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Terranova Homes & Care v SFWU - appeal dismissed

Judgment: Terranova_Homes__Care_Ltd_v_Service__Food_Workers_Union_Judgment.pdf





(CA631/2013) [2014] NZCA 516


This summary is provided to assist in the understanding of the Court’s judgment. It does not comprise part of the reasons for that judgment. The full judgment with reasons is the only authoritative document. The full text of the judgment and reasons can be found at

The Court of Appeal has dismissed an appeal against an Employment Court judgment relating to the scope of the Equal Pay Act 1972.

Two proceedings were filed against Terranova Homes & Care Ltd (Terranova) in the Employment Court. One was filed by Ms Bartlett, a rest home caregiver employed by Terranova. The other was filed by the Service and Food Workers Union Nga Ringa Tota Inc (the Union). Both proceedings allege that the wages paid by Terranova to its caregivers are lower than they would be if care giving of the aged were not work predominantly performed by women. Ms Bartlett and the Union accept that Terranova pays its female caregivers (who make up the vast majority of its care giving staff) the same as its male caregivers, but argue that the male caregivers’ wages have also been depressed because care giving is viewed as “women’s work”.

Section 3(1)(b) of the Equal Pay Act contains the criteria to be used to determine whether an element of sex-based differentiation in wages exists when the work in question is exclusively or predominantly performed by women. It requires the court to consider the rate that would be paid to a hypothetical male performing the work.

In the judgment under appeal, the Employment Court determined several preliminary questions of law relating to the two proceedings. Terranova was granted leave to appeal two of the Employment Court’s answers to the Court of Appeal. Those answers concern the evidence that can be taken into account in determining the rate that would be paid to the hypothetical male in s 3(1)(b). In particular, the Employment Court held that:

a) any evidence of systemic undervaluation of the work in question derived from current or historical or structural gender discrimination must be taken into account; and

b) evidence of wages paid by other employers or in other industries may be taken into account if wages paid by the defendant employer or other employers in the same industry would be an inappropriate comparator.

Both rulings are based on the premise that the Equal Pay Act is not limited to requiring equal pay for the same or similar work, but that it also requires equal pay for work of equal value (often referred to as pay equity).

On appeal, Terranova argued that while there may be exceptional circumstances where it would be permissible to look at wages paid by other employers in the same sector as the defendant, it would never be relevant to consider wages paid by employers in other sectors or evidence of systemic undervaluation. In effect, Terranova advocated an approach that would limit the Equal Pay Act to requiring equal pay for the same or similar work.

The Court of Appeal has upheld the Employment Court decision. While the Court disagreed with parts of the Employment Court’s reasoning, it concluded that the Employment Court’s answers to the preliminary questions are correct. Based on the wording of s 3(1)(b), the purpose of the Equal Pay Act and its definition of equal pay, the Court considered it clear that the Act is not limited to requiring equal pay for the same or similar work. The Court accordingly accepted that in determining what would be paid to the hypothetical man featured in s 3(1)(b), it may be relevant to consider evidence of wages paid by other employers and in other sectors. Further, any evidence of systemic undervaluation of the work in question must be taken into account.

The Court of Appeal judgment was delivered by Justice O’Regan, Justice Stevens and Justice French.

Judgment: Terranova_Homes__Care_Ltd_v_Service__Food_Workers_Union_Judgment.pdf

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