IHC sleep-over payments dispute back to court

As the battle related to sleep-over payments is to enter its next round in court this week, the opposing parties are critical of the Ministry of Health's lack of involvement.

IHC chief executive Ralph Jones described the ministry's stance as disconcerting.

"I wonder at what point they will take an interest. This is not so much about IHC but about the Crown."

Service and Food Workers Union national secretary John Ryall has also called for its urgent involvement.

The ministry could not afford to "stand idly by and not do anything" because the case had policy implications for service delivery in the health and disability sector.

"It's not just about money, but also whether, in fact, the method of service delivery should change," he said.

The ongoing action is proving expensive for both parties.

Mr Ryall said he could not say how much the union, which initiated the action, had paid exactly, but it would be tens of thousands of dollars.

IHC advises the various actions in which findings have gone against IHC have cost the organisation $230,000 so far.

If the Employment Court rulings on the sleep-over rates and the practice of averaging wages were implemented, however, it estimates it would potentially cost it an extra $36,232,897 a year.

Its total annual wage bill to the end of last June was $176.7 million.

IHC estimates that if it had to provide back pay to 2003/04 for all of its affected workers, this would cost $128,033,937.

The case also has implications for a variety of other organisations, many of them reliant on government funding, who employ workers who sleep over or who use "averaging" of wages.

The ministry's chief legal adviser, Phil Knipe, said while the Crown maintained an ongoing interest in the matter, it did not intend to apply to "intervene in these proceedings at this time".

The case relates to an Idea Services (an IHC service) community house worker Phillip William Dickson and the $34 payment he received for sleep-over shifts.

The Employment Relations Authority initially determined this time as work, which therefore qualified for a minimum wage payment, a finding upheld by the Employment Court last July.

Further deliberations were made on the issue of averaging of wages.

Idea Services argued that since Mr Dickson was paid $17.66 an hour for some of his fortnightly work, outside the time he was asleep, it should be able to set off that amount against what was effectively a $3.50 an hour sleep-over rate.

This meant that over a fortnight his average hourly wage would not be below the minimum rate.

The Service and Food Workers Union successfully argued that each hour needed to be paid at the minimum rate, then $12.50.

The Employment Court ruling on this issue last December, however, was not unanimous.

One of the three judges, Judge Barrie Davis, agreed with the averaging approach.

IHC has sought a stay of proceedings regarding the Employment Court rulings because it is seeking leave to appeal both the sleep-over decision and the averaging one in the Court of Appeal.

Its application for this is to be heard tomorrow.

If it is considered there are grounds for an appeal, a date would then be set for hearing it.

Mr Ryall said the union supported a stay of proceedings providing money to cover possible payments in future, excluding back pay, were put into a court administered account until the outcome of the actions were finalised.

A decision on the application for the stay of proceedings has not yet been released.

elspeth.mclean@odt.co.nz