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Nurses taking legal route against Health NZ Te Whatu Ora over late pay

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By Soumya Bhamidipati and Phil Pennington of RNZ

Te Whatu Ora is months late in changing the pay rates for nurses who are now taking legal action seeking compensation.

The payroll woes for the health agency are compounded by fresh delays for its huge project trying to fix the two dozen fragmented payroll systems Health NZ inherited from the district health boards — with many running behind.

A pay equity deal in July required nurses’ pay rates to be adjusted by September.


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Most health districts missed the deadline, and by October four still had not altered them.

Now the Nurses Organisation union has hit them with a breach of agreement and is seeking penalty payouts at the Employment Relations Authority.

Primary health nurses in Waipukurau protesting the lack of pay parity for primary health care and Plunket nurses. Photo / Rachel Wise
Primary health nurses in Waipukurau protesting the lack of pay parity for primary health care and Plunket nurses. Photo / Rachel Wise

“Our members are pretty grumpy about it really and rightfully so,” New Zealand Nurses Organisation industrial services manager Glenda Alexander said.

“It’s depreciating its value as we go on and they’re worried we’ll be back into another round of bargaining next year and this hasn’t been resolved yet.”


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The districts mostly blamed the delays on “their antiquated payroll systems” and the upgrade struggle, Alexander said.

The pay equity settlement was part of the previous Government’s moves to address long-standing discrimination where women-dominated professions are paid less.

By the time the union lodged the ERA action on November 14, 11,000 nurses had still not got an adjustment, Alexander said.

“What it says to us is that sometimes, unless the pressure is applied, the focus on these matters is elsewhere.”

Health NZ Te Whatu Ora said it could not comment on the legal action.

The clash is at the sharp end of the Crown health agency’s multi-layered, multibillion-dollar payroll problems.

Breaches of the tangled Holidays Act have cost myriad companies and agencies hundreds of millions in backpay so far, and Te Whatu Ora owes the most.

It owes about $2 billion to 310,000 current and former hospital staff of all kinds, for breaches around shift and leave pay going back years.

The joint project to get that paid back, as well as bring in a unified payroll system, is running short on resources, according to the latest progress report this month.

“Ongoing resourcing challenges, the complexities of the go-live process for remediation and rectification, external vendor capacity, brown-out/black-out periods, settlement payments and strikes” were among the hurdles, the report said.


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However, the agency told RNZ on Wednesday it had already paid back 40 per cent of its current staff or 34,000 people.

“We’ve fixed this issue on seven of our payroll systems … we’re now sorting out another 17 payrolls,” chief people officer Andrew Slater said in a statement.

“The next payments to current employees will be in 2024, and payments to former employees will also start in 2024.”

An online portal where ex-staff can check what they might be owed went live on November 9, and 60,000 people have registered so far.

The progress report appears to show only two out of 19 systems on track, and paying back people. Auckland is the furthest ahead.

Its pages are chock-full of “TBCs” regarding delivery times, and of red flags that signal projects are “off track”.


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Waikato got all the way to a “remediation go-live” point, till data problems scotched that, and it has more to do.

The payroll industry was short of resources to get such a big job done on time, the report shows – all three categories of “external vendor capacity” were flashing red in mid-November.

A backlog of essential tasks was “posing a risk to the vendor capacity”, the report said.

In the likes of Hawke’s Bay, staff “burnout” was a risk, met by hiring five more contractors from consultants Grant Thornton.

Tech reliability questions have arisen in Tairāwhiti (Gisborne).

“The payments that are owed are incredibly slow at coming out,” Alexander said.


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Te Whatu Ora is relying on consultants to get out of the mire two of the big four consultancies, KPMG and EY, and US software provider Ceridian are deeply embedded, the document shows.

“None of the payroll systems we inherited were compliant with the Holidays Act,” Slater said. “We’re absolutely committed to ensuring our people are correctly paid.”

The Holidays Act itself is years overdue for an overhaul, and this now falls on the new Government to address.


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