A pay equity working group set up following a landmark Court of Appeal ruling is close to announcing its recommendations to the Government on how the court's interpretation of the Equal Pay Act could be applied, with the aged-care sector warning its costs could jump by $500 million a year.
The Government set up the group with governor general-elect Patsy Reddy as the facilitator last October, to recommend how employers and employees should implement pay equity. It was the Government's response to a Court of Appeal ruling in the case of Kristine Bartlett, an aged-care worker, and the Service and Food Workers Union against private rest home chain Terranova Homes and Care.
The court rejected an appeal by Terranova and the NZ Aged Care Association in upholding an Employment Court ruling in 2013 that in female-dominated work the Equal Pay Act 1972 "requires equal pay for work of equal value (pay equity), not simply the same pay for the same work", a change from how the law had been interpreted.
The ramifications are huge for the estimated 30,000 caregivers and 5000 nurses in New Zealand's 666 aged residential care homes - facilities owned by listed operators Ryman Healthcare, Metlifecare and Summerset Group, district health boards, charities, religious and welfare organisations, and private interests.
The NZACA says the ramifications of the case are "very significant" for its members based on union ambitions to raise the average hourly caregiver pay rate to $26 from $15.30 currently, just 5 cents above the minimum wage, an increase that would force retirement village operators "to find $500 million annually" and could result in some failing. And the Public Service Association says it is determined to ensure the court's interpretation of the Equal Pay Act is applied.
