Caregivers and teacher aides are a step closer to potentially huge pay rises after employers, unions and Government officials unveiled a consensus on new principles for equal pay.

Caregivers are seeking an "equal pay rate" of $26 an hour, about 70 per cent higher than their current starting rate of about $15.30 - a deal that would cost taxpayers an extra $500 million a year.

Teacher aides and other education support workers are seeking an extra $8, or 50 per cent, above a starting rate of $16.04 an hour.

Both groups are more optimistic after a working group led by Governor-General-designate Dame Patsy Reddy announced that it had reached consensus on principles for addressing equal pay claims for any kind of work that is "predominantly performed by women" and has been "historically undervalued" because of gender-related factors such as "labelling of the work as 'women's work'".


The principles provide that such claims should be negotiated on the basis of:

• "A thorough assessment of the skills, responsibilities, conditions of work and degrees of effort of the work done by women."

•This assessment "must fully recognise the importance of skills, responsibilities, effort and conditions that are commonly overlooked or undervalued in female-dominated work, such as social and communication skills, responsibility for the wellbeing of others, emotional effort, cultural knowledge and sensitivity."

• The work done by the female-dominated group must be compared with "appropriate comparators".

"Appropriate comparators" may include both "male comparators performing work which is the same or similar to the work at issue" and "male comparators who perform different work" with similar responsibilities, effort and conditions.

Last month's Budget included an unquantified contingent liability for extra costs both for an initial claim for 50,000 caregivers and for wider claims based on the new principles.

The Cabinet has not yet endorsed the principles. Workplace Relations Minister Michael Woodhouse and State Services Minister Paula Bennett said ministers "will now consider the joint working group's recommendations and expects to respond to them shortly".

But approval in some form is expected given the consensus that has been reached and the authority of the next Governor-General.

A separate working group is still negotiating over the first specific claim for caregivers which started with a claim by Lower Hutt rest home worker Kristine Bartlett. Aged Care Association chief executive Simon Wallace said that negotiation covered 50,000 caregivers across aged care, disability care and home care.

He said employers and unions both agreed that caregivers were underpaid, with starting rates only just above the legal minimum wage of $15.25.

"The Aged Care Association has for a long time and publicly lobbied for caregivers to be paid more," he said.

"We believe they should be paid at least at parity with their counterparts in public hospitals, in the range of $2 to $3 an hour more."

He said that would cost a "ballpark" $100 million more a year.

He said it would cost $500 million a year to lift all caregivers to the $26 rate claimed by the unions for the aged care sector alone, and more than that to cover disability and home care as well.

"You can see how unrealistic that is," he said.

E Tu union assistant secretary John Ryall said he was sceptical about that figure, but said: "We think probably the whole exercise is probably worth about $500 million. That would be for the whole of the care and support sector."

Both sides agreed that any increase was likely to happen in stages over two or three years.

NZ Educational Institute president Louise Green said her union would seek to apply the principles to about 28,000 teacher aides and other school support workers such as administrators and librarians.

The institute has already lodged a claim for 500 support workers employed directly by the Ministry of Education, claiming an increase of $8 an hour on top of a current starting rate of $16.04 an hour.

Mr Ryall said his union applied to the Employment Court last week to set a date for hearing the proposed principles for the Kristine Bartlett case - effectively pressuring the Government to settle the caregivers' claim before the court date, which is likely to be within the next few months.

He said the "comparators" justifying the union claim of a $26 pay rate included other groups in the public health sector and in Corrections.