This note is not part of the order, but is intended to indicate its general effect.
This order, which comes into force on 28 March 2014, modifies and extends the operation of the Sleepover Wages (Settlement) Act 2011 (the Act) to give effect to a settlement of litigation between Central Otago Living Options Limited (the specified employer) and certain of its employees. The litigation relates 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 of Act: extinguishing claims for sleepover wages
Subpart 1 of Part 2 of the Act already applies to the specified employer, because it applies to all employers in the health and disability sector funded through Vote Health. It extinguishes claims relating to sleepovers performed before the Act commenced, if those claims were lodged after 5 pm on 2 September 2011. Claims filed before that time are preserved. Section 9 of the Act extinguishes claims by employees of Idea Services Limited and Timata Hou Limited for sleepover wages, including those that would otherwise have been preserved. Clause 5 extends the effect of section 9 of the Act to employees of the specified employer and will have the effect of extinguishing claims for sleepover wages that were lodged by its employees before 5 pm on 2 September 2011.
Subpart 2 of Part 2 of Act: settlement relating to specified employer
Clause 6 extends the effect of subpart 2 of Part 2 of the Act (which implements the Idea settlement) to the specified employer and its employees, but with certain modifications that are set out in clauses 7 to 10.
Clause 7 modifies section 19 of the Act, which sets out how back wages for sleepovers must be calculated. The formula in section 19 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 formula in section 19 is amended so that the applicable minimum hourly rate will instead be multiplied by 10.59 to represent the number of hours of a sleepover performed by employees of the specified employer.
Clause 8 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 specified employer 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 9 modifies section 21 of the Act, which sets out an employee’s entitlements for sleepovers performed between 1 July 2011 and 17 October 2011 (being the date immediately before commencement of the Act), and when those entitlements must be paid. The modification provides that the amount payable to employees of the specified employer for sleepovers performed during this time is either 50% of the applicable minimum hourly rate for each hour of the sleepover or the amount the employee would have received immediately before the date of commencement of this order (whichever is greater). This formula differs from the formula set out in the Act for calculating the wages payable to an employee for performing sleepovers during this period in that it does not include variables for taxable allowances or paid annual leave.
The modification also provides that the amount payable for sleepovers performed in this period must be paid no later than 2 months after the date of commencement of this order. Section 28(c) of the Act permits this modification of the date on which payment is due only if the relevant Minister is satisfied that the proposed period has been agreed to by a simple majority of the employer’s employees. The Minister has indicated that he is so satisfied.
Clause 10 modifies section 22(1) of the Act, which sets out how sleepover wages are to be calculated for sleepovers performed after 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 10, for sleepovers performed on or after 18 October 2011, an employee of the specified employer will be entitled to be paid either the rate that is specified in the Act for the relevant period of time (except that the rate of 75% of the applicable minimum hourly rate applies until the close of 30 June 2013) or the amount the employee would have received immediately before the date of commencement of this order, whichever is greater.