For much of the past year, the Health Minister has been adamant that the Government would not bail out disability services facing multimillion-dollar debts. It was not liable and it would not pay, said Tony Ryall. Now, with an election looming, there has been a change of heart. The Government has agreed to a proposed $100 million deal to pay disability support workers the minimum wage for overnight sleepover shifts from Christmas next year. The turnaround, albeit late in the piece, is welcome. Not only is this the right thing to do but the proposal manages to minimise damage to the taxpayer.
The long-running dispute harks back to the movement of the mentally disabled out of institutions and into the community. Carers doing rostered overnight stays have typically been paid a $34 allowance, rather than an hourly wage. This applied even though they were not in their own homes, were not free to leave, and were on call.
A case seeking the minimum wage for such workers succeeded at both the Employment Relations Authority and the Court of Appeal. This week's settlement forestalled an appeal by IHC's service arm, Idea Services, to the Supreme Court. Throughout the legal jousting, it had argued that sleeping was not working.
Under the deal, 3700 IHC sleepover workers and about 2000 others working for other employers would get $55 million in backpay, plus an ongoing $47.5 million a year from Christmas 2012. Sleepover pay would increase in three steps to the full minimum wage of $13 an hour at that date. The Government would pay the first two increases, but only fund the increase to the full minimum wage from July 2013. IHC would carry the extra cost of paying the full rate from Christmas.
The best-possible solution for the taxpayer may have involved a salary package, rather than an hourly wage. Firefighters operate this way. However, a welcome degree of give and take is evident in the proposed deal. The Service Workers Union has compromised by accepting a graduated process and essentially half the backpay owed since 2005. A more strident stance could have risked community care's very future. The Government, for its part, has recognised that an appeal to the Supreme Court was unlikely to succeed.
It has also abandoned thoughts of changing the law, a path that could create problems because of both international conventions and the Appeal Court's rejection of the averaging of earnings. Legislation would also have represented an overreaction based on a fear that the likes of teachers involved in occasional school camps would start making similar demands. The court was clear about the narrow ambit of its ruling.
The IHC and other employers will also have to fund half the cost of the backpay. Because virtually all their funding comes from the Government, they will have to seeks means and ways to continue operating. The IHC is likely to mortgage some of its properties. That, in itself, may amount only to shunting the problem down the line. But time may be the IHC's friend, given the possibility of more generous Government funding as the economy improves.
Most importantly, fairness has prevailed. It should never have been assumed that sleepover workers would accept an overnight allowance that fell so far short of the minimum hourly wage. Sleeping is working when those involved have clear restrictions and responsibilities.
Those caring for the disabled are no different from emergency crews, who may also sleep overnight. They had good reason to be dissatisfied with their lot. And good residential care for disabled people would quickly be jeopardised if too many had become disenchanted.