By Bernard Hickey
Prime Minister John Key has warned that a court ruling forcing pay higher in sectors dominated by women could increase Government costs by hundreds of millions of dollars.
Key told 3News' First Line the Government was considering the implications of the Appeal Court ruling on Wednesday that nursing home carers were entitled to similar pay to those with similar skills in male-dominated industries.
Aged Care Association CEO Martin Taylor said the ruling would cost rest home home operators up to an extra NZ$140 million a year, which would drive more than half of them out of business unless there was an associated increase in Government funding.
He expected to have an urgent meeting with the Government within coming days to discuss the issue. He said an appeal to the Supreme Court was possible.
Key said the ruling could have implications beyond the aged care industry. He said aged care workers provided a tremendous service that helped keep people out of hospital.
"But the case here is not about that – it's about whether there is discrimination in what is a largely female workforce, and that was the test under the Equal Pay Act," Key said.
"All I can say is we'll have to work our way through that, but it's not quite as straightforward as saying it's just about carers, because there are quite a number of industries where this could now apply," he said.
"The cost for the Government is hundreds of millions of dollars, so it's not just a few million and the Government being awkward here; it's hundreds and hundreds of millions of dollars potentially."
Law change?
The case has been sent back to the Employment Court to set the principles by which pay in a male-dominated industry can be compared with another female-dominated one.
Business NZ said the Government may have to legislate.
Business NZ Employment Manager Paul Mackay said the Appeal Court had judged the Equal Pay Act could be used to compare male and female pay rates and had sent the case back to the Employment Court to state the principles to be followed in creating such comparisons.
"The Employment Court will now have to establish an objective method of comparison. Given there is currently no accepted method of determining pay relativities between women- and men-dominated industries, this will be a significant undertaking," Mackay said.
"It may be appropriate that the Government consider legislating to bring clarity into this complex and ambiguous area," Mackay said.
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