ECC withdraws Pay Parity legal action after significant early learning investment promise in Budget 2023

Budget 2023’s promise of significant additional ECE funding has the potential to help many centres avoid financial unviability and hardship, as long as the current 20-hours conditions are kept, prompting the Early Childhood Council to withdraw its urgent legal action.

“Taking legal action sent the Government a clear message – we will hold you to account. The sector will not sit by as it pushes through questionable policies,” said ECC CEO Simon Laube.

“The new early learning investment promised in Budget 2023 means a key ground underpinning our legal action is set to be addressed. Now, it’s up to the government to deliver and provide services with funding conditions that allows them to fully utilise this investment.

“We’ll closely monitor progress - until the Government’s Pay Parity approach actually changes and the conditions that incentivise centres to employ teachers on lower salary steps and sacrifice ratios are removed.”

“Potentially, this pressure could start reducing from March 2024 if Labour’s 20 Hours ECE extension comes into effect with the right conditions. However, that’s cold comfort for centres struggling to stay afloat right now,” said Simon Laube.

The ECC’s focus is now on encouraging members to make submissions on the Pay Parity consultation which closes on Tuesday 6 June, lobbying Government to find a way to address the gap between teacher wage costs and the funding received by centres, and confronting the potential major risks to 20 Hours ECE that recently surprised the sector in Budget 2023.

“We sincerely hope the Government has got the message about respecting the sector, and giving us the tools to model proposed funding changes ourselves. Work with us, and don’t assume all centres are the same,” said Simon Laube.

“It’s not OK for politicians and officials in Wellington to determine which centres will fail through opaque workings, and for parents to find out the hard way when the community group or business owner providing early learning for their child can no longer afford to cover centre costs and has to close.”

ECC took Pay Parity legal action against the Ministry and Minister of Education in March 2023, where it alleged the early learning teacher Pay Parity initiatives breached the right to freedom from discrimination for older female teachers under the Human Rights and New Zealand Bill of Rights Acts, and that the funding gap between higher salary steps centres have to pay teachers, and Ministry of Education funding, was irrational and unreasonable.

Parties agreed to cover their own legal costs incurred.