Why National had to settle the Pay Equity case

Written By: - Date published: 10:19 am, April 19th, 2017 - 45 comments
Categories: business, capitalism, class war, Economy, employment, minimum wage, tax, the praiseworthy and the pitiful, Unions, wages, workers' rights - Tags:

As reported by Anthony Robins yesterday the Government has flipped on the pay equity issues raised by the case of Service and Food Workers Union Nga Ringa Tota Inc v Terranova Homes and Care Ltd. The case started five years ago when Kristine Bartlett and the Service and Food Workers Union lodged a claim against her employer the basis of which was that she was working in an industry dominated by female workers and because of this she was being paid less than she would have been if the industry had equal numbers of male and female workers. From this you can understand how significant the case was and why the claim, if successful could have major repercussions on many industries.

As summarised by the Court of Appeal in its decision:

The case has potentially far-reaching implications, not only for the residential aged care sector, but for other female-intensive occupations as well. It raises important issues about the scope of the Act, in particular whether it was intended to provide for pay equity (meaning equal pay for work of equal value) or whether it is limited to requiring equal pay for the same (or substantially similar) work.

In the original decision of the Employment Tribunal it held that the Equal Pay Act requires that equal pay for women for work predominantly or exclusively performed by women is to be determined by reference to what men would be paid to do the same work abstracting from skills, responsibility, conditions and degrees of effort as well as from any systemic undervaluation of the work derived from current or historical or structural gender discrimination.

Terranova sought leave to appeal the decision to the Court of Appeal and this leave was granted. The decision is here.

Note that the Attorney-General took part in the Appeal case as an “intervener”. This means that he was granted leave to appear because even though the Crown was not an original party to the litigation it had a significant interest in the case, given its role in funding the industry. His position basically was that the Employment Tribunal got it wrong, that the EPA did not mandate the decision that had been reached. If the Attorney General’s argument succeeded then the whole case would have failed and the Government would have been off the hook, at least for now.

Thankfully the Court of Appeal saw it differently and ruled that the EPA should allow a Court to look at different industries and rule that workers in one industry are being underpaid and therefore discriminated against.

The Law Society’s website has this description of what happened next:

The Court of Appeal was careful to state that, as it had only been asked to determine preliminary questions about the operation of s3 of the EPA, it would not go further and attempt the practical task of identifying appropriate comparators to the rest home workers role, or to even give guidance on how the evidence of other comparator groups or systemic undervaluation should be adduced.

The Court of Appeal did, however, offer its view that “the best way forward would be for the Employment Court to be asked to state the principles under s9 before embarking on the hearing of Ms Bartlett’s substantive claim. … As mentioned the Court may for example in its statement of principles identify appropriate comparators and guide the parties on how to adduce evidence of other comparator groups or issues relating to systemic undervaluation.” ( CA at 239)

In December 2014, the Supreme Court announced that it would not grant Terranova leave to appeal the Court of Appeal decision, as the appeal is considered substantially an appeal on preliminary questions. The Court effectively endorsed the Court of Appeal’s view that the next logical step appeared to be that the Employment Court set the principles under s9 of the EPA.

Since December 2014, there has been no further progress in the Terranova litigation. However, it has emboldened parties in other female-dominated professions to issue equal pay proceedings. In 2015, the New Zealand Educational Institute (NZEI) issued proceedings on behalf of education support workers against the Ministry of Education in the Employment Relations Authority. In 2016, the New Zealand College of Midwives filed a claim in the High Court against the Ministry of Health for breach of the New Zealand Bill of Rights Act 1990, alleging gender discrimination in rates of pay for midwives.

The issue had clearly developed a great deal of steam and all parties realised that some day at some time the issue would be resolved and from the looks of things so far the care workers had a strong case.

Clearly the Government has been looking to resolve the matter. It could have changed the Equal Pay Act but such a move would have been deeply damaging and made a mockery of its attempt to portray itself as a woman friendly party.  And just in time for the election the Government has agreed to do what is right, and that is increase the pay of three government-funded service sectors which employ mainly women on low rates. The workers in these sectors, aged residential care, home support, and disability services, are saints and deserve every cent of the increase.

The basic structure of the industry is the problem. The Government has contracted out to the private sector the provision of services which can be provided publicly. The bulk funding of these services allowed the private sector to grind down wages and conditions of workers in the industries in the pursuit of profit.  Neoliberalism then takes over.

The Government is celebrating its backflip. But just to remind everyone it should be remembered that in the Court of Appeal it sought leave to take part in the case and argued in support of Terranova’s position and against the Union’s claim.  This resolution has occurred because the Union had to play hard ball and litigate and negotiate every step of the way over the past five years.  If the Government wanted to do something about pay equity it should have done so years ago.

It should also be remembered that the deal represents a compromise. The increase will not be back dated and there was a reasonably significant risk this would have happened if the Court process was seen to its conclusion.

Audrey Young in the Herald summarized the situation well (yes you read that right):

The Government was driven by the reality that if it did not reach a settlement with the unions, the courts had given every indication they would. They would not only impose a settlement in the Bartlett case, but would come up with criteria to assist future cases.

Governments do not like relinquishing control to the courts.

The alternative would have been to legislate away any such judicial expansion of the Equal Pay Act. That would have been unacceptable to many in the Cabinet, not least because of the essential truth of the claim.

Women’s work is low paid because it is women’s work and the market values it less than men’s.

Some on the right are not so happy that some of our poorest paid yet most dedicated workers are now being paid a better although not necessarily a living wage. They are upset that the decision is “inefficient”.  The logical conclusion of this is everyone, or at least workers, should be paid peanuts then we will have peak efficiency.  Long may they squirm.

But basically through gritted teeth and in election year National has chosen to celebrate doing that which it should have accomplished years ago.

At least it appears that tax cuts will now be off the table. Although the reality is that the so called fiscally neutral tax cuts National gave in 2009 were paid for by the underpaying of women performing that most important of jobs, caring for those of us who need it.

45 comments on “Why National had to settle the Pay Equity case”

  1. Ross 1

    Some on the right are not so happy that some of our poorest paid yet most dedicated workers are now being paid a better although not necessarily a living wage.

    True but I bet if you asked David Farrar whether carers of his elderly mother or father, bedridden and requiring around the clock care, deserve a mere $15.75 an hour, he’d probably say “no fucking way”. Although he can be a dick, I’d say he isn’t a principled dick.

  2. One Anonymous Bloke 2

    The only thing Tory scum understand is force. The only way they will ever acknowledge human rights is when they are compelled by force (in this case the power of the judiciary) to do so.

    All history shows this.

  3. Ad 3

    Who needs the NZLS when Mickey can set it all out like this?

  4. tc 4

    This cuts them in many ways the opposition can leverage. The adequate remuneration of dedicated souls who care for those less fortunate cuts right across all demographics.

    The arrogance knows no boundaries and who is lining up that twat coleman as he personifies nationals intransigence.

    This provides a nice segway into the wrecking ball they’ve run through health.

  5. The Chairman 5

    So contracted providers get to maintain profits as taxpayers are looking at a potential increase in ACC levies to cover the cost.

    Meanwhile, those in private run rest homes or those that don’t have subsidised care are potentially looking at fee increases.

  6. Antoine 6

    I will stick in my oar as a Tory scum,

    I am very pleased with the result, a good outcome, well done to all those who contributed.

    I also do have a certain unease with the possibility of wages being decided by the courts at an industry level, and I wonder where this will all lead.

    Still mostly I’m pleased.

    A.

    • mickysavage 6.1

      The problem with the system that has operated over the past 9 years is that the pay rates of these workers has lagged further and further behind where they should be. If the Courts rather than the Government are needed to correct the situation then so be it and all strength to them.

    • One Anonymous Bloke 6.2

      I wonder where this will all lead

      One thing it’s going to do is prove that when Tory scum claim that higher wages cause unemployment, they are lying.

      With any luck it will help increase wages across the board, as more normal law-abiding New Zealanders realise that the courts can protect their human rights too.

      • NZJester 6.2.1

        This also shows how important Labour Unions are to low paid working people to help with negotiations. Without them, the government would have likely steamrolled her.

        • Antoine 6.2.1.1

          Very true.

          Dumb question, do non union members get the award?

          • One Anonymous Bloke 6.2.1.1.1

            Dumb? Looks more like flame bait.

            • Akldnut 6.2.1.1.1.1

              A better question would be “Should they be getting the union awarded rates.
              I think Labour might have a coat tailing policy to stop that from happening and the employers using it to depower unions.

          • Michael 6.2.1.1.2

            Of course you would, I’d like to see an employer not pay a non union member.

    • DoublePlusGood 6.3

      Do you think it is quite possible that you are mistaken, kind citizen, and that you are, in point of fact, one of those socialists everyone complains so much about?

    • Except the court isn’t simply setting wages, it just decided that the wages were determined as a result of gender discrimination in accordance with existing law. I agree that centralised setting of wages is a bad idea but that’s by no means what’s going on here. It’s the same principle of looking at comparable industries in terms of skills and job requirements that feminists have been talking about since forever. Aged care workers are essentially just a slightly less skilled version of nurses, who, coincidentally, are also probably paid less than they’re worth.

      If employers want to avoid having judges overturn their wage decisions then they should pay women (and men in female-dominated industries) a fair wage and it will never need to go to court in the first place. 🙂

  7. John up North 7

    Big thing that annoys the shit out of me is the likes of Coleman crowing what a wonderful person he is (and by proxy the Nats). Quite normal for these clowns…..sigh.

    The line Campbell should have pursued is to question why is Coleman claiming credit for something that the govt were dragged kicking and screaming to the negotiating table after realising the courts were gonna force them to pay up.

  8. Michael 8

    At least the Nats did apply the principle of pay equity to this dispute, even if forced to by the Courts. It’s still a lot more than “Labour” ever did, something we’ll hear a lot more of between now and September (as we will about the Nats raising core benefit rates for the first time in 43 years).

    • Anthony Rimell 8.1

      Michael

      You’re kidding, right???

      You have to be.

      Let’s have some true facts; not made up stuff from the right’s false facts files.

      It was Labour who enacted the legislation that enabled this case. Had they still been in power in 2008 it is clear they intended to see this type of issue promoted: on the basis of fairness and equity.

      One could argue they could have taken it further and enacted said pay equity directly. But the squeals of the Right would have been heard in Tokyo and beyond.

      This outcome is both thoroughly deserved by the women in the industry AND five years late; the latter due to the reluctance of the Nats and employers to recognise this basic equity right.

      Well done Kristine and her fearless colleagues!

    • mickysavage 8.2

      How do you feel Michael about National doing its best to mimic Labour values? I mean I am happy whenever they do so but it feels a bit weird.

      Does it upset you that National actually did something right for poorly paid workers? Even if it did so realising that it had no choice?

  9. Draco T Bastard 9

    The Government has contracted out to the private sector the provision of services which can be provided more cheaply with better services and with better wages publicly.

    FTFY

    The bulk funding of these services allowed the private sector to grind down wages and conditions of workers in the industries in the pursuit of profit. Neoliberalism then takes over.

    Which, of course, was the whole point of privatisation – higher profits for the private sector which has cost us billions in dead-weight loss since the 1990s.

  10. John 10

    All power to the unions and their members for standing up and fighting for a decent wage. Hope all other workers on minimum wages can see what can be achieved by sticking up for whats fair and just. A living wage with dignity. Kia kaha

    • mickysavage 10.1

      Aye and some of the workers still are not on a living wage. The struggle continues …

  11. timeforacupoftea 11

    HipRay !!
    At last that dirty word – INFLATION INFLATION INFLATION
    HIGHER INTEREST RATES
    Higher NZ superannuation
    Higher deposit rates just when I need to retire !
    Snowball snowball snowball
    The handbrake is OFF !
    I’ve been waiting for this for 25 years or more.

    • One Anonymous Bloke 11.1

      That’s an interesting prediction.

    • mickysavage 11.2

      There does not need to be higher inflation. Just no tax cut for the wealthy in the next couple of years.

      • timeforacupoftea 11.2.1

        I wrote this ramble the other day to prove what has happened in New Zealand in the past.

        18 April 2017 at 7:39 pm
        Congratulations !
        This is fantastic for these workers.

        Heres my story !
        I remember a way back in 1971 ( Holyoake / Marshal GVT when my husband, a A grade mechanic and I working as a student in the hospital health profession, when our unions got us major increases to our award wages. He got a 42% wage increase and I got a 46% wage increase, I was still earning more than him even though I was a student.
        Things were very tight before the increase our rent was $12 per week for a one bedroom flat with kitchen dinning room and large lounge all open living and a very large bathroom/toilet, never seen one since so large and a large bath to equal the room size, so we looked for a boarder. We found a man through the church 20 years older than myself he was waiting for his devorce to come through ( I think they took 6 years back then ) he paid our rent. We ran into hot water problems though, as the water heater only held 20 gallons and with such a large bath we decided that the three of us would bath together so the water level would rise. So set bath times every night, 9.30pm unless we were going out which was 7pm. haaaaa such trivia but great fun times for me “blush”.

        Moving on.
        Anyway we saved like mad and had enough for a deposit for a brand new house by late 1973.
        But then, INFLATION took off, INFLATION INFLATION INFLATION that dirty word through the Kirk GVT house trebled in value, Inflation continued under Muldoon GVT etc etc until 1986 and then the sharemarket crash.
        Is this the start to high interest rates again ? I hope not but would help me now as I will retire when I feel like it but not now.

        • Nic the NZer 11.2.1.1

          The cause of the inflation in the 1970’s was well known (at the time). The root cause was OPEC raising the price of Oil (it doubled around 1973) in a political protest. This caused inflation the world over, primarily as the oil price increases left no room for both wages and capital to receive the same income share. This then resulted in wage/price inflationary spirals as both workers and capital tried to maintain their share of income. That kind of thing seems unlikely to repeat at present, with workers having no where near the bargaining power of those times.

          In line with economic theory the inflation was combated at the time by the RBNZ setting high interest rates (supposed to slow borrowing and supposed inflationary pressures due to increases in the money supply), though this didn’t work. What did work was abandonment of full employment as a policy goal and the use of unemployment as a policy tool to discipline wage increases.

          This agreement is a very small improvement in the situation of only some sectors of the economy, after decades of wages running well behind productivity increases due to a (entirely intentional) lack of worker bargaining power. Its highly unlikely that such a wage increase will be inflationary as the government is the primary employer in these sectors so its not introducing significant cost competition onto the private sector (which is how inflationary pressures work, the happen where there is competition for resources).

          It also seems unlikely the RBNZ can raise interest rates much without seriously damaging the balance sheets of commercial banks with significant numbers of loan defaults. The other thing which indicates inflation will pick up slowly at fastest is that one of the better indicators of the future inflation rate is the present inflation rate. Inflation seems to be somewhat driven by some form of inertia of expectations.

          @mickysavage, how would a tax cut influence inflation?

          • mickysavage 11.2.1.1.1

            Only that if the increase was paid by running a deficit the effect would probably be inflationary.

            • Nic the NZer 11.2.1.1.1.1

              Ok, given you qualify that statement with the condition, if we assume the economy is presently fully employed. Otherwise the deficit spending does not have to compete for real resources avoiding the inflation risk in that situation. Further any other spending, including exporting and totally non-government carries the same inflation risk in every situation.

  12. Skeptic 12

    I wonder if cleaners and garbage collectors and maintenance people can use the same principle to force an increase in their wages – most are on the minimum. After all, there is a very long tradition of such occupations being prized above public servants – in ancient China that is.

    If I’ve got my history correct, one of the things Marco Polo commented on was the wealth of the street cleaners in Imperial China’s cities, and the state of (relative) cleanliness of China’s cities (compared to Europe at that time). It seems the Chinese prized their cleaners as they kept disease and fifth from spreading – which prevented the growth of vermin populations – which of course was one of the root causes of plague.

    Might our cleaners, handy people and rubbish collectors not be similarly prized in an enlightened NZ society? And be put on par with nurses and carers as specialists?

    But then maybe I have read too much into it.

    • mickysavage 12.1

      They should be but for the EPA to apply discrimination on the basis of sex has to be shown. Discrimination against poorly people in an industry with not dissimilar numbers of males and females will not qualify …

    • timeforacupoftea 12.2

      Get yourselves a very very strong Union.

      As much as I hated unions all my life I was astonished how powerful, horrible, nasty, arrogant huge men with enormous forceful power.
      At meetings in front of 700 members they would spit vile at us and our employers.
      My husband and I rented a flat above the union office and if you forgot to pay your monthly rent by cash by 5pm Thursday they would open your door with there keys walk in and demand rent immediately, to bad if you were in some stage of undress.
      I was frightened sick incase my husband had not paid at lunchtime.

  13. Cricklewood 13

    Just wait until its pubicly announced that the massive supercity infrastructure maintenance contracts have been awarded to an offshore company and that they are planning to pay staff subsantially less than current NZ based contracters.
    In my industry we are preparing for 100s of redundancies. Whilst the new contract will pay living wage most affected are already paid above this.

    Its a fucken disaster for Auckland.

    • tc 13.1

      Super city is keys enduring gift to Jaffas.

      An almighty cluster of cronyism and unnecessary costs that stopped short of flogging the assets and settled for just buggering up our major city and economic hub.

      Take a bow national, bravo. They only settled this to avoid the bad pr and attempt to swing the terminally stupid into thinking it was out of their warmth and humanity.

    • Antoine 13.2

      If this happens you should blame the Left controlled council

  14. Incognito 14

    If you want better conditions for the working class, you have to be populist right wing.

    https://qz.com/896463/is-it-ok-to-punch-a-nazi-philosopher-slavoj-zizek-talks-richard-spencer-nazis-and-donald-trump/

  15. Tanz 15

    I have worked in a job placing nurses/caregivers into shifts, and I think it sucks
    that they were on a low rate. Any job these days should pay twenty dollars an hour, and care giving is really hard work (close family member does it), challenging and very physical. About time they all got a pay rise, at long last. So should other low paid workers, also all the old benefits such as holiday pay and sick leave have now been written out of contracts, so wrong!!
    The unions were a strong voice once, now they mostly just seem to cave in to employers demands. Good on them here though. In this day and age, and especially in super rip-off Auckland, $15 bucks an hour is an absolute joke.

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