"It was pretty plain to them that we could have won, we could have won the legal principle [of pay parity discrimination based on gender] and that was the one they were worried about," she said.
The case will be adjourned but not withdrawn, and Ms Guilliland said the college reserved the right to restart proceedings if no agreement was reached within three months.
"I'm pretty sure the Ministry has made this offer in good faith. I think they really want to sort the issue and so do we, however if we can't sort the issues the midwives are clear that they will pursue the legal pathways."
The mediation will be facilitated directly under the Human Rights Commissioner, a fact that Ms Guilliland said brought confidence to the College.
Discussions will be held before Chief Mediator Pele Walker.
Community, or self-employed lead maternity carers (LMCs), were contracted to the Ministry of Health and forbidden from charging to cover rising costs, unlike GPs, who can pass additional costs onto clients.
"The ideal outcome for us is that midwives have equal access to negotiation and equal access to the resources and frameworks around the maternity service and midwifery service that other services have.
"Right now they are individuals with no framework to work under to give them any strength or collective voice."
Ms Guilliland said it was important to place value on the work that LMC midwives.
"Currently if a midwife looks after a woman for nine months, that six and a half of pregnancy and two and a half months of labour and birth, for 24 hours a day she is on call - and she gets $2200 that isn't anything like what most other people working in the world would get for that kind of service."
In a previous statement, the college said community midwives were paid the equivalent of unskilled or junior staff, despite being university-educated health professionals who must complete twice the number of clinical hours as nurses.
Recent pay increases included a 2012 increase of two percent and another last April of two percent, but Ms Guilliland dismissed these rises as they only covered certain care modules.
"That's even more underhand in my view - they got the headlines but most of the modules didn't get any increase at all.
Miss Guilliland said this is the first time the Ministry has formally offered and accepted an organised mediation between its top ministry officials and the College.
"This would not have happened without the College taking the claims action to the High Court. We are not a union, we are not litigators, we are midwives caring for women and their babies and we want to be able to continuing doing just that within a safe and sustainable maternity service."
Hamilton Midwife Rachel Cassie has been a community midwife for nine years and previously described the wage as a disaster.
She said community midwives were contracted to the Ministry of Health and forbidden from charging to cover rising costs, unlike GPs, who can pass additional costs onto clients.
"The only way to make more money is to sign on more women, but this could compromise the safety or service," she said.
Ms Cassie said the wage had to be considered in the context of a student loan combined with the cost of setting up a practice.
North Waikato midwife Sheryl Wright said compulsory costs included the annual practicing certificate ($400), indemnity insurance ($695), ongoing education ($500) and Midwifery Standards Reviews ($150).
"The midwife must pay all her own expenses. This will include things such as clinic rent, fuel and running costs for her vehicle, telephone expenses, postage, stationery, equipment replacement, insurance, ACC cover, advertising and accountancy fees ... In total, average expenses come to around $25,000 per year - excluding student loan repayments, which are not considered business expenses."
She said every time inflation or the CPI (Consumer Price Index) increases, the only way to renegotiate wages was to renegotiate the whole contract.
Hamilton News approached the Ministry of Health for comment but it was unable to provide a statement before deadline.
