Fair Pay Agreements Bill

Fair Pay Agreements Bill

Government Bill

115—1

Explanatory note

General policy statement

Policy objective

The Fair Pay Agreements Bill provides a framework for bargaining for fair pay agreements. The objective is to improve labour market outcomes in New Zealand by enabling employers and employees to collectively bargain industry-wide or occupation-wide minimum employment terms. The Bill builds on the analysis and recommendations of the Fair Pay Agreement Working Group in December 2018.

While New Zealand’s labour market has some strengths, it also has systemic weaknesses. These include a significant prevalence of jobs with inadequate working conditions, low wages, and low labour productivity. For example, Māori, Pacific peoples, young people, and people with disabilities are over-represented in jobs where low pay, job security, health and safety, and upskilling are significant issues. Barriers to good labour market outcomes are particularly prevalent for people who fall within more than 1 of those groups. The Bill will help address these issues.

At present, New Zealand’s employment relations and employment standards regulatory system only allows for collective bargaining at an enterprise level (ie, between individual employers and unions. There is no mechanism for parties to co-ordinate collective bargaining across entire occupations or industries.

The Bill creates a framework for bargaining for fair pay agreements by—

  • setting out a general duty of good faith, and good faith obligations that apply to bargaining parties (within the same bargaining side and between bargaining sides); and

  • prescribing processes for initiating bargaining (including when a default bargaining party may be required), carrying out bargaining, and finalising a fair pay agreement; and

  • providing processes to resolve disputes that may arise during bargaining for a fair pay agreement; and

  • establishing regulation-making powers to give full effect to fair pay agreements bargained under the Bill.

Fair pay agreement bargaining process

The Bill enables any eligible union to initiate bargaining for a fair pay agreement if it meets either a representation test of at least 1,000 employees or 10% of the employees in proposed coverage, or a public interest test based on specified criteria such as low pay, little bargaining power, or lack of pay progression. The chief executive of the Ministry of Business, Innovation, and Employment (CE MBIE) will assess applications based on either test and may request further evidence and information from the initiating union if required.

The Bill requires an initiating union to describe the coverage of a proposed fair pay agreement (a proposed FPA) as either an industry-based agreement or an occupation-based agreement. All employers and employees within the proposed coverage will be covered by the fair pay agreement.

Under the Bill, bargaining will take place between bargaining parties representing employees and employers. Employee bargaining parties will be eligible unions. Employer bargaining parties will be eligible employer associations, and could also include certain specified public sector employers who are allowed to participate directly in bargaining. A bargaining party must meet certain requirements, such as having an employee (or an employer who has an employee) within the coverage of the proposed FPA as a member. If one side is unrepresented (or becomes unrepresented during bargaining), default parties will step into bargaining.

The Bill creates notification and communication obligations for eligible unions and affected employers. Employers must allow employees to attend two 2-hour paid meetings for fair pay agreement purposes (1 additional paid meeting must be allowed for a proposed FPA, a proposed renewal, or a proposed replacement if the (initial) 2 meetings have been used). Employee bargaining parties will also be able to access a workplace if there are employees within coverage at that workplace and the visit is for fair pay agreement purposes. The Bill provides safeguards relating to the notification and communication requirements, similar to those under the Employment Relations Act 2000.

The Bill sets out a general obligation of good faith that applies to certain relationships, which is based on similar obligations in the Employment Relations Act 2000. It also outlines specific good faith obligations between parties within the same bargaining side (for example, between 2 bargaining parties), and also between the employee bargaining side and the employer bargaining side. These obligations will support efficient, constructive bargaining that is focused on finalising a fair pay agreement in a timely manner. Each bargaining side will also have obligations to use its best endeavours to represent those within coverage, and to ensure that Māori employees and employers are represented effectively.

The Bill sets out what must, or may, be contained in a fair pay agreement. Each fair pay agreement must specify when it comes into force and when it expires, its coverage (with sufficient clarity), the normal hours of work, minimum base wage rates (including when and how they are adjusted), overtime, penalty rates, any superannuation, the governance arrangements that will apply to the bargaining sides, and the process for each bargaining side to engage with the other bargaining side, if they are bargaining to vary the agreement.

The Bill also sets out several other topics that bargaining parties must discuss whether to include in a fair pay agreement, for example, health and safety requirements or leave entitlements. Those do not need to be included in the fair pay agreement. Bargaining sides will also be able to agree different terms that apply to different employees or classes of employees, for example, the terms of the fair pay agreement may differentiate on the basis of the territorial districts in which the employees work. Bargaining sides can also agree that the fair pay agreement (or certain terms of the fair pay agreement) will have delayed commencement for specified employers. Bargaining sides will be able, but not required, to discuss and include any other employment-related topics they consider to be relevant.

The Bill provides a dispute resolution process based on the Employment Relations Act 2000. Parties may access mediation and support services under the Bill. If parties cannot resolve their dispute using those services, a bargaining party may apply to the Employment Relations Authority (the Authority) for a determination. In addition, if parties cannot reach agreement during bargaining and specified criteria are met (for example, exhausting all other reasonable alternatives) or if ratification of a fair pay agreement has failed twice, a bargaining side may apply to the Authority to fix the terms of the fair pay agreement through a determination.

After bargaining, in order to finalise a fair pay agreement it must be—

  • assessed and approved by the Authority; and

  • ratified by the employees and employers who would be covered by the proposed FPA; and

  • verified by the CE MBIE; and

  • brought into force by the CE MBIE through secondary legislation.

When a fair pay agreement has been finalised, all employers within coverage will be bound by it, regardless of whether they participated in the bargaining process. Likewise, all employees within coverage will receive the new minimum employment terms set by the fair pay agreement. This will improve outcomes for employees across the labour market.

Enforcement

The Bill includes a penalty regime for non-compliance consistent with other employment legislation.

Consequential amendments

Implementing the Bill requires consequential amendments to the Employment Relations Act 2000, the Equal Pay Act 1972, the Holidays Act 2003, the Judicial Review Procedure Act 2016, and the Minimum Wage Act 1983.

Departmental disclosure statement

The Ministry of Business, Innovation, and Employment is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Clause by clause analysis

Clause 1 is the Title clause.

Part 1Preliminary provisions

Clause 2 provides that the Bill will come into force 1 month after receiving the Royal assent.

Clause 3 sets out the purpose of the Bill, which is to provide a framework for collective bargaining for fair pay agreements.

Clause 4 provides an overview of the content of the Bill.

Clause 5 defines terms used in the Bill.

Clause 6 provides that the transitional, savings, and related provisions set out in Schedule 1 have effect according to their terms.

Clause 7 provides that the Bill, when enacted, binds the Crown.

Clause 8 provides that it is not possible to contract out of this Bill.

Part 2General principles and obligations

Clause 9 states the object of Part 2 of the Bill.

Subpart 1—Freedom of Association

Voluntary membership

Clause 10 prohibits any contract, agreement, or other arrangement from encouraging or discouraging membership of a union or employer association for the purpose of bargaining.

Clause 11 provides that only an employee bargaining party may represent the collective interest of covered employees.

Clause 12 provides that only an employer bargaining party may represent the collective interests of covered employers.

Prohibition on preference

Clause 13 prohibits a fair pay agreement, or other contract, agreement, or arrangement from giving preference, in relation to employment, to a person because of whether or not the person is a union member. However, a fair pay agreement may provide for an employee to be paid a union member payment, which must be no more than the employee’s annual union membership fees.

Clause 14 prohibits a fair pay agreement, or other contract, agreement, or arrangement from giving preference to an employer because of whether or not the employer is a member of an employer association.

Clause 15 provides that a contract, an agreement, or another arrangement that is inconsistent with clause 13 or 14 has no force or effect.

Undue influence

Clause 16 prohibits exerting undue influence on any person for the purposes of bargaining for a fair pay agreement.

Subpart 2—Good faith obligations

Clause 17 sets out a general obligation of good faith that applies to the listed employment-related relationships when taking part in the listed activities that relate to fair pay agreements.

Clause 18 provides the good faith obligations that apply to bargaining parties that are on the same bargaining side.

Clause 19 provides the good faith obligations that apply to opposing bargaining sides.

Clause 20 provides the penalty that applies for failing to comply with the obligation in clause 17.

Clause 21 prohibits an employer from engaging a person as an independent contractor instead of as an employee with the intention of preventing the person from being covered by a fair pay agreement.

Subpart 3—General obligations

Clause 22 provides that if this Bill imposes an obligation on a bargaining side, each bargaining party on the bargaining side must ensure that at least 1 of the bargaining parties on the bargaining side complies with the obligation.

Clauses 23 and 24 provide limitations on the collection, use, and disclosure of personal information under the Bill.

Clause 25 provides that a strike or lockout that relates to bargaining under this Bill is unlawful, unless it is permitted under section 84 of the Employment Relations Act 2000.

Part 3Initiating bargaining for proposed FPA

Clause 26 provides an overview of the contents of Part 3.

Subpart 1—Process for initiating bargaining and forming bargaining sides

Clause 27 provides that bargaining for a proposed FPA may only be initiated under subpart 1 of Part 3.

Union to apply for approval to initiate bargaining for proposed FPA

Clause 28 provides that an eligible union may initiate bargaining for a proposed FPA only with the chief executive’s approval (which the chief executive must publicly notify under clause 34.

Clause 29 sets out 2 alternative tests for initiating bargaining for a proposed FPA: the representation test and the public interest test.

Clause 30 sets out how an application for the chief executive’s approval to initiate bargaining must be made, including specifying the coverage of the proposed FPA and whether the application relies on the representation test or the public interest test.

Clause 31 provides that the coverage of a proposed FPA must be based on the occupation of the employees who would be covered (an occupation-based agreement) or based on the occupations and the industry of the employees (an industry-based agreement).

Chief executive assesses application for approval to initiate bargaining

Clause 32 requires the chief executive to assess an application for approval and to decide whether to grant approval based on specified requirements.

Clause 33 provides that the chief executive may, in certain circumstances, invite public submissions when deciding whether to approve an application to initiate bargaining.

Clause 34 requires the chief executive to publicly notify a decision to approve an application.

Formation of employee bargaining side

Clause 35 provides that an employee bargaining side is formed 3 months after the chief executive notifies having approved an application to initiate bargaining.

Initiating union must notify approval to initiate bargaining

Clause 36 requires a union that has had an application to initiate bargaining approved to notify each union with members who are covered employees, and each employer that employs covered employees, of that approval. The initiating union must also provide a statement and a form for the employers to provide to the covered employees, relating to the bargaining process and the requirement for the employer to provide the employees’ contact details to the union.

Clause 37 requires an employer to pass on the statement and the form to the covered employees.

Clause 38 requires a union with members who are covered employees to notify each employer that is a party to a collective agreement with the union, and that has covered employees, that approval has been granted to initiate bargaining.

Employee information

Clause 39 requires an employer to provide each covered employee’s contact details to each employee bargaining party for the proposed FPA. However, the obligation does not apply in relation to a covered employee who elects not to have their contact details provided.

Clause 40 provides that an initiating union or an employee bargaining party must use a covered employee’s contact details only for purposes related to the proposed FPA.

Clause 41 places limits on how an initiating union or an employee bargaining party may store and access employees’ contact details.

Employer bargaining side

Clause 42 defines employer association.

Clause 43 provides that, once the chief executive has approved a union’s application to initiate bargaining, an eligible employer association may apply for approval to form or join the employer bargaining side.

Clause 44 requires the chief executive to assess each application from an employer association under clause 43 and sets out the criteria for the chief executive to decide whether to approve the application.

Clause 45 provides that an employer bargaining side is formed 3 months after the chief executive notifies approval of a union’s application to initiate bargaining.

Clause 46 provides that, when bargaining for a proposed FPA, an employer bargaining party must endeavour to represent the collective interests of all covered employers, not just those employers who are members of the employer association.

Clause 47 provides exceptions from clause 46 that apply to specified employer bargaining parties for a proposed FPA or a fair pay agreement.

Clause 48 requires each employer bargaining party for a proposed FPA to ensure effective representation of Māori employers.

Other union may apply to join employee bargaining side

Clause 49 provides that if the chief executive has approved a union’s application to initiate bargaining for a proposed FPA, another eligible union may apply for approval to join the employee bargaining side.

Clause 50 sets out the requirements for an application made under clause 49.

Clause 51 requires the chief executive to assess each application made under clause 49 and notify the applicant of the decision.

Clause 52 requires the chief executive to advise a union whether its application under clause 49 has been approved or declined and to publicly notify the approval of the union’s application.

Clause 53 provides that an employee bargaining party must endeavour to represent the collective interests of all covered employees, whether or not an employee is a member of the union.

Clause 54 requires each employee bargaining party for a proposed FPA to ensure effective representation of Māori employees.

Clause 55 provides that a union that is not an employee bargaining party, but that has members who are covered employees, may provide its members’ views to the employee bargaining side, and the employee bargaining side must take those views into account.

Subpart 2—General provisions for initiating bargaining

Notification of bargaining parties

Clause 56 requires the chief executive, 3 months after notifying approval of a union’s application to initiate bargaining for a proposed FPA, to provide each bargaining party with the name of each other bargaining party.

Bargaining sides

Clause 57 sets out the employee bargaining parties that make up an employee bargaining side for a proposed FPA.

Clause 58 sets out the employer bargaining parties that make up an employer bargaining side for a proposed FPA.

Clause 59 provides that each bargaining side for a proposed FPA must agree an inter-party side agreement and appoint a bargaining side lead advocate.

Clause 60 provides that an inter-party side agreement must include the process that the bargaining side will follow to make decisions, and requires the bargaining side to provide a copy of the agreement, and any amendments to the agreement, to the chief executive.

Clause 61 provides that if a bargaining party joins a bargaining side that has already provided its inter-party side agreement to the chief executive, the bargaining side need not amend the agreement but must consider whether to amend it.

Specified employer bargaining parties

Clause 62 defines terms used in clauses 63 to 67.

Clause 63 sets out the circumstances in which the Public Service Commissioner or the Director-General of Health may be a specified employer bargaining party and provides that each may delegate that function.

Clause 64 provides that clause 65 applies to the Chief of Defence Force, the Chief Parliamentary Counsel, and the Commissioner of Police.

Clause 65 sets out the circumstances in which an employer listed in clause 64 may be an employer bargaining party, or may ask the Public Service Commissioner to act on behalf of the employer.

Clause 66 provides that other State services employers may ask the Public Service Commissioner to act on behalf of the employer.

Clause 67 provides that a specified employer bargaining party has the same rights, duties, and obligations as any other employer bargaining party.

Clause 68 requires a specified employer bargaining party to notify the chief executive if it is an employer bargaining party.

Subpart 3—Default bargaining parties

Clause 69 sets out an overview of when default bargaining parties may be required and, for the purposes of subpart 3 of Part 3, defines relevant employer to mean an employer that is described in clause 63, 64, or 66.

Clause 70 provides that an employer default bargaining party may be an employer bargaining party only if the proposed FPA, proposed variation, proposed renewal, or proposed replacement covers employees who are not employed by a relevant employer.

Clause 71 sets out who the chief executive must notify in various situations where there is no longer a bargaining party on a bargaining side.

Default bargaining parties for proposed FPAs

Clause 72 sets out the circumstances in which the employer default bargaining party is deemed to be an employer bargaining party for a proposed FPA, the obligations that result from being deemed to be an employer bargaining side, and the effects of another employer bargaining party subsequently joining the bargaining side.

Clause 73 sets out the circumstances in which the employee default bargaining party may elect to be an employee bargaining party for a proposed FPA, how it makes that election, the effect of another employee bargaining party subsequently joining the bargaining side, and the outcome if the employee default bargaining party does not make an election.

Default bargaining parties for proposed variations

Clauses 74 and 75 set out the actions that a default bargaining party may take in relation to a proposed variation and provide that a default bargaining party may withdraw from bargaining for a proposed variation.

Default bargaining parties for proposed renewals or proposed replacements

Clause 76 sets out the circumstances in which the employer default bargaining party is deemed to be an employer bargaining party in relation to a proposed renewal or proposed replacement, the obligations that result from being deemed to be an employer bargaining side, and the effects of another employer bargaining party subsequently joining the bargaining side.

Clause 77 sets out the circumstances in which the employee default bargaining party is deemed to be an employee bargaining party for a proposed renewal or proposed replacement, the obligations that result from being deemed to be an employee bargaining side, and the effects of another employee bargaining party subsequently joining the bargaining side.

Clause 78 sets out the circumstances in which a default bargaining party is deemed, or may elect, to be a bargaining party in relation to a proposed renewal or proposed replacement that was initiated by an employer bargaining party.

Clause 79 sets out the circumstances in which a default bargaining party is deemed to be a bargaining party in relation to a proposed renewal or proposed replacement that was initiated by a specified employer bargaining party.

Clause 80 sets out the circumstances in which a default bargaining party is deemed, or may elect, to be a bargaining party in relation to a proposed renewal or proposed replacement that was initiated by an employee bargaining party.

Part 4FPA meetings and union access to workplaces

Subpart 1—FPA meetings

Clause 81 sets out the circumstances in which an employee bargaining party for a proposed FPA, a proposed renewal, or a proposed replacement may arrange an FPA meeting. It also sets out how the employee bargaining party must make arrangements for the meeting with affected employers.

Clause 82 provides that employees are entitled to attend 2 FPA meetings in relation to a proposed FPA, 1 meeting in relation to a proposed variation, and 2 meetings in relation to a proposed renewal or proposed replacement. Meetings must last no longer than 2 hours.

Clause 83 provides that an employer must allow an employee to attend an FPA meeting on ordinary pay.

Clause 84 provides an entitlement for an employee to attend an additional FPA meeting if the result of the first ratification vote for a proposed FPA, a proposed renewal, or a proposed replacement is against ratification.

Subpart 2—Employee bargaining party may access workplaces

Clause 85 defines dwellinghouse for the purposes of clauses 86 to 91.

Clause 86 provides the right for a representative of an employee bargaining party to enter a workplace without the employer’s consent to discuss bargaining or a fair pay agreement.

Clause 87 sets out the conditions that apply when a representative of an employee bargaining party enters a workplace.

Clause 88 provides that a representative of an employee bargaining party may be denied access to a workplace for reasons relating to the security or defence of New Zealand or the investigation or detection of offences.

Clauses 89 and 90 provide that a representative of an employee bargaining party may be denied access to a workplace on religious grounds if the chief executive has issued the employer a certificate of exemption.

Clause 91 provides that any person who prevents or obstructs a representative of an employee bargaining party from entering a workplace is liable to a penalty.

Part 5Bargaining

Subpart 1—Good faith obligation to provide information

Clause 92 sets out the process for a bargaining side to request information from the other bargaining side during bargaining. A bargaining side must provide the requested information to the requesting bargaining side or to an independent reviewer. If the parties are unable to agree whom to appoint as an independent reviewer, they may apply to the Authority for a determination.

Subpart 2—Obligations during bargaining

Ceasing to be bargaining party

Clause 93 sets out the circumstances in which a bargaining party ceases to be a bargaining party.

Clause 94 provides that a bargaining party, other than a specified employer bargaining party or a default bargaining party, that wishes to cease being a bargaining party must apply to the chief executive for approval to do so.

Clause 95 sets out the circumstances in which a bargaining party is no longer eligible to be a bargaining party and requires a bargaining party to notify the chief executive if the bargaining party is no longer eligible.

Clause 96 requires a bargaining side to appoint a new bargaining side lead advocate if the bargaining side lead advocate is a representative of a bargaining party that ceases to be a bargaining party.

Clause 97 requires an employee bargaining side for a fair pay agreement to provide the employer bargaining side with a new address to which employees’ contact details must be provided if the initiating union ceases to be a bargaining party.

Provision of information

Clause 98 requires an employer to provide its employees’ contact details to another employee bargaining party if the initiating union is no longer a bargaining party and the employee bargaining side has provided a new address.

Clause 99 requires an employee bargaining side to ensure that it provides a current address to which employers must provide employees’ contact details.

Clause 100 provides that, if the coverage of a proposed FPA, a proposed renewal, or a proposed replacement changes during bargaining, the initiating party must apply to the chief executive for approval to continue bargaining. The chief executive must approve the application if it meets the specified criteria.

Clause 101 relates to the information that an employer or employer bargaining side must provide if a new employee comes within coverage during bargaining or there is a new covered employer.

Clause 102 relates to the information that must be provided if, during bargaining, a new employee commences employment in a role that is within the coverage of a proposed FPA, a proposed renewal, or a proposed replacement.

Subpart 3—Coverage overlap, consolidation, and addition of occupation

Coverage overlap between proposed FPA and fair pay agreement

Clause 103 provides that clauses 104 and 105 apply when there is coverage overlap between a proposed FPA, a proposed renewal, or a proposed replacement, and a fair pay agreement that is already in place.

Clause 104 provides that if there is coverage overlap between a proposed FPA, a proposed renewal, or a proposed replacement and a fair pay agreement, the chief executive must notify the initiating party of the overlap and the initiating party must notify the bargaining parties.

Clause 105 provides that if there is coverage overlap the Authority must review the terms of the overlapping agreements and determine which provides the covered employees with the better terms overall.

Consolidation of bargaining for fair pay agreements

Clause 106 provides that clauses 107 to 111 apply when the coverage of 2 agreements being bargained overlaps.

Clause 107 provides that, depending on timing, either bargaining for proposed agreements with coverage overlap is consolidated automatically, or the bargaining sides may elect to do so.

Clause 108 requires the chief executive to notify various parties of the consequences of the timing and possible consolidation of bargaining.

Clause 109 sets out the consequences of two proposed agreements being consolidated, including the combination of the bargaining sides and the extension of the coverage.

Clause 110 provides that when bargaining sides combine, a bargaining party may request that the inter-party side agreement is negotiated for the combined bargaining side.

Clause 111 sets out the effect of a decision not to consolidate 2 overlapping agreements, which includes that the second agreement is validated as a schedule of the first agreement, rather than as a stand-alone agreement.

Addition of occupation to fair pay agreement

Clause 112 provides that if bargaining is initiated for a proposed industry-based FPA that overlaps with an existing industry-based agreement, the second agreement is validated as a schedule of the first agreement rather than as a stand-alone agreement.

Clause 113 places notification requirements on the chief executive in the circumstances described in clause 112.

Part 6Content of fair pay agreements

Content of fair pay agreements

Clause 114 provides a list of terms that must be included in each fair pay agreement.

Clause 115 provides a list of topics that bargaining sides must discuss whether to include in a proposed FPA, a proposed renewal, or a proposed replacement.

Clause 116 provides that a term that is not listed in clause 114 or 115 may be included in a proposed FPA, a proposed renewal, or a proposed replacement. However, a term is void if it does not relate to the employment of covered employees, is contrary to law, or is inconsistent with the Bill.

Minimum entitlement provisions

Clause 117 provides that a term of a fair pay agreement that relates to 1 or more of the listed topics, is a minimum entitlement provision.

Clause 118 sets out how minimum entitlement provisions must be expressed.

Clause 119 specifies how minimum entitlement provisions apply in relation to other employment-related legislation.

Minimum wage rates

Clause 120 explains how entitlements under fair pay agreements relate to entitlements under a minimum wage exemption permit issued under the Minimum Wage Act 1983.

Clause 121 provides that a fair pay agreement may also specify a starting-out rate of wages and a training rate of wages.

Differentiation of application and entitlement

Clause 122 permits fair pay agreements to include terms that apply to a class of employees that differ to terms that apply to another class of employees. However, such a term must not relate to any of the topics listed in this clause.

Clause 123 permits a fair pay agreement to include terms that apply differently in different districts in New Zealand. However, such a term must relate to one of the topics listed in this clause.

Clause 124 provides that if a fair pay agreement includes terms that apply differently in different districts, an employee is bound by the terms that apply in the district in which the employee works for the majority of the time.

Clause 125 permits a fair pay agreement to include a minimum entitlement provision that applies differently to different employees, but only if the difference is based on the employee’s district, occupation, or role.

Clause 126 provides that a fair pay agreement must not include a term that is contrary to any other law.

Delayed commencement of term in fair pay agreement

Clause 127 provides that the bargaining sides may consider applications from employers for delayed commencement, but only after bargaining is complete and before the proposed FPA, the proposed renewal, or the proposed replacement is submitted to the Authority for a compliance assessment.

Clause 128 specifies that a term that has delayed commencement must relate to 1 or more of the topics listed in this clause.

Clause 129 specifies the reasons for approving an employer’s application for the delayed commencement of 1 or more terms and provides that the delay must be for less than 12 months.

Part 7Finalisation of proposed agreement

Clause 130 sets out an overview of Part 7.

Clause 131 defines proposed agreement for the purposes of Part 7 to mean a proposed FPA, a proposed renewal, or a proposed replacement.

Subpart 1—Compliance assessment

Clause 132 provides that when bargaining for a proposed agreement is complete, it must be submitted to the Authority for a compliance assessment.

Clause 133 requires the Authority to assess a proposed agreement to determine whether it complies with this Bill, employment standards, and any other relevant employment law requirements.

Clause 134 sets out the Authority’s responsibilities if it does not approve a proposed agreement, including notifying the bargaining sides of the reasons for not approving the proposed agreement.

Clause 135 provides that, as well as assessing a proposed agreement for compliance, the Authority must also check for coverage overlap. If the Authority decides there is coverage overlap, it must determine which agreement provides the better terms overall.

Clause 136 sets out the time frame for the Authority to notify the bargaining sides of the results of a compliance assessment and a check for coverage overlap.

Clause 137 sets out the time frame for the Authority, if it has determined there is coverage overlap, to determine which agreement provides the better terms overall.

Clause 138 explains how the Authority determines which agreement provides the better terms overall.

Clause 139 sets out the consequences of the Authority’s determination as to which agreement provides the better terms overall that include the requirement to amend coverage.

Subpart 2—Ratification

Clause 140 provides that once a proposed agreement has been approved and checked for coverage overlap, the proposed agreement must be ratified.

Clause 141 requires the bargaining sides to notify covered employees and covered employers that a ratification vote will soon be held and provide related information. Employers must provide additional information to their covered employees.

Clause 142 sets out the time frame for holding a ratification vote.

Clause 143 provides that, before the ratification vote, further information about the vote must be provided to covered employees and covered employers.

Clause 144 sets out the details of holding a ratification vote. Covered employees are entitled to 1 vote each in the employee vote, and covered employers are entitled to a number of votes determined by the number of covered employees they employ (1 vote per employee over 20 employees, or for 20 or fewer employees, the number specified in Schedule 2).

Clause 145 requires a bargaining side that completes a ratification vote to notify the other bargaining side of the outcome of the vote. If both ratification votes are in favour of ratification, the bargaining sides must submit evidence of the outcome to the chief executive. If the first ratification vote for a proposed agreement is against ratification, the bargaining sides must restart bargaining. If the second ratification vote is against ratification, either bargaining side may apply to the Authority to fix the terms of the proposed agreement.

Clause 146 requires each bargaining side to retain records of a ratification vote to demonstrate that the vote was held in accordance with this Bill.

Subpart 3—Verification

Clause 147 provides that, if both bargaining sides vote in favour of ratification, the bargaining sides must submit information relating to the ratification votes and a copy of the proposed agreement to the chief executive.

Clause 148 requires the chief executive, after receiving the information relating to the ratification votes, to verify the proposed agreement if satisfied of the specified requirements.

Clause 149 provides that, if the chief executive declines to verify a proposed agreement, the chief executive must require 1 or both bargaining sides to undertake the ratification process again and resubmit evidence of the ratification vote for verification.

Clause 150 provides that a bargaining party or a covered employer that intentionally or recklessly provides inaccurate information in relation to a ratification vote is liable to a penalty.

Subpart 4—Chief executive’s assessment of overlapping coverage

Clause 151 requires the chief executive, after verifying a proposed agreement, to assess whether there is coverage overlap between the proposed agreement and any fair pay agreement.

Clause 152 provides that, if the chief executive concludes there is coverage overlap, the bargaining sides must submit the proposed agreement to the Authority for it to determine which agreement provides the better terms overall.

Clause 153 requires the Authority to determine whether a proposed agreement submitted under clause 152, or the fair pay agreement, provides the better terms overall.

Clause 154 sets out the consequences if the Authority determines that the proposed agreement provides the better terms overall, including amending the coverage of the fair pay agreement to remove the overlap and the bargaining sides being required to notify covered employees and covered employers.

Clause 155 sets out the consequences if the Authority determines that the fair pay agreement provides the better terms overall, including amending the coverage of the proposed agreement to remove the overlap and the bargaining sides being required to notify covered employees and covered employers.

Subpart 5—Issuing fair pay agreement notice

Chief executive to issue fair pay agreement notice

Clause 156 provides that the chief executive may validate the terms of a fair pay agreement by issuing a fair pay agreement notice or a fair pay agreement amendment notice. A notice is secondary legislation.

Clause 157 sets out the form and content of a fair pay agreement notice issued under clause 156.

Clause 158 requires the chief executive to notify the relevant bargaining sides when the chief executive has issued a fair pay agreement notice.

Clause 159 authorises the chief executive to make minor listed changes to a fair pay agreement that the chief executive has validated.

Application and effect of fair pay agreement

Clause 160 provides the date on which a fair pay agreement notice comes into force. From that date it binds the parties specified.

Clause 161 requires each party to a fair pay agreement to comply with the terms of the fair pay agreement.

Clause 162 provides for the effect of a fair pay agreement on an employment agreement.

Clause 163 provides for the relationship between a fair pay agreement and a collective agreement.

Part 8Variation, renewal, and replacement of fair pay agreements

Subpart 1—Variation

Clause 164 provides that subpart 1 applies when 1 or both of the bargaining sides proposes to vary a fair pay agreement.

Clause 165 specifies which parties may propose bargaining for a variation to a fair pay agreement.

Clause 166 provides that bargaining for a proposed variation may start only if both bargaining sides agree to do so. If a bargaining side withdraws its agreement to bargain, the bargaining ceases.

Clause 167 requires the bargaining sides that agree to bargain for a proposed variation to notify the chief executive. A bargaining side that withdraws its agreement must notify the chief executive and the other bargaining side, and then the bargaining sides must notify covered employees and covered employers that bargaining has stopped.

Clause 168 provides that a new bargaining party may join bargaining that has started for a proposed variation.

Clause 169 sets out limitations on when a bargaining party may request agreement to bargain for a proposed variation, and limitations on which terms of a fair pay agreement may be varied.

Clause 170 requires the employer bargaining side to notify covered employers if bargaining for a proposed variation has started.

Clause 171 sets out obligations on both bargaining sides to provide information relating to the proposed variation to covered employees and covered employers.

Clause 172 imposes further obligations on a covered employer to provide information about bargaining for a proposed variation when a new employee commences in a role that is within the coverage of the fair pay agreement.

Clause 173 imposes further obligations on the employer bargaining side and a new covered employer to provide information about bargaining for a proposed variation.

Clause 174 sets out the process that must be followed to finalise a proposed variation when bargaining is complete.

Clauses 175 and 176 set out the process and timeframe to be followed to ratify a proposed variation.

Clause 177 specifies which employees and employers are entitled to vote for ratification of a proposed variation if the fair pay agreement has another fair pay agreement attached as a schedule.

Clause 178 provides that the chief executive may validate a variation of a fair pay agreement by issuing a fair pay agreement variation notice. A fair pay agreement variation notice is secondary legislation.

Clause 179 specifies the form and content of a fair pay agreement variation notice.

Clause 180 provides that the bargaining sides for a proposed variation may together seek a non-binding recommendation from the Authority.

Clause 181 prohibits either bargaining side to a proposed variation from seeking a determination from the Authority.

Subpart 2—Renewal and replacement of fair pay agreements

Clause 182 specifies that the purpose of this subpart is to set out the process that must be followed to renew a fair pay agreement.

Clause 183 provides that a specified bargaining side that wishes to renew a fair pay agreement must apply to the chief executive for approval to initiate bargaining.

Timing

Clause 184 sets out when a bargaining party may apply to the chief executive for approval to initiate bargaining for a proposed renewal.

Clause 185 provides that if no application for renewal is made before a fair pay agreement expires, a union or an employer association may apply to the chief executive for approval to initiate bargaining for a replacement fair pay agreement that is based on the expired fair pay agreement.

Clause 186 provides that, if a party applies for approval to initiate bargaining for a proposed renewal, the fair pay agreement remains in force until the later of 4 listed dates.

Clause 187 specifies the dates on which a proposed renewal or a proposed replacement may come into force.

Coverage

Clause 188 provides that an application for approval to initiate bargaining for a proposed renewal or a proposed replacement must have the same, or broader, coverage as the fair pay agreement that is being renewed or replaced.

Application for approval to renew or replace fair pay agreement

Clause 189 sets out the requirements for an application to initiate bargaining for a proposed renewal or a proposed replacement.

Clause 190 requires an application to initiate bargaining for a proposed renewal or a proposed replacement to meet either the representation test or the public interest test and specifies how to meet those tests.

Clause 191 requires the chief executive to assess an application for a proposed renewal or a proposed replacement and notify the applicant of the chief executive’s decision.

Notification requirements

Clauses 192 and 193 set out the requirement for the chief executive and other parties to notify the chief executive’s decision to approve an application to initiate bargaining for a proposed renewal or a proposed replacement.

Clause 194 provides for the formation of an employer bargaining side for a proposed renewal or a proposed replacement.

Clause 195 provides for the formation of an employee bargaining side for a proposed renewal or a proposed replacement.

Part 9Penalties

Clause 196 sets out a penalty not exceeding $20,000 for an individual or not exceeding $40,000 for any other person for a breach of an obligation that refers to this section.

Clause 197 sets out a penalty not exceeding $10,000 for an individual or not exceeding $20,000 for any other person for a breach of an obligation that refers to this section.

Clause 198 provides that the Authority has jurisdiction to recover all penalties for a breach of a fair pay agreement or a breach of this Bill.

Clause 199 provides that if a person breaches this Bill and another Act, proceedings must be brought under the applicable Act specified in this clause.

Clause 200 lists the criteria that the Authority or the Employment Court (the court) must have regard to when determining an appropriate penalty under clause 196 or 197.

Clause 201 sets out further details relating to recovering a penalty under this Bill.

Clause 202 provides that the chief executive or a Labour Inspector may recover any penalty ordered as a debt due to the Crown.

Clause 203 provides that, unless the Authority or court has ordered that all or part of a penalty must be paid to any person, a penalty must be paid into a Crown Bank Account.

Part 10Institutions

Subpart 1—Mediation services

Clause 204 requires the chief executive to engage or employ persons to provide mediation services to support specified relationships relating to fair pay agreements.

Clause 205 provides that various sections of the Employment Relations Act 2000 apply, with all necessary modifications, in relation to mediation services.

Clause 206 clarifies that a person may use mediation services other than those provided under this Bill or under the Employment Relations Act 2000.

Subpart 2—Bargaining support services

Clause 207 requires the chief executive to employ or engage persons to provide bargaining support services to support bargaining under this Bill.

Clause 208 provides how a person who wishes to access bargaining support services may access those services.

Clause 209 provides discretion to the chief executive as to how to provide bargaining support services.

Clause 210 clarifies that a person may use bargaining support services other than those provided under this Bill.

Subpart 3—Employment Relations Authority

Clause 211 sets out the role of the Authority and how it must operate.

Determinations and recommendations

Clause 212 sets out which parties may apply to the Authority for a determination, and the nature of that determination.

Clause 213 provides that the Authority has exclusive jurisdiction to make determinations relating to fair pay agreements.

Clause 214 provides that specified parties may apply to the Authority for a determination as to whether a proposed FPA, a proposed renewal, or a proposed replacement should include a term that addresses a topic listed in clause 115.

Clause 215 provides that the parties to a proposed FPA, a proposed renewal, or a proposed replacement may apply to the Authority for a non-binding recommendation as to the content of a term to be included in the proposed FPA, the proposed renewal, or the proposed replacement, if the bargaining parties are unable to agree the content of the term.

Clause 216 provides that, in most circumstances, the Authority must consider whether to direct the parties to use mediation before the Authority issues a determination or a recommendation.

Clause 217 provides that the parties are not required to use mediation before applying to the Authority for a determination as to whether an employee is a covered employee or an employer is a covered employer.

Fixing terms of fair pay agreements

Clause 218 provides that bargaining sides may apply to the Authority for a determination to fix the terms of a proposed FPA, a proposed renewal, or a proposed replacement.

Clause 219 lists the terms that the Authority may fix under clause 218.

Clause 220 sets out what the Authority must consider when recommending or fixing terms of a proposed FPA, a proposed renewal, or a proposed replacement.

Clause 221 sets out certain limitations on the Authority when fixing terms of a proposed FPA, a proposed renewal, or a proposed replacement.

Clause 222 provides that terms fixed by the Authority are binding and enforceable and are not required to be assessed or ratified under subparts 1 and 2 of Part 7.

Clause 223 provides that, when fixing terms, the Authority must consist of a panel of 3 members, 1 of whom must be appointed to be the chairperson.

General provisions relating to Employment Relations Authority

Clause 224 limits the Authority’s powers in certain circumstances.

Clause 225 prohibits an Authority member that has fixed terms of a fair pay agreement from hearing any disputes about that agreement.

Clause 226 provides that the decision of a majority of the Authority members is the decision of the Authority.

Clause 227 provides that a person must not obstruct or delay the Authority from performing a function under this Bill.

Provisions that apply when application made to Authority

Clause 228 provides that 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 to the Authority or court when performing a function under this Bill.

Part 11Miscellaneous provisions

Clause 229 defines document for the purposes of this Part.

Clause 230 provides that an individual employee or employer may choose any person to represent them in relation to actions listed in this clause.

Clause 231 provides that a bargaining party may choose any person to represent them in relation to actions listed in this clause.

Record-keeping requirements

Clause 232 sets out the record-keeping requirements that apply to an employer that has an employee covered by a fair pay agreement that applies to a specific district.

Clause 233 sets out the record-keeping requirements that apply to an employer that has an employee covered by a fair pay agreement that includes a penalty rate or an overtime rate.

Clause 234 provides how a record kept under clause 232 or 233 may be kept.

Labour Inspector may make determination of coverage by fair pay agreement

Clause 235 provides how an employee or employer may apply to a Labour Inspector for a determination as to whether an employee or group of employees is covered by a fair pay agreement.

Clause 236 provides the circumstances in which a Labour Inspector may determine whether an employee is covered by a fair pay agreement.

Clause 237 provides that a Labour Inspector may seek a determination from the Authority as to whether an employee is covered by a fair pay agreement.

Clause 238 provides that a determination made under clause 236 is prima facie evidence of the matter, except in the specified circumstances.

Clause 239 provides a limited power to appeal against a determination made under clause 236.

Clause 240 sets out a Labour Inspector’s extended powers when determining whether an employee is covered by a fair pay agreement.

Clause 241 limits a Labour Inspector’s powers under clause 240.

Regulations

Clause 242 is the regulation-making provision.

Forms

Clause 243 provides that the chief executive may approve and issue forms for the purposes of this Bill.

Clause 244 provides that the Acts specified in Schedule 4 are amended as set out in that schedule.