By John Ryall, former E tū Assistant National Secretary
Introduction
David Weil of Harvard University developed a theory of
“strategic choice” for unions, in which he divided the power-building task into
two facets – strategic leverage and organisational capacity. According to Weil,
when both strategic leverage and organisational capacity are high, the chances
of a union win are vastly improved. When either of these is low the chances of
winning are correspondingly lessened.
According to Weil organisational capacity is the strength of
the union’s internal organisation (eg increasing union density, active
articulate members), while strategic leverage is the factors outside of the union
that give the union added power (eg political and community allies, labour
shortages, legal cases, public support).
The unanimous vote in Parliament in favour of the 2017 Care
and Support Pay Equity (Settlement) Act, following a union-negotiated $2.2
billion settlement, was not just a win for 55,000 low-paid care and support
workers, but a confirmation of this theory.
For 40 years aged residential care workers, joined at a
later stage by their comrades in disability support and home support, had struggled
to build both organisational capacity and strategic leverage to have the
undervaluation of their work recognised and put right.
The eventual success of this struggle must be understood in
this context.
Creating Minimum Conditions
The award system, which for nearly 100 years provided
national minimum wage rates for private sector occupations, almost completely
missed aged residential care workers.
The first award was achieved for rest home workers in 1973,
but only for those in the Canterbury District. This award was opposed by the
majority of rest home owners in the area, who were represented by the Religious
and Welfare Providers Group.
They applied to the Arbitration Court for their exclusion
from the award because their workforce was mainly “married women” who saw the
work “primarily as a contribution to a worthy cause”. They submitted a letter
from a female worker who stated that she was “completely satisfied” with her
current situation.
The court sided with the union and rejected the application,
although the fight did not finish there, as nine years later the Salvation Army
was still arguing that it was not covered by the award because it was not
seeking “any pecuniary gain” from the work. The court again rejected this
argument and said that the Salvation Army workers should receive the award
conditions.
The Hotel and Hospital Workers Federation organised
throughout the rest of the country and finally in 1980 achieved a New
Zealand-wide Rest Home Workers Award.
The 1970s saw all awards phasing out female-specific pay
rates as the 1972 Equal Pay Act outlawed discriminatory pay rates on the basis
of gender. Rest home workers hardly noticed such a change, even in Canterbury,
as it was hard to find a male worker, although the Arbitration Court nominated
an arbitrary rate that was to be achieved in four steps.
Organising in the 1980s
While the Muldoon-led National Government’s 1982-84 wage
freeze held up improvements in workers’ conditions, the election of the Lange-led
Labour Government saw the removal of the wage freeze, and the organising of
rest home workers taking off with a new drive for union workplace structures, union delegate education,
regional and national delegates’ meetings.
The Government policy of moving continuing care patients out
of public hospitals into aged residential care put the focus on the difference
between the wage rates for Hotel and Hospital Workers Union public hospital
members (cleaners, food service workers and orderlies) and rest home members.
The NZ Rest Home Award rate at the time was $4.45 an hour,
the weekend part-time rates were time and a quarter, and penal rates for
working on public holidays were less than double time.
Public hospital part-time workers at that time were paid
$5.49 an hour, time and a quarter at nights, time and a half and double time
for working weekends, and triple time for public holidays.
The claim from rest home workers to match the public
hospital employment conditions was supported enthusiastically by meetings of
rest home workers, but industry employers were less than enthusiastic without
additional government funding.
Although compulsory arbitration had been removed in 1984,
because of the rise in the organisational capacity of its unionised workforce,
including the first sector strikes, the aged care employers agreed that union
parity claims could go to the Arbitration Court for a decision in both 1985 and
1987.
The union was not fully successful before the Court. The
Court focussed on the distinction between hospitals as part of the “health
system” and rest homes as part of “welfare services”, although the Court increased
the wage rates in the sector by more than double the increases being achieved
by workers in the wider New Zealand economy. For the first time, the Court
accepted that workers supporting residents with personal care were entitled to
a higher rate (equivalent to the cook’s rate) to recognise the skill required
in this job and introduced an additional allowance for caregivers with a Level
1 qualification.
While the employers’ all-male witnesses in the 1987 case all
argued that the work of caregivers was unskilled (one said the work was
“similar to the work that women did in their own homes”), they did agree to
many of the union demands to lift the employment conditions of the
predominantly female workforce by the end of the 1980s.
The caregiver base rates increased to be only slightly less
than the public hospital rates, weekend rates had been increased to
time-and-a-half, a shift payment and free meal had been introduced for night
shift workers, bereavement leave had been improved, sick leave had increased to
10 days per year, the award coverage had been extended to day centres for the
elderly and caregivers were looking at using the about-to-be-passed Employment
Equity Act 1990 as a point of leverage to increase their wages even further.
With the election of the National Government in 1990 this
progress came to a grinding halt. The Employment Equity Act 1990 was repealed
and the Employment Contracts Act was introduced. The NZ Rest Home Workers Award
expired on 30 April 1991 and the Licensed Rest Homes Association said they had
no interest in renewing it without major cuts to penal rates, overtime and
leave arrangements.
The Religious and Welfare Providers Group agreed to roll
over the award for a further 12 months with a 2% wage increase, and on expiry they
then demanded the same clawbacks as the private owners.
The 1990s was a period of massive destruction of employment
rights for rest home workers, even though the union fought a rearguard action
in some areas to protect the conditions of members. Sick leave, night and
weekend rates, qualification payments and union rights were taken while new
hours of work and employment status clauses were introduced through “take it or
leave the job” individual contracts or employer-captured collective contracts.
The 1990s was a decade when sector employers dictated
employment terms and used the Employment Contracts Act and the newly invented
“partial lockout”, where the employer forced you to come to work but on lesser
conditions until you agreed to sign a contract permanently giving your
conditions away.
By 2000 the pattern in the sector was well established.
Penalty rates for weekends had either been removed or substantially reduced to
the level of a small allowance. Overtime rates were either removed or reduced. The
hourly rate was very low, either at or near the minimum wage and unionisation
levels had tumbled.
The ERA and New Strategies
The advent of the Employment Relations Act 2000 did not
significantly improve matters. Early decisions of the Employment Court confirmed
the weakness of the new legislation in the area of multi-employer bargaining,
meaning that unless it was convenient to employers to have multi-employer
agreements such bargaining could not and did not take place.
The funding arrangements for the aged care sector
effectively precluded or at least abridged and seriously limited genuine
collective bargaining in the sector. The Residential Care Association (the rest
home employers’ national body) admitted in January 2001 that sector wages were
poor and that this had caused a turnover of staff but said “we will provide the
(employment) conditions the Government is willing to pay for”.
The reaction of the two unions, the Service and Food Workers
Union (SFWU) and the NZ Nurses Organisation (NZNO), was to search for other
mechanisms to address these problems.
In 2001 the two unions sent a paper to the Associate
Minister of Health Ruth Dyson describing the dire situation for workers in the
aged care sector and in 2002, and supported by the NZCTU they proposed setting
up a tripartite forum to address workforce issues, including caregiver pay
rates.
This organisation, called the Health of the Older Persons’
Forum (HOOPS), also included the consumer advocacy groups Grey Power and Age
Concern.
The unions’ focus was minimum qualifications, higher pay
rates and minimum staffing levels, but they accepted that the winning of minimum
qualifications for caregivers was likely to be the pathway to higher wage
rates. This was also the issue that united all the forum participants.
The NZCTU distributed a discussion document in 2002 entitled
“Training for Caregivers in the Aged Care Sector”, which included
recommendations on training and qualification standards. In 2003 the Forum
supported the NZCTU recommendations, including funding to the Careerforce
Industry Training Organisation to develop the uptake of a national training
standard, that the training would be provided free of cost to the caregiver, at
no cost to the employer and once the caregivers had completed the qualification
government would fund providers enough for a $2.00 an hour pay increase (at
that time 20% of the then base rate for caregivers).
While the Associate Minister of Health prepared a budget bid
to implement this proposal the paucity of data on the existing number of
caregivers, their existing qualification level and their pay rates meant that
it could not be accurately costed. The 2003/2004 budget did though allocate $1
million for background research, called the Quality and Safety Project, to
inform a budget bid for the 2004/2005 financial year.
The unions did not wait for the Quality and Safety Project
to deliver its data on the workforce (which by then had been extended to the
whole of the care and support workforce, not just aged residential care). They
commenced organising around the HOOPS Forum proposal through parliamentary
submissions and campaigning against employers not passing-on the government
funding they received to the caregiver workforce.
In 2004 the Parliamentary Health Select Committee, in a
report on two petitions about caregiver wage rates and qualifications, said it
supported “the full implementation of a fairly paid, fairly reimbursed and
appropriately trained workforce.”
The Quality and Safety Project completed its work in August
2004 and its research showed an annual turnover in the aged residential care
sector of 29% and employers agreeing that more than half of their care
workforce was not adequately trained to carry out their job. The Minister of
Health allocated funding to Careerforce to develop a foundations-level
qualification that could be used as part of the minimum qualification/higher
pay rate proposal.
Later that year the Ministry of Health allocated funding to
test a Careerforce foundations course on 1000-1200 caregivers. Pressure from
the HOOP forum and the religious and welfare employers led to the setting up of
a Ministerial Working Group to look at the viability of the aged care and
disability support sectors and workforce issues. Its report was published in
February 2005.
This did not immediately turn on the money tap and the
Salvation Army, Presbyterian Support Eastern and the St John of God Group
decided to sell their rest homes and hospitals to large corporates.
Workforce union activity continued around pay levels with a
union proposal to the Government in April 2005 to grant premium funding for
aged residential care providers who agreed to higher minimum pay rates and
minimum caregiver qualifications. A big rally was held outside parliament on
budget day 2006 of SFWU and NZNO members expressing anger at the targeted 51
cents an hour increase for aged care workers in the budget.
The Health Workforce Advisory Committee, set up by the
Minister of Health to provide advice on health workforce issues, was also
becoming actively involved in the care and support workforce and made
recommendations to the Minister in October 2006 for funding to sector providers
to be contingent on the providers having a training and development package in place
with competencies linked to the NZ Qualifications Framework.
Low Paid Workers’ Initiative
It looked like the stars were aligning when the District
Health Boards, with the support of the Minister of Health, agreed on a funding
increase for the aged care sector by way of a “Low Paid Workers’ Initiative”.
In May 2007 extra government funding was offered to the residential aged care
sector (and eventually to disability support and home support) with a directive
that providers were obligated to pass through an increase in the hourly rate of
at least $1.30 an hour and use all reasonable endeavours to conclude collective
agreements (as a way of transparent delivery of the pay rates).
Following opposition from the employer groups the hourly
rate increase was reduced to $1.00 an hour with a minimum caregiver pay rate of
$12.55 an hour, at that point $1.05 an hour above the minimum wage. The
Government indicated that this would be stage one of further improvements in
caregiver wage rates.
While a majority of providers initially signed up to the
District Health Board funding agreement, following advice from their
representative body Health Providers NZ (HPNZ) they did not implement the
agreement and supported HPNZ in persuading the High Court that the contract was
unlawful on various grounds, including the provision related to collective
bargaining.
Although the High Court decision was a blow to union efforts
to get targeted money and mechanisms to improve caregiver wage rates, some of
the comments in the judgement were supportive of our underlying approach.
“Better pay and industrial power through collective
agreements could – I do not say would – lead to a more satisfied and stable
workforce with a flow-on effect for ARC residents. Better the experienced and
motivated carer than the inexperienced and resentful so far as ARC health is
concerned. It is possible to say that better wages and – though more debatably
– better union organisation within provider workforces – would promote better
care of the aged”.
The unions continued to campaign around the pass-on of the
funding following the court decision, including initiating collective
bargaining with over 200 aged care employers, who didn’t have collective
agreements in place, for a national multi-employer collective agreement.
Although this strategy, called “Winning as One”, met stiff resistance from the
national provider bodies the unions estimated that 50% of the aged care
residential providers covering 70% of the sector workforce passed on the full
$1.00 an hour and the $12.55 an hour minimum pay rate, 45% of the providers
covering 28% of the sector workforce passed on between 50-85 cents an hour and
about 2% of the workforce received no increase.
Just before the 2008 General Election a Parliamentary Social
Service Select Committee Report was released calling for major increases to
support worker wage rates, just days after a 10,000 signature petition was
presented to parliament from the unions calling for the implementation of an
Aged Care Charter that included better pay for caregivers, minimum
qualification levels and mandatory minimum staffing levels.
This was quickly followed by an announcement by the Minister
of Health David Cunliffe of a $20 million funding package to immediately lift
caregiver wages, allow better access to qualifications and an Aged Residential
Care Workforce Action Group, made up of sector stakeholders including unions. They
delivered two reports on how to address wage parity with District Health
Boards, the implementation of minimum mandatory qualifications for all
caregivers and the phasing in of minimum staffing levels.
With the Clark Labour-led Coalition Government losing the
election in 2008 the Cunliffe proposals were abandoned and the unions looked
for new points of leverage to gain higher wages for care and support workers.
Examining Leverage Strategies
Since about 2003 the SFWU had been claiming the minimum wage
for members required to be on-call during the night in employer-controlled
community homes for people with intellectual disability. The employers’
standard response had been that government funding was not sufficient to pay
the union’s claim. It was time to look for new forms of leverage.
In 2009, the union decided on a new approach and issued
proceedings on behalf of support worker Philip Dickson in the Employment
Relations Authority against IDEA Services Limited, in what became known as the
sleepover litigation. This did not affect workers in aged residential care
directly as sleepovers are not worked in this sector with only isolated
exceptions. However, it focussed attention on the plight of the low paid
support workers in the disability sector, of whom 75% are women.
The unions (SFWU was joined by the PSA) prevailed in this
litigation, which in essence came to an end with a judgement issued by the
Court of Appeal on 16 February 2011. The result was an industry-wide settlement
agreement between the unions and the Crown, leading to the Sleepover Wages
(Settlement) Act 2011, passed unanimously in Parliament later that year.
The process around the settlement of this claim was
important for the later equal pay settlement. It was accepted by the Crown that
the unions represented all sector workers, whether union members or not, that
any agreement would have to be ratified by sector workers, and that any
settlement would be the subject of parliamentary legislation to stop any
further litigation from individuals who wanted to get more than was contained
in the settlement.
While the Minister of Health Tony Ryall had publicly
suggested that the Government may change the law to override the court
decisions, the joint SFWU/PSA campaign “Up Where We Belong”, which involved
petitions, meetings and invitations to all Members of Parliament to work for
two hours alongside of them (which many MPs took up) had built up the public
and political support to take that option off the agenda and make a settlement
inevitable. The approximate 4000 individual support worker cases filed in the
Employment Relations Authority in pursuit of the minimum wage for sleepovers
also persuaded the Government that a settlement was a better option rather than
going to war with these workers.
Collective bargaining was increasingly perceived as an
ineffective basis for addressing poverty wages of aged care residential
workers. In 2011/12 there was an eight-month dispute with New Zealand’s then
largest aged care residential provider Oceania, which involved strike action
taken by SFWU and NZNO members in 42 of its 59 facilities.
The dispute though was not about wage parity with District
Health Boards but was merely to get Oceania to pass on the 3% funding increase
it had received from the District Health Boards. While this dispute was successful
there was a realisation from the unions that a different approach was needed,
and the union began to pay greater or at least more focussed attention to the
gendered basis of the low wages in question.
The SFWU and its legal team, fresh from the sleepover
settlement, considered whether a legal case in the aged residential care sector
could be used as leverage to get the government funder into direct negotiations
around the caregiver wage rates.
There had already been a great deal of research into the
undervaluation of female-dominant workforces and there had been recent cases in
Australia that gave cause for hope. There was also an important report Caring
Counts published by the Human Rights Commission following an inquiry under section
5(2)(h) of the Human Rights Act 1993.
The Caring Counts report, released in May 2012, made some
important observations and recommendations. Of particular importance to the
union were the observations and conclusions contained within the report
regarding the comparatively low wages for care workers compared to other
occupations. The Human Rights Commissioner concluded that there was a
substantial argument in favour of at least ensuring that pay parity should be
achieved between care workers outside the District Health Boards and those who
were employed inside the DHBs. The Commissioner noted the number of submissions
made to the Inquiry that cited other roles including those in occupations or
industries where men were dominant that were paid more than care workers and
were, in effect, less skilled.
The Caring Counts report also included detailed financial
modelling around the cost of achieving pay parity and contained a legal opinion
that the non-payment of home support workers for the time taken travelling
between clients was in breach of the Minimum Wage Act.
Filing of the Equal Pay Case
On 13 September 2012 the SFWU filed proceedings in the
Employment Relations Authority on behalf of long-time caregiver Kristine
Bartlett, employed on an individual agreement at an aged care residential
facility owned by Terranova Homes and Care Limited in the Hutt Valley. At the
same time, the SFWU filed proceedings in the Employment Court on its own
behalf.
Terranova sought the Bartlett proceedings to be struck out
on the basis that the claim was frivolous and vexatious and an abuse of
process. This application failed, and the case was removed to the Employment
Court, which agreed to tackle the case one part at a time. The first question
to be asked was whether section 3(1)(b) of the Equal Pay Act 1972 allowed
workers in female predominant workforces to look outside of their workplace or
industry to decide what a male worker would be paid “with the same, or
substantially the similar, skills, responsibility, and service performing the
work under the same, or substantially similar, conditions and with the same, or
substantially the similar, degrees of effort.”
While the Employment Court was preparing to hear the
Bartlett and SFWU cases, a helpful dispute broke out on a different front with
both the PSA and SFWU filing cases in the Employment Relations Authority (the
SFWU case was subsequently withdrawn) in pursuit of the minimum wage for home
support workers travelling between clients.
The speed with which
the Government moved to negotiate a settlement of this claim with the two
unions was another win for the unions’ leverage strategy. By September 2014 the
Government had announced a $30 million investment in payment for the minimum
wage and for an increase in the home support workers’ mileage allowance and had
agreed to a process whereby casualisation of the workforce would be addressed.
In October 2014 the Court of Appeal delivered its decision
on the Bartlett and SFWU v Terranova case with a resounding victory for the
unions.
While Terranova sought leave to appeal to the Supreme Court
against the Court of Appeal judgement, this action failed. The next step was to
return to the Employment Court to set the principles for the implementation of
equal pay for Kristine Bartlett.
The Government, through the Minister of Finance Bill
English, was quick off the mark. He approached the SFWU about negotiating a
settlement in the same way as the sleepover and in-between travel settlements
had been negotiated.
Meetings took place between the unions (SFWU, PSA, NZNO and
NZCTU) and Doug Martin, the Crown-appointed negotiator. The Cabinet-approved
negotiating mandate was announced in October 2015, covering all care and
support workers in the disability and aged care sectors, not just residential
aged care workers. The announcement also set up a broader Joint Working Group
on Pay Equity Principles to “recommend principles to Government that provide
practical guidance to employers and employees in implementing pay equity”.
The mandate envisaged that the care and support negotiations
would be completed by March 2016 and any settlement would be funded to commence
on 1 July 2016. The Government’s primary purpose was set out in its negotiating
mandate.
“Resolve through negotiations, pay rates and address pay
and associated workforce issues (related to pay) for the care and support
workforce in aged and disability residential care and aged and disability home
and community support services; and as a consequence, settle all claims lodged
under the Equal Pay Act 1972, including the TerraNova case”.
The negotiations between the unions and the Crown were
relatively simple from the union perspective – gain a new set of wage rates
that substantially lifted the pay rates in the sector, embed in a
qualifications regime that we had been pursuing for 20 years, and increase our
organisational capacity.
Our biggest point of leverage was the threat of the Employment
Court setting its own principles and high equal pay rates and back pay for the
6000 individual care and support workers who had and continued to file equal
pay claims in the Employment Relations Authority.
As the negotiations dragged on beyond 31 March 2016 the SFWU
(now E tū) applied to the Employment Court to set down a hearing date. The
Court agreed to do so despite the Terranova objections, although noted that it
was aware of the work of the Joint Working Party on Pay Equity Principles that had
already been completed and given to the Government.
The Court would spring to life at various times during the next
six months to issue minutes or convene directions conferences, but by the time
it was ready to act in early 2017 the substantive negotiations had been
completed giving the largest pay increases that care and support workers had
ever experienced and embedding in a system of qualification attainment
supported by the employer.
Conclusion
The passing of the Care and Support Workers Pay Equity
(Settlement) Act in 2017 was due to decades of activity by aged care
residential workers, who organised in their worksites, organised in their
communities, took strike action, marched on parliament, presented parliamentary
petitions and built a favourable public picture of the value of the care of
older people.
However, there may have been no conclusion to the argument
about their pay rates and those of
workers in home support and disability support without the union
leverage strategy by way of the Courts. The Courts had breathed new life into
the Equal Pay Act 1972, restored an arbitration right that was lost in 1984 and
given the unions the power to negotiate, rather than simply accept what the
powerful were prepared to offer. The nearly two years of negotiation of the
care and support equal pay settlement, although frustratingly slow for some
people at the time, was a mere blip in the 40 years of previous struggle.
The unions did not agree that this settlement was the end of
the struggle for the proper valuation of the work of care and support workers,
but they did acknowledge that it was a big step forward, which has subsequently
flowed on to thousands of other low-paid New Zealand women workers.
As Katherine Ravenswood has pointed out, the care and
support settlement has not come without further challenges for the workers in
terms of workloads, the right to gain qualifications and higher pay rates and
the implementation of guaranteed hours.
One of my favourite quotes from departed UK Labour MP Tony
Benn is “there is no final victory as there is no final defeat” in the struggle
for justice. Sometimes progress will be made, such as aged care residential
workers did in the 1980s, and sometimes big steps backwards will be taken, such
as in the 1990s, and then further progress again with the 2017 settlement.
The issues that have arisen from the care and support
settlement will provide plenty of organising challenges for a new generation of
care and support workers.
