Landmark Pay Equity case; TerraNova's decision to Appeal

EMBARGOED UNTIL 3:00 p.m. 18th September 2013

Landmark Pay Equity case; TerraNova explains its decision to Appeal.

By TerraNova Homes & Care Limited

Auckland

18th September 2013

TerraNova Homes & Care Ltd has today filed an application for leave to appeal the decision in the Employment Court Judgement [2013] NZEmpC 157.

Background

That decision delivered the Court’s guidance on preliminary questions of law which establish principles to assist parties determine if Section 3.1(b) of the Equal Pay Act 1972 has been breached.

Section 3.1(b) deals with the definition of “equal pay” in circumstances where the particular work in question is ‘predominantly or exclusively’ performed by female employees.

Amongst other things, the Court found that:

1. in determining whether an employee in such work receives “equal pay”, it may be necessary to compare the pay-rates for that work with the pay-rates offered to a competitor’s workforce, or even with pay-rates offered to workforces in unrelated sectors, and to use those comparators to deduce the appropriate pay-rate to achieve “equal pay”.

2. The Court has the power to order the appropriate rate of pay that must be paid if it finds there is gender discrimination, based on this assessment.

3. The Court has these powers regardless of whether the employer had intentionally discriminated against the relevant employee or if the failure to achieve “equal pay” was a result of the (unintentional but) systemic undervaluation of the work resulting from current or historical or structural gender bias.

Comment

The key facts are:

• We pay our female employees the same as our male employees doing the same role – this was accepted by the Court.

• We pay our care-givers broadly the same as what every other provider in the sector pays – unsurprising given we are funded identically by the DHB’s.

This is not about TerraNova but it is about the public’s desire to have Aged Care Providers delivering good care and being funded sustainably - and the DHBs’ willingness or ability to pay for that standard.

TerraNova’s owner and CEO, Terry Bell said “Caregivers are not well paid and of course we would love to pay our caregivers significantly more: Surely there are few more deserving than caregivers of the likes of our Kristine Bartlett. But we can’t realistically do that on our current funding. I am sure many, if not most operators would fail within the year if we were instructed to pay a ‘living wage’ to our care-givers without the DHBs arranging back-to-back funding for providers”.

Mr Bell said that there has been a lot of commentary about the wider ramifications of this case for the sector and for employers generally. He said “It’s true we are deeply concerned about the basis to the Court’s decisions, however it is not a problem of our making. Already this case has cost our small business hundreds of thousands of dollars, and while we have a lot of support from all sorts of organisations, to date no one has contributed a dollar towards our legal defence costs”.

Mr Bell said “This is not our fight. Ultimately it is an issue that needs to be resolved between industry representatives and the government of the day. The Board of the New Zealand Aged Care Association has informed us it will next meet on October 16. We are filing an application for leave to appeal today which should also give it time to consider the issues and hopefully advise us on the next steps”.

About TerraNova Group

Set up 14 years ago by Terry Bell, C.A, MBA

With experience in accounting, finance, corporate treasury and general management across a range of sectors including Manufacturing, Farming, Retail and Banking

Almost unique in the sector for its size and scale as a family owned business

Operates 5 facilities across the North Island with approximately 300 beds focussed on Hospital level care (but certified to provide resthome care as well)

Provides approximately 1% of all NZ’s residential care beds, under contracts with 5 of the country’s 20 DHB’s

Employs circa 300 people.

The main operating company is TerraNova Homes & Care Limited.

That business’s Board of Directors are;

Dr Michael Ashby (independent professional Director)

Terry Bell (Beneficial owner & C.E.O)

Neil Aston (Chief Operating Officer)

Yolanda Muir (Clinical Operations Manager)

Website: www.terranovahomes.co.nz

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