Millions At Stake As Equal Pay Case Heads To Supreme Court

- Alastair Duncan

For the background to this case see Alastair’s article “Who Cares? And Who Profits” in Watchdog 136, September 2014, Ed.

Corporate aged care providers are divided over a decision by the Aged Care Association to push the Kristine Bartlett equal pay case all the way to the Supreme Court. In November 2014 the industry lobby group, the Aged Care Association (ACA), applied to the Supreme Court to overturn a Court of Appeal decision which had come down firmly in favour of the argument by her union, the Service and Food Workers Union (SFWU), that Kristine, and by extension 30,000 other women carers, had not received equal pay due to their industry being “predominantly or exclusively” made up of working women.

Unchallenged, the Court of Appeal would have seen the case go back to the Employment Court to determine a set of principles to be used to assess equal pay – not only for aged care workers but potentially for hundreds of thousands of other female-dominant occupations such as community workers, hospitality, retail and clerical. ACA says the case is one of “general commercial significance”, something of an understatement in what is fast becoming the share market focus of NZ Inc. With the billion dollar plus wage bill in the sector largely underwritten by Government funding, ACA’s application will not only drag out the proceedings but could also give the Government the opportunity to use its majority to change the 1972 Equal Pay Act and destroy the rationale behind the case. If that happens, then libertarian MPs such as Act’s David Seymour and United Future’s Peter Dunne could hold the whip hand. State interference in judicial proceedings is always a risky move.

While few of the corporates seem comfortable to speak publicly about their position, Ryman Healthcare boss Simon Challis is on the record arguing the Act is not the right mechanism to address the pay gap. In 2013 Ryman argued for the right to increase part charges to residents – a classic user pays solution. Other providers, including some very large overseas-controlled operators, seem more responsive. Retirement village operator Metlifecare told its shareholders that the company wouldn’t be wafting for the case to be resolved and that it will take steps in 2015 to lift pay. BUPA, the country’s largest operator, is not a member of the ACA and its Chief Executive Officer, Gráinne Moss, was one of the early voices calling for a round table approach to fix the problem. Ironically, she was joined by Terra Nova boss Terry Bell. Terra Nova is Kristine Bartlett’s employer but, in what could have been a tactical error, handed the managing of the case across to the ACA.

Before the election ACA argued for pay parity* for staff with District Health Board rates. The Government ignored it. Now equal pay is front and centre. Equal pay will cost millions, a point conceded by John Key and the case was noted as “risk” in the 2014 Budget papers. 42 years after Finance Minister Robert Muldoon spoke in Parliament to support the concept of the 1972 Equal Pay Act, Key holds the power to do the right thing. Aged care is the classic “public private partnership” which has soared on the back of an aging population and an undervalued workforce. Charter schools got millions. Now it could be charter care’s turn. *Parity would have meant private sector carers’ rates increasing by three or four dollars an hour to an average of $19. Pay equity is expected to be closer to $25 and would also involve assessing other remuneration such as overtime, weekend rates and superannuation.

Alastair Duncan is a long time CAFCA member whose day job is with the SFWU.

In December 2014 the Supreme Court rejected the application by the Aged Care Association to overturn the Court of Appeal’s decision. Ed.


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