Crown knew it legally had to pay midwives better, court hears

Former health ministers' comments prove the Crown knew it breached legally binding agreements to improve midwives' pay and contracts, a lawyer has told the High Court in Wellington.

The College of Midwives is leading a class action against the government on behalf of more than 1500 lead maternity carers (LMCs / self-employed midwives) in a bid for "fair and reasonable pay" and a change in contract model.

It claimed previous governments agreed to reform the sector but never followed through, and that midwives had been subjected to gender-based discrimination under the Bill of Rights Act.

But government lawyers say there was never a legally binding agreement for more pay and better contracts, and there had been no unlawful discrimination.

More than 20 midwives and midwifery students filled the public gallery on Friday to hear the college's lawyers closing arguments, which followed the Crown's closing on Thursday.

The end of the six-week proceedings was a "solemn moment" for them, lead counsel Robert Kirkness said after a nearly decade-long fight.

Even the most senior officials acknowledged their own government's lack of action, Kirkness said.

He referred to former Health Minister Andrew Little's comments made on RNZ's Morning Report in 2022, that he understood why midwives were taking court action and was horrified to hear of workers' experiences.

Under cross-examination, former associate Health Minister Dr Ayesha Verrall agreed with those comments, said Kirkness.

"She endorsed them... these are the ministers of health, within the Crown, talking about Crown conduct," he said.

"There is the use of the word 'horror', and that is not a word in my submission that ministers would use lightly to describe conduct by their own department."

This "consistent narrative" showed the Crown knew it had made legal commitments, but failed to meet them, Kirkness said.

A 2017 settlement agreement between the College and the Crown contained an obligation for ministry officials to submit a 2018 budget bid for more pay, said Kirkness.

Both parties agreed on that, he said, but "the ministry advised the new minister against doing that", citing concerns about " fiscal consequences".

Former Health Minister Dr David Clark had told the court he could not justify authorising the extent of the payment, said Kirkness.

"No Budget bid was made that aligned with the legal commitment in the 2017 settlement agreement, and your honour, that is breach of contract."

A subsequent settlement agreement made in 2018 had also not been honoured, he said.

Kirkness argued the Crown had known since 2018 at the latest that it was "substantially underfunding" LMC midwives.

The Crown itself had commissioned an independent report by PwC, which determined what a "fair and reasonable price" for an LMC midwife was, he said.

The Crown used that as a benchmark - even as recently as in its 2022 Budget bid document, said Kirkness.

"There is a worrying consistency there where benchmark is known, the risk is identified, it's a risk of breach, it's a risk of litigation, [but] the bid is rejected."

Kirkness rejected the Crown's assertion that midwives' pay had "caught up" to what was reasonable.

"The gap may have closed somewhat, but it is still in the order of tens of millions of dollars a year."

In the government's closing, lawyer Pauline Courtney said arguments over pay were better done by negotiation with Ministry of Health officials.

But Kirkness said midwives had tried that, but were "forced" to go to court after what he alleged was the breach of two legal agreements.

"Without a court judgment they are never going to get any actual action on the commitments that the Crown makes to them."

In the 2018 settlement agreement, the Crown had apologised for breaching the 2017 agreement, Kirkness acknowledged.

The way the Crown briefed its witnesses raised "serious questions", Kirkness said.

A number of Crown witnesses confirmed they had provided evidence in written briefs about events they had no recollection of, Kirkness said.

The Crown also failed to call witnesses it should have, who could have shared their perspective on "crucial matters", he said.

They included Little, former Associate Health Minister Julie Anne Genter, and the Ministry of Health's chief legal advisor who signed the 2018 agreement.

Proceedings were to conclude on Friday, Justice Cheryl Gwyn expected to reserve her decision.