This note is not part of the order, but is intended to indicate its general effect.
This order, which comes into force on 10 September 2012, modifies and extends the operation of the Sleepover Wages (Settlement) Act 2011 (the Act) to give effect to a settlement of litigation between the Ministry of Social Development and certain of its employees relating to the payment of wages to employees who were permitted to sleep overnight at their workplace while on duty (sleepover wages). The Act implements a settlement of similar litigation between Idea Services Limited and Timata Hou Limited and their employees (the Idea settlement). Subpart 1 of Part 2 of the Act extinguishes certain claims for sleepover wages in the health and disability sector, and subpart 2 of Part 2 of the Act implements the terms of the Idea settlement.
Subpart 1 of Part 2: Extinguishing claims for sleepover wages
Clause 5 extends the application of subpart 1 of Part 2 of the Act to the Ministry of Social Development. The Ministry directly employs people to provide services for the purposes of the Children, Young Persons, and Their Families Act 1989, using funding from Vote Social Development. Section 9 of the Act extinguishes claims by employees of Idea Services Limited and Timata Hou Limited for sleepover wages. Clause 6 extends the effect of section 9 of the Act to also extinguish claims by employees of the Ministry of Social Development. (Further orders are expected to be made to settle claims for sleepover wages by employees of Child, Youth and Family-related service providers who operate under contracts with the Ministry of Social Development.)
Subpart 2 of Part 2: Settlement relating to Ministry of Social Development
Clause 7 extends the application of subpart 2 of Part 2 of the Act (which implements the Idea settlement) to the Ministry of Social Development and its employees, but with certain modifications that are set out in the following clauses.
Clauses 8, 9, and 10 (which modify sections 14, 15, and 16 of the Act respectively) apply to current, recent, and historic employees of the Ministry of Social Development. Sections 14, 15, and 16 of the Act relate to the payment of back wages. The modifications ensure that—
the period of time in relation to which back wages are payable to recent employees of the Ministry of Social Development is extended to the close of 31 January 2012; and
employees will be entitled to back wages for sleepovers if they made a claim by 5 pm on 31 January 2012.
Clause 11 modifies section 19 of the Act, which sets out how back wages for sleepovers must be calculated. The formula in section 19 of the Act involves multiplying the applicable minimum hourly rate by 9, which represents the number of hours of a sleepover performed by employees of Idea Services Limited and Timata Hou Limited. The resulting sum is then adjusted by deducting the amount actually paid, adjusting for holiday pay, and multiplying by 0.5. Clause 11 modifies the formula in section 19 to reflect the manner in which Ministry of Social Development employees were paid when performing sleepover work. Ministry of Social Development employees were historically paid on a 24-hour basis. The amount paid for 24 hours equated to payment of the applicable minimum hourly rate for 16 hours. If the remaining 8 hours are treated as the hours of the sleepover, for the purposes of calculating back pay, this means Ministry of Social Development employees did not receive any payment for those sleepover hours. To reflect this, clause 11 includes a formula that is modified in the following respects:
the applicable minimum hourly rate must be multiplied by 8, not 9 (because it is only 8 hours for which no payment was received):
those aspects of the formula that relate to deducting amounts actually paid are omitted (because no payment was made in respect of the 8 hours that are being treated as the hours of the sleepover).
Clause 12 modifies section 20 of the Act, which sets out when back wages must be paid. It provides that back wages due to employees of the Ministry of Social Development must be paid no later than 2 months after the date of commencement of this order.
Sections 21 and 22 of the Act provide for a staged progression towards the minimum hourly wage payable under the Minimum Wage Act 1983. Clause 13 modifies section 21 of the Act, which sets out when an employee’s entitlements for sleepovers performed between 1 July 2011 and 17 October 2011 (being the date immediately before the commencement of the Act) must be paid. The modifications—
amend the period of time to which the section relates to cover the period between 1 February 2012 and 31 March 2012; and
provide that the amount due to employees of the Ministry of Social Development for sleepovers performed during this time must be paid no later than 2 months after the date of commencement of this order.
Clause 14 modifies section 22(1) of the Act, which sets out how sleepover wages are to be calculated for sleepovers performed after the commencement of the Act by those employees to whom subpart 2 of Part 2 of the Act applies. The section implements a staged progression towards payment of the full minimum hourly wage payable under the Minimum Wage Act 1983. Under clause 14, for sleepovers performed on or after 1 April 2012, an employee of the Ministry of Social Development will be entitled to be paid either the applicable rate specified in the Act, or the amount the employee would have received immediately before the date of commencement of this order, whichever is greater.