Sort pay equity problems out through 'good faith' bargaining, government told

The government should introduce a set of principles to guide firms on paying their staff fairly and install a process to allow for "good faith" bargaining, says the working group tasked with addressing a landmark Court of Appeal ruling interpreting the Equal Pay Act.

State Services Minister Paula Bennett and Workplace Relations Minister Michael Woodhouse say they are considering the joint working group's recommendations, which they've been sitting on since May 24. The working group - made up of incoming governor general Patsy Reddy, Council of Trade Union head Richard Wagstaff, former BusinessNZ boss Phil O'Reilly and public servants Paul Stocks and Lewis Holden - based its recommendation on the idea that parties to a pay equity claim sort out their issues as quickly as possible under the good faith bargaining arrangements of the Employment Relations Act 2000.

"Our preferred approach may be summarised as having the parties who would benefit from the claim bargain in good faith, using a set of principles designed to identify and confirm, assess and resolve a claim," the group said. "One area that we have not resolved is the extent to which the principles provide guidance on identifying comparators in terms of industry or sectoral proximity to the employees in the pay equity claim."

The working group was a response to a Court of Appeal ruling in the case of Kristine Bartlett, an aged-care worker, and the Service and Food Workers Union against private rest home chain Terranova Homes and Care.

The court rejected an appeal by Terranova and the NZ Aged Care Association in upholding an Employment Court ruling in 2013 that in female dominated work the Equal Pay Act 1972 "requires equal pay for work of equal value (pay equity), not simply the same pay for the same work", a change from how the law had been interpreted in the past.

The retirement village sector has estimated a hike in the average hourly pay for caregivers would add an extra $500 million a year to their costs and probably lead to some failing.

Bennett and Woodhouse said the government expects to respond to the recommendations "shortly".

If the recommendations are accepted legislation would need to be amended to recognise pay equity claims and the government would probably need to provide a level of resourcing to give workers and companies support through the process.

"The parties did not envisage the process leading to protracted settlements of pay equity claims, and stress that a timely and efficient resolution to matters will be more likely with additional specialist resources such as information, research and subject matter experts," the working group said.

The working group also said the government, as the country's biggest employer, could respond more broadly to the issue, with a range of options available such as leading equal pay settlements where it was the primary funder such as in care and support work.

(BusinessDesk)