[Full judgment: 2013_NZEmpC_157_SFWU_vTerranova_Homes_and_Ca.pdf]

IN THE EMPLOYMENT COURT
AUCKLAND
[2013] NZEmpC 157
ARC 63/12

IN THE MATTER OF an application under the Equal Pay Act
BETWEEN SERVICE AND FOOD WORKERS UNION NGA RINGA TOTA INC
Plaintiff
AND TERRANOVA HOMES AND CARE LIMITED
Defendant
WRC 30/12
IN THE MATTER OF of proceedings removed from the Employment Relations Authority
BETWEEN KRISTINE ROBYN BARTLETT
Plaintiff
AND TERRANOVA HOMES AND CARE LIMITED
Defendant

Judgment: 22 August 2013

JUDGMENT OF THE FULL COURT

Background

[1] The defendant operates rest homes in the residential aged care sector and is, we are told, relatively typical of residential elderly care providers in New Zealand. It provides rest home services, continuing care hospitalisation services, specialist dementia services and psycho-geriatric services. The plaintiff union has brought the claim on behalf of a number of its members – each of whom is female. They provide care to the elderly residents of the Riverleigh Home, one of the defendant company’s residential facilities.

[2] It is common ground that there is a preponderance of female workers in the aged care sector. In 2009 there were 33,000 workers in the sector, 92 per cent of whom were women (mainly older women). Many work part-time.

[3] The defendant employs 106 female and four male caregivers. They are all paid at caregiver rates, which are around $13.75 to $15.00 per hour. The minimum wage is currently set at $13.75 per hour.

[4] Contracted care services are purchased by the relevant District Health Board (DHB) from providers such as the defendant company. The work and training standards expected of staff are set out in a contract between the provider and the DHB. The Ministry of Health monitors the provider’s performance.

[5] In essence the claim is that the female caregivers employed by the defendant are being paid a lower rate of pay than would be the case if caregiving of the aged were not so substantially female dominated, because those caregivers are female. While the claim is brought on behalf of a limited number of plaintiffs it has potentially broad implications, not only within the residential aged care sector but more generally. It is for this reason that a number of organisations sought leave to intervene.

[6] The substantive claims have not been heard. Rather the Court is concerned with a number of preliminary issues, the resolution of which will inform the scope of any subsequent inquiry conducted by it under s 9 of the Equal Pay Act 1972 (Equal Pay Act). The preliminary issues involve questions of law which are novel. The Court is not, at this stage, embarking on questions of fact but has been asked to consider and determine issues of principle and law for later application. That is why a full Court was convened. The substantive hearing will be conducted by a judge alone.

[7] The key issue for determination at this preliminary stage is the scope of the requirement for equal pay for female employees for work exclusively or predominantly performed by them, and how compliance with this requirement is to be assessed. This involves consideration of the scope of s 3 of the Equal Pay Act (which sets out the criteria to be applied in determining whether an element of differentiation in remuneration based on sex exists) and s 9, which relates to the Court’s jurisdiction under the Act.

[...]

Preliminary questions

[118] The preliminary questions and our answers to them are as follows:
In determining whether there is an element of differentiation in the rate of remuneration paid to a female employee for her work, based on her sex, do the criteria identified in s 3(1)(b) of the Equal Pay Act require the Court to:

(a) Identify the rate of remuneration that would be paid if the work were not work exclusively or predominantly performed by females, by comparing the actual rate paid with a notional rate that would be paid were it not for that fact; or
(b) Identify the rate that her employer would pay a male employee if it employed one to perform the work?

Answer: Section 3(1)(b) requires that equal pay for women for work predominantly or exclusively performed by women, is to be determined by reference to what men would be paid to do the same work abstracting from
skills, responsibility, conditions and degrees of effort as well as from any systemic undervaluation of the work derived from current or historical or structural gender discrimination.
What is the extent of the Employment Court’s jurisdiction to state principles pursuant to s 9?

Answer: The Court has jurisdiction to state general principles for the implementation of equal pay that will be generally available to guide any parties who negotiate about such matters.

Is a female employee or relevant union required to initiate individual or collective bargaining before that jurisdiction can be exercised?

Answer: No.

Does the defendant have a complete defence to the claim if it alleges and proves it pays four male caregivers the same rates as the 106 females, and it would pay additional or replacement males those rates?

Answer: No.

Does s 9 of the Equal Pay Act contemplate “general principles” to be stated by the Employment Court which would do no more than summarise or confirm the existing law?

Answer: No.

In considering the s 3(1)(b) issue of “…the rate of remuneration that would be paid to male employees with the same, or substantially similar, skills, responsibility, and service, performing the work under the same, or substantially similar, conditions and with the same or substantially similar, degrees of effort”, is the Authority or Court entitled to have regard to what is paid to males in other industries?

Answer: They may be if those enquiries of other employees of the same employer or of other employers in the same or similar enterprise or industry or sector would be an inappropriate comparator group.

Does an employment agreement provide for equal pay in terms of s 6(8) of the Equal Pay Act if there is no element of differentiation in the rates of remuneration that the relevant employer pays to its female employees as compared to its male employees for the same work, where the female and male employees have the same or substantially similar skills, responsibility and service?

Answer: Not if the rate of remuneration is affected by gender discrimination.

Does an employment agreement provide for equal pay in terms of s 6(8) if there is no element of differentiation in the rates of remuneration that the relevant employer would pay to its female employees as compared to what the relevant employer would pay to its male employees for the same work, where the female employees and male employees would have the same or substantially similar skills, responsibility and service?

Answer: Not if the rate of remuneration is affected by gender discrimination.

[119] We wish to record our appreciation for the assistance that all counsel were able to give to the Court and for the preparedness of their clients to contribute to these important issues.

[120] Costs are reserved although our inclination is that the circumstances are such that no orders may be warranted to this point at least.

[121] The Registrar is to convene a directions conference of counsel for the parties (but for clarity, not of representatives of the interveners), before a judge alone, about a month hence and for which we invite counsel to confer and file memoranda of proposed directions.

Judge Christina Inglis
for the Full Court
Judgment signed at 3.15 pm on 22 August 2013

[Full judgment: 2013_NZEmpC_157_SFWU_vTerranova_Homes_and_Ca.pdf]

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