About 3000 hospital cleaners, orderlies and kitchen staff have won a new starting wage of $14.25 an hour - a breakthrough with potential flow-on effects for thousands of other low-wage workers.
Australian-owned Spotless Services yesterday abandoned a nine-day lockout of its 800 cleaners belonging to the Service and Food Workers Union and agreed to pay the $14.25 starting rate to them and another 700 non-union members.
The other three big cleaning contractors, all European-based, ISS, OCS and Compass, and all district health boards which employed their own service workers, agreed to the same starting rate in principle several weeks ago.
The new rate is $3 an hour above the minimum wage of $11.25 and will make it harder for employers paying less than $14.25 to retain staff.
It has been made possible by a $16 million budget increase for DHBs that was tagged to low-wage service workers in public hospitals.
Another $12 million to $15 million allocated in the year's Budget for low-wage workers and caregivers in rest homes is not yet reflected in higher wages because the rest homes, through Healthcare Providers of NZ, are challenging the DHBs' powers to dictate wages through annual service contracts.
South Canterbury DHB chief executive Craig Climo, who led its negotiations with the service workers, said the boards wanted rest homes to give their workers an extra $1 an hour and pay a minimum rate of $12.55 an hour.
But Healthcare Providers chief executive Martin Taylor said rest homes wanted to use the extra funding to raise the whole wage structure, keeping relativities for qualifications and experience. They are seeking a judicial review of the health boards' attempt to interfere in the rest homes' relationships with their employees.
Spotless cleaners, orderlies and kitchen staff at Middlemore Hospital yesterday celebrated pay increases of up to 27 per cent now that the Australian firm has come into line with other cleaning companies.
Cleaner Fuamago Masoe, who earns $12.28 an hour at Middlemore on weekdays and $11.25 an hour at the Manukau Superclinic at weekends, said the jump to $14.25 an hour in both jobs would allow her to join the new KiwiSaver scheme and start saving for her retirement.
"I haven't got enough words to bring out how happy we are."
Lasi Leatigaga, the sole provider for herself, her husband and four children aged 4 to 16, said the jump from $12.28 to $14.25 an hour ($491 to $570 a week) would pay for school fees, uniforms, clothing and food.
Ivy Tauhinu, still on $12.28 an hour after 37 years as an orderly, said that in all her time at Middlemore she had never seen a company lock out its staff as Spotless had for nine days.
"How can they just let us go like that?" she asked. "Maybe I'm not good enough."
Union negotiator Alastair Duncan said Spotless had wanted to pay new employees $1 an hour less than the $14.25 rate agreed by the other contractors, with a provision that they would go up to $14.25 and get back-pay if they "proved themselves" after six months.
He said the company backed off and agreed to the same pay structure as the other companies late on Monday night, a few hours after the Employment Court ordered an end to the lockout.
But Spotless Healthcare Services general manager Mark Russell said it had forced the union to the negotiating table by maintaining services through the lockout with the 700 non-union members in hospitals and "volunteers".
He said the company had agreed to the $14.25 rate from the start, apart from the first six months, but the union wanted it to sign a detailed agreement reached with the district health boards which Spotless had not even seen.
"We hadn't had five minutes in bargaining on our principles for this issue and they decided to take our people out on strike for nine days without discussions ever breaking down, because they never started," he said.
"They were on strike. We responded with a lockout. We didn't lock out for no reason. They were rolling strikes for which we received little or no notice."
The union has dropped its initial bid for a single multi-employer collective agreement for the four cleaning companies and the district health boards. A multi-employer deal was agreed with the health boards, but the union is now seeking separate agreements with each cleaning company.
Labour Department figures last year showed that 56,600 workers earned between $11.25 and $12 an hour.
No figures were available last night on how many earn less than $14.25 an hour, but the number will be in the hundreds of thousands.