District health boards and three unions have agreed to a landmark deal giving 43,000 health sector workers a 2% pay rise.
The Nurses Organisation, the Public Service Association and the Service and Food Workers Union ratified the deal with all 21 DHBs on Wednesday.
Under the agreement, which covers 18 months, the rise will be delayed for nine months. It is open to other health sector workers in other unions affiliated to the Council of Trade Unions.
A wide range of hospital employees, including nurses, midwives, clerical staff, orderlies, kitchen staff and cleaners, will receive the rise.
DHBs say they are delighted with the deal, which will cost them $54 million. Spokesperson Peter Glensor, the Hutt Valley DHB chairman, says they can afford it, but it will stretch them.
Nurses say it is a pragmatic decision that will give DHBs breathing space in tough financial times.
The 3000-strong Service and Food Workers Union says a 2% deal at a time of belt-tightening and uncertainty is better than the zero increase it had faced.
National secretary John Ryall says his members have already approved it and the union will also get a say in restructuring decisions affecting DHBs throughout New Zealand.
CTU welcomes settlement
CTU president Helen Kelly says Government calls for a wage freeze were never going to be acceptable to workers.
She says the settlement not only recognises that workers need their pay to continue to move, and also that wages don't have to be the lowest priority in tough times.
She says those involved in reaching the deal have worked constructively towards it and can be proud of the achievement.
Meanwhile, senior doctors say they have chosen to remain out of the proposed deal.
The Association of Salaried Medical Specialists says it supports it, but wants a separate, longer term way of addressing the pay gap with Australian doctors.
The association's executive director, Ian Powell, says the deal would prevent other unions - but not senior doctors - gaining more than 2%.