Will the pay equity case rocking the aged care sector be resolved in or out of court? JUDE BARBACK looks at the momentum building within government circles, the aged care sector, and other industries.

The long-rumbling Kristine Bartlett pay equity case has sprung back into life in recent months, although progress remains slow as the true complexity of the case begins to show.

An Employment Court hearing date has been set for late November – but an adjournment has been sought due to a lack of guidance from the court. The Government has also begun a negotiation process with the industries and unions to settle the case out of court – but this too appears to have reached a hiatus.

With midwives recently filing for court action over pay discrimination and education support workers signalling their intention to do the same, it would seem aged care workers are far from alone in their quest for equal pay.

Regardless of whether the case is settled in or out of court, the Government will need to be prepared for the wider implications of any solution achieved for caregivers.

However, some aged care providers aren’t prepared to wait for an outcome to the case, with retirement village operator Metlifecare signing a union agreement to increase staff pay rates by an average of 7.7 per cent.

Yet, increasing pay rates is not as easily achieved for all providers. The sector remains hopeful of a solution to emerge from the pay equity case that will see any pay rate increase accompanied by an increase in government  funding to providers.

Metlifecare’s move

The agreement between Metlifecare and the Service and Food Workers’ Union (SFWU) and New Zealand Nurses’ Organisation (NZNO) will see many Metlifecare carers’ pay rates increase by around 12–14 per cent.

SFWU’s Alastair Duncan says the move “sets a new and impressive benchmark”.

“Metlifecare have essentially said we’re not going to wait until the pay equity case is resolved and the Government sorts this out. Instead, they’ve reached deep into their own pockets to fund the shortfall,” says Duncan.

However, Metlifecare chief executive Alan Edwards says their decision to lift pay rates wasn’t influenced by the Kristine Bartlett case.

“At the point the courts make a decision on the appropriate pay rate, Metlifecare will either be equal to, below or above. If we’re below, we’ll raise our rates accordingly. If we’re above, then that’s fine. We’re happy today with the choice we’ve made. We’re very proud of the fact that we’ve got these rates.”

Edwards says the decision to increase pay rates was more about doing what was best for the future of Metlifecare. He does not have any expectation or desire to see other operators follow suit.

The pay agreement came after Metlifecare held a strategic review of its employee value proposition.

“We looked at the entire process of recruiting people, providing meaningful career paths, learning frameworks and reward mechanisms that are associated with learning and development. We saw that retention and loyalty produce quality outcomes,” says Edwards.

“At the end of the day our employee value proposition needed to seamlessly integrate with our customer value proposition.

“One thing residents value most is the consistency of care provided. This is solved by improving retention, which in turn is solved by offering a meaningful rate of pay.”

He says the reaction from staff has been positive.

“They’re saying ‘fantastic’ – that’s step 1. Step 2 is how to access learning to support what we’re doing.”

Not all providers can pull a Metlifecare

Other large listed operators also pay staff above average.

Ryman Healthcare has increased their pay rates by 16 per cent over three years and introduced new incentives to train.

Summerset chief executive Julian Cook said Summerset increased wages by around seven per cent last year. He says Summerset pays above average and links pay with training and qualifications.

However Cook says the size of the operator is irrelevant and the Government has a responsibility to increase funding to the sector to allow operators to pay their staff fairly. He is hopeful that the Kristine Bartlett case will result in such an outcome.

“Our position is clear – the Government should fund the sector properly. It’s not right that DHB healthcare assistants should be paid more than caregivers in residential facilities, who arguably do a harder job. It’s not an issue for the larger operators, but for the whole sector.”

Smaller operators that are not in a position to increase funding are also hoping the Bartlett case will result in an increase to government funding.

New Zealand Aged Care Association (NZACA) chief executive Simon Wallace says while Metlifecare should be commended for what they’re doing, it isn’t a move that can be easily replicated by other providers. He says Metlifecare has a small proportion of care beds and has the ability to cross-subsidise from its retirement village operation. It can’t be easily compared with operators like Bupa or Oceania, which have significantly more care beds.

Yet the SFWU has confirmed that both Bupa’s and Oceania’s bargaining agreements concluded with good progress on equal pay engagement – although not to the same degree as Metlifecare.

Will the case be resolved in or out of court?

Meanwhile the pay equity case continues to rumble on. The Employment Court is set to hear the case the week starting Monday 23 November: however, the NZACA’s legal defence has sought an adjournment due to the lack of any interlocutory judgement from the court that would define the principles and scope of the case.

Wallace says without this information, the NZACA can’t adequately prepare its defence.

“We can only surmise that the delay is due to the complexity of the case,” he says.

When the court does meet – in November or later if an adjournment is granted – it will establish the principles to be used to decide what Kristine Bartlett should be paid. It will also look beyond Bartlett’s situation to what precedent should be set – not only for other workers in the aged care sector, but other sectors that are similarly dominated by women.

Government officials are continuing to work with unions and aged care sector leaders in an attempt to resolve the case out of court. Negotiations are yet to start, with the brief for negotiations currently being prepared. It will look at the parameters around caregiver wages in the aged care, home-based care and disability sectors. Negotiations are expected to take a similar format to the recent in-between travel time case. The negotiation process is expected to run until the end of the year, with a view to reaching a settlement by March next year. Any settlement is likely to impact on the 2016 Budget.

So the negotiation process will run parallel to the court proceedings, although the negotiation process now appears to have stalled as well.

Simon Wallace says while he is hopeful the issue can be settled out of court, the NZACA must participate in both processes. The Association is continuing to raise money from its membership to meet the legal costs of the case. While donations are voluntary, the recommended amount is $10 per bed for the financial year.

“Some members are asking why they need to contribute when the government negotiation process is happening – which is a valid question. However we need to prepare for both. A solution may emerge from the negotiation process or the court process,” says Wallace.

“The NZACA takes the same line as it did in its 2014 election campaign. Caregivers are undervalued and should be paid more. However, any increase must be matched with an increased subsidy from government.

“The difficulty is that no one knows how much money is available from government.”

A problem of precedent

How much money the Government has to resolve this problem, is a very real concern. The outcome of the Kristine Bartlett case is likely to set a far-reaching precedent. Both the negotiation and court processes are looking beyond residential aged care to include caregivers from home-based care and disability sectors, but the precedent is likely to stretch further still.

With midwives recently filing for court action over pay discrimination and education support workers intending to do the same, the “me too” effect of this issue is potentially huge.

Primary school teachers’ union NZEI national secretary Paul Goulter said the union has been watching the Kristine Bartlett case and the midwives’ legal action with interest.

“There has been no real movement, and in fact what we’re seeing across the workforce in New Zealand is growing inequity and female-dominated workforces are suffering the most. We have given the Government plenty of time to tackle this issue and we will now follow the path of the midwives and Kristine Bartlett, and seek redress through the legal system,” said Goulter.

Any decision made in determining what Kristine Bartlett should be fairly paid will therefore need to take into consideration the ramifications it will have for many other industries.


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