Christmas payday for underpaid council workers

Wednesday, 20 December 2023

Hundreds of unionised council workers are getting their wages bumped to market rates - and the very welcome back-pay will be in time for Christmas.

Hundreds of Christchurch City Council workers who appear to have been systemically underpaid will have more in their wallets in time for Christmas following an agreement between the council and a union.

It comes as the council faces continued delays in reviewing its 18-year-old remuneration framework, which excludes union members from a pay band structure and may be exacerbating the organisation’s high turnover rate.

Some 722 unionised council workers will see their wages rise by at least 8.4% under the agreement, to match market rates for their jobs.

Of those, 88 will get an increase of at least 20%, according to Rachel Wells, the council’s acting head of people and culture.

The employees will receive back-pay to July 1 this year, but the council says it won’t know the full cost until it has gone through payroll.

Based on the minimum increase and the council’s minimum wage of $26 an hour, as a living wage employer, if all employees are full-time workers, the council potentially owes at least $1.4 million in back-pay.

All payments will be made by Christmas, The Press understands.

PSA union organiser Adrian Mealing said the adjustment was a matter of equity, as the wages of all employees on the union’s collective agreement hadn’t been in line with market rates.

Mayor Phil Mauger says if the council has good people, it needs to pay them well, “otherwise they’ll walk”. (File photo)

This is not the case for non-union employees, whose pay and performance is tied to the council’s 18-year-old remuneration band framework, which considers market rates.

According to the council’s terms of reference for its remuneration and recognition project - which was originally due in July, but is ongoing - released to The Press under official information laws, union members have been excluded from the band framework.

In the terms of reference, the council said organisations typically audit their remuneration and job evaluation processes every three years, but the council has not done so since its remuneration band framework was created in 2005.

The council suspected its remuneration framework was contributing to its high turnover rate, made increasingly difficult by the “war for talent in the employment market”, the terms of reference said.

The remuneration band framework links pay to performance, but not tenure, institutional knowledge, career or succession planning.

New employees were also being hired for more money than would historically be offered due to market pressures, which may mean they were paid more than existing staff, the document said.

Despite the big boost to some wages, there is still work to do. The council is yet to finish reviewing its 18-year-old remuneration framework, which it suspects could be contributing to its high staff turnover.

The project was meant to have started in May but, according to the terms of reference, it relied on the joint efforts of senior council leaders, a number of whom have resigned or moved roles in 2023.

They include chief executive Dawn Baxendale and chief financial officer Leah Scales, the latter of whom was the project’s sponsor. Both resigned in November.

The council’s head of people and culture, Jane O’Toole, resigned in March. Peter Keegan replaced her in July, but abruptly went on leave in early November. The council would not say if he had a return date.

Wells said the council put in extra effort to come to an agreement with the union before Christmas in spite of its busy long-term plan preparations.

“We, alongside the unions, value our employees and it was important to prioritise this round of bargaining to demonstrate the importance of their terms and conditions of employment, and their financial well-being,” she said.

She said bargaining was ongoing with the E tū union and Amalgamated Workers Union NZ, which represent different employees than the PSA.

Mayor Phil Mayor said it was good news, and that council’s interim chief executive Mary Richardson had been particularly determined to make staff happier.

“If you’ve got good people you’ve got to pay them, otherwise they’ll walk,” he said.

Earlier this year, an internal council staff survey found morale was “very low” due to inadequate pay and high staff turnover, and a lack of confidence in the executive leadership team.

Mealing told The Press in April the survey results were a wake-up call for the council to take its remuneration process seriously, or the problems would become “corrosive”.

He said the union was pleased with the result and the council’s commitment to fairness and equity.