NZNO says proposed pay equity settlement contrary to Equal Pay Act

April 14, 2022

NZNO says a legal review of the recently proposed nursing pay equity settlement has concluded it is contrary to the Equal Pay Act 1972.

DHB nurses will be able to have a vote on how pay equity should proceed.

On Thursday, NZNO chief executive Paul Goulter said that a planned ratification vote was cancelled after receiving the results of a review of the settlement, and the process leading up to it, he commissioned on April 11 – undertaken by employment lawyer Peter Cranney.

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Goulter said on the basis of advice, he had informed the Government, DHBs, and fellow union the PSA, that NZNO would not proceed with ratification, without a clear mandate from members.

Instead, members would be asked whether they would:

  • Endorse NZNO directly approaching the Employment Relations Authority (ERA) to have pay equity rates determined and deal with the back pay issue. Or:
  • Proceed to ratification on the basis of the existing proposed agreement despite that it breaches earlier agreements and is in conflict with the Equal Pay Act.

DHB members would be contacted next week with information on how the vote will proceed. “We will also be holding more online information sessions so members can learn more and ask questions next week, and beyond if necessary,” Goulter said.

Goulter said he fully supported the work of the pay equity negotiation team.

“These negotiators, who include NZNO members, were operating under intense pressure in complicated circumstances. They brought to members what they believed was the best possible proposed settlement under those circumstances, and they should be congratulated for their hard work and determination to get the very best result for members after years of delay.”

Goulter said the developments would delay implementation of the new rates to DHB employees but NZNO would “go hard” to make sure any eventual DHB base rates were extended to all sectors of nursing, including primary health care, aged care, and particularly Māori and iwi providers.

“These negotiators, who include NZNO members, were operating under intense pressure in complicated circumstances.”

Meanwhile Goulter said aside from the back pay, most members appeared satisfied with the base rate increases.

“I am aware that many senior nurses are not satisfied because the new proposed pay rates have reduced the difference between their wages and those of other nursing groups. This was largely because no suitable comparators could be found for many senior nursing roles.”

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He said a joint working group would be established to address these pay differences and “fully capture the breadth and depth of senior nurse practice, leadership roles and responsibilities”.

Back pay was a major issue in the proposed pay equity settlement.

It would identify terms and conditions for senior nursing roles which were attractive and would encourage the development and maintenance of this workforce group.

“This work is to be completed by October 2022, in time for it to be part of the 2022 MECA negotiations.”

Settlement announced

An in-principle agreement was reached in December 2021, which was eventually released to members on Friday last week. It was intended they would vote on whether to ratify the proposal.

Goulter launched the legal review this week. Feedback from members showed significant dissatisfaction with the back-pay aspect of the deal: the proposed lump sum payment recognising past work was not what they were expecting, he said.

This was based on member understanding they would be individually back paid to December 31, 2019.

This week NZNO set up three additional members-only zoom meetings outlining the proposed settlement.

Background

In an email to DHB members, Goulter outlined the background to the pay equity proposal, as follows:

On September 17, 2021, NZNO and the 20 DHBs signed a settlement which provided that the pay equity pay rates once settled would be back paid to December 31, 2019.  This back pay entitlement was an existing contractual term for each member.

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The Equal Pay Act provides that a pay equity settlement that contains a term that reduces an employee’s employment agreement entitlements has no effect.  The proposed settlement agreement conflicts with this rule as it removes a large part of the contractual back pay entitlement previously agreed.

The purpose of the rule is to prevent settlements under which pay equity increases are offset against existing entitlements.

NZNO considers that the proposed back pay payment is contrary to the Equal Pay Act because it contains terms which reduce employees’ employment agreement entitlements agreed last year.

Those entitlements require the employer to pay back pay to December 31, 2019. The proposed pay equity settlement would significantly reduce that entitlement for many members.