Terranova Homes, also styled as TerraNova Homes and sometimes referred to as Terranova v Bartlett, was a decision of the New Zealand Court of Appeal concerning equal pay for women, and turned on the interpretation of the Equal Pay Act 1972, which was enacted in response to the 1971 report of the Commission of Inquiry into Equal Pay.Commission of Inquiry into Equal Pay Equal Pay in New Zealand (September 1971). It was alleged that the wages paid by TerraNova Homes & Care Ltd to its caregivers were lower than they would be if care giving of the aged were not work predominantly performed by women. The Court, by O'Regan P, Stevens and French JJ, directed counsel to participate in a directions conference for which the Court invited counsel to confer and file memoranda of proposed directions for further action by the lower court.Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at .
The case became a landmark ruling when a subsequent settlement negotiated by the government between the unions and employers was the first instance in New Zealand that acknowledges that in some industries, wages are lower because the work is mainly undertaken by women.
Factual background TerraNova operates rest home facilities in New Zealand. In 2009, 92 percent of the 33,000 workers in the aged care sector in New Zealand were women.Juthika Badkar and Richard Manning "Paid Caregivers in New Zealand: Current Supply and Future Demand" (2009) 35 NZ Popul Rev 113 at 116–117. In June 2012, 106 of the 110 caregivers employed by TerraNova were women. No party in the case contended that the four male caregivers were paid more than their female colleagues for doing the same work.Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. However, the respondents argued that this did not mean equal pay exists, rather that the male caregivers' wages were reduced because care giving was seen as "women's work". Caregivers employed by TerraNova were paid between $13.50 and $15 per hour. Where each caregiver fell in that range was based on an assessment of their competence.
Two proceedings were brought against TerraNova in the Employment Court in 2013, both in relation to allegations that it paid its caregivers lower wages that it would otherwise pay if its work force was not predominantly made up of women. The first proceeding was brought by Kristine Bartlett, a rest home caregiver employed by TerraNova. Her statement of claim pleaded two causes of action: that TerraNova's failure to provide for equal pay breached the Equal Pay Act, and also that it breached schedule 1B of the Employment Relations Act 2000. She sought an order determining what rate would represent equal pay and an order amending her employment contract to reflect that rate.Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. The second proceeding was brought by the Service and Food Workers Union Nga Ringa Tota Inc (the union), on behalf of 15 caregivers who were members of the union, and who considered the wage rates not to provide for equal pay within the meaning of the Equal Pay Act. The union sought a statement under s 9 of the Equal Pay Act of the general principles of equal pay. Individual employees do not have the right to make applications under s 9; this, the Court of Appeal assumed, was the reason that two separate proceedings were brought in the Employment Court. The Court of Appeal noted in its judgement that, "rather unhelpfully", the statement sought by the union consists simply of a restatement of the statutory provisions.
The court also noted that there was a regrettable lack of clarity in the way the Employment Court dealt with the preliminary questions. This was primarily caused by confusion as to which of the proceedings the Employment Court was referring to at various points in its judgement. It also failed to explain how it intended to carry out a s 9 application, or how a s 9 hearing would add to or differ from a determination of the claim already before them, filed by Ms Bartlett. Further complicating matters was that the Court of Appeal was being asked to decide on a question of law before a full examination of facts in a lower court. This required them to take an approach which did not prejudge the outcome of the following inquiry.
Difficulties of the parties The court acknowledged three difficulties that were facing the parties, interveners and the Employment Court in this case.Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. The first was the cumbersome syntax and "elliptical" drafting of the Equal Pay Act. The second problem was the ambiguity of the commission report which led to the act. The judges found this particularly unfortunate since the wording of s 3(1)(b) was essentially unchanged from the report, meaning that the report was of limited use to the parties, interveners and the courts. The final difficulty was the lack of existing case law on the matter.
Question of law on appeal Appeals to the Court of Appeal from the Employment Court are limited to questions of law, and leave must be granted for an appeal hearing to take place. Employment Relations Act 2000, s 214. The question of law in this case was altered by the Court of Appeal to better reflect the Employment Court's decision. The final question for determination was: "were the answers given by the Employment Court to the 1st and 6th questions at of its decision wrong in law?"Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at .
Judgment of the court The judgment of the Court of Appeal was delivered by Justice French. The court dismissed TerraNova's appeal, upholding the Employment Court's decision.
Commission report The report of the New Zealand Royal Commission of Inquiry into Equal Pay in 1971 (commission report) was relied on heavily by the Employment Court. However, the Court of Appeal found that it was sufficiently ambiguous so as to support all of the parties' competing interpretations. Therefore, it also found that the weight given to the report by the Employment Court was unjustified.Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. The commission report recognised the "crowding of women" into lower-paying occupations, however it also suggests that the issue was equality opportunity, rather than pay equity.Commission of Inquiry into Equal Pay Equal Pay in New Zealand (September 1971) at [2.3]–[2.4]. Systemic undervaluation of skills is not mentioned, nor is there any discussion of s 3 of the Government Service Equal Pay Act, which the Court of Appeal considered to be relevant. The commission rejected the United Kingdom's approach to equal pay with very little discussion, and rejected the Australian approach with little more. The report was also considered to be unhelpful because of its age, and the societal shift in attitude towards enterprise bargaining and away from centralised wage fixing and multi-employer agreements since it was written in 1971.
Text of the Equal Pay Act The court identified that there are two separate categories within section 3(1) of the Equal Pay Act 1972, and that interpretation of the section must make a meaningful distinction between them.Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. The phrase "would be" in s 3(1)(b) indicated that the comparator was intended by Parliament to be hypothetical, therefore causing the court to dismiss TerraNova's argument that the act was solely concerned with internal comparisons between male and female workers under the same employer.
Having decided that external comparators were allowed, the Judges then considered what sort of external evidence could be considered. They noted that s 3(1)(b) contained no restrictions other than to require that the evidence must be in relation to "a hypothetical male with the same or substantially similar skills, responsibility and service performing the work".Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at .
For completeness, the judges also included a brief discussion of section 4 of the act, which may influence an interpretation of s 3(1)(b).Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. They concluded that it "raises more questions than it answers", and that it was of no practical assistance.Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at
Arguments made by TerraNova TerraNova made several arguments to establish that the Employment Court's interpretation of the act was not what Parliament intended.Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at . These included the title of the act,Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. the use of the definite article in various sections,Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. the phrase "under any instrument" in s 3(1) of the act,Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. the exception in s 2(2) of the act,Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. and the singular nature of the inquiry based on s 2A of the act.Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. The court disagreed with all of these points. However, it was persuaded by TerraNova's final two arguments regarding the mandatory and exhaustive nature of the s 3(1)(b) criteria (although they did not agree that the Employment Court had attempted to insert an additional criterion),Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –. and that the comparator was a hypothetical male, not an actual or real male.Terranova Homes & Care Limited v Service and Food Workers Union Nga Ringa Tota Incorporated NZCA 516 at –.
Workability, the absence of guidelines and section 9