A historic pay equity settlement could lead to hefty pay rises for about 55,000 low-paid, mainly female workers as part of a deal between unions and the Government.
Cabinet will discuss the settlement later on Tuesday, with Prime Minister Bill English saying ministers do not want to leave the issue for the courts to decide.
NZME reported the deal would lead to significant pay increases from July for workers in aged residential care, home support, and disability services, all state-funded service sectors with low pay rates and predominantly female employees.
Kristine Bartlett, the aged care worker whose court case kickstarted the pay equity negotiations, would have her salary increase from about $16 an hour to about $23 an hour.
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Overall pay rises would be between $3 and $7 an hour, depending on the type of work and the employee’s level of experience, and would not be backdated, NZME reported.
The settlement would cost the Government over $500 million a year by the time it was fully implemented in 2022, if signed off by unions and the Cabinet.
Bartlett, an aged care worker from Lower Hutt, argued in court that her employer TerraNova was underpaying staff because of the high percentage of female employees.
A landmark Court of Appeal decision found women in predominantly female workforces could make a claim for pay equity under the Equal Pay Act.
That led to the Government setting up a working group to develop principles for dealing with pay equity claims, and introducing legislation late last year that meant employees could file pay equity claims directly with their employer, rather than through the courts.
Last week, education support workers began historic mediation talks with the Ministry of Education after a 10-year fight for pay equity.
Labour leader Andrew Little said the likely settlement was a victory for the perseverance and determination of Bartlett and the unions, and would make a significant difference to the lives of many Kiwis.
“But make no mistake, the Government has been dragged kicking and screaming to this point, having had lawyers at each appeal stage of the original case opposing lower court decisions on pay equity determinations.
“This settlement wouldn’t have been reached without the unions’ involvement, which will see thousands of other workers benefit from the legal case and the outcome of the negotiations.”
English told RNZ Cabinet would be discussing the pay equity issue later on Tuesday, “and we may have more to say about it later”.
English said the Government had entered negotiations about two years ago with goodwill from both it and the unions, and a desire to avoid pay decisions being made by the courts.
“It’s always been our preference and I think the unions’ preference that we don’t leave it to the judges to decide what the pay rates may be…
“There’s a lot of goodwill across the community for these care workers, and certainly the government’s approach to this situation has always been positive.”
A PSA spokeswoman declined to comment, saying there would be an announcement later on Tuesday.