Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill
Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill
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Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill
Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill
Government Bill
104—2
As reported from the Education and Workforce Committee
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Hon Brooke van Velden
Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill
Government Bill
104—2
Contents
The Parliament of New Zealand enacts as follows:
1 Title
This Act is the Employment Relations (Pay Deductions for Partial Strikes) Amendment Act 2024.
2 Commencement
This Act comes into force on the day after Royal assent.
3 Principal Act
This Act amends the Employment Relations Act 2000.
Part 1 Amendments to principal Act
4 Section 80 amended (Object of this Part)
After section 80(ba), insert:
(bb)
to provide for specified pay deductions, including how the amount of such deductions must be calculated; and
5 New section 82AA inserted (Meaning of partial strike and specified pay deduction)
After section 82, insert:
82AA Meaning of partial strike and specified pay deduction
In this Act,—
partial strike— means a strike in which the employees who are party to the strike do one or both of the following:
(a)
means an act of the employees who are a party to a strike in continuing continue to perform some work for their employer or employers during the strike instead of wholly discontinuing their employment during the strike, and includes, without limitation,—
(i)
a partial discontinuance of work through a refusal or failure to accept engagement for work that forms part of the employees’ normal duties:
(ii)
a reduction in the employees’ normal performance of work, normal output, or normal rate of work:
(b)
means an act of the employees who are a party to a strike in breaking break their employment agreement, whether or not the act involves any reduction in the employees’ normal duties, normal performance of work, normal output, or normal rate of work
specified pay deduction means a deduction—
(a)
made, or to be made, from an employee’s salary or wages in accordance with section 95A; and
(b)
calculated—
(i)
in accordance with section 95C(1) and (2); or
(ii)
by imposing a flat rate of 10% under section 95C(3).
5A Section 86A amended (Notice of strike)
Replace section 86A(2)(b)(ii) with:
(ii)
the nature of the proposed strike, including—
(A)
whether or not the proposed action will be continuous; and
(B)
whether or not the employees will continue to perform some work for their employer while undertaking the proposed action; and
5B Section 90 amended (Strikes in essential services)
Replace section 90(3)(b) with:
(b)
the nature of the proposed strike, including—
(i)
whether or not the proposed action will be continuous; and
(ii)
whether or not the employees will continue to perform some work for their employer while undertaking the proposed action; and
5C Section 93 amended (Procedure to provide public with notice before strike in certain passenger transport services)
Replace section 93(2)(b) with:
(b)
the nature of the proposed strike, including—
(i)
whether or not the proposed action will be continuous; and
(ii)
whether or not the employees will continue to perform some work for their employer while undertaking the proposed action; and
6 New sections 95A to 95G and cross-headings inserted
After section 95AA, insert:
Specified pay deductions in relation to partial strike
95A Employer may make specified pay deductions in relation to partial strike
(1)
If there is a partial strike, the employer may make a specified pay deduction from the salary or wages of an employee who is a party to the strike.
(2)
However, the employer must not make a specified pay deduction—
(a)
if the partial strike is lawful on the grounds referred to in section 84 (which relates to lawful strikes on the grounds of safety or health); or
(b)
if—
(i)
the employee is paid by piece work; and
(ii)
the partial strike results in the employee reducing their normal output; or
(c)
in respect of the partial strike if the strike involves only—
(i)
a refusal to work overtime; or
(ii)
a refusal to perform call-out work if the employee would otherwise receive a special payment for performing that work; or
(d)
in respect of any period of the partial strike that involves—
(i)
a refusal to work overtime; or
(ii)
a refusal to perform call-out work if the employee would otherwise receive a special payment for performing that work.
(3)
Before making any deduction, the employer must comply with the notice requirements in section 95B.
(4)
The amount of the deduction must be calculated in accordance with section 95C.
(5)
To avoid doubt, a deduction under this section—
(a)
may relate only to the employee’s salary or wages that are payable for the day of the partial strike or the period of the partial strike (whichever applies under section 95C):
(b)
does not require an employer to have suspended or locked out the employee.
95B Notice of specified pay deduction
(1)
If an employer intends to make specified pay deductions in relation to a partial strike, the employer must give notice to each employee who is, or will be, party to the strike that the employer will make those deductions.
(2)
A notice under subsection (1) may be given only if the employer has received notice of the partial strike in accordance with this Part or section 589 of the Education and Training Act 2020 (whichever applies).
(3)
A notice under subsection (1) must—
(a)
be in writing; and
(b)
specify the relevant pay period or relevant pay periods in respect of which the employer will make a deduction; and
(c)
be given—
(i)
as soon as is reasonably practicable; and
(ii)
before the first deduction is made or the end of the first relevant pay period specified under paragraph (b) (whichever comes first).
(4)
If 2 or more of the employer’s employees are parties to a partial strike, the employer may, instead of giving notice to each of those employees, give notice under this section by—
(a)
providing a single notice to all those employees or their union; or
(b)
providing a notice to each of those employees, with the same wording in each notice.
(5)
To avoid doubt,—
(a)
an employer may choose the method of giving notice under this section:
(b)
the validity of a notice is not affected merely because it is also given to employees who are not subject to the specified pay deduction (for example, non-striking employees):
(c)
if the partial strike continues over more than 1 pay period, the employer is not required to give notice more than once:
(d)
a notice under this section is not required to specify the amount or proportion of a specified pay deduction:
(e)
the validity of a notice is not affected if the employer recovers a specified pay deduction as an overpayment under section 6 of the Wages Protection Act 1983.
(6)
In this section, relevant pay period means a pay period within which an employee will, in the normal course of events, be paid for a period within which a partial strike, or part of a partial strike, occurred.
95C Calculation of specified pay deduction
(1)
An employer must calculate the amount of a specified pay deduction by—
(a)
ascertaining, for the employee or group of employees, the usual hours of work for the day of the partial strike (which may be by reference to information contained in the wages and time record, the employment agreement, or a roster or any other document or record used in the normal course of the employee’s employment); and
(b)
identifying the work that the employee or employees will not be performing because of that strike (which must be by reference to the information contained in the relevant strike notice); and
(c)
estimating how much time the employee or employees would, but for the strike, have spent performing the work referred to in paragraph (b) on the day of the strike; and
(d)
calculating the time referred to in paragraph (c) as a percentage of the employee’s or employees’ usual hours of work (as ascertained for the purposes of paragraph (a)).
(2)
The percentage referred to in subsection (1)(d) is the percentage of the employee’s or employees’ salary or wages that may be deducted.
(3)
However, despite subsections (1) and (2), an employer may, instead of calculating and applying a deduction in accordance with those provisions, impose a 10% deduction on the salary or wages that are payable to the employee or employees for the period of the partial strike (which must be ascertained by reference to the information contained in the relevant strike notice), regardless of whether the amount of deduction calculated in accordance with subsection (1) would have been more or less than 10%.
(4)
An employer may calculate and apply a specified pay deduction in respect of a group of employees only if each member of the group performs work of the same, or a similar, nature.
95D Relationship between specified pay deduction and minimum wage
(1)
Section 6 of the Minimum Wage Act 1983 does not apply to an employee who receives payment at less than the applicable minimum rate of wages prescribed under section 4, 4A, or 4B of that Act if the payment—
(a)
is the result of a specified pay deduction; or
(b)
is, in the case of an employee who is paid by piece work, the result of—
(i)
the employee being party to a partial strike; and
(ii)
the employee’s normal output being reduced because of the employee being party to that partial strike.
(2)
Subsection (1)(a) applies only in relation to a period during which deductions may be made under sections 95A to 95C.
Rights of union in relation to specified pay deductions
95E Union may request information about application or calculation of specified pay deduction
(1)
This section applies if an employee or a group of employees considers that the employer has incorrectly made applied or calculated a specified pay deduction in relation to that employee or those employees.
(2)
The union representing that employee or those employees may request that the employer provide the union with the information relied on to make apply or calculate the specified pay deduction under section 95A.
(3)
A request under subsection (2) must—
(a)
be in writing; and
(b)
be made as soon as is reasonably practicable after the pay day on which the deduction was first made.
(4)
To avoid doubt, this section does not permit an employee, or a group of employees, to request the information from the employee’s, or employees’, employer.
95F Employer must respond to request for information about application or calculation of specified pay deduction
(1)
If an employer has received a request under section 95E, the employer must provide the union with—
(a)
all information relied on by the employer to make apply or calculate the specified pay deduction under section 95A; and
(b)
an explanation of how the calculation under section 95C(1) and (2), or the 10% deduction under section 95C(3), was applied to make the deduction from the employee’s or employees’ salary or wages under section 95A.
(2)
The employer must provide the information and explanation—
(a)
in writing; and
(b)
as soon as is reasonably practicable after the employer receives the request.
95G Resolution of problem relating to specified pay deduction
(1)
This section applies if, having considered the information and explanation provided under section 95F, the an employee or group of employees is not satisfied that the specified pay deduction was made correctly. considers that the employer has—
(a)
incorrectly applied, notified, calculated, or recovered a specified pay deduction in relation to that employee or those employees (including incorrectly notified recovery of an overpayment):
(b)
failed to comply with section 95F.
(2)
The union, on behalf of that employee or those employees, must give the employer notice of that fact, and the matter must be dealt with as an employment relationship problem.
(2A)
However, if the notice concerns the application or calculation of the specified pay deduction, the notice may be given only if—
(a)
the union has complied with section 95E; and
(b)
either—
(i)
the employer has failed to comply with section 95F; or
(ii)
the employer has complied with section 95F and the employee or group of employees has considered the information and explanation provided.
(3)
The union must provide the notice—
(a)
in writing; and
(b)
as soon as is reasonably practicable after the union receives the information and explanation. becomes aware that the employee or group of employees considers that the employer has incorrectly applied, notified, calculated, or recovered a specified pay deduction or failed to comply with section 95F.
(4)
If the employer and the union are unable to resolve the problem (including by way of mediation), the union may lodge an application with the Authority in accordance with section 158.
7 Section 100 amended (Jurisdiction of court in relation to injunctions)
(1)
After section 100(1)(b), insert:
(c)
to stop a specified pay deduction that is being, or is to be, made.
(2)
After section 100(2)(b), insert:
(c)
to stop a specified pay deduction that is being, or is to be, made.
(3)
After section 100(3), insert:
(4)
Subsection (5) applies if any action or proceedings seeking the grant of an injunction to stop a specified pay deduction that is being, or is to be, made are commenced in the court, and the court is satisfied that—
(a)
the employer is entitled to make a deduction under section 95A; and
(b)
notice has been given in accordance with section 95B; and
(c)
the deduction has been correctly calculated in accordance with section 95C.
(5)
If the court is satisfied of the matters specified in subsection (4)(a) to (c),—
(a)
the court must dismiss that action or those proceedings; and
(b)
no proceedings seeking the grant of an injunction to stop that specified pay deduction may be commenced in the District Court or the High Court.
8 Section 161 amended (Jurisdiction)
After section 161(1)(l), insert:
(la)
any proceedings related to a partial strike (other than those founded on tort or seeking an injunction):
In section 161(1)(l), after “strike”
, insert “(including a partial strike)”
.
9 Schedule 1AA amended
In Schedule 1AA,—
(a)
insert the Part set out in the Schedule of this Act as the last Part; and
(b)
make all necessary consequential amendments.
Part 2 Consequential amendments to other Acts
Consequential amendments to Wages Protection Act 1983
10 Principal Act
Section 11 amends the Wages Protection Act 1983.
11 Section 6 amended (Employer may recover overpayments in certain circumstances)
(1)
In section 6(1), definition of recoverable period, after “pay any wages”
, insert “or, if the employer is entitled to make a specified pay deduction, any part of any wages”
.
(2)
In section 6(1), insert in its appropriate alphabetical order:
specified pay deduction has the same meaning as in section 82AA of the Employment Relations Act 2000
(3)
After section 6(3)(b), insert:
(ba)
in the case of an overpayment that relates to a specified pay deduction, that notice—
(i)
is given no later than 10 working days after the pay day on which the overpayment was made; and
(ii)
specifies the method that the employer used to calculate the deduction (being either the method specified in section 95C(1) and (2) of the Employment Relations Act 2000 or the method specified in section 95C(3) of that Act); and
Consequential amendments to Education and Training Act 2020
12 Principal Act
Sections 13 and 14 amend the Education and Training Act 2020.
13 Section 586 amended (Negotiation of conditions of employment)
In section 586(3), replace “lock out employees or suspend striking employees” with “lock out employees, suspend striking employees, or make specified pay deductions”.
In section 586(3), replace “suspend striking employees”
with “suspend, or make specified pay deductions in respect of, striking employees”
.
14 Section 587 amended (Public Service Commissioner’s powers when collective agreements are negotiated)
(1)
Replace section 587(2) with:
(2)
To avoid doubt and without limiting subsection (1), the powers referred to in that subsection include the power to—
(a)
lock out employees:
(b)
suspend employees:
(c)
make specified pay deductions.
(2)
After section 587(4), insert:
(4A)
In any case where the Public Service Commissioner intends to make a specified pay deduction, the Commissioner may give a direction that a specified pay deduction is to be made.
(3)
In section 587(5), after “subsection (4)”
, insert “or (4A)”
.
(4)
In section 587(6),—
(a)
after “subsection (4)(b)”, insert “or (4A)”; and
(b)
after “section 6(3)(b)”, insert “or (ba)”.
(4)
In section 587(6), after “subsection (4)(b)”
, insert “or (4A)”
.
15 Section 589 amended (Strikes in schools to be notified)
Replace section 589(2)(a) with:
(a)
the nature of the proposed strike, including—
(i)
whether or not the proposed action will be continuous; and
(ii)
whether or not the employees will continue to perform some work for their employer while undertaking the proposed action; and
Schedule New Part 7 inserted into Schedule 1AA
s 9
Part 7 Provisions relating to Employment Relations (Pay Deductions for Partial Strikes) Amendment Act 2024
23 Employer may not make specified pay deductions for partial strikes that occurred before commencement
(1)
In this Part, 2024 amendment Act means the Employment Relations (Pay Deductions for Partial Strikes) Amendment Act 2024.
(2)
Section 95A of this Act (as inserted by the 2024 amendment Act) does not apply in relation to—
(a)
a partial strike that ended before the commencement of the 2024 amendment Act; or
(b)
any period of a partial strike that occurred before the commencement of the 2024 amendment Act.
Legislative history
9 December 2024 |
Introduction (Bill 104–1) |
|
10 December 2024 |
First reading and referral to Education and Workforce Committee |
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Versions
Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill
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Commentary
Recommendation
The Education and Workforce Committee has examined the Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill and recommends by majority that it be passed. We recommend all amendments unanimously.
Introduction
The Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill would amend the Employment Relations Act 2000 and make consequential amendments to the Wages Protection Act 1983 and the Education and Training Act 2020.
Partial strikes are industrial actions by employees that are less than a full withdrawal of labour. Under the current law, employers’ main options for responding to a partial strike are to take no action, or to suspend or lock out employees and deduct all pay for that period as if it were a full strike. The bill would give employers the ability to make pay deductions in response to partial strikes. A similar mechanism was in place between 2015 and 2018.
The bill would give employers two alternative ways to calculate pay deductions, should they wish to make them. They could either: deduct 10 percent of an employee’s pay for the period of the partial strike; or reduce an employee’s pay by a proportionate amount (calculated using a specified method).
The bill would require employers to give notice of the pay deductions and sets out the dispute resolution process that would apply in relation to a dispute about pay deductions for a partial strike.
Legislative scrutiny
As part of our consideration of the bill, we have examined its consistency with principles of legislative quality. The majority of us have no issues regarding the legislation’s design to bring to the attention of the House.
Proposed amendments
This commentary covers the main amendments we recommend to the bill as introduced. We do not discuss minor or technical amendments.
Circumstances where pay deductions cannot be made
New section 95A would allow an employer to make a specified pay deduction from the salary or wages of an employee who is a party to a partial strike. Subsection (2) sets out the circumstances in which an employer is not allowed to make a specified pay deduction.
Submissions highlighted that the differences between subsections (2)(c) and (2)(d) are unclear. Both subsections relate to a refusal to work overtime or a refusal to perform call-out work for which the employee would otherwise receive a special payment.
We were advised that subsection (2)(c) was intended to cover strikes where a refusal to work overtime or perform call-out work was the only action. Subsection (2)(d) was intended to cover situations where a refusal to work overtime or perform call-out work was part of a range of strike actions.
Subsection (2)(d) would cover both situations described above. Therefore, we recommend deleting new section 95A(2)(c), as it is unnecessary.
Notice of specified pay deduction
New section 95B would require an employer to give notice to an employee if the employer intends to make a specified pay deduction in relation to a partial strike. Subsection (2) provides that the employer could only do so if they have received notice of the partial strike in accordance with Part 8 of the Act.
We note that the bill is intended to cover partial strikes in schools. However, the notice requirements for strikes in schools are specified in section 589 of the Education and Training Act 2020. Therefore, we recommend amending new section 95B to also refer to strike notices made under section 589 of the Education and Training Act 2020.
Requirements for strike notices
The Employment Relations Act sets out the requirements for strike notices made by employees. These are in:
section 86A (Notice of strike)
section 90 (Strikes in essential services)
section 93 (Procedure to provide public with notice before strike in certain passenger transport services).
Similarly, section 589 of the Education and Training Act contains requirements for strike notices in schools.
Under the current law, strike notices must specify the “nature of the proposed strike”. We were advised that where a strike action involves the refusal to perform particular tasks, it may not be clear from the strike notice whether the employees will still perform other work (a partial strike) or not perform any work during the time when they would have been completing those tasks (a full strike).
We consider it useful for strike notices to make the intention clear. We therefore propose that the bill be amended to require employees’ strike notices to specify whether the employees would continue to do some work during the strike period. This would help employers to determine whether the strike action is a partial strike. We recommend inserting clauses 5A, 5B, 5C, and 15 accordingly.
Calculation of specified pay deduction
New section 95C sets out how an employer would be required to calculate the amount of specified pay deduction for a partial strike. Subsection (1)(a) would require the employer to ascertain, for the employee or group of employees, the “usual hours” of work for the day of the partial strike. Submissions suggested that further guidance be provided on how to ascertain employees’ usual hours of work in this context.
We propose that the bill draws on the definition of “usual hours” in section 130 of the Act. This would mean the employer could ascertain the “usual hours” by referring to information in the wages and time record, the employment agreement, or a roster or any other document or record used in the normal course of the employee’s employment. We recommend amending new section 95C accordingly.
Resolution of problem relating to specified pay deduction
New sections 95E, 95F, and 95G provide for the rights of unions (acting on behalf of employees) if they have concerns in relation to specified pay deductions:
If an employee, or group of employees, who is party to a partial strike considers that the employer has made a specified pay deduction incorrectly, new section 95E would allow the union representing the employee(s) to request that the employer provide it with the information used to make the specified pay deduction.
New section 95F would require the employer to provide the requested information to the union, including an explanation of how the specified pay deduction was calculated.
New section 95G would allow a union to raise an employment relationship problem if the employee or group of employees it represents is not satisfied that the specified pay deduction was made correctly. Before the union does so, new section 95G in the bill as introduced requires that the employee or group of employees must have considered the information and explanation provided by the employer under new section 95F.
An employment relationship problem in relation to a specified pay deduction may not be about the information requested and provided under new sections 95E and 95F. For example, a union may raise concerns about the notice requirements (under new section 95B or section 6 of the Wages Protection Act) or the requirement to provide information about the specified pay deduction (under new section 95F).
We do not consider that unions should be required to request and consider information under new sections 95E and 95F before raising an employment relationship problem under new section 95G if the dispute does not relate to the application or calculation of the pay deduction. Therefore, we recommend amending the above three new sections to reflect this.
New Zealand Labour Party differing view
The New Zealand Labour Party opposes this bill and the specific legislative changes that reduce a worker’s right to take strike action. This bill would unjustly affect workers’ ability to advocate for their best interests and tips the balance of workplace negotiations unfairly in the employer’s favour.
Partial strikes have been a tool for workers to engage in industrial action in a way that makes their point effectively whilst not unsustainably reducing the output of their workplace. Imposing sanctions on partial strikes, as evidenced in the select committee submissions, increases the likelihood that full strikes would be undertaken.
The regulatory impact statement (RIS) claims that these proposed changes aim “to restore better balance to collective bargaining situations”. It argues that employers are disadvantaged because they cannot make proportionate responses to partial strikes undertaken by employees during bargaining. This reasoning fundamentally ignores that employers can respond to partial strikes under the current law through suspension of employees.
The RIS also shows no robust evidence on the effectiveness of the bill. Clear evidence of the impacts of these measures should be available as these amendments have been previously enacted and repealed; however, the evidence of the effectiveness of these proposals towards the Minister’s aims has not been provided.
The bill undermines Aotearoa New Zealand’s obligations under international labour standards. Relevant statements in the RIS in relation to consistency with international obligations including labour standards were redacted. The bill misaligns with ILO Convention 98 (Right to Organise and Collective Bargaining Convention, 1949) in that it enables discriminatory treatment of workers engaging in lawful union activity.
The bill specifies that a partial strike can be defined as “a reduction in the employees’ normal performance of work, normal output, or normal rate of work”. Yet, the bill allows sanctions for actions undertaken as part of a partial strike that cannot reasonably be construed as impacting upon the worker’s “normal performance of work”. It also ignores the unfairness of this proposal that would mean that an employer could deduct 10 percent of an employee’s wages for any partial strike even if that partial strike did not mean the employee was not doing 100 percent of their job, for example if the employer determined wearing a union badge on a uniform was a partial strike.
It is our view the bill will damage relationships between employers and employees, is a solution looking for a problem with no evidence provided for the alleged issue, and further impacts an industrial landscape where good faith, trust, and co-operation have been sacrificed for ideologically political purposes.
Green Party of Aotearoa New Zealand differing view
The Greens oppose this bill and believe that the right of workers to organise collectively to advance their interests must be protected and that upholding the right of workers and their unions to campaign for political, environmental, social, and work-related industrial issues and, importantly, the right to strike. There is no evidence to show that the partial strike provisions which existed from 2018 to now have encouraged more or longer industrial action. There are a number of negative consequences of this bill. One is that this provision could lead to manifestly unjust consequences, such as workers losing pay for partial strike action. Another is the chilling effect that this bill will create, in conjunction with other industrial relations measures that this Government has advanced and proposed. This bill will make it more difficult for workers to take strike action for better pay and conditions, tipping the balance further in favour of employers, keeping wages low and enabling more of the income share to go to capital rather than labour.
Appendix
Committee process
The Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill was referred to the committee on 10 December 2024. The House instructed us to report the bill back no later than 22 April 2025. We invited the Minister for Workplace Relations and Safety to provide an oral submission on the bill. She did so on 19 February 2025.
We called for submissions on the bill with a closing date of 30 January 2025. We received and considered submissions from 620 interested groups and individuals. We heard oral evidence from 20 submitters at hearings in Wellington and via videoconference.
Advice on the bill was provided by the Ministry of Business, Innovation and Employment. The Office of the Clerk provided advice on the bill’s legislative quality. The Parliamentary Counsel Office assisted with legal drafting.
Committee membership
Katie Nimon (Chairperson)
Carl Bates
Camilla Belich (until 12 March 2025)
Mike Butterick (until 29 January 2025)
Shanan Halbert (from 12 March 2025)
Francisco Hernandez (from 29 January 2025)
Grant McCallum
Dr Parmjeet Parmar
Hon Willow-Jean Prime (from 12 March 2025)
Hon Jan Tinetti (until 12 March 2025)
Hon Phil Twyford
Dr Vanessa Weenink (from 29 January 2025)
Dr Lawrence Xu-Nan (until 29 January 2025)
Related resources
The documents received as advice and evidence are available on the Parliament website.