It seem likely that the long-running equal pay dispute will be resolved through the out-of-court negotiations process. But what happens if a settlement can’t be reached? JUDE BARBACK talks to providers and unions about the possible paths ahead.

The out-of-court negotiations process to resolve the equal pay dispute in aged care began at the end of October between the providers, unions and Government. Four meetings were held before the end of the year, mainly to establish the process and look strategically at the task at hand.

Negotiations recommenced on 20 January with the Crown negotiating team running separate meetings with provider and union representatives. Working parties were then formed to consider in more detail the various issues relating to a potential settlement.

The New Zealand Aged Care Association (NZACA) has surveyed its members to aid the work of the provider working party, led by NZACA deputy chair Max Robins.

The union-led working parties are looking at two work streams. One is a possible financial settlement enabling the litigation to be withdrawn, and the other an agreement around what principles could inform equal pay determinations.

“I believe the negotiations process is helping,” says NZACA chief executive, Simon Wallace. “The meetings have not been heated, nor have they been convivial. They have been run in a business-like, rational way.”

He says the NZACA is fully committed to achieving an out-of-court settlement that is acceptable to NZACA members and that will result in an increase in pay for care and support workers.

However, the unions are taking a more guarded view of the negotiations process.

“The unions are hopeful but at the same time are conscious that any settlement that does not deliver true equal value may not be acceptable to the workforce. We have already identified to the courts a base hourly rate of $26 an hour,” says E tū spokesman, Alastair Duncan.

Meanwhile, the court case between aged care provider TerraNova and employee Kristine Bartlett that instigated the negotiations process has been parked, so as to allow for an out-of-court settlement to be reached by the end of March.

However, there is some concern that the NZACA isn’t ready for further litigation, should a settlement not be reached through the negotiations process.

Terry Bell, executive director of TerraNova, the provider at the centre of the equal pay court case, is among those concerned.

“I will be delighted if a resolution can be reached through the tripartite negotiations process. But if we don’t get a decision, we’re going to be left scrambling with our pants down around our knees,” says Bell. “Clearly there hasn’t been enough preparation for continued litigation. There appears to be a very strong reliance on the political process.”

Wallace says the Association will be prepared for more litigation if necessary.

“Going back to court is the least preferred option for the NZACA, but the Association will be prepared for that eventuality if and when it arises,” he says.

The unions have a clear plan should settlement not be reached.

Duncan says E tū has secured over 1,000 further authorities from residential aged care and disability sector employers.

“In the event there is no agreement these will be pursued. We are looking at filing additional cases if the need arises.”

Meanwhile, work on the broader pay equity principle initiative is running in tandem to the negotiations process, involving a joint working group of government officials, Business New Zealand, Council of Trade Unions and other parties. Wallace says the NZACA is not privy to these discussions.

Recommendations to Ministers are expected by the end of March 2016 and some may need to be included in legislation, if accepted by the Government. Unions have agreed to put their legal action on hold until then.

Changes to the legislation and any resulting from the settlement process could have an impact on the Age-related Residential Care (ARRC) Services agreement. The NZACA says that if the final settlement from the Equal Pay negotiations requires NZACA members to provide services that exceed their agreed contractual responsibilities under the ARRC agreement, then the Association would likely invoke the A23 variation to agreement clause, which states that the terms of the contract may be varied if any law changes or cost changes come into play.


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