Terry Bell: Caregivers' well-deserved wage lift must be backed by Government

The court sees historic injustices in caregivers' earnings, but there is only so much money to go around. Photo / Getty Images

Opinion

Pay equity case will leave rest homes struggling if they don't get more funding, writes Terry Bell.

I often reflect that "losing" the equal pay test case stands to benefit residential aged-care providers more than the caregivers taking the case.

Clearly the courts have shifted the well-settled understanding of "equal pay". It no longer simply means equal pay for women and men doing the same work. It means equity with pay for different but supposedly comparable work. The yet-to-be-heard substantive case is likely to see caregivers' pay being mandatorily moved towards a "living wage".

Materially lifting pay rates will allow providers to retain loyal staff, demand more skilled caregivers and to invest more in training. However, there are complex factors that determine pay and conditions in any industry and it is simplistic to believe these can be discovered, balanced and delivered by a court acting along the one-size-fits-all principle.

TerraNova, the rest home operator in the test case, does not intentionally discriminate against anyone on the basis of their sex. Neither does it set out to address perceived wrongs in society's employment structures. We work with what we are given. We are vitally interested in the skills, qualifications, aptitude and attitude of our 300 or so staff.

However, it is unrealistic to expect increasing standards and accountability from providers while our funding streams decline in real terms.

Because our fees are fixed and capped by regulation at marginally uneconomic levels, the sector lacks the mechanism to rationally invest in improved or extended services. Imagine a hotel operator deciding to provide a five-star service when the Government decrees they are allowed to charge only a two-star fee.

Providers should be expected to deliver a high standard of care at all times, but they are not magicians; either the state needs to pay fairly for those services, or it needs to rebalance the regulations so those who can pay for "premium" services are encouraged to contribute more towards those standards of care. Alternatively, real standards of care will continue to stagnate or perhaps decline over time.

The Court of Appeal did not find that TerraNova discriminated against Kristine Bartlett or indeed any of its female staff - that question is set to be investigated through the next set of court proceedings - but it did find a new way of interpreting the Equal Pay Act. It has determined that the Employment Court can look beyond the employer and even the sector in question to find what it considers is an appropriate comparator to decide if an employer has discriminated against its predominantly female staff.

The court can then effectively set the pay rate for all participants in those industries - akin to the old awards mechanism that existed in 1971 when the Equal Pay Act was passed.

Clearly the court sees the smoking gun of historic and systematic underfunding of "women's work" in the aged care sector, but its decision is not limited to this sector. The case is significant for almost every industry and a headache for government.

TerraNova can't be responsible for the nationwide ramifications of the court's activism but we feel a duty to address the parlous pay rates the sector has been cornered into paying its caregiving staff. We hear the call from the wider community to address the fairness of caregivers' pay; we hear the call from Kiwis to improve the skills and stability of the aged-care workforce.

We applaud Kristine Bartlett and the Service and Food Workers' Union for taking this case. Now the court has shown how the Equal Pay Act is to be read today, we are keen to work with the union to find an equitable pay rate.

We know we and many other providers could not operate for long if the court awards a significant increase in wages but the Government does not fund the uplift or allow for you and I to contribute more towards the costs of care.

• Terry Bell is executive director of TerraNova Homes and Care, which is represented in the case by the New Zealand Aged Care Association. This article is a personal view.