Crown says agreement with midwives imposed no legal obligations to improve pay, conditions

• More than 1500 midwives are taking on the government in the High Court over what they say is nearly a decade of broken promises over fair pay and contracts
• The College of Midwives is leading the class action, with its lawyers arguing the Crown has breached a legally binding settlement agreement, and the Bill of Rights Act by way of gender discrimination
• But a government lawyer says the agreement did not carry legal obligations around pay and contracts, and there has been no unlawful discrimination

A government lawyer has told a court a settlement agreement between midwives and the Crown did not carry legal obligations to improve pay and contracts.

The College of Midwives is leading a class action being heard at the High Court in Wellington involving more than 1500 self-employed midwives (called Lead Maternity Carers, or LMCs) after what they claim is nearly a decade of broken government promises over fair pay and contracts.

In opening remarks on Monday, the College of Midwives' lawyer Robert Kirkness said the government must be held to account having "repeatedly baulked" at fair pay and for failing to honour a legally binding settlement agreement.

A lawyer for the Attorney-General, the government defendant in the case, gave a 'mini opening' on Tuesday, briefly laying out its position before making full opening remarks later in proceedings.

Pauline Courtney said a 2018 settlement agreement was a contract to work together towards a further agreement.

"It didn't impose legally binding obligations that there be a national midwifery agreement by July 2020, that the Crown pay LMC midwives a fair and reasonable service price, and that the Crown provide a right for LMC midwives to renegotiate price annually," she said.

It was important to look at the words in the agreement, she said - for example, "the Ministry [of Health] agrees to a process to make a fair and reasonable service price".

Courtney said while officials had worked "in good faith" towards that, they did not have the capacity to commit the Crown to spend what an independent report had determined amounted to fair pay.

"It carried significant financial implications. Any final decision-making was subject to ministerial and Cabinet decision-making processes, required budgetary approvals, was subject to change in changing circumstances, and interacted with policy and funding decisions related to the wider health sector," she said.

But the government did aim to reach a firm agreement on fair pay, she said.

"It doesn't want to underpay them.

"There's absolutely no doubt that a track to a fair and reasonable service price was in the minds of the Crown over the years, over a significant period, and good progress, if not arrival, has taken place."

The Crown had increased money for midwives every year since 2015, Courtney said.

Midwives' lawyer says the Crown knows it's not paying enough

Before the Crown's mini opening, Kirkness continued the plaintiff's arguments, stating the Crown had publicly acknowledged that midwives' pay and contract model were inadequate.

He pointed to a January 2020 "new spending initiatives" document which showed the Ministry of Health knew it was paying significantly less than what was fair.

"The cost of paying fair and reasonable, as modelled in an independent report, is $100 million per annum on top of the current ... LMC midwife spend," he quoted.

That report was completed by PwC to inform a new funding model co-designed by the government and midwives, which the government "never suggested was incorrect", Kirkness said.

It was unconscionable, he argued, that the Crown would renege on its agreement to pay that.

"The Crown knows it is receiving high quality LMC services that it publicly states are essential ... it knows they're being delivered pursuant to ... an inadequate model, and it knows that that inadequate model is $100 million per year less than a fair and reasonable price."

Kirkness also argued midwives were subject to gender-based discrimination under the Bill of Rights Act.

Midwives and their contribution to the health sector could be compared with "historically male" professions like GPs, obstetricians and pharmacists, he said. But unlike those professionals, midwives had a Crown-imposed income cap, they could not negotiate their pay, and had no guarantee of fair and reasonable pay, he said.

"The key relevant difference between these groups is gender."

But the Crown disagreed.

"Differential treatment between Lead Maternity Carer midwives and the comparator groups is not on the basis of sex," Courtney said.

Rather, LMC funding arrangements were the result of "health policy considerations, stakeholder advocacy including by the College ... political lobbying, fiscal policy, competing expenditure policies, and the significant economic constraints following the global financial crisis and the Covid-19 pandemic," she said.

Proceedings continue on Wednesday, and are expected to take six weeks.