Kristine Bartlett is worried that the gains made by care and support workers in 2017 are being lost. Photo / Mark Mitchell
ANALYSIS
Just over seven years ago, there were great celebrations among an unlikely group of people at the Loaves and Fishes hall across the road from Parliament - the National Party and a bunch of unionists.
They had just announced a $2 billion pay equity catch-up deal, the likes of which had never been seen before.
Kristine Bartlett was there, at the time an aged care worker in a residential rest home, the figurehead of the claims and later to become New Zealander of the Year.
Others included the leaders of the E Tu union, the Public Service Association, the Nurses Organisation, the Council of Trade Unions, Health Minister Jonathan Coleman and his chief negotiator, Doug Martin.
The deal would benefit 55,000 care and support workers in the aged care and disability sector whose work, like Bartlett’s, had been historically undervalued in the marketplace precisely because it was “women’s work”.
But the amount of the settlement was so huge that some of the detail was largely overlooked, namely that it was a $2b deal that would last only five years before a new deal had to be agreed.
Given that the deal expired on June 30, 2022, it was reasonable to expect that a Labour majority Government would have been highly motivated to get a new deal done before the 2023 election on October 14.
The day after the 2017 deal expired in 2022, the three unions, the Public Service Association, E tu, and the New Zealand Nurses Organisation, filed a new claim to 15 representative employers on behalf of 17,500 employees.
But progress has stalled and the debacle continues for the care and support workers’ pay equity – in which people are paid the same for different work that has a similar level of skill, responsibility and effort.
The gains that the care and support workers got in recognition of gender bias in their pay packers are being eroded, and many are back on the minimum wage or close to it.
A lot of work went into getting a new agreement settled involving former Health Minister Andrew Little, his successor Ayesha Verrall, and Finance Minister Grant Robertson.
Shortly before the election, there was a proposal by unions and employers to do an interim deal as had occurred with the hospital nurses’ pay equity deal.
A contingency had been squirrelled away by Robertson. But there was no statutory mandate for an interim pay adjustment when an agreement had not yet been reached.
Bartlett, who retired from her job before the deal expired, still keeps a strong interest in what is happening.
Of particular annoyance to her and the unions involved in pay equity Mark II for the care and support workers was the decision by Te Whatu Ora to review the methodology used to assess the level of undervaluation of care and support workers. And that is largely blamed for the failure to clinch a deal.
“It’s a joke,” says Bartlett. “I’m not very happy with the way they’ve dealt with it,” she told the Herald from her Hutt Valley home.
The review of methodology was announced in September last year, and with the October election so close, there was no hope of getting agreement before then.
The unions see it as Te Whatu Ora interfering for the primary purpose of reducing the cost of any pay equity deal - in a process that is meant to be devoid of any bias.
Te Whatu Ora and the Government saw it as a prudent move to guard against potentially expensive miscalculations in modelling for comparisons of job profiles.
“My concern is about the funding for these caregivers,” Bartlett said.
“I think the whole aged-care sector is going to fall because the rest-home conditions are not as good as when I was there. If they don’t fund the caregivers, what is going to happen to these old people, because people are walking.”
When the deal was done in 2017, the minimum wage for New Zealand was $15.75 an hour and the new entry-level rate in the pay equity deal was set at $21.50, level two qualification at $23, level three at $25, and level four $27.
Just before the deal expired in 2022, the entry-level rate was lifted to $22.49, level two to $24.06, level three to 26.16 and level four to $28.25 but by then, the minimum wage was $21.20 and the relativity eroded. The current minimum wage is $23.15.
Another increase was made last year but not all employers have passed it on to workers. Bartlett says that eroding gains in pay are adding to the workforce problems by getting inexperienced carers looking after vulnerable older people.
“It’s unacceptable. I wouldn’t want myself or my mother to go into a home that’s inexperienced,” Bartlett said.
“I went to visit a friend of mine the other week in a rest home and it was just so sad. There was nobody around. The corridors were empty.
“Why aren’t they doing something instead of talking about it?”
Robertson told the Herald he was disappointed the care and support workers’ claim was not settled. But it was very complicated and the pay equity framework “got quite heavily in the way” of getting a comprehensive result. In the end the process got “timed-out” by the election.
He said he would encourage the Government to adopt a pragmatic approach.
“It is a very important righting of a series of wrongs.”
But it took time to address it.
The stalled pay equity claim is now at an important cross-road. The three unions have spent the past week holding webinars with workers covered by the claim, union and non-union, about what should happen next.
The unions have recommended a return to the courts and will meet this week to discuss next steps.
The courts have already played a pivotal role in pay equity. Negotiations on the original pay equity claim were initiated by then Finance Minister Bill English after Bartlett’s union, now E tu, won a series of preliminary cases.
Essentially, the Government wanted to avoid the courts settling the terms of pay equity claims for thousands of workers in occupations funded by the Government.
The Government wasn’t the employer but it did not want to lose control of a process which it would have to pay for so it negotiated the first big one, Bartlett’s, and initiated work on a law and framework by which future claims could be decided.
And it worked. While National lost office shortly afterwards, Bartlett’s deal was enshrined in legislation for five years and a process established for other claims.
By the time of last year’s election, 10 other pay equity claims had been settled, including hospital nurses, hospital midwives, social workers, and school support staff, and another 25 had been lodged.
Going back to court has its risks. It would mean everybody, the unions included, losing control of the outcome and potentially getting a fixed settlement that no one was happy with.
Melissa Woolley is the leader advocate for the unions. She is a former care and support worker and manager at Idea Services and is now PSA assistant secretary.
She said after the latest pre-bargaining talks with the employers three weeks ago, the union realised they were quite far apart.
She says the preference at this stage is to negotiate with the Government rather than go through the legal route.
“We have advised the minister that we are open to having conversations to try and resolve this. That’s our ideal – that we don’t have to go through a legal process to reach a settlement.”
The unions’ intent was to have a single work profile, and a single set of rates that were linked to qualifications and time in the job, just like the 2017 settlement but with increased pay equity rates.
“I’m hoping the Government want to settle this. It was the National Government that delivered pay equity to these workers in 2017 and I’m hoping they want to deliver pay equity again for all the same reasons they delivered it in 2017.”
The outward signs are not exactly positive. Finance Minister and Public Service Minister Nicola Willis has abolished the pay equity taskforce in the Public Service Commission, a team of about six experts supporting various claims in the Government-funded sectors. And the Cabinet has removed the funded framework - including the seven milestones that provided for staged oversight of claims.
But Willis said last night that that did not affect the Government’s commitment to pay equity.
“The Government remains committed to upholding its obligations under the Equal Pay Act and continues to have funds set aside, including in tagged contingencies for settlements in both the public and funded sectors,” she said in a statement.
“The removal of the funded framework does not impact the ability for pay equity claims to be brought or progressed in the funded sector,” she said. “The reset is about making clear that that bargaining should occur between employees and employers.
“Moving forward, it will be up to individual funding agencies to determine what oversight arrangements they wish to put in place for employer providers they fund.”
The Government would consider funding for settlements on a case-by-case basis.
The minister now in charge of the care and support workers’ claim is Health Minister Shane Reti. He said Health NZ (Te Whatu Ora) had asked the employers of the care and support workers covered by the claim to consider the findings of the review of methodology.
“I also understand they have been asked to provide any further evidence that will address the review’s key findings,” he said.
“I recognise and value the mahi by care and support workers around New Zealand, and the difference they make to the lives of those they support, their whānau and the wider community on a day-to-day basis.“
It is an extremely complicated area and it goes wider than aged residential care.
The funders are not the employers. The funders are government agencies such as Te Whatu Ora, the Ministry of Social Development, Oranga Tamariki, ACC, and Whaikaha which fund employers to provide health and social services. Te Whatu Ora is the lead funding agency in this claim.
It is accepted by all that any deal reached with the 15 employers would have to apply to the 60,000 care and support workers employed by about 1000 employers (coverage of the original settlement was expanded by 5000 to disability vocational workers and mental health and addiction services, taking it to over 60,000.)
The employers and workers come from four sectors: aged residential care; home and community support services; disability support services; and mental health and addiction. They have different contracting arrangements with different funding agencies.
Some providers are for-profit organisations, some are not. The lead employer representative is Mike Peters of NZ Health Group. Among the 15 other employers are Pathways, Vision West, Prestbyterian Support, CCS and Bupa.
There is a raft of material and resources approved by the Cabinet setting out processes and milestones to help assess the degree of undervaluation, if at all. But there is no single agreed process for establishing undervaluation.
In March 2023, the care and support workers’ employers and unions formed a work assessment panel with four representatives each to assess the level of undervaluation between the claimants and the comparators, using what is known as Te Orowaru Factor, a technical tool that had been used in previous claims.
The agreed comparators were three male-dominated workforces - Fisheries officers, Customs officers and Corrections officers. To create a work profile the assessors look at skills, responsibility, effort and working conditions. Care and support workers scored highest at 837 points, Fisheries 754, Corrections 737, and Customs 709.
Further comparisons involve an assessment of remuneration and terms and conditions of the claimants and comparators which included looking at pay scales, penal rates, hours of work, allowances, leave, and training.
All three comparator groups, male-dominated, were paid higher, had better terms and conditions, and many more steps in remuneration.
The employers and unions agreed that the undervaluation of care and support workers, because of gender discrimination, was between 24 per cent and 38 per cent.
The assessment report by the unions and employers was sent to the funders’ oversight group in April and May which was chaired by Grainne Moss in her former capacity as head of pay equity in the Public Service Commission.
But at a meeting in August, the unions and employers were told that Te Whatu Ora was asking them to consider adding health care assistants and mental health care assistant roles, who had recently been part of the pay equity settlement for Te Whatu Ora nurses, as additional (but less well paid) comparators.
There was a bit of an outcry from both the unions and employers. The new comparators were added but the review proceeded anyway.
It was about that time that claim parties heard that the funding contingency for the care and support workers deal was set at $205 million per annum, way less than what employers and unions thought necessary for settlement.
Such figures are never openly confirmed but it added to the suspicion that the aim was to engineer the outcome to fit the budget. As Willis’ Budget day approaches on Thursday, there are questions about whether that contingency has survived privately in the book or been swallowed up for other priorities.
Te Whatu Ora (Health NZ) national director of commissioning Abbe Anderson says that it first raised concerns with employers about the methodology in April and commissioned the review in September.
“The review was intended to support Health NZ meet its responsibility to provide assurance to the Government of the robustness of the methodology and evidence used to determine the sex-based undervaluation of this valued workforce,” Anderson said in a statement.
“This is important because Government agencies need to balance workers receiving equitable pay rates, with ensuring Government funding is used prudently.”
The unions refused to co-operate with the review or hand over any of the detailed documentation it developed with employers.
But the review’s main findings were as follows:
Anderson said the 15 employers of the care and support workers covered by the claim had been asked to consider the report and the review’s findings “and to provide any further evidence that will assist us to provide assurance to the Government on the robustness of the union and employers’ claim”.
Although employers’ rep Peters wasn’t available for this article, the employers are clearly in a difficult position, caught in between the unions and the funders at a time when cost pressures are acute and workforce shortages are dire.
Like the unions, they were highly critical at Te Whatu Ora’s decision to review the methodology but given it is now a reality, perhaps would rather work with it than hand the matter over to the courts.
That runs the risk of the courts fixing a settlement that the employers are obliged to pay but the Government won’t necessarily fully fund.
Woolley believes Te Whatu Ora went about it the wrong way when they had concerns with the methodology.
“We could have entered into tripartite discussions with the unions, the employers and the funders and tried to resolve this together. We are all adults. We all know each other very well. We could have taken a problem-solving approach but they chose not to.
“They chose to implement a review which has slowed us down and is delaying thousands of workers from getting money that they’re owed every day that this has dragged on.”
Audrey Young is the New Zealand Herald’s senior political correspondent. She was named Political Journalist of the Year at the Voyager Media Awards in 2023, 2020 and 2018.
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