KEY POINTS:
Pete Hodgson overstepped his bounds when as Minister of Health he pushed an initiative to promote collective bargaining and a higher minimum wage for aged-care workers, a court has heard.
HealthCare Providers NZ, which represents 520 residential care homes, is seeking a judicial review of the way its contracts were made with district health boards nationwide this year.
It is asking Justice Andrew McGechan to set aside two clauses that it says were forcibly inserted: one raises the minimum wage for the sector's workers to $12.55 an hour, the other requires employers to take reasonable steps to allow collective employment contracts.
HealthCare's lawyer, Francis Cooke, QC, told the court the DHBs, under a directive from Mr Hodgson, who was then Health Minister, had worked with union groups to push through the clauses while keeping HealthCare in the dark.
As HealthCare opened its case in the High Court at Wellington yesterday, hundreds of aged-care workers held protests around the country, upset that court action was being taken to challenge their wage rises.
Council of Trade Unions president Helen Kelly said the aged-care industry had a history of "making a lot of money and paying very low wages".
"It's disingenuous to say they're happy for wages to be reasonable in the sector. Those that have taken this case, we believe, have an agenda of keeping wages low and are paying lip service to the idea that they want to increase wages."
Service and Food Workers Union spokesman Alastair Duncan said the Government had to step in to lift wages in the sector because the industry kept ignoring the issue.
But HealthCare chief executive Martin Taylor said he had no objection to wage rises.
"The issue is that DHBs gave an increase that worked out to [boosting wages by] between 70c to 80c an hour, and then they insisted that providers pass on $1 an hour.
"They weren't willing to fund an increase they were forcing on us.
"If the DHBs had said, 'Here is the money and we want to ensure it goes to the workers with a contractual requirement', we would have said, 'Great'."
Mr Taylor said some providers had lost more than $100,000 meeting the new pay demands.
Mr Cooke said DHBs, under the Public Health and Disability Act 2000, could negotiate a contract with a provider "if permitted to do so by its annual plan".
The directive from Mr Hodgson was not reflected in DHB plans, he said.
Moreover, HealthCare was kept out of the process while Mr Hodgson and the DHBs worked out the detail of the clauses and the Budget announcements to fund them.
In meetings to review the contracts, HealthCare asked whether any relevant policy changes were likely to affect the review process and was told by DHB New Zealand that none would, "however [we] are awaiting confirmation from the [Health] Ministry".
In its written submission to the court, HealthCare states: "The DHBs deliberately misled the providers. When the true position was then revealed, the DHBs adopted a 'take it or leave it' approach ... in a manner that put the providers in an impossible position."
