This note is not part of the order, but is intended to indicate its general effect.

This order, which comes into force on 14 December 2012, modifies and extends the operation of the Sleepover Wages (Settlement) Act 2011 (the Act) to give effect to a settlement agreement reached between the Te Awamutu Residential Trust and certain of its employees. The settlement relates to the payment of wages to employees who are permitted to sleep overnight at their workplace while on duty (sleepover wages).

The Act implements a settlement of litigation between Idea Services Limited and Timata Hou Limited and their employees (the Idea settlement) relating to the payment of sleepover wages. Subpart 1 of Part 2 of the Act extinguishes certain claims for sleepover wages in the health and disability sector, and subpart 2 of Part 2 of the Act implements the terms of the Idea settlement.

Subpart 1 of Part 2 of the Act already applies to the Te Awamutu Residential Trust, because it applies to all employers in the health and disability sector funded through Vote Health. It extinguishes claims relating to sleepovers performed before the Act commenced if those claims were lodged after 5 pm on 2 September 2011. Claims filed before that time are preserved. Section 9 of the Act extinguishes claims by employees of Idea Services Limited and Timata Hou Limited for sleepover wages. It is not necessary to extend the application of this section to the Te Awamutu Residential Trust and its employees, because no employees lodged claims regarding sleepover wages before the specified time.

Clause 5 extends the effect of subpart 2 of Part 2 of the Act (which implements the Idea settlement) to the Te Awamutu Residential Trust and its employees, but with certain modifications that are set out in clauses 6 and 7.

Sections 21 and 22 of the Act provide for a staged progression towards the minimum hourly wage payable under the Minimum Wage Act 1983. Clause 6 modifies section 21 of the Act, which sets out an employee’s entitlements for sleepovers performed between 1 July 2011 and 17 October 2011 (being the date immediately before commencement of the Act), and when those entitlements must be paid. The modification provides that the amount payable to employees of the Te Awamutu Residential Trust for sleepovers performed during this time is either an amount calculated in accordance with the agreed transitional formula (which is defined in clause 4) or the amount the employee would have received immediately before this order comes into force (whichever is greater). The agreed transitional formula reflects the agreement reached between the parties. The formula differs from the formula set out in the Act for calculating the wages payable for sleepovers performed during the same period in 2 ways as follows:

• it uses a variable to reflect the number of hours in the sleepover:

• the order in which the operations are performed produces a lower result.

Clause 6(3) provides that the amount payable for sleepovers performed between 1 July 2011 and 17 October 2011 must be paid no later than 2 months after the date of commencement of this order. Section 28(c) of the Act permits this modification of the date on which payment is due only if the relevant Minister is satisfied that the proposed period has been agreed to by a simple majority of the employer’s employees. The Minister has indicated that he is so satisfied.

Clause 7 modifies section 22(1) of the Act, which sets out how sleepover wages are to be calculated for sleepovers performed after commencement of the Act by those employees to whom subpart 2 of Part 2 of the Act applies. The section implements a staged progression towards payment of the full minimum hourly wage payable under the Minimum Wage Act 1983. The effect of clause 7 is to modify the staged progression set out in the Act in the following ways:

• for sleepovers performed in the period between 18 October 2011 and 30 June 2012, an employee of the Te Awamutu Residential Trust must be paid an amount calculated in accordance with the agreed transitional formula, rather than in accordance with the Act:

• the period of time during which an employee of the Te Awamutu Residential Trust must be paid at least 75% of the applicable minimum hourly rate is extended to the close of 30 June 2013:

• if, before the commencement of this order, an employee of the Te Awamutu Residential Trust would have received an amount greater than that specified in this order, he or she will be entitled to be paid that greater amount.