The PSA, NZNO and E Tū unions have taken a pay equity claim against a representative group of 15 employers of care and support workers in Aotearoa New Zealand.
It is anticipated that if and when a pay equity settlement is reached, the Government will look at extending benefits of any settlement to workers performing the same work in the wider care and support sector.
This FAQ provides information about the Care and Support Workers Pay Equity Claim - including background to the claim, progress and next steps, and potential future impacts for employers and their staff in the wider sector.
Please note that this FAQ relates primarily to the Care and Support Workers Pay Equity Claim. A separate claim has been lodged for administrators/coordinators and frontline managers in the sector. That claim is progressing in parallel, however it was lodged later and is less advanced than the care and support workers claim.
The Care and Support Workers Pay Equity claim was lodged by three unions (PSA, E tū and NZNO), against 15 employers from the aged residential care, disability, home and community, mental health and addiction sectors in July 2022. The claim seeks pay equity for people who perform care and support work for those employers.
Pay equity means equal pay for people who do jobs that are different, but require the same level of skill, responsibility, and effort. Many occupations with a lot of female workers (like care and support work) have historically been paid less than occupations with more men. Pay equity is about correcting sex-based pay discrimination that may have occurred over time.
The care and support workers claim covers people performing care and support work for the 15 employers: BUPA, CCS Disability Action Incorporated, Dunedin Community Care Trust, Emerge Aotearoa, Geneva Healthcare Limited, Healthcare of New Zealand Ltd, New Zealand Community Living Ltd, Pacific Island Homecare Services Trust, Pathways Health Ltd, Presbyterian Support Central, Spectrum Care Ltd, Te Roopu Taurima O Manukau Trust, The Lifewise Trust, Toucan Taranaki, Visionwest Community Trust.
The unions have lodged a separate claim for administration/coordinator workers and frontline managers in these sectors and the second claim is progressing in parallel, however it was lodged later and is less advanced.
Both claims are considered to be representative of the wider sector. Any settlement of either claim may be extended to people who perform the same work for other organisations - but that will be a separate process, led by the Government. Extension of the claim is not guaranteed under the current or any future government, although it is anticipated, and the government has a separate work stream underway to consider extension of any settlement.
Pre-bargaining meetings between union and employer representatives have looked at a range of topics that may be covered by any settlement, including remuneration, wider terms and conditions, training and qualifications.
The majority of employers in the claim are represented by, and all are working in partnership with four peak bodies: the Home and Community Health Association (HCHA), the NZ Disability Support Network (NZDSN), Platform Charitable Trust (Platform), and the NZ Aged Care Association (NZACA).
These four peak bodies are also involved in a separate process being led by the Public Service Commission Te Kawa Mataaho, around the extension of a settlement to other workers in these sectors.
The claim is being progressed under the Government’s Pay Equity Funded Sector Framework.
Workers within the scope of the claim deliver services that are funded by multiple agencies including Health NZ Te Whatu Ora, Māori Health Authority Te Aka Whai Ora, Ministry for Disabled People Whaikaha, Ministry of Social Development, Ministry of Housing and Urban Development, Accident Compensation Corporation, Oranga Tamariki and the Department of Corrections.
A Government Oversight Group has been established to oversee the claim, comprising Te Whatu Ora, Te Aka Whai Ora, Whaikaha, Accident Compensation Corporation, Ministry of Social Development, Ministry of Housing and Urban Development, Oranga Tamariki, and Department of Corrections - and led by Grainne Moss (Public Service Commission Te Kawa Mataaho, All of Government Chief Executive for Pay Equity). The Ministry of Health Manatū Hauora, is involved in the oversight group as an independent monitor.
Te Whatu Ora has been designated as Lead Funding Agency for the claim.
The Oversight Group’s role is to coordinate and inform the relevant Government parties of the progress of the claim, including Cabinet and Treasury and other funders, in respect of wider sector implications and the related process of extending any benefits of the settlement of this claim to the wider sector, as well as having oversight of each of the Milestone steps.
Any settlement of the claim will need to be fully funded through additional government funding. Employers will not be able to meet the costs of a settlement within existing funding. The parties are firmly committed to ensuring the settlement is fully funded, including any consequential costs that result from the settlement.
Pay equity claims in the funded sector follow a detailed policy framework that the Government established in 2021, closely aligned with the Equal Pay Act.
This is called the Pay Equity Funded Sector Framework. It has six milestones that have to be worked through, as reviewed by the relevant Government Oversight agency, to establish that care and support workers are paid less than people in occupations with similar skills and demands, show how big that gap is, and to agree a settlement and related funding – whilst working through each process step as required.
The milestones in the framework encourage unions and employers (the ‘parties’ in the claim) to work together and gather evidence to make decisions and reach agreements, rather than relying on the courts.
Milestone 1: lodging the claim and confirming it is ‘arguable’. Agreement in principle by the Government to fund the settlement and an assessment of potential scope or criteria for extending the settlement.
Milestone 2: confirming the process to address the claim, and an initial bargaining strategy for the employers (to be endorsed by Government).
Milestone 3: parties working jointly and collaboratively to gather information, data, and evidence to complete work assessments.
Milestone 4: considering any conclusions reached about undervaluation from the work assessment process.
Milestone 5: involves the Government Oversight Group’s review of the employers‘ bargaining strategy and the Oversight Group then seeking contingency funding approval from Cabinet prior to any bargaining commencing.
Milestone 6: requires pre-bargaining planning, testing and affirming the proposed settlement.
Milestone 7: implements a post settlement review process.
The Care and Support Workers Pay Equity Claim is currently at Milestone 5. The Government’s Oversight Group is currently reviewing the employers’ bargaining strategy and employers are waiting for contingency funding approval before considering whether they can proceed to Milestone 6.
Milestone 6 involves bargaining and progressing to reach a settlement in-principle. This will include reviewing any proposed settlement against the allocated contingency funding and determining whether any changes are required.
Extensive pre-bargaining talks between union and employer representatives are continuing, in efforts to address any key issues before official bargaining. The parties hope to be at a stage where any issues have been resolved through pre-bargaining to expedite formal bargaining if and when that can proceed.
The parallel claim for administrators and frontline managers is currently at Milestone 2 (as it was lodged later than the care and support workers claim).
It is tentatively hoped that an agreement in principle may be reached in October 2023. However, a date is still to be set for bargaining, pending written confirmation from funders that there is sufficient funding to implement a potential pay equity settlement. Formal bargaining cannot begin until employers know that funding is available to pay for a potential settlement.
Following bargaining, unions and employers will need to seek ratification of any proposed settlement, and Cabinet will need to release funding to cover the costs of any settlement for it to be enacted.
A separate process to extend a settlement to other workers in these sectors is being led by the Public Service Commission Te Kawa Mataaho, with the involvement of the unions and peak bodies. It is currently in early stages of development.
The funded sector framework extension process recognises that the settlement of a representative claim would impact the sector as a whole. The extension process is designed to recognise those impacts and to address the undervaluation of the work across the aged residential care, disability, home and community, mental health and addiction health and disability sectors in New Zealand.
While it is not guaranteed, the government has given positive signals around the potential extension of any pay equity settlement.
This is a separate process led by the Government; it is not guaranteed and timing is unknown.
The Peak Bodies and unions have proposed that a decision should be made soon to fast-track plans for this claim extension due to the particular circumstances surrounding this workforce (and the fact that the work has already been defined consistently across the sector since 2017). The parties are jointly expecting that any such sector extension should occur at the same time as any claim settlement is implemented.
Under the Equal Pay Act, any extension is unable to happen until after a settlement has been reached for the representative claim.
Employers and peak bodies involved in the current care and support workers pay equity claim have set up a joint working group with the main funders to look at implementation issues for any settlement. This includes considering how additional money would be transmitted from the funders to employers, and systems and processes that employers would need to have in their own organisations to implement the settlement. It is anticipated that existing systems would need significant amendment to incorporate proposed employment changes.
We will share this information with members as it evolves and we get closer to any settlement and possible extension of the claim. However, we encourage all employers to start looking at their HR and payroll systems and processes and identify any gaps in systems or data, in preparation for any extension.
No, these are separate processes.
However, the funders have suggested that the proposed 3% CSW wage increase (from 1 July 2023) may be used as a common baseline in funding calculations for future pay equity funding – regardless of whether individual service providers have actioned this increase or not. This is the subject of ongoing engagement between employer and funder representatives in this pay equity process.
It is not yet clear what will happen to the existing legislation that is set to expire on 31 December 2023. That may depend on who is in Government following this year’s General Election.
The parties to the current claim have been working hard to progress the claim with the 31 December 2023 expiry in mind.
- We will continue to provide updates to members and others on our database. If you are not a member and wish to sign up you can do that here: https://www.hcha.org.nz/sign-up, or you can email us at email@example.com.
- More information about pay equity and the Pay Equity Act can be found at https://www.publicservice.govt.nz/system/public-service-people/pay-gaps-and-pay-equity/pay-equity/