International mechanisms to revalue women's work: research

Appendix 1 – Case Study 8 – New Zealand: The Pay Equity Settlement Act

In New Zealand the GPG was 6.5% in 2019^[109] and collective bargaining coverage 18.6% in 2020^[110]. This case study looks at the New Zealand experience of addressing pay equity in the aged care sector. The New Zealand Human Rights Commission’s report ‘Caring Counts’ (2012) created a supportive policy environment through its recommendations for the role of Health Boards in creating equal pay in the sector. This provided the inspiration for a case brought by a care and support worker, supported by her trade union, against her employer, Terranova Homes and Care Ltd. The case eventually led to the 2017 Pay Equity Settlement Act, but the results show that implementation of new legislation has to be carefully planned, monitored and evaluated. In 2015 the Government appointed a Crown Negotiator to lead negotiations on equal pay claims. More widely, the New Zealand Government has just announced Fair Pay Agreements, sectoral agreements between unions and employers that set minimum standards (such as sectoral minimum wages), with enforced arbitration.

Initiative

There is a tradition of low pay, poor working conditions and minimal entry requirements in the aged care sector because the work has been considered ‘women’s work’ although there have been many attempts by trade unions to change this^[111]. In 2011/12, the New Zealand Human Rights Commission led an inquiry into the ageing care sector, which resulted in a final report, ‘Caring Counts: Report of the Inquiry into the Aged Care Workforce’ (2012)^[112]. It made a wide range of recommendations including pay, qualifications, travel, health and safety. Two of its most significant recommendations were in relation to pay:

• The Minister of Health directs District Health Boards (DHBs) to develop a mechanism to achieve pay parity between health care assistants working in DHBs and carers working in home support and residential facilities
• DHBs and residential care and home support providers implement pay parity for carers across the government-funded health sector within three years.

The publication of ‘Caring Counts’ led to the formation of the Caring Counts Coalition in 2012, which brought trade unions, aged care providers and the Human Rights Commission together to campaign for better pay in the aged care sector. Their recommendations inspired a care and support worker, Kristine Bartlett, supported by her union (E Tū), to file a pay equity claim under the Equal Pay Act 1972 against her employer, Terranova Homes and Care Ltd. She argued that the caring work she did was undervalued because it was mainly performed by women. This was compared to work that was male dominated but required a similar level of skill, effort and responsibilities, working under different employers.

The claim was upheld and extended to 55,000 workers, who also worked in aged care, disability and home support, resulting in higher wages and a new classification structure. However, there were subsequent appeals by the employers^[113].

Outcome

In 2015, the New Zealand Government appointed a Crown Negotiator to lead negotiations with key stakeholders – care providers, unions and funders – to resolve the case with Terranova and other equal pay claims. This led to the 2017 Care and Support Worker (Pay Equity) Settlement Act^[114]. The Crown Negotiator played a key role in providing access to increased funding for the pay increases.

Recent research by the New Zealand Work Research Institute, informed by interviews with 69 participants from across New Zealand, found that although the Pay Equity Settlement Act was broadly welcomed by both workers and managers, there had been unintended consequences due to the way in which the funding had been implemented. Smaller providers had struggled to remain in business under the current funding model. Although the settlement prescribed hourly pay rates over four levels, depending on length of service and qualifications, workers on level 3 and level 4, the highest levels, were affected negatively because home and community care managers reduced the hours available to them in order to cut costs. The workloads of care and support workers had increased, which led to some negative effects on the quality of care. The main legislation and funding changes were not effectively communicated to workers and managers and there was a lack of support provided for these groups to deal with the changes^[115].

The Equal Pay Amendment Bill passed in 2020 aims to provide a clearer and more accessible process for pay equity claims, but also sets out a bargaining framework for employers, workers and unions to negotiate in good faith. It encourages use of mediation and dispute resolution services if agreement is not reached, with legal action a last resort. It is hoped to mark a move away from adversarial legal proceedings. A union can raise a pay equity claim on behalf of its members with multiple employers, while multiple unions within a workplace can raise a collective claim.

Applicability

First, improving the pay equity of aged care workers requires a change in perception of care work by society and linking it to human rights raises awareness of the importance of care work. The Human Rights Commission report (2012) was a significant step in this process because it included some specific recommendations about equal pay. Second, the 2017 Pay Equity Settlement Act was an achievement, but the implementation of this Act has shown that there can be unforeseen consequences that need to be addressed, particularly the initial communication of a settlement and the provision of adequate funding and support for key stakeholders. The appointment of a Crown or similar national Negotiator for equal pay and move to a requirement for parties to negotiate in good faith are approaches that could be adopted by the SG. These requirements are based on the experience of involving the Crown Negotiator with key stakeholders as well as bringing together human rights and industrial relations expertise^[116].