Equal Pay confusion

By Simon Wallace, Chief Executive, NZACA, 9 June 2016

My phone was running red hot with media calls when they confused a Joint Working Group (JWG) announcement on pay equity with a settlement in the caregiver and support worker negotiations.  They aren’t the same thing, but they are related!

The JWG (union, employers and bureaucrats) was set up by the Government in 2015 to address the pay gap between men and women.  It followed a Court of Appeal decision in the Kristine Bartlett caregiver equal pay case which found that women in predominantly female workforces could make a claim for pay equity under the Equal Pay Act. 

This was a different interpretation of the law and the Government feared it could open the door to a raft of court cases. They asked the JWG to come up with guiding principles that would take pay equity cases out of the courts and back to the bargaining table.   

At the same time, the Government began negotiations with employers and unions to find a solution to the caregiver and support worker equal pay case.   NZACA has been one of the employer representatives around the negotiating table, bargaining in good faith.

What happened on 8 June was an announcement that the JWG had reached consensus on how to achieve pay equity consistent with New Zealand’s employment relations framework and a well-functioning labour market. Currently before Ministers, the guiding principles the JWG is recommending change nothing as far as our equal pay case negotiations are concerned, however they do provide a set of guidance for employers economy-wide on future pay equity claims.

Positively, the principles are in line with what NZACA and other employer representatives have been living and breathing in the equal pay case negotiations.  In particular, they recommend that pay equity claims should be negotiated on the basis of skills, responsibilities, conditions of work and that work done by the female-dominated group must be compared with “appropriate comparators”.

Meanwhile, the equal pay case negotiations, which started in October 2015, continue. Since April the discussions have largely been between the Government and the unions as they work to reach a settlement.

How big is the gap in that settlement?  We agree with the unions that private sector caregivers are underpaid. We have been publicly lobbying the Government for many years to put more money into our sector. This case isn’t about gender, it’s about fairness – a private sector caregiver starting out is paid around $15.50 an hour, that’s $2 - $3 less than a public sector caregiver.  At the very least they deserve pay parity with their DHB counterparts – something that would cost the Government an estimated $100 million more a year.

The union has talked about raising the hourly caregiver rate to $26.00.  Our calculations show that the sector would need to find an additional $500 million annually to increase caregiver pay rates to this level. This is simply not sustainable and would see aged care homes having to close their doors.  Many of our members are welfare, religious or not-for-profit homes.  The majority of our members run on a break-even or even loss situation, and wages account for 60% to 70% of their costs.

NZACA is backing the equal pay negotiations and wants them to continue for as long as it takes to reach a fair solution. The outcome will affect hundreds of businesses and around 50,000 caregivers. No one will win if the case returns to Court for what would undoubtedly be an extremely protracted and expensive fight.


Read more about the Equal Pay Case on our website.

Read more about the Joint Working Group Pay Equity Recommendations