Why should health workers in DHBs expect an 18% pay rise in 2018?

With District Health Board (DHB) nurses in the Nurses Union voting no to their latest 2% pay offer, union members need to set some demands. If members expect a certain percentage increase, then there needs to be a clear figure in people’s minds. If this is not clear, then what are people fighting for?

Health Sector Workers Network (HSWN) have considered this and detailed a clear rationale for this target. Our focus has been specifically on the NZNO (New Zealand Nurses Organisation) DHB collective agreement. This collective agreement covers most Nurses, Midwives and Health Care Assistants (HCAs) in DHBs across New Zealand. This agreement is referred to as the DHB MECA which stands for DHB Multi-Employer Collective Agreement. The previous DHB MECA can be found here as a reference. This agreement expired on the 1st of August 2017.

If you do not read anything else from this article, then just remember this:

  • 14% increase back paid to August 2017 means that all health workers under the NZNO DHB MECA will get a living wage, and that HCAs and all other health workers will achieve relative increases in line with the aged-care sector pay settlement.
  • From mid-2018 the increase should be another 4% for all groups in line with the planned aged-care settlement increases.

Therefore, members should be demanding 14% initially, back paid to August 2017 and a cumulative total increase of 18% in mid-2018. This means 18% by 2018 or 18 in 18.

Here is some campaign material to download and share.

A4 campaign poster here

A5 posters here and here

Sharable images here and here

If you want to read more about how we came to this conclusion, and a brief discussion about what people need to consider, then keep reading…

The rationale

Detailed here is some key factors that have been considered in determining a wage increase demand for the 27,000+ health workers covered by the NZNO DHB MECA. The focus has been on setting a benchmark with Health Care Assistants (HCAs) and then determining relative increases for other health workers covered by the same collective agreement.

At least a living wage

Workers should not be paid less than the living wage. The living wage was $20.20 per hour for 2017/2018. This equates to a yearly salary of $42,016. This means that a Step 1 HCA in DHBs should received an of at least 13.7% to their existing salary backdated to August-2017. This would mean that all health workers would be getting at least a living wage. The living wage — which is set every year — increased very recently on the 4th of April to $20.55 — an increase of 15.6% from the existing rate. Future increases to HCA pay rates should stay at or above this rate.

Relative increases for HCAs following pay equity settlement in the aged-care sector

The pay equity win in the aged-care sector meant significant increases for carers and HCAs. HCAs in the DHBs should expect a similar pay increase. The work has already been done in assessing and confirming the ‘merit’ of this claim. The work is the same. Therefore, direct comparisons should be able to be made.

There are a few things to consider in regards to comparisons between the aged-care settlement and DHB workers. Firstly. HCAs in the aged-sector have 4 steps similar to NZNO DHB HCAs, but the steps in aged-care are not annual increments but increases based on both NZQA level qualification or years experience (as can be seen in the Table 1). Additionally, in DHBs there is a merit allowance of $1000 or $2000 for merit 1 and 2 respectively. Finally, there are better provisions in the DHB MECA compared to the aged-care sector — this means additionally penal rates and leave provisions, all of which are a benefit to working under the DHB MECA. Therefore, the steps do not exactly match. [i]

Table 1: Aged-care HCA pay rates following pay equity settlement

What we can say is that as of July 2017 a HCA in aged-care who is Level 4 or has 12+ years experience will be earning $48,880 per annum. This is a 14.6% increase from the current Step 4 DHB HCA salary. There will be many HCAs in DHBs who have either a Level 4 NZQA qualification and/or many HCAs who have worked for over 12 years. A comparison should be made.

If exact comparisons were an issue, this could be easily fixed by mapping the DHB HCA salary steps to aged-care settlement steps (i.e. in terms of qualification and/or years of experience). Another would be to increase the number of steps in DHBs from 4 to 12 — with $48,880 being the top band. Either way, HCA wages need to increase significantly to match aged-care HCAs salary steps. The most qualified and experienced HCAs in DHBs should expect their current salaries to increase by approximately 14.6% backdated to August-2017.

The aged-care HCA salary figures increase almost every year to 2021 (as can be seen in Table 1). These increases are on average 5.12% between 2017 and 2018, and then 3.05% between 2018 and 2019. These increases per year need to be taken into consideration.

Aged-care slow to realise a living wage

While we support keeping step with the aged-care sector, we do not support paying below the living wage. The lowest step for an aged-care worker — even after the aged-care settlement — will be below a living wage. For example, the living wage for 2017/2018 is $42,016 per year or $20.20 per hour. A step 1 aged-care worker will only get $39,520 in 2017. We do not support people being forced to work on poverty wages. We call for increases to pay rates in both the DHB and aged-care HCA steps to match at least a living wage.

DHB HCA wage proposal

We propose all HCAs in DHBs should receive a 14% increase backdated to August-2017. This increase should be followed by a further 4% increase for 2018. These figures are detailed in Table 2. These figures mean that the lower HCA wage steps achieve a living wage and that the increases match the increases following the aged-care pay equity settlement.

Table 2: Proposed HCAs wage increases under NZNO DHB MECA

Keeping relativities

If we consider that the current wage differentials are fair, then groups covered by the same collective agreement should all move relatively. By this we mean, if currently a new-graduate nurse on the NZNO DHB MECA is paid 15.9% more than a Step 4 HCA — then this relative difference should remain. Therefore, if relativities in the existing pay rates are to remain, then every other group would have to increase by the same amount. This would then translate that Registered Nurses, Senior Nurses, Enrolled Nurses and Midwives would all have to increase by the same amount as HCAs. Therefore, if we follow this method then every health worker group should expect a 14% increase from the expiry date of the previous DHB MECA and a further 4% from mid-2018.

One caveat

There is one caveat to factor in when we consider the process of establishing ‘pay equity’. The aged-care pay equity case was based on the fact that aged-care workers were historically underpaid because it was a female dominated workforce. Carers were paid less due to institutionalised discrimination based on gender. The fundamental question is whether the current Registered Nurse, Senior Nurse, Enrolled Nurse and Registered Midwife wage rates in DHBs are disadvantaged to the same levels that were/are experienced by aged-care sector workers. For example, while HCAs should receive equal pay rates with their aged-care counterparts, should the relative increases for the other health worker groups move up by the same rates?

As we argued above, moving up by the same rates will keep the same relative pay differentials from the existing agreements (DHB MECA), but maybe HCAs and carers may have been systematically undervalued more and may have even been more undervalued relative to other health worker groups. Irrespective, this doesn’t preclude increases for other health groups — it simply highlights that pay differentials in existing contracts may also be the product of institutionalised discrimination and undervaluing of different groups of people.

Irrespective, the fact is that the pay equity case for the aged-care sector saw increases from 15 to 50%. Our proposed increases simply places equally qualified workers on par with these new wage rates. Therefore, keeping relativities is just about adjusting pay rates in alignment with these increases. For simplicity it would make sense to keep constant the current differentials in pay between health workers in the DHB MECA, especially considering they are all female dominated groups, i.e. HCAs, nurses and midwives. If HCAs can justifiably increase by 14% backdated to mid-2017 or 18% in mid-2018 — then all other groups under the same collective agreement should increase by the same amount.

Table 3: Example of proposed wage rates for Registered Nurses under the NZNO DHB MECA

Some things to consider:

1) Overcoming the cost

The cost of an increase for all health workers salaries in DHBs by 14% from August 2017 could be in excess of an additional $220 million dollars to the DHB expenditure for the first year. This is very rough estimate based on FTE figures in DHBs given by the Ministry of Health in March 2017. This figure is based on 25,974.9 FTE clinical staff in DHBs, and this includes all nursing groups, midwives and HCAs. The total cost is the multiple of the mean base salaries for each group by the proportionate representation of each health worker group. This figure does not include penal rates and allowances. Therefore, the real figure could be closer to $300 million. Furthermore, as the DHB MECA is a benchmark for the health workforce wages, this means that any increase in the DHB MECA should be translated across the health sector, where allied health, paramedics and other health worker groups would expect similar increases. This would ultimately lead to a significant increase in personnel costs for the government. While HSWN wholeheartedly supports wage increases for working people, a movement of this kind will be met with significant resistance. For example, the current government’s ‘Budget responsibility’ rules give no account for such an increase. This means if people want a better wage and better conditions, they will need to be willing to fight for it. Such a large shift in wages will not come lightly — it will have to be overcome.

2) Planning for the insidious response

HSWN believe that workers can organise to win better pay and better conditions, but workers need to be aware of the potential response to recoup costs. Increasing a person’s pay may simply result in even more difficult working conditions. This could initially mean either changes to collective agreements to compensate (i.e. cutting penal rates or annual leave provisions) or more subtlety- it could mean a more difficult work environment (i.e. more patients per nurse/midwife or shorter turnover in patient bed days).

If health workers want to win better pay, then there must be a simultaneous movement to address safe staffing in hospitals and communities. NZNO is currently promoting Care Capacity Demand Management (CCDM). This could be described as a complicated but detailed mechanism to manage workload demand. But this mechanism lacks clarity and strength to make change. We therefore think health workers must campaign for the inclusion of minimum staff ratios, similar to what has been occurring in Australia, California and Canada, among others. While described as a ‘blunt instrument’, minimum staffing ratios set a benchmark. Currently this minimum is confused, variable, and subsequently difficult to enforce. We see minimum staffing ratios as a clear and strong mechanism. A mechanism that could help protect conditions. We must be smart and think long term. We will address this in more detail in a future article.

3) Build solidarity — start now

The HSWN demand is — at its heart — about building a clear vision for health workers to rally around. It does not pit one worker against the other — all health workers must be valued. No worker should be on poverty wages. If health workers in the DHBs can see an equality of experience across the health sector, then a movement can start — solidarity can be built. A disorganised and disempowered workforce clears the way for exploitation. Show solidarity for your fellow worker. A better health system and better work conditions rests on our collective capacity to organise together.

Summary

In summary, Health Sector Workers Network believes that members covered by the NZNO DHB MECA should all demand an increase of 14% backdated to August 2017 — when the previous contract expired, with a further increase in August 2018 of another 4%. This is in line with both the aged-care settlement and also brings all members and health workers covered by the collective above the previous and current living wage rates. This means that members should be demanding a cumulative 18% increase in 2018 or simply: 18 in 18.

We know that members in DHBs and health workers across the health sector in Aotearoa/New Zealand can win. We do not have to wait for lawyers to speak, for industrial negotiators to decide, or back room deals to be done with government officials. This is an opportunity for a movement to build that recognises the value of health workers. A clear goal is at the heart of any purposeful movement. Let the campaign start for 18 in 18!

In Solidarity,

Health Sector Workers Network

Endnote

[i] These comparisons are with the NZNO DHB MECA. PSA members who work as Psychiatric Assistants (PAs) are currently on a higher pay rate than HCAs under the NZNO DHB MECA. A different comparison is needed for this group. We are not exploring this here.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s