Unions have agreed to put off legal action over pay equity after joining a group set-up by the Government to try and make headway on the issue.

Legal action will be put on hold until March next year.

Union representatives will be led by Council of Trade Unions representative Helen Kelly, who stepped down from the CTU presidency this month following a February diagnosis of terminal lung cancer.

The establishment of the joint working group comes after a recent Court of Appeal ruling that to establish equal pay for workers in the female-dominated aged care industry, their pay must be equal to workers in a similar male-dominated industry.

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Lower Hutt rest-home worker Kristine Bartlett initiated the historic case when she lodged a claim for equal pay from her employer Terranova Homes and Care with the Employment Court in May 2013.

She argued that her employer Terranova was breaching the Equal Pay Act by fixing caregiver wages at a low rate because 92 per cent of the country's 20,000 rest-home caregivers were women.

In her last major speech as president to the CTU conference in Wellington this month, Kelly nominated the Bartlett case as one of the biggest wins for the union movement in recent history.

The ruling meant the Employment Court would have developed a set of principles to be observed in implementing pay equity in the aged care sector.

Workers in other industries would also look at legal action to ask the Courts to establish such a set of principles for their industry.

Now, the Joint Working Group will develop principles for dealing with claims of pay equity, that could be applied across the entire economy.

"I am very pleased unions and employers' groups have been so willing to take part in this process and work together with Government officials to come up with practical solutions," said Paula Bennett, Minister of State Services.

The group is expected to meet later this month with recommendations to Ministers by the end of March next year. If accepted, some will likely require a law change.

Today's announcement has been hailed as a "big step in the right direction" byu the Pay Equity Coalition. Spokeswoman Angela McLeod said hundreds of thousands of women were not being paid equal pay for work of equal value.

"It has taken brave working women over 40 years to get to this point - we're pleased the Government has finally seen the sense in joining us."

Green Party women's spokeswoman Jan Logie welcomed the group's establishment, and said the Bartlett case had forced National's hand.

"The National Government should be congratulated for seeing the writing on the wall and deciding that it's better to be on the right side of history. It's well overdue."

Business New Zealand chief executive Phil O'Reilly said it was important that any principles agreed upon by the working group reflected economic reality.

"Rather than a bureaucratic or token approach to women's employment, while supporting equitable pay rates in women-dominated occupations."

Meanwhile, Health Minister Jonathan Coleman has today confirmed the Government will enter negotiations over pay rates for about 50,000 care and support workers.

"We are confident that the responsible approach taken by the unions, employers and funders to resolve the long standing in-between travel issue can be replicated in these discussions," Dr Coleman said.