In clause 5(1), definition of minimum base wage rate, paragraph (b) , replace “overtime rates or penalty rates” (page 22, line 25) with “overtime rate or penalty rate”.

In clause 5(1), replace the definition of overtime rates (page 22, line 31 to page 23, line 1) with:

overtime rate means a rate that is payable to a covered employee under a fair pay agreement for the time that the employee works in excess of a total number of hours worked in a day or a total number of hours worked in a week, as specified in the fair pay agreement

In clause 5(1), replace the definition of penalty rates (page 23, lines 2 to 15) with:

penalty rate means a rate that is payable to a covered employee under a fair pay agreement to compensate the employee for working on a particular day of the week, or on a public holiday, or outside the standard hours set out in the fair pay agreement

In clause 5(1), after the definition of specified employer bargaining party (page 24, after line 18), insert:

standard hours means the hours each day, as specified in a fair pay agreement, during which the base wage rate is payable for work performed

Clause 29A

Delete clause 29A(2) (page 40, lines 4 to 21).

Delete clause 29A(3)(c) (page 40, lines 28 to 30).

Delete clause 29A(4) (page 40, lines 31 to 33).

Clause 32

Delete clause 32(2) (page 43, line 35 to page 44, line 2).

In clause 32(3), replace “subsection (2)” (page 44, line 4) with “section 32B”.

Replace clause 32(4)(b) (page 44, lines 11 to 26) with:

(b)

based on the information provided in the application, any additional information or evidence the chief executive receives under section 32B(2), any information the chief executive receives under section 32B(3), and any submissions received under section 33,—

(i)

the coverage of the proposed FPA is defined with sufficient clarity (as required by section 31(4)); and

(ii)

the applicant has met one of the initiation tests for the proposed FPA; and

(iii)

all of the work or each type of work that is within the coverage of the proposed FPA is not already within the coverage of 1 fair pay agreement or 1 proposed FPA for which bargaining has already been initiated.

Replace clause 32(5)(b) (page 44, lines 31 to 34) with:

(b)

after considering any additional information or evidence the chief executive receives under section 32B(2), any information the chief executive receives under section 32B(3), and any submissions received under section 33, the chief executive is not satisfied that the application meets the requirements listed in subsection (4).

Clause 32A(3)(b)

Replace clause 32A(3)(b)(i) and (ii) (page 45, lines 6 to 8) with:

(i)

any additional information or evidence required to be provided under section 32B(2); and

(ii)

any information required to be provided under section 32B(3).

New clause 32B

After clause 32A (page 45, after line 16), insert:

32B Chief executive may require applicant to provide further information

(1)

This section applies when the chief executive is considering whether to approve an application to initiate bargaining.

(2)

The chief executive may require the applicant to provide additional information or evidence if the chief executive considers the application does not contain enough information for the chief executive to decide whether to approve the application.

(3)

The chief executive may, for the purpose of verifying information that the applicant has provided under section 30A(1)(a)(ii), require the applicant to provide information, of a type prescribed in regulations, in relation to—

(a)

all employees who would be covered by the proposed FPA; or

(b)

a sample of the employees who would be covered by the proposed FPA.

Clause 89(a)

In clause 89(a), replace “section 90” (page 92, lines 37 and 38) with “section 24 of the Employment Relations Act 2000”.

Clause 90

Delete clause 90 (page 93, lines 6 to 17).

Clause 92D(b)

In clause 92D(b), replace “member” (page 97, line 19) with “person”.

Clause 92E

In clause 92E(a), replace “views” (page 97, line 24) with “feedback”.

Replace clause 92E(b) (page 97, lines 26 and 27) with:

(b)

the employee bargaining side must consider that feedback when bargaining for the proposed FPA.

Clause 92G(b)

In clause 92G(b), replace “member” (page 98, line 35) with “person”.

Clause 102E(2)(c)

Replace clause 102E(2)(c) (page 107, lines 24 to 31) with:

(c)

the application must include further evidence of how the proposed agreement, if its coverage is changed, meets an initiation test (see sections 29 and 29A).

Clause 106(1)(b)

In clause 106(1)(b), after “that covers an” (page 110, line 30), insert “additional”.

Clause 108(1)

Replace clause 108(1)(a) and (b) (page 112, lines 24 to 30) with:

(a)

the initiating party for the second proposed agreement—

(i)

that the chief executive has already approved bargaining for the first proposed agreement; and

(ii)

that the first proposed agreement is an industry-based agreement; and

(iii)

that the second proposed agreement covers an additional occupation group within the industry that the first proposed agreement covers; and

(iv)

whether 6 months or more have passed since the chief executive publicly notified the approval of the initiating party’s application to initiate bargaining for the first proposed agreement; and

Clause 114

Replace clause 114(1)(c) to (db) (page 117, lines 17 to 33) with:

(c)

for each type of work covered by the agreement, and for each class of covered employees, the standard hours:

(d)

the following details of wages to be paid for each type of work covered by the agreement, and to each class of covered employees:

(i)

a minimum base wage rate, and when it applies:

(ii)

an overtime rate, and when it applies:

(iii)

a penalty rate, and when it applies:

(iv)

in relation to each rate in subparagraphs (i) to (iii),—

(A)

the specified amount by which it must be adjusted; or

(B)

the calculation that must be used to adjust it:

(da)

for each type of work covered by the agreement, and for each class of covered employees, the arrangements for training and development:

(db)

for each type of work covered by the agreement, and for each class of covered employees, the leave entitlements:

Replace clause 114(3) and (4) (page 118, lines 15 to 24) with:

(4A)

For the purposes of subsection (1)(c), and subject to section 114A(3), the fair pay agreement must provide that an employee is entitled to be paid the relevant minimum base wage rate for work performed during the standard hours.

(4B)

Subsection (1)(d) applies subject to section 114A.

New clause 114A

After clause 114 (page 118, after line 29), insert:

114A Mandatory content: details of wages

(1)

Despite section 114(1)(d), a fair pay agreement may, in relation to minimum entitlement provisions (as defined in section 5 of the Employment Relations Act 2000), state that the minimum entitlements in the Minimum Wage Act 1983 and the Holidays Act 2003 apply without specifying each minimum entitlement in the agreement.

(2)

For the purpose of section 114(1)(d), if a minimum base wage rate specified in a fair pay agreement includes a starting-out rate of wages or a training rate of wages, the rate must be set in accordance with the requirements in sections 4A and 4B of the Minimum Wage Act 1983, except that the rate is specified in the agreement and not prescribed by Order in Council.

(3)

A fair pay agreement must provide that—

(a)

an employee is entitled to be paid the relevant overtime rate for any hours worked in excess of the maximum hours of work in a day or in a week for which the minimum base wage rate is payable, regardless of whether the hours worked are within the standard hours of work; and

(b)

if both an overtime rate and a minimum base wage rate are payable in respect of the same hours worked by a covered employee (but not a penalty rate), the employee is entitled to be paid the higher of the 2 rates; and

(c)

if both a penalty rate and minimum base wage rate are payable in respect of the same hours worked by a covered employee (but not an overtime rate), the employee is entitled to be paid the higher of the 2 rates; and

(d)

if both an overtime rate and a penalty rate are payable in respect of the same hours worked by a covered employee, the employee is entitled to be paid the higher of the 2 rates; and

(e)

if a minimum base wage rate, an overtime rate, and a penalty rate are payable in respect of the same hours worked by a covered employee, the employee is entitled to be paid the highest of the 3 rates.

Clause 121

In the heading to clause 121, after “minimum” (page 121, line 28), insert “base”.

Clause 121A

In the heading to clause 121A, after “minimum” (page 122, line 38), insert “base”.

Clause 121B

In the heading to clause 121B, after “minimum” (page 123, line 29), insert “base”.

Clause 123

In clause 123(2)(c), delete “during which the minimum base wage rate is payable, but penalty rates and overtime rates are not” (page 124, lines 26 and 27).

Replace clause 123(2)(e) (page 124, line 30) with:

(e)

an overtime rate, and when it applies:

Replace clause 123(2)(f) (page 124, line 31) with:

(f)

a penalty rate, and when it applies:

In clause 123(4), replace “this section” (page 125, line 13) with “subsection (2)(a), (b), (c), (e), (f), (g), or (i)”.

Clause 128

Replace clause 128(d) and (e) (page 127, lines 9 and 10) with:

(d)

an overtime rate, and when it applies:

(e)

a penalty rate, and when it applies:

Clause 141(2)(b)(iii)

Delete clause 141(2)(b)(iii) (page 134, line 20).

Clause 146(2)(b)

In clause 146(2)(b), replace “eligible” (page 139, line 3) with “entitled”.

Clause 160A

After clause 160A(2) (page 147, after line 23), insert:

(3)

For the purpose of subsection (2)(b), the percentage of the work that an employee described in section 160(3)(a) performs must be assessed based on the work that the employee will perform.

Clause 189A(1)(f)

Replace clause 189A(1)(f) with:

(f)

if the application is made, in accordance with section 190(2)(b)(ii) (on the basis that 1 or more employers who, between them, employ at least 10% of all employees who would be within the coverage of the proposed renewal or the proposed replacement support the application), the total number of employees that will be within the coverage of the proposed renewal or the proposed replacement.

Clause 191

In clause 191(2), after “32A,” (page 163, line 33), insert “32B,”.

After clause 191(2) (page 163, after line 37), insert:

(2A)

The chief executive may, for the purpose of verifying information the applicant has provided under section 189(1A) or (1B) or 189A, require the applicant to provide information, of a type prescribed in regulations, in relation to—

(a)

all employees or employers who would be covered by the proposed renewal or the proposed replacement; or

(b)

a sample of the employees or employers who would be covered by the proposed renewal or the proposed replacement.

In clause 191(3)(b), replace “section 32(2)” (page 164, line 5) with “section 32B(2) or any information provided under section 32B(3)”.

In clause 191(3)(c), replace “section 32(2)” (page 164, line 9) with “section 32B(2)”.

Clause 211(1)

In clause 211(1)(aa), after “overlap” (page 177, line 15), insert “(see sections 135(1) and (2) and 153(1)(a))”.

In clause 211(1)(b), replace “section 105” (page 177, line 20) with “sections 135(3) and 153(1)(b)”.

New clause 211A

After clause 211 (page 177, after line 37), insert:

211A Jurisdiction of Authority

(1)

The Authority has exclusive jurisdiction to make determinations relating to fair pay relationships (listed in section 204(2)), including—

(a)

any matter arising during the initiation of, bargaining for, or ratification of a proposed agreement or a proposed variation, including matters relating to—

(i)

forming bargaining sides:

(ii)

notifying covered employees of process requirements for bargaining:

(iii)

whether an employee is a covered employee:

(iv)

whether an employer is a covered employer:

(v)

who to appoint as an independent reviewer for the purposes of section 92A; and

(b)

determining whether a party has complied with the duty of good faith imposed by this Act, including—

(i)

in the terms of an inter-party side agreement:

(ii)

in the terms of the bargaining process agreement:

(iii)

when appointing a bargaining side lead advocate:

(iv)

when providing requested information under section 92A:

(v)

when deciding whom to appoint as an independent reviewer for the purposes of section 92A; and

(c)

determining whether a bargaining party or bargaining side has complied with its bargaining obligations imposed by this Act, including the following:

(i)

ensuring a sufficient level of representation of covered employees (see section 92C) or covered employers (see section 92F):

(ii)

ensuring a sufficient level of Māori representation (see sections 92D and 92G); and

(d)

resolving a dispute about whether an employee is a covered employee in relation to a fair pay agreement; and

(e)

resolving a dispute about the interpretation or application of, or compliance with, a fair pay agreement; and

(f)

determining whether a topic listed in section 115(1) must be included in a proposed agreement under section 214; and

(g)

recommending the terms of a proposed agreement under section 215, or the terms of a proposed variation under section 180; and

(h)

fixing the terms of a proposed agreement under section 218 or 228C; and

(i)

determining any other matter arising under this Act.

(2)

The Authority also has jurisdiction to—

(a)

assess for coverage overlap (see sections 135(1) and (2) and 153(1)(a)); and

(b)

if the Authority decides there is coverage overlap, determine whether the proposed agreement or the fair pay agreement provides the better terms overall for employees who are covered employees in relation to both agreements (see sections 135(3) and 153(1)(b)); and

(c)

assess a proposed agreement or a proposed variation to determine whether it complies with the requirements of this Act and other legislation (see section 133).

(3)

This section is subject to section 236.

Clause 213

Delete clause 213 (page 178, line 37 to page 180, line 8).

Clause 215(2)

In clause 215(2), replace “must” (page 181, line 5) with “may”.

Clause 224

Delete clause 224 (page 186, lines 7 to 17).

Clause 228

Replace clause 228 (page 187, lines 10 to 16) with:

228 Application of Employment Relations Act 2000

(1)

The provisions of the Employment Relations Act 2000 listed in Part 1 of Schedule 3, and the provisions set out in Part 2 of Schedule 3, apply—

(a)

if a person applies, in accordance with this Act, for the Authority or the court to—

(i)

issue a determination or recommendation:

(ii)

resolve a dispute:

(iii)

fix the terms of a fair pay agreement:

(b)

when the Authority is—

(i)

assessing for coverage overlap (see sections 135(1) and (2) and 153(1)(a)):

(ii)

if the Authority decides there is coverage overlap, determining whether the proposed agreement or the fair pay agreement provides the better terms overall for covered employees who are within the coverage of both agreements (see sections 135(3) and 153(1)(b)):

(iii)

assessing a proposed agreement or a proposed variation to determine whether it complies with the requirements of this Act and other legislation (see section 133).

(2)

Subclause (1) applies subject to clauses 1A, 1AB, and 1B of Schedule 3.

Schedule 3

In the Schedule 3 heading (page 210, line 2 and 3), delete “relating to Employment Relations Authority”.

In Schedule 3, clause 1, after “clauses 1A” (page 210, line 10), insert “, 1AB,”.

In Schedule 3, after clause 1A (page 211, after line 18), insert:

1AB Limited Authority powers in certain circumstances

(1)

This clause applies when the Authority is—

(a)

assessing for coverage overlap (see sections 135(1) and (2) and 153(1)(a)):

(b)

(c)

assessing a proposed agreement or a proposed variation to determine whether it complies with the requirements of this Act and other legislation (see section 133).

(2)

When this clause applies,—

(a)

clause 1 of this schedule does not apply; and

(b)

the provisions of the Employment Relations Act 2000 listed in subclause (3) apply, with all necessary modifications, when an application is made to the Authority or the court under this Act; and

(c)

the Authority has the power—

(i)

to call for evidence and information from any person:

(ii)

to interview any person:

(iii)

to follow whatever procedure the Authority considers appropriate; and

(d)

Part 2 of this schedule does not apply to the Authority or the court, except for the following clauses:

(i)

clause 17:

(ii)

clause 17A:

(iii)

clause 17B:

(iv)

clause 18(1)(c), (2), and (3):

(v)

clause 19:

(vi)

clause 23:

(vii)

clause 24.

(3)

The provisions of the Employment Relations Act 2000 that apply are—

(a)

section 156:

(b)

section 158:

(c)

section 160(2) and (4):

(d)

section 165:

(e)

section 166:

(f)

sections 166A to 173:

(g)

sections 175:

(h)

section 176:

(i)

section 185:

(j)

section 186:

(k)

section 188(1) and (4):

(l)

section 189:

(m)

section 191:

(n)

section 193:

(o)

sections 195 to 213:

(p)

section 217:

(q)

sections 219 to 222:

(r)

Schedule 2 (as applied by section 165):

(s)

Schedule 3 (as applied by section 191).

In Schedule 3, replace clause 12(3)(a)(ii) (page 218, lines 5 to 7) with:

(ii)

whether, if the Authority applied 1 or more of the criteria that it may consider under section 220 (which applies in accordance with section 228C(2)), it applied the criteria correctly; or

In Schedule 3, replace clause 12(3)(b) (page 218, lines 8 to 13) with:

(b)

in relation to fixing the terms of a fair pay agreement under section 218(2),—

(i)

whether the threshold for fixing the terms of a fair pay agreement (see section 218) had been met; or

(ii)

whether, if the Authority applied 1 or more of the criteria that it may consider under section 220, it applied the criteria correctly.

Schedule 4

In Schedule 4, after the item relating to new section 14(1A) and (1B) of the Employment Relations Act 2000 (page 226, after line 20), insert:

In section 24(1), after “section 23”, insert “, or for the purposes of section 89 of the Fair Pay Agreements Act 2022”.

In Schedule 4, item relating to new section 161(1)(qe) of the Employment Relations Act 2000, replace “section 213” (page 227, line 16) with “section 211A”.

In Schedule 4, item relating to new section 7 of the Judicial Review Procedure Act 2016, after new subsection (2)(b)(ii) (page 229, after line 26), insert:

(iii)

clause 19 of Schedule 3 (which provides that a person may not apply for review or bring proceedings unless any appeal has first been determined):

(iv)

clause 19A of Schedule 3 (which provides that a person may only apply for review or bring proceedings in certain circumstances).

In Schedule 4, item relating to new section 8(4) of the Minimum Wage Act 1983, replace “within the scope of” (page 230, line 3) with “a covered employee in relation to”.

In Schedule 4, after the item relating to new section 8(4) of the Minimum Wage Act 1983 (page 230, after line 7), insert:

Replace section 8(6) with:

(6)

In this section,—

covered employee has the same meaning as in section 5(1) of the Fair Pay Agreements Act 2022

disability has the same meaning as in section 21(1)(h) of the Human Rights Act 1993.

Explanatory note

This Supplementary Order Paper amends the Fair Pay Agreements Bill (the Bill).

Clause 2, which relates to the commencement of the Bill, is amended so that the Bill will come into force on specified dates. The majority of the Bill will come into force on 1 December 2022, rather than coming into force 1 month after the date of Royal assent.

Clause 5, which is the interpretation clause, is amended by—

replacing the definitions of overtime rates and penalty rates, including by clarifying how the rates relate to the minimum base wage rates:
inserting a definition of standard hours, for the purposes of clarifying when minimum base wage rates and overtime rates are payable.

Clause 29A, which sets out the public interest test for initiating bargaining, is amended by deleting subclause (2) and making other consequential amendments. Subclause (2) sets out examples of evidence that an application under this clause could include. It is deleted because it is unclear how evidence provided under that subclause would assist the chief executive’s decision whether to approve the application.

Clause 32 sets out that the chief executive must assess an application for approval to initiate bargaining. Subclause (2), which authorises the chief executive to seek additional information or evidence from an applicant, is deleted because it has been shifted to new clause 32B.

Clause 32A, which sets out the time frame for the chief executive to make a decision on an application for approval to initiate bargaining, is amended as a consequence of the amendments to clause 32, and the insertion of new clause 32B.

New clause 32B is inserted, which sets out the additional information the chief executive may request when considering an application to initiate bargaining. It includes the power to seek additional information or evidence, which was previously set out in section 32(2), as well as an additional power to seek information, of a type to be prescribed in regulations, to enable to chief executive to verify information provided with an application.

Clause 90, which authorised the chief executive to issue an employer with a certification of exemption to prevent a union representative from accessing a workplace, is deleted. Instead, the certificate will be issued under section 24 of the Employment Relations Act 2000 (the ER Act). Consequential amendments are also made to section 89 and Schedule 4 (an amendment to section 24(1) of the ER Act).

Clauses 92D, 92E, and 92G, which relate to representation in the bargaining process, are amended to make minor changes to assist clarity.

Clause 102E(2)(c) sets out the evidence that must be provided with an application to change the coverage of a proposed agreement. It is amended to extend the requirement to provide evidence to all applications, regardless of which initiation test the original application to initiate bargaining relied upon.

Clause 106, which sets out when sections 107 to 111 apply, is amended to clarify that those sections apply when an additional occupation is covered by a subsequent industry-based proposed agreement.

Clause 108(1) is amended to clarify the information that the chief executive must notify when the chief executive approves bargaining for a proposed industry-based agreement that covers an additional occupation group to the occupations that are covered by another proposed industry-based agreement.

Clause 114(1) sets out the topics that must be specified in each fair pay agreement. Paragraphs (c) to (db) are amended to clarify that the details should be specified in relation to each type of work covered by the agreement and to each class of covered employees, and to account for the new definitions of overtime rate, penalty rate, and standard hours. Clause 114 is also amended as a consequence of new clause 114A being inserted.

New clause 114A is inserted to specify when a minimum base wage rate, a penalty rate, or an overtime rate must be payable, and also includes details about how the minimum base wage rate may be specified (which was previously included in clause 114(3) and (4)).

The headings to clauses 121, 121A, and 121B are amended to provide clarity.

Clause 123 permits district variation for some terms of a fair pay agreement. Subsection (2) is amended to align with the new definitions of overtime rate, penalty rate, and standard hours, and subsection (4) is amended to remove terms relating to redundancy, health and safety, and flexible working from the requirement to be specified in a form required in regulations or to include details required in regulations.

Clause 128, which relates to the delayed commencement of some terms within a fair pay agreement, is amended to align with the new definitions of overtime rate, penalty rate, and standard hours.

In clause 141, which sets out notification requirements prior to holding a ratification vote, the form that each covered employer must provide to its covered employees is no longer required to include the name of the employee bargaining side. As a covered employer is already required to provide the name of the employee bargaining side, there is no need to repeat it in the form, which is intended to be a standard form that can be used in all situations rather than being specific to each ratification vote.

Clause 146, which requires records to be kept of a ratification vote, is amended for consistency of wording.

In clause 160A, which provides the threshold for an employee to be covered by a fair pay agreement, new subsection (3) is added to clarify how to assess the percentage of the work performed by an employee who becomes a covered employee after the fair pay agreement comes into force.

Clause 189A(1) specifies the information that an eligible employer association or a specified employer bargaining party must include with their application when applying to renew or replace a fair pay agreement based on the representation test. Paragraph (f) is replaced to clarify that the application must include evidence of the number of employees that will be within coverage if the application is made on the basis that 1 or more employers, who employ at least 10% of the covered employees, support the application.

Clause 191 relates to the chief executive assessing an application for approval to renew or replace a fair pay agreement. Subclauses (2) and (3) are amended as a consequence of adding new section 32B, and new subclause (2A) is added to provide that the chief executive may require the applicant to provide information prescribed in regulations for the purpose of verifying information provided with the application.

In clause 211, which sets out the role of the Employment Relations Authority (the Authority), a cross-reference is added in subclause (1)(aa) and an incorrect cross-reference is corrected in subclause (1)(b).

New clause 211A sets out the jurisdiction of the Authority. However, the contents of this clause are not new, as they have been moved from clause 213 (which has been deleted) so that the provision is in a more logical place within the Bill.

Clause 213, which sets out the jurisdiction of the Authority, is deleted because it has been moved to be new clause 211A.

In clause 215, which provides when a bargaining side may apply to the Authority for a recommendation in relation to a term of a proposed agreement, is amended to align with a wording change previously made to clause 220.

Clause 224, which sets out the Authority’s powers when performing certain listed functions, has been deleted and replaced by new clause 1AB of Schedule 3.

Clause 228 provides that the provisions of the ER Act listed in Part 1 of Schedule 3, and the provisions in Part 2 of Schedule 3, apply to the Authority or the Employment Court in certain circumstances. It is amended so that those provisions also apply when the Authority is performing 3 additional listed functions. It is also amended to make it clear that clauses 1A, 1AB, and 1B of Schedule 3 limit the application of the listed provisions.

New clause 1AB of Schedule 3 is added to replace clause 224, and to clarify which provisions of the ER Act and which provisions of Part 2 of Schedule 3 apply when the Authority is performing 3 listed functions.

Clause 12 of Schedule 3, which specifies the circumstances in which a party may appeal on a question of law, is amended for clarity and so that an appeal may only be brought on the grounds of whether the Authority correctly applied any criteria under clause 220 that it considered.

Schedule 4, which sets out consequential amendments to other legislation, is amended as follows:

section 24 of the ER Act is amended to provide that a certificate of exemption issued under that Act is also issued for the purposes of this Bill:
new paragraph (qe) inserted into section 161(1) of the ER Act is amended to include a reference to new section 211A:
new section 7 of the Judicial Review Procedure Act 2016 is amended to refer to clauses 19 and 19A of Schedule 3 of the Bill:
new section 8(4) of the Minimum Wage Act 1983 is amended for consistency with the drafting in this Bill:
section 8(6) of the Minimum Wage Act 1983 is replaced to include a definition required as a result of the amendment to section 8(4).

Departmental disclosure statement

The Ministry of Business, Innovation, and Employment is required to prepare a disclosure statement to assist with the scrutiny of this Supplementary Order Paper. The disclosure statement provides access to information about any material policy changes to the Bill and identifies any new significant or unusual legislative features of the Bill as amended.

A copy of the statement can be found at http://legislation.govt.nz/disclosure.aspx?type=sop&subtype=government&year=2022&no=264&

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