertaken).
3. Implementation
3.1 Effective date of settlement
This Settlement Agreement will come into effect on [insert relevant date].
4. Review
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(Delete whichever of the following two options does not apply to this claim)
The parties agree to align the review to ensure pay equity is maintained with any applicable
collective bargaining round for [occupation/position/description of work].
OR
The parties agree to review and ensure pay equity is maintained, if no collective bargaining
round applies, at least every 3 years.
[Detail the processes agreed to support the review and maintenance of pay equity here].
5. Union mandate
5.1 [union] confirms that:
• it represents each employee covered by the union raised claim (proposed settlement
employee)
• it has the mandate to sign this Settlement Agreement on behalf of employees under
coverage of the settlement pursuant to section 13ZF(5) of the Act.
6. Good Faith
6.1 The parties will deal with each other in good faith on all matters under, or associated with, this
Settlement Agreement in accordance with section 13C of the Act.
7. Costs
7.1 The parties agree to bear their own costs of negotiating and entering into this Settlement
Agreement.
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Section 13ZH(1)(b) and (3)(b)(viii) and (ix) of the Act.
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8. Counterparts and entire agreement
8.1 This Settlement Agreement may be executed in counterparts, each of which shall be deemed to
be an original, but all of which, taken together, shall constitute one and the same agreement.
8.2 This Settlement Agreement is made up of all of its parts including appendices, and supersedes
and extinguishes all previous drafts, agreements, arrangements, and understandings between
the parties.
9. Legal advice
9.1 The parties agree they have had the opportunity to seek independent legal advice on the
meaning and effect of this Settlement Agreement.
Signatories
Name
Role
For [employer] Date:
Name
Role
For [claimant or union] Date:
