About 5700 of the country's lowest-paid workers have won a landmark $100 million deal to pay them the minimum wage for overnight sleepover shifts from Christmas next year.
The Service Workers Union says Health Minister Tony Ryall has agreed to recommend legislation to the Cabinet on Monday to raise sleepover rates for disability support workers from current IHC rates of $34 a night to the minimum wage of $13 an hour in three steps over the next 15 months.
The deal includes backpay from July 2005 of half the difference between what workers were paid and the minimum wage applying at the time - up to $70,000 for some workers.
Glenfield IHC support worker'Ofa Ta'ufo'ou will get about $30,000 in backpay, or a bit over $20,000 after tax, and may finally have enough for a deposit on a house.
The pay rise for sleepovers will also give him time with his wife, Sue, and daughters Amelia, 8, and Jolene, 4. He now works 80 hours, including three sleepovers, every week to pay the family's $400 rent and other bills.
"When I leave for work on Sunday morning, I only see Amelia on Wednesday night," he said. "I finish on Monday morning when Amelia's at school, go back on Monday afternoon before she gets home, and it's three days before I see her again."
Service Workers Union secretary John Ryall said the proposed settlement, agreed with Government and IHC negotiators late on Monday night, capped "a long struggle" which began when the union lodged an Employment Relations Authority claim for the minimum wage for sleepover workers in 2007. The authority upheld the claim in 2008. IHC's service arm Idea Services appealed all the way to the Court of Appeal, which upheld it again in February this year.
Idea Services appealed again to the Supreme Court, but also opened negotiations with the union which led to Monday's settlement.
Mr Ryall said the settlement would be worth about $55 million in backpay for the 3700 IHC Group sleepover workers and about 2000 others working for other employers, plus an ongoing $47.5 million a year from Christmas next year.
Sleepover pay will increase to half the minimum wage ($6.50 an hour) backdated from July 1 this year, 75 per cent of the minimum from July 1 next year and the full minimum wage from Christmas 2012.
If the Cabinet approves, the Government will pay for the first two increases, but will only fund the increase to the full minimum wage from July 2013. Mr Ryall said IHC would pay the extra cost of paying the full rate from Christmas.
"I think they are going to have to mortgage some of their properties," he said. "We would rather the Government paid the whole lot."
IHC and other employers will also have to fund half the cost of the backpay, with the Government paying the other half.
IHC chief executive Ralph Jones was not available for comment but confirmed he was seeking an adjournment of the Supreme Court hearing set down for September 13 on the basis that the settlement could be ratified by then.
Public Service Association secretary Richard Wagstaff said the deal could benefit most of the 5000 disability sector workers his union represents in agencies other than IHC, and potentially others in areas such as Barnardos and Child, Youth and Family homes.
A spokeswoman for the Health Minister called it "a generous offer". She said legislation would probably be introduced to Parliament before the election.