While unions are delighted with an Employment Court decision which could eventually cost the Government millions of dollars to boost the pay of at least 15,000 workers, the legal issues are yet to be resolved.
In a decision issued this week, the court ruled "sleep-over" time by community service worker Phillip William Dickson was work under the Minimum Wage Act.
He was employed by Idea Services caring for disabled people in a community home.
For part of his work, he was paid at a rate of $17.66 an hour, but during times when he slept over at a home he was paid $34 for the sleep-over time, which the court was told worked out at between $3.40 and $4.30 an hour.
An earlier Employment Relations Authority determination that the sleep-over time was work was challenged by Idea Services (an IHC service).
While the court agreed with the authority on that issue, dismissing the challenge, it has yet to make a ruling on a second related issue of whether the provisions of the Minimum Wages Act would be satisfied by an employer "averaging" the wages of employees.
Idea Services counsel Michael Quigg argued the conditions of the Act were met if, at the end of a fortnightly pay period, Mr Dickson had received not less than $12.50 an hour when the wage for the total hours he worked was divided by the number of hours worked.
Counsel for Mr Dickson, Peter Cranney, disagreed, submitting payment had to be assessed on an hour-by-hour basis and that Mr Dickson should be paid at least $12.50 for each and every hour worked.
The full Employment Court, Chief Judge Graeme Colgan, Judge Barrie Travis and Judge Tony Couch, was convened to consider the wage averaging issue, as it did not appear to have been determined authoritatively since the passing of the Minimum Wage Act in 1945. the court stated.
This issue could affect many other employers and employees in sectors where low wages were paid, it said.
Rather than make a decision on the averaging issue at this stage, the court is giving Business New Zealand and the New Zealand Council of Trade Unions the opportunity to appear and be heard on the issue.
Counsel for the parties will also be able to supplement any submissions they have already made.
Yesterday, while the Public Service Association and the Service and Food Workers Union were describing the decision classing sleep-over time as work as a historic legal victory which would bring New Zealand into line with other countries such Britain, Canada and the United States, organisations likely to be affected were totting up the cost and saying they would not be able to afford it.
IHC estimated if it had to pay all its sleep-over workers, involving 250,000 sleep-overs a year, it could cost it an extra $20 million.
IHC and Idea Services general manager of human resources David Timms said as an organisation which had services fully funded by the Government, there was no money for this and the organisation was looking to the Government for a solution.
The judgement would impact on the retirement sector, boarding schools and many other groups, not just his organisation.
In Otago, Pact service delivery manager Glenn Murtagh agreed it would have huge implications for a variety of groups which did not currently receive sufficient government funding to cover such a cost.
It would cost Pact in Otago thousands of dollars to increase the wages of staff who each week did 120 hours of sleeping over in 15 houses.
Health Minister Tony Ryall yesterday was only prepared to say that the Government was considering the issue.
Service and Food Workers Union national secretary John Ryall said staff working in the houses often faced heavy workloads after 10pm.
Before the ruling, their efforts were not regarded as work.
CTU president Helen Kelly confirmed the organisation would be making a submission to the court against the averaging concept and supporting the payment of at least $12.50 for every hour worked.
A Business New Zealand spokeswoman said it would be some days before the organisation made a decision on what action it would take.
