Workers in care homes could face a long road before they can achieve pay parity with men in similar occupations, an employment lawyer says.
The Court of Appeal yesterday ruled in favour of a pay discrimination claim brought by a female rest-home worker, paving the way for the employment court to consider whether current pay rates are unlawful.
Last year, Lower Hutt caregiver Kristine Bartlett and the Service and Food Workers Union successfully argued in the Employment Court that her $14.32 hourly pay rate was a result of gender discrimination under the Equal Pay Act.
Her employer, Terranova Homes and Care, took the case to the Court of Appeal, backed by other aged care providers
In its ruling the court threw out their objections, saying the case has potentially far-reaching implications and should be examined by the Employment Court.
The head of the Council of Trade Unions, Helen Kelly, said there are huge groups of female workers being paid lower wages simply because they work in female dominated occupations.
Ms Kelly says the decision has the potential to affect 63,000 unregulated health workes and 91,000 retail workers as well as child care teachers and administration and school support staff.
But employment lawyer Peter Cullen warns the difficulty for the court now, is finding a comparable industry, which both sides agree on.
He estimates it could be another year before the Employment Court makes a ruling.
And the organisation representing rest homes is also sounding a warning.
Aged Care Association chief executive Martin Taylor said improving pay rates in aged residential care would cost between $120 and $140 million a year - money which will have to come from the Government.
He said if the court rules against the sector, and the government does not meet the shortfall, half the country's rest homes could close within a year.
"Depending on how the court implemented the higher wages, you'd probably have straight away a quarter of age care facilities would be insolvent and it would progressively roll on from that," Mr Taylor said.
Director of research at Forsyth Barr Jeremy Simpson said the aged care sector is fragmented, with a number of smaller operators, many of which receive a low level of return.
He said while larger companies like Metlifecare, Summerset and Ryman Healthcare have been building new facilities, they account for less than 10 percent of the market.
"Metlife and Summerset have started building aged care beds again, relatively recently, over the last year or so. Ryman's been consistently building beds for 25-30 years. So really for quite a period there, say the last five years, it's really been Ryman building large scale numbers of beds in the market," Mr Simpson said.
And unable to keep with with demand he warns there's a chronic shortage of good quality beds on the horizon.
The Aged Care Association said it expects to meet with the government in the coming days to discuss the ruling and will take a couple of days before deciding whether to lodge an appeal.