The country's 20,000 rest home caregivers could be in line for pay rises averaging about 27 per cent after a historic Employment Court victory.
The woman at the heart of the case is Kristine Bartlett, 64, a grandmother of six who makes $14.44 an hour - only 69c above the legal minimum wage - after working for 20 years at a Lower Hutt rest home owned by the Auckland-based Terranova Group.
A full bench of the Employment Court has ruled that her pay rate may be compared against occupations that are not female-dominated to determine whether the company is breaching the Equal Pay Act by paying her and other female caregivers such low wages.
The judgment is a preliminary ruling on the key legal issues. Lawyers for Ms Bartlett and Terranova now have to go back to the court to argue over the appropriate "comparator" occupations to determine whether the company is breaching the act.
Union secretary John Ryall said likely comparator groups included public hospital healthcare assistants, who are paid an average of $19.46 an hour after five years, psychiatric assistants in mental health facilities on around $22 an hour, and prison guards on around $25 an hour.
Even the lowest of those, public hospital healthcare assistants, earn 27 per cent more than the median rate of $15.30 an hour for rest home caregivers with four to seven years' experience in a survey by the Aged Care Association last October.
The association's chief executive, Martin Taylor, said it would cost an extra $140 million a year to lift all rest home caregivers to public hospital rates.
"That would have a major impact on the sector. You would instantly find a majority of the sector would be close to insolvent," he said.
The landmark judgment is a serious upset. When the court hearing started in June, Mr Taylor said, a win for Ms Bartlett on the key legal issue was "a long shot" because there was no precedent for comparisons between different occupations since the Equal Pay Act was passed in 1972.
But former Labour minister Margaret Wilson, now a law professor at Waikato University, said the act was waiting for a union willing to put resources into testing it.
"There hasn't been a tradition in New Zealand of litigation of employment relations matters of a collective or societal sort," she said.
The court's interpretation of the act was in line with human rights legislation passed since 1972, she said, and reduced public tolerance of discrimination.
Mr Ryall said the union would seek a negotiated settlement involving Terranova, other aged care companies and the Government, which funds the sector, similar to a $117 million settlement of a case involving 3700 disability workers on overnight shifts in 2011.
Terranova managing director Terry Bell said he had not yet decided whether to appeal.
Associate Health Minister Jo Goodhew said the Government would consider the judgment carefully.
Ms Bartlett said she would not get much personally out of the case because she was near retirement, but she was pleased for all other caregivers.
"I'm absolutely thrilled," she said. "There are quite a few that are on the minimum wage, it's just so unfair."
Who gets what
Hourly rates with 5 years' experience
• $25.53: Prison guard level 3
• $22.35: Psychiatric assistant step 5
• $19.46: Public hospital healthcare assistant step 4
• $15.30: Rest home caregiver median after 5-7 years
• $14.98: Stop-Go man at Allied Workforce
• $14.44: Kristine Bartlett