The equal pay case between TerraNova Homes & Care Ltd and employee Kristine Bartlett on behalf of the Service and Food Workers’ Union (SFWU) was heard before the Court of Appeal at the beginning of February, after TerraNova appealed the Employment Court’s decision last year. At the time of going to print, the judges had reserved decision on the case.

While the case hinges on gender-based pay parity, many agree it is more significantly drawing attention to the low levels of funding for the residential aged care sector.

TerraNova executive director Terry Bell says that while he empathises with the union’s objective to address the inadequate funding of caregiver wages, he doesn’t support the legal argument the SFWU is using to seek to achieve that, stating that they have stretched the interpretation of the Equal Pay Act 1972 “too far to be credible or practical”.

Bell believes TerraNova has been unfairly singled out in an issue that involves the entire New Zealand residential aged care industry.

“Frankly, we find it bizarre that our business has ended up in court nominally speaking on behalf of an entire industry when everyone involved accepts that the inadequate funding of the aged care workforce is a systemic issue that needs to be addressed by government and key sector representatives outside of the courts.

“It seems that the stonewalling of this issue by successive governments has led us to the point that the union’s only credible option was to select and litigate against one representative provider in an attempt to make the case for a timely and adequately funded remedy for all by Government.”

All parties appear to share Bell’s hope that the hearing will ultimately result in the Government taking some accountability and action for the underfunding of the aged care sector.

SFWU’s spokesperson Alastair Duncan says the union is confident the court will uphold the lower court decision. He says how the Government responds to the case would be a test of its commitment to the lives and interests of older New Zealanders.

“The Government is the funder but this government had its head in the sand for the past two years since the Human Right commission condemned the poverty pay in the aged care sector. This is the time to put an end to underfunding and undervaluing those who care for our elderly,” he said.

The SFWU and the New Zealand Nurses Organisation filed applications with the Employment Relations Authority (ERA) late last year against a number of large aged care providers, along the same lines as that filed on behalf of Kristine Bartlett against TerraNova. The unions have asked the ERA to wait for

the outcome of the appeal before hearing the new cases, which are likely to be heard together.

Duncan says the SFWU’s goal over the next four to six months will be to file against every employer where it has members to ensure the matter is truly an industry–wide issue.

Martin Taylor, chief executive of New Zealand Aged Care Association (NZACA) agrees it is time for the Government to lift funding.

“The reality is New Zealand will have a one billion dollar surplus by the middle of the year, so the time has come for the Government to engage with the aged care sector and increase funding by $160 million, which will support wages of $17 per hour for all caregivers,” says Taylor.

Late last year, the NZACA signed a litigation funding agreement with Terranova.

“Some may see defending this case as not consistent with supporting higher caregiver’s wages but they would be wrong,” says Taylor.

“The reason we are defending the case is because no aged care provider can pay higher wages unless we are funded at a higher level. Wages going up without more funding would cause a crisis.”

Bell says TerraNova is “relieved” to have the association’s support, describing it as “timely, perhaps even overdue” for the NZACA to front the industry’s response to the union’s claims.

Bell is hopeful that with the NZACA’s support, the sector can secure a viable funding solution from Government that is both affordable and acceptable to the public at large. However, he is mindful of the need for support from the wider industry.

“We can only afford to allow the sector to speak on our behalf if the association’s members respond to its call to raise the funds necessary to cover the very substantial costs of the campaign.”

The NZACA has already contributed $82,000 from its reserves towards the litigation, but has called on members to pay a $20 per bed contribution to the TerraNova Litigation Fund.

To date over $200,000 has been spent in litigation costs and another $200,000 is expected to be spent completing the process.

“As such, we need to raise $400,000 to defend the case to the best of our abilities, and if possible, to organise a workable solution with the Government,” says Taylor.

While the Government cannot comment on cases while they are before the courts, the involvement of the Attorney General alongside the Human Rights Commission, Business NZ, and the NZACA as an intervener on the hearing suggests that any decision made on this case may have far-reaching implications.

“Regardless of the success of either side in the courts, it is plain that we will all need to look for leadership from the sitting Government to fund our aged care workforce fairly,” says Bell.

“The reality is that this decision will have wide-ranging consequences on many workplaces far beyond aged care and that this would not serve New Zealand well.”

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