Terranova Homes & Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc.

• Jurisdiction: New Zealand
• Judge: French J
• Judgment Date: 28 October 2014
• Neutral Citation: [2014] NZCA 516
• Docket Number: CA631/2013
• Court: Court of Appeal
• Date: 28 October 2014

BETWEEN

Terranova Homes & Care Limited

Appellant

and

Service And Food Workers Union Nga Ringa Tota Incorporated

First Respondent

and

Kristine Bartlett

Second Respondent

[2014] NZCA 516

Court:

O'Regan P, Stevens and French JJ

CA631/2013

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal from an Employment Court decision concerning evidence that could be taken into account in determining the rate that would be paid to the hypothetical male under s3(1)(b) Equal Pay Act 1972 (“EPA”) (work exclusively or predominantly performed by female employees… remuneration that [which] would be paid to male employees with the same, or substantially similar, skills) — EC held that any evidence of historical systemic undervaluation of the work or structural gender discrimination could be taken into account along with evidence of wages paid in other industries if those in the same industry would be an inappropriate comparator — whether the EPA was limited to requiring equal pay for the same or similar work — whether evidence of wages paid by other employers and in other sectors could be considered — whether evidence of systemic undervaluation could be considered — whether s9 EPA (Court may state principles for implementation of equal pay) allowed the EC to set guidelines for the implementation of equal pay — whether the repeal of the Employment Equity Act 1990 (EEA) meant that the EPA should be interpreted to be limited to equal pay for the same work.

Counsel:

A H Waalkens QC and E J Coats for Appellant

P Cranney, S A Dyhrberg and A J Connor for Respondents

P T Kiely and J M Douglas for Business New Zealand Inc as Intervener

B A Corkill QC and J Lawrie for New Zealand Council of Trade Unions Inc as Intervener

J C Holden and C Fleming for Attorney-General as Intervener

P A McBride for New Zealand Aged Care Association Inc as Intervener

M S R Palmer for Human Rights Commission as Intervener (appearance excused)

• A We answer the question of law submitted for determination by this Court:.

  “Were the answers given by the Employment Court to the 1st and 6th questions at [118] of its decision [set out at [12] of this judgment] wrong in law?”

  No.

• B The appeal is dismissed..

• C The respondents are granted leave to file an application for costs within 10 working days of the date of this judgment in the event they disagree with the Court's provisional view that there should be no award of costs..

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by French J)

Table of Contents

	Para No
Introduction	[1]
Background
An historical overview of equal pay in New Zealand	[16]
Factual background to this case	[44]
The current proceedings	[51]
The question of law on appeal	[64]
Arguments on appeal	[70]
The difficulties	[82]
The Commission report	[86]
The text	[96]
Two categories of cases	[98]
Purpose of the Act and the definition of equal pay	[104]
Arguments made by Terranova	[111]
The title of the Act	[112]
Use of the definite article	[116]
“Any instrument”	[120]
Section 2(2)	[122]
Section 2A	[126]
The s 3(1)(b) criteria are exhaustive	[131]
Hypothetical comparator	[133]
The same or substantially similar conditions	[136]
Section 4	[138]
Conclusion on text	[147]
Workability, the absence of guidelines and s 9
The arguments	[148]
Section 9	[153]
Our assessment	[164]
The existence of a settled interpretation	[176]
The enactment and repeal of the Employment Equity Act	[182]
The Employment Court's reliance on the New Zealand	[201]
Bill of Rights Act 1990
The Employment Court's reliance on New Zealand's international obligations	[215]
The single source doctrine	[232]
Conclusion
Our view	[236]
Where to from here?	[239]
Costs	[241]

Introduction

1 For 42 years the Equal Pay Act 1972 has remained “largely mute”. 1 This case seeks to reactivate it.

2 Ms Bartlett is a rest home caregiver. She contends that the wage rates paid to her by her employer, Terranova Homes & Care Ltd (Terranova), do not provide for equal pay within the meaning of the Equal Pay Act (the Act).

3 Ms Bartlett, along with 14 other caregivers employed by Terranova, is a member of the Service and Food Workers Union Nga Ringa Tota Inc (the Union). In a separate proceeding the Union has applied to the Employment Court under's 9 of the Act for a statement of principles to be observed for the implementation of equal pay.

4 The judgment under appeal relates to both proceedings, and we describe both in more detail below.

5 Equal pay is defined under the Act as: 2:

rate of remuneration for work in which rate there is no element of differentiation between male employees and female employees based on the sex of the employees

6 It is accepted that Terranova pays Ms Bartlett the same wages as it pays its male employees doing the same work. However, what is claimed in effect is that both male and female caregivers are being paid a lower rate of pay than would be the case if care giving of the aged were not work predominantly performed by women.

7 The case has potentially far-reaching implications, not only for the residential aged care sector, but for other female-intensive occupations as well. It raises important issues about the scope of the Act, in particular whether it was intended to provide for pay equity (meaning equal pay for work of equal value) or whether it is limited to requiring equal pay for the same (or substantially similar) work.

8 At the request of the parties, the Employment Court agreed to hear and determine certain preliminary questions of law. 3

9 It convened a full Court to decide the preliminary questions and also granted leave to several interveners to be represented. 4

10 In its subsequent decision, the Employment Court answered eight preliminary questions. 5 It identified the key issue raised by the questions as being “the scope of the requirement for equal pay for female employees for work exclusively or predominantly performed by them, and how compliance with that requirement is to be assessed”. 6 The eight questions and the Court's answers are set out in a schedule attached to this judgment.

11 Terranova now challenges two of the answers given by the Employment Court. The two answers concern the interpretation of s 3(1)(b) of the Act. Section 3(1)(b) sets out the criteria to be applied in determining whether an element of sex-based differentiation exists in wage rates being paid for work that is exclusively or predominantly performed by female employees.

12 The relevant questions asked of the Employment Court and its answers were as follows: 7

[Question 1]

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.

…

[Question 6]

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.

13 Terranova applied for leave to appeal to this Court under's 214 of the Employment Relations Act 2000. The Union and Ms Bartlett consented to the application and to the formulation of the question of law for determination. Leave to appeal was subsequently granted. 8

14 As we shall explain, the wording of the question of law was further refined after the hearing of the appeal. The question for determination in its final form is:

Were the answers given by the Employment Court to the 1st and 6th questions at [118] of its decision wrong in law?

15 The two answers are interrelated. Both are based on the premise that correctly interpreted the Act is not limited to providing equal pay for the same work.

Background

An historical overview of equal pay in New Zealand

16 In order to be able to understand the question for determination, it is necessary for us to provide a brief historical overview.

17 According to its long title, the Act is intended to make provision for the removal and prevention of sex-based discrimination in the rates of remuneration of males and females in paid employment.

18 The Act had its genesis in the 1971 report of the Commission of Inquiry into Equal Pay (the Commission report). 9

19 As noted in the Commission report, equal pay between women and men had already been implemented in the public sector by the Government Service Equal Pay Act 1960 (affecting around 25 per cent of the total workforce). 10 However, there...