Fair Pay Agreements Amendment Regulations 2023

2023/68

Coat of Arms of New Zealand

Fair Pay Agreements Amendment Regulations 2023

Rt Hon Dame Helen Winkelmann, Administrator of the Government

Order in Council

At Wellington this 8th day of May 2023

Present:
Her Excellency the Administrator of the Government in Council

These regulations are made under section 283 of the Fair Pay Agreements Act 2022—

(a)

on the advice and with the consent of the Executive Council; and

(b)

on the recommendation of the Minister for Workplace Relations and Safety made in accordance with sections 5(3) and 283 of that Act.

Regulations

1 Title

These regulations are the Fair Pay Agreements Amendment Regulations 2023.

2 Commencement

These regulations come into force on 8 June 2023.

3 Principal regulations

These regulations amend the Fair Pay Agreements Regulations 2022.

4 New Part 1 heading inserted

After regulation 4, insert:

Part 1 Applications to initiate bargaining

5 Regulation 13 and cross-heading replaced

Replace regulation 13 and the cross-heading above regulation 13 with:

Part 2 Mandatory content

13 Application

This Part applies to certain aspects of the mandatory content of each fair pay agreement (see section 123 of the Act).

14 Agreement must specify mandatory content as it applies to each class of employees

(1)

If the mandatory content of a fair pay agreement is the same for all covered employees, the agreement need specify the mandatory content only once.

(2)

If the mandatory content of a fair pay agreement applies differently to a specified class of employees in accordance with sections 130 to 137 of the Act, the agreement must specify the mandatory content (in accordance with these regulations) separately for each such class of employees.

Class of covered employees

15 Specification of class of covered employees

(1)

Subclause (2) applies if a fair pay agreement includes terms that apply to a class of covered employees that are different from the terms that apply to another class of covered employees under the same fair pay agreement, and the terms relate to 1 or more of the following matters:

(a)

minimum base wage rates (see regulation 16):

(b)

overtime rates (see regulation 19):

(c)

penalty rates (see regulation 20):

(d)

adjustments to any of the rates listed in paragraphs (a) to (c) (see regulations 17 and 21):

(e)

standard hours of work (see regulation 18):

(f)

leave entitlements of a type that is covered in Part 2 of the Holidays Act 2003 (see regulation 22).

(2)

The fair pay agreement must—

(a)

describe each class of covered employees, by specifying 1 or more of the following:

(i)

the occupation or occupations of the covered employees within the class:

(ii)

the role or roles within each specified occupation:

(iii)

the district or districts in which the employees work (see section 136 of the Act); and

(b)

comply with regulations 16 to 22 in relation to each class of covered employees.

(3)

If a fair pay agreement provides the same entitlements for the matters listed in subclause (1) for all covered employees—

(a)

in all occupations covered by the agreement, the agreement may specify that those entitlements apply to all occupations within the coverage of the agreement:

(b)

in all roles within a specified occupation, the agreement may specify that those entitlements apply to all roles within the specified occupation:

(c)

in all districts of New Zealand, the agreement may specify that those entitlements apply nationally.

Minimum base wage rates

16 Minimum base wage rates

(1)

For the purpose of section 123(1)(d)(i) of the Act, a fair pay agreement must specify the minimum base wage rate, other than a starting-out rate of wages or a training rate of wages, by either or both of the following methods:

(a)

specifying the minimum base wage rate as an amount, in which case the agreement must specify, for each type of work covered by the agreement and for each class of covered employees,—

(i)

the amount that an employee is paid per hour; or

(ii)

that an employee is to be paid the hourly amount prescribed under section 4 of the Minimum Wage Act 1983:

(b)

specifying a method of calculating the minimum base wage rate, in which case the agreement must specify, for each type of work covered by the agreement and for each class of covered employees,—

(i)

a percentage of the amount prescribed under section 4 of the Minimum Wage Act 1983; or

(ii)

a formula to calculate the minimum base wage rate (for example, by reference to data published by Statistics New Zealand).

(2)

For the purposes of sections 131 to 133 of the Act, a fair pay agreement must—

(a)

specify a starting-out rate of wages or specify that a starting-out rate of wages is not payable under the fair pay agreement; and

(b)

specify a training rate of wages or specify that a training rate of wages is not payable under the fair pay agreement.

(3)

If a fair pay agreement specifies a starting-out rate of wages or a training rate of wages, it must be expressed as being 1 or more of the following:

(a)

a percentage of the applicable minimum base wage rate specified in the fair pay agreement under subclause (1):

(b)

a percentage of the amount prescribed under section 4 of the Minimum Wage Act 1983:

(c)

an hourly amount:

(d)

in the case of the starting-out rate of wages, a percentage of the amount prescribed under section 4A of the Minimum Wage Act 1983:

(e)

in the case of the training rate of wages, a percentage of the amount prescribed under section 4B of the Minimum Wage Act 1983.

17 Adjustments to minimum base wage rates

For the purpose of section 123(1)(d)(iv) of the Act, a fair pay agreement must specify that the minimum base wage rate, including any starting-out rate of wages and any training rate of wages, is adjusted by 1 or more of the following methods:

(a)

increasing it to a new rate on a specified date:

(b)

applying a specified percentage to the rate on a specified date:

(c)

applying a percentage to the rate, which is determined by reference to data published by Statistics New Zealand, on a specified date:

(d)

applying a specified formula to the rate on a specified date or after a specified event.

Standard hours, overtime rates, and penalty rates

18 Standard hours

For the purpose of section 123(1)(c) of the Act, a fair pay agreement must specify the standard hours for each type of work covered by the agreement and for each class of covered employees under the agreement by specifying—

(a)

the days of the week on which standard hours occur; and

(b)

the hours on those days that are standard hours.

19 Overtime rates

(1)

For the purpose of section 123(1)(d)(ii) of the Act, a fair pay agreement must specify an overtime rate for each type of work covered by the agreement and for each class of covered employee under the agreement by specifying 1 or more of the following:

(a)

an hourly rate:

(b)

a percentage of the applicable minimum base wage rate that is payable (which percentage must not be less than 100%):

(c)

a formula to calculate the overtime rate (for example, by reference to data published by Statistics New Zealand).

(2)

The fair pay agreement must specify when overtime rates are payable by reference to 1 or both of the following (but see section 124 of the Act):

(a)

the total hours that the employee has worked in a week before they are entitled to be paid the overtime rate:

(b)

the total hours that the employee has worked on a specified day before they are entitled to be paid the overtime rate.

20 Penalty rates

(1)

For the purpose of section 123(1)(d)(iii) of the Act, a fair pay agreement must specify penalty rates for each type of work covered by the agreement and for each class of covered employees under the agreement by specifying 1 or more of the following:

(a)

an hourly rate:

(b)

a percentage of the applicable minimum base wage rate that is payable (which percentage must not be less than 100%):

(c)

a formula to calculate the penalty rate (for example, by reference to data published by Statistics New Zealand).

(2)

The fair pay agreement must specify when the penalty rates are payable by specifying (but see section 124 of the Act)—

(a)

the hours (which must not include any of the standard hours specified under regulation 18) or days on which penalty rates are payable; or

(b)

that all hours worked, other than the standard hours, are hours for which penalty rates are payable.

21 Adjustments to overtime rates and penalty rates

For the purpose of section 123(1)(d)(iv) of the Act, a fair pay agreement must specify that each overtime rate and each penalty rate is adjusted by 1 or more of the following methods:

(a)

increasing it to a new rate on a specified date:

(b)

applying a specified percentage to the rate on a specified date:

(c)

applying a percentage to the rate, which percentage is determined by reference to data published by Statistics New Zealand, on a specified date:

(d)

applying a specified formula to the rate on a specified date or after a specified event.

Leave entitlements

22 Leave entitlements

(1)

For the purpose of section 123(1)(f) of the Act, a fair pay agreement must specify each leave entitlement for each type of work covered by the agreement, and for each class of covered employees, by specifying,—

(a)

if the leave entitlement is of a type that is covered in Part 2 of the Holidays Act 2003, that the relevant leave entitlement is the same as, or greater than, the entitlement provided in that Act; or

(b)

in all other cases, the information required by regulation 23.

Example

In relation to annual holidays provided under subpart 1 of Part 2 of the Holidays Act 2003, a fair pay agreement may specify 1 or more of the following:

(a)

that a class of covered employees is entitled to a specified amount more than the minimum annual holidays provided under section 16(1) of that Act:

(b)

that the annual holiday pay for a class of covered employees is paid at a higher rate than the rate specified in section 22(2)(b) of that Act.

(2)

For the purpose of section 128 of the Act, if a leave entitlement is expressed as a specified amount, it must be expressed using the same unit of time as that used in the Holidays Act 2003 for the corresponding type of leave.

23 Additional types of leave

If a fair pay agreement provides employees performing a type of work covered by the agreement, or a class of covered employees, with a leave entitlement other than leave of a type provided by Part 2 of the Holidays Act 2003, the agreement must specify—

(a)

the name of the leave; and

(b)

a description of the leave; and

(c)

the circumstances in which an employee is entitled to the leave (which may include, for example, how long an employee must work for an employer to be entitled to take the leave and when the employee may take the leave); and

(d)

the extent of the leave (for example, the maximum number of days of the leave that an employee may take in a specified period); and

(e)

the rate of pay that the employee must be paid when taking the leave; and

(f)

whether any remaining leave balance must be paid out on the termination of the employee’s employment.

Part 3 Miscellaneous

Default bargaining parties

24 Default bargaining parties

(1)

The employee default bargaining party is New Zealand Council of Trade Unions Te Kauae Kaimahi Incorporated.

(2)

The employer default bargaining party is Business New Zealand Incorporated.

Form of fair pay agreement notice if notice amends coverage of fair pay agreement

25 Form of fair pay agreement notice if notice amends coverage of fair pay agreement

(1)

A fair pay agreement notice issued by the chief executive under section 168(1)(b) of the Act to amend the coverage of a fair pay agreement must contain the following information:

(a)

a statement that the chief executive has amended the coverage of the fair pay agreement in accordance with the requirements of section 150 or 166 of the Act, as relevant:

(b)

identification of the proposed agreement and the fair pay agreement that had a coverage overlap:

(c)

the FPA reference number of the proposed agreement and the fair pay agreement:

(d)

the amended coverage of the fair pay agreement, described in accordance with the requirements of regulation 10:

(e)

any other information the chief executive considers relevant.

(2)

In this regulation,—

department means the department, departmental agency, or interdepartmental venture (as named in Part 1, 2, or 4 of Schedule 2 of the Public Service Act 2020) that, with the authority of the Prime Minister, is responsible for the administration of this legislation

FPA reference number means, in relation to a proposed agreement or a fair pay agreement, the reference number issued by the department when the chief executive received the application for approval to initiate bargaining for the proposed agreement.

Rachel Hayward,
Clerk of the Executive Council.

Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on 8 June 2023, amend the Fair Pay Agreements Regulations 2022 (the principal regulations).

Regulation 4 inserts a new Part 1 heading after regulation 4 of the principal regulations to provide a better legislative structure.

Regulation 5 replaces regulation 13 of the principal regulations with new Parts 2 and 3. New Part 2 relates to terms that section 123 of the Fair Pay Agreements Act 2022 (the Act) requires to be included in each fair pay agreement (mandatory content). It provides details of how a fair pay agreement must specify some, but not all, of the mandatory content. Mandatory content that is not addressed in these regulations is still mandatory, but may be provided in the form agreed by the bargaining sides to the fair pay agreement.

New regulation 13 sets out how the requirements of new Part 2 apply to the mandatory content of a fair pay agreement.

New regulation 14 requires a fair pay agreement to specify mandatory content as it applies to each class of employees. If the fair pay agreement does not have classes of employees, it need only specify the mandatory content once.

New regulation 15 sets out how a fair pay agreement must set out certain terms if they apply to different classes of employees in different ways.

New regulation 16 requires a fair pay agreement to specify—

  • the minimum base wage rate, either as a specified amount or by specifying a method of calculation; and

  • certain matters relating to a starting-out rate of wages and a training rate of wages.

New regulation 17—

  • requires a fair pay agreement to specify the method by which adjustments to the minimum base wage rate will be made; and

  • sets out the permissible methods by which adjustments to the minimum base wage rate may be paid.

New regulation 18—

  • requires a fair pay agreement to specify standard hours of work; and

  • sets out how those standard hours of work must be specified.

New regulation 19—

  • requires a fair pay agreement to specify overtime rates for each type of work covered by the agreement and for each class of covered employee under the agreement; and

  • sets out how those overtime rates must be specified.

New regulation 20—

  • requires a fair pay agreement to specify penalty rates for each type of work covered by the agreement and for each class of covered employee under the agreement; and

  • sets out how those penalty rates must be specified.

New regulation 21—

  • requires a fair pay agreement to specify the method by which each overtime rate and penalty rate is adjusted; and

  • sets out the permissible methods by which overtime rates and penalty rates may be adjusted.

New regulation 22 requires a fair pay agreement to specify each leave entitlement for each type of work covered by the agreement and for each class of covered employees, with reference to entitlements under Part 2 of the Holidays Act 2003 or new regulation 23, as relevant.

New regulation 23 sets out the information that a fair pay agreement must specify in relation to a type of leave not provided for under Part 2 of the Holidays Act 2003.

New Part 3 consists of—

  • new regulation 24, which carries over (without change) regulation 13 of the principal regulations as it was immediately before the commencement of these regulations. This regulation sets out the default bargaining parties and has been moved to provide a better legislative structure in the principal regulations:

  • new regulation 25, which sets out the information that must be provided in a notice made by the chief executive of the Ministry of Business, Innovation, and Employment under section 168(1)(b) of the Act to amend the coverage of a fair pay agreement.

Issued under the authority of the Legislation Act 2019.

Date of notification in Gazette: 11 May 2023.

These regulations are administered by the Ministry of Business, Innovation, and Employment.