Among the Government’s long list of employment policies, the recently introduced Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill 2024 (Bill) has been referred to the Education and Workforce Select Committee following an extended period for public submissions.
This article addresses the proposed scope of the Bill and its potential impact.
The status quo
Since 2018, employers have not been allowed to deduct wages if their employees partially strike and must continue to pay salary or wages, or attempt to suspend or lock out an employee. This contrasts with an employer’s options if there is a full strike in which case, generally, an employee is not entitled to remuneration.
In response to this, the Government has introduced the Bill as an apparent means to rebalance collective bargaining situations, where the alternatives are continuing to pay partially striking employees or taking more disruptive approaches.
What is a partial strike?
The Bill would reintroduce the following definition of a partial strike, which:
- means an act of the employees who are a party to a strike in continuing 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,–
- a partial discontinuance of work through a refusal or failure to accept engagement for work that forms part of the employees’ normal duties:
- a reduction in the employees’ normal performance of work, normal output, or normal rate of work:
- means an act of the employees who are a party to a strike in breaking 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
This replicates the status quo before 2018.
Proposed pay deductions
The Bill proposes that if an employee or employees partially strike – in particular circumstances and provided appropriate notice is given – an employer could make a “specified pay deduction” from the wages of an employee who partially strikes.
In the Bill’s current iteration, the specified pay deduction is either:
- Calculated proportionately to the partial strike action; or
- 10% of the employee’s salary or wages payable.
However, in the Ministry of Business, Innovation and Employment’s (MBIE) Regulatory Impact Statement for the Bill, MBIE made the following observations:
- Undertaking a proportionate assessment could be impractical and time consuming, “particularly where there are large workforces involved or it is highly difficult to quantify the amount of an employees’ time/output being impacted by the partial strike.”
- A 10% deduction could be disproportionate in response to low-level partial strikes, citing wearing a union shirt in place of uniform as an example.
- If there was only a 10% deduction, this also risks incentivizing greater partial strike action.
Our comments
Given the range of actions that fall in the scope of partial strikes, the Bill does raise questions of proportionality in practice. Given the possible complications with calculating the impact of a partial strike, the ease of applying a flat 10% deduction risks employees facing disproportionate consequences to collective action.
Where the specified pay deductions mean an employee could be paid less than minimum wage and this concern has appeared in various submissions and in the House, we anticipate receiving more information on this as the Select Committee reports back.
We expect that as the Bill progresses, it will also be subject to further criticism from unions and workers, because partial strikes are often considered a form of collective action that minimises disruption to services.
If you have any concerns or queries in respect of the Bill or any other employment law aspects, please do not hesitate to contact a member of Lane Neave’s experienced employment law team.
