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Fair Pay Agreements Bill (Consistent) (Sections 14, 16, 17, 19, 21) [2022] NZBORARp 4 (9 March 2022)
Last Updated: 3 April 2022
![2022_400.jpg](2022_400.jpg)
9 March 2022
LEGAL ADVICE
LPA 01 01 24
Hon David Parker, Attorney-General
Consistency with the New Zealand Bill of Rights Act 1990: Fair Pay Agreements
Bill
Please find attached our advice about the consistency
of this Bill with the New Zealand Bill of Rights Act 1990. We have concluded
that the Bill appears to be consistent with that Act.
Details of the Bill
|
Hon Michael Wood
|
Bill Type:
|
Government Bill
|
Committee:
|
Cabinet Economic Development Committee
|
Meeting Date:
|
16/03/2022
|
Recommendations
Note the attached advice about the consistency of the Bill with the
New Zealand Bill of Rights Act 1990.
|
YES / DISCUSS
|
Direct the Ministry of Justice to publish the advice on its
website.
|
YES / NO
|
Refer a copy of the advice to the Minister for Workplace Relations
and Safety.
|
YES / NO
|
Refer a copy of the advice to the Minister of Justice.
|
YES / NO
|
Contacts for telephone discussion (if required)
Name
|
Position
|
Telephone
|
1st contact
|
(work)
|
(a/h)
|
Jeff Orr
|
Chief Legal Counsel
|
04 494 9755
|
027 221 6859
|
|
Hannah Gray
|
Lead Bill of Rights Advisor
|
021 149 6024
|
|
✓
|
Stella Ivory
|
Policy Advisor
|
04 471 7418
|
|
|
|
|
|
Hannah Gray Lead Bill of Rights Advisor Policy Group
|
|
Hon David Parker Attorney-General
/ / 2022
|
![2022_400.jpg](2022_400.jpg)
9 March 2022
LEGAL ADVICE
LPA 01 01 24
Hon David Parker, Attorney-General
Consistency with the New Zealand Bill of Rights Act 1990: Fair Pay Agreements
Bill Purpose
- We
have considered whether the Fair Pay Agreements Bill (the Bill) is consistent
with the rights and freedoms affirmed in the New
Zealand Bill of Rights Act 1990
(the Bill of Rights Act).
- We
have not yet received a final version of the Bill. This advice has been prepared
in relation to the latest version of the Bill
(PCO 21869/26.0). We will provide
you with further advice if the final version includes amendments that affect the
conclusions in
this advice.
- We
have concluded that the Bill appears to be consistent with the rights and
freedoms affirmed in the Bill of Rights Act. In reaching
that conclusion, we
have considered the consistency of the Bill with s 14 (freedom of expression), s
16 (freedom of peaceful assembly),
s 17 (freedom of association), s 19 (freedom
from discrimination) and s 21 (freedom from unreasonable search and seizure).
Our analysis
is set out below.
Summary
- The
Bill creates a framework for the collective bargaining of Fair Pay Agreements
(FPAs) and sets out the general principles and obligations
to guide parties in
bargaining FPAs.
- The
Bill’s explanatory note states that FPAs will enable employers and
employees to collectively bargain minimum employment
terms and conditions for
covered employees that will be binding on an industry or occupation.
- The
Bill makes provisions for information sharing between bargaining parties, and
employers and employees; and restricts strikes and
lockouts related to the
bargaining of FPAs. These provisions engage the right to freedom of expression,
freedom of peaceful assembly,
as well as the freedom of association. The
membership and coverage of FPAs also engages freedom of association. Access to
workplaces
for union members and labour inspectors engages freedom from
unreasonable search and seizure. Some provisions related to the requirements
of
Māori representation as part of the FPA framework and processes engage
freedom from discrimination.
- We
have concluded that, to the extent that the Bill limits these rights and
freedoms, the limits are justified. The Bill therefore
appears to be consistent
with the rights and freedoms affirmed in the Bill of Rights
Act.
The Bill
- The
purpose of the Bill is to provide a framework for collective bargaining for
FPAs, which will specify industry-wide or occupation-wide
minimum employment
terms.
- The
Bill’s explanatory note explains that the main objective is to drive an
enduring and system-wide change that improves labour
market outcomes, including
more equitable distribution of benefits from increased labour productivity. It
seeks to achieve this by
enabling employers and typically low
bargaining-power employees to collectively bargain minimum employment terms and
conditions for
covered employees that will be binding on an industry or
occupation.
- The
Bill outlines the process that provides for FPAs to be developed,
including:
- General
principles and obligations of FPAs which include that membership is voluntary,
that FPAs must not be used to determine preferences
or as a lever of influence
for either the employer or the employee, and that FPAs must be developed in good
faith.
- The
process and guidelines for:
- initiating
FPA bargaining, and forming bargaining sides for both the employer and the
employee
- FPA
meetings and union access to workplaces and bargaining for the proposed FPA
- the
content and form of FPAs, and their finalisation, variation and renewal,
and
- the
penalties and enforcement of FPAs, and the role of relevant institutions such as
the Employment Relations Authority (the Authority)
and the Labour
Inspector.
- The
resulting FPAs will be given force via secondary legislation and will bind a
whole industry or occupation.
Consistency of the Bill with the Bill of Rights Act Section 14 – Freedom
of expression
- Section
14 of the Bill of Rights Act affirms the right to freedom of expression,
including the
freedom to seek, receive, and impart information and
opinions of any kind in any form. The right to freedom of expression has also
been interpreted as including the right not to be compelled to say certain
things or to provide certain information.1
Sharing of relevant information across bargaining parties
- There
are several provisions throughout the Bill that require bargaining sides to
share relevant information to facilitate bargaining
of an FPA. For example, cl
30 requires an employer to provide employee information to the employee
bargaining side, cl 44 where the
chief executive must provide each bargaining
party with the name of each other bargaining party for the proposed FPA, and cl
108
where bargaining parties must inform employers and employees about who is or
is not covered by the proposed FPA. Clause 110 outlines
the requirements for
employers to notify employees who may be covered by the proposed FPA, and that
the employee can elect not to
have their details provided to the bargaining
side.
- These
provisions prima facie limit the freedom of expression under s 14 of the
Bill of Rights Act. Where a provision is found to limit a particular right or
freedom,
it may nevertheless be consistent with the Bill of Rights Act if it can
be considered a reasonable limit that is
1 See, for example, Slaight
Communications v Davidson 59 DLR (4th) 416; Wooley v Maynard [1977] USSC 59; 430 US
705 (1977).
demonstrably justified in a free and democratic society, under s 5 of that
Act. Justification under s 5 occurs where the limit seeks
to achieve, and is
rationally connected to, a sufficiently important objective; impairs the right
or freedom no more than reasonably
necessary to achieve the objective; and is
otherwise in proportion to the importance of the
objective.2
- The
objective of the Bill is to create a framework for bargaining of FPAs and
facilitate a process to enable employers and employees
to collectively bargain
minimum employment terms and conditions for covered employees that will be
binding on an industry or occupation.
We consider this to be an important
objective.
- The
provisions highlighted in paragraph 13 above relate to sharing information
(including personal details where necessary) between
employers, employees and
bargaining parties for the purposes of negotiating, ratifying and maintaining
FPAs. The required information
is largely factual and relates to communication
about, and clarity of who and what, is covered by FPAs across these groups.
These
processes are integral to enabling the important objective of this Bill to
be met.
- We
consider that, to the extent that these provisions engage the right in s 14 (as
to whether such information is truly ‘expressive’
in nature), they
do not limit the right any more than is reasonably necessary to allow FPAs to be
negotiated, ratified and maintained,
and are in proportion to that objective.
These provisions are justified in terms of s 5 of the Bill of Rights
Act.
Strike or lockouts in relation to an FPA
- Clause
123B of the Bill makes participation in a strike or lockout unlawful, if the
strike or lockout3 relates to bargaining for a proposed
FPA. Lockouts and strikes are forms of expression and any legislative curbs on
these activities
may be seen as limitations on the freedom of expression rights
of workers and employers.
- As
explained above, the limitations on freedom of expression raised by cl 123B may
be consistent with the Bill of Rights Act if the
limitations are reasonable and
are justifiable under s 5 of that Act.
- The
obligation of good faith is a key feature of the FPA system. It provides a basis
for the parties, when bargaining, to be active
and constructive in establishing
and maintaining productive relationships, and aims to minimise the parties
resorting to industrial
action. The restriction on strikes and lockouts appears
to be necessary to facilitate that obligation of good faith. While industrial
action, such as strikes and lockouts, may be a part of bargaining, the objective
of the FPA system would likely erode if the parties
can take industrial action
during the bargaining process. We consider the limitations on the right to
freedom of expression are rationally
connected to the success of the FPA
system.
- We
also consider the restriction impairs the right no more than reasonably
necessary to achieve that objective and is otherwise in
proportion to the
importance of the objective. In coming to this conclusion we note that the
restrictions on the ability to strike
and lockout relates only to bargaining for
a proposed FPA and does not extend to strike or lockouts on grounds of safety or
health.4 Further, instead of resorting to industrial
action to resolve an impasse, the bargaining parties are encouraged to use the
disputes
resolution mechanisms
2 See Hansen v R [2007] NZSC 7,
[2007] 3 NZLR 1 (SC).
3 ‘Strike’ and ‘lockout’ are
defined in ss 81 and 82 of the Employment Relations Act 2000.
4 Employment Relations Act 2000, s 84.
available to them under the Bill, such as applying to the Authority to fix
the terms of a proposed agreement where the parties are
unable to
agree.5 We therefore consider the limit to be justified
under s 5 of the Bill of Rights Act.
Sections 16 and 17 – Freedom of Association and Freedom of Peaceful
Assembly
- Section
17 of the Bill of Rights Act affirms that everyone has the right to freedom of
association. The right to freely associate
is directed towards the right to form
or participate in an organisation, to act collectively, rather than simply to
associate as
individuals.6 The right recognises that
everyone should be free to enter a consensual arrangement with others and
promote common interests of the
group. By protecting the right of individuals to
decide freely whether they wish to associate with others, it also includes the
right
not to associate.
- Section
16 of the Bill of Rights Act provides that everyone has the right to freedom of
peaceful assembly. The choice of method, place,
and time of peaceful assembly is
integral to the free exercise of that
right.7
Universal coverage of
FPAs
- The
purpose of the Bill, as expressed in cl 3 is to provide a framework for
collective bargaining for FPAs which will specify industry
wide or occupation
wide minimum employment terms. FPAs will have universal coverage, within the
relevant industry or occupation,
and aims to improve labour market outcomes for
covered employees, in particular those with low bargaining power.
- As
was observed by Gault J in Eketone v Alliance Textiles (NZ) Ltd
“the right to elect and pursue collective bargaining arises out of,
but generally are not regarded as elements of, the freedom
of
association.”8 As such, we are of the view that
the decision to elect and pursue bargaining of an FPA does not amount to an
associational activity
protected by the right to freedom of association.
- We
also do not consider the universal coverage of the FPA engages s 17, because
while two people who enter into a contract might be
described as
‘associating’, they could not be considered to have an
‘association’ within the meaning of s
17.9
In any case, we note that there is nothing preventing an employer and a
covered employee agreeing a term in an employment agreement
that is more
favourable to the employee than the corresponding term provided in the FPA, if
they wish to do so.10
Voluntary
membership of a union or an employer association
- We
have also considered whether the Bill engages the right not to join an
association, noting that membership of a union or an employer
association is
voluntary.11 Where a benefit is so great as to
practically compel or induce an individual to become part of an
5 Clause 172.
6 Moncrief-Spittle v Regional Facilities Auckland
Limited [2021] NZCA 142 [30 April 2021] at [113].
7 Brooker v Police [2007] NZSC, 30 at [116]
per McGrath J.
8 Eketone v Alliance Textiles (NZ) Ltd [1993]
2 ERNZ 783 (CA) at 796.
9 Andrew Butler and Petra Butler, The New Zealand
Bill of Rights Act: A Commentary (2nd ed, LexisNexis, Wellington, 2015) at
[15.7.2]. See also Turners & Growers Ltd v Zespri Group Ltd (No 2)
(2010) 9 HRNZ 365 (HC) at [73].
10 Clause 123.
11 Clause 7.
association, the extent of the inducement may give rise to an issue of
inconsistency with the right to freedom of
association.12
- However,
we have concluded that it does not engage s 17 of the Bill of Rights Act as cl
10 and 11 prohibit conferring on an employee
or employer any benefit or
opportunity because they are or are not a member of a union or an employer
association. While cl 10(2)
provides that an FPA can provide that a union member
payment may be paid to an employee, who is within coverage and a member of a
union, we do not consider it to be sufficient to constitute a breach. This is
because the union member payment cannot be more in
total than the amount of the
employees’ union membership fees for the period covered by the
FPA.13
Industrial action – strikes
and lockouts
- The
restriction on industrial action at cl 123B of the Bill engages the right to
freedom of association and peaceful assembly. Like
freedom of expression, the
limitations on these freedoms may be consistent with the Bill of Rights Act if
the limitations are reasonable
and are justified under s 5 of that Act.
- The
rights to freedom of association, and peaceful assembly, as particular
manifestations of expression, are intimately bound together.
Justification for
the limits imposed on these freedoms by cl 123B are identical to those outlined
above in paragraphs 20 and 21 of
this advice. We therefore conclude that the
limits imposed by cl 123B are justified under s 5 of the Bill of Rights
Act.
Section 19 – Freedom from discrimination
- Section
19(1) of the Bill of Rights Act affirms that everyone has the right to freedom
from discrimination on the grounds set out
in the Human Rights Act 1993 (the
Human Rights Act).
- The
key questions in assessing whether there is a limit on the right to freedom from
discrimination are:14
- (a) does the
legislation draw a distinction on one of the prohibited grounds of
discrimination under s 21 of the Human Rights Act;
and, if so
- (b) does the
distinction involve disadvantage to one or more classes of
individuals?
- A
distinction will arise if the legislation treats two comparable groups of people
differently on one or more of the prohibited grounds
of discrimination. Whether
disadvantage arises is a factual determination.15
12 Air New Zealand Ltd v Trustees of
the New Zealand Airline Pilots Mutual Benefit Fund [2000] 1 NZLR 418 (HC) at
429. Randerson J considered that while the benefits of a fund created some
incentive for pilots or flight engineers to join NZALPA
he did not consider that
to be sufficient to create a breach of s 17. He noted that “[t]he position
may be different where
the extent of the inducement is so great as to amount to
a practical compulsion to join an employees organisation so as to obtain
the
relevant benefits.” See also Canadian Supreme Court decision Lavigne v
Ontario Public Service Employees Union [1991] 2 S.C.R 211.
13 Clause 10(4)(c).
14 See, for example, McAlister v Air New Zealand
[2009] NZSC 78, [2010] 1 NZLR 153; Ministry of Health v Atkinson
[2012] NZCA 184, [2012] 3 NZLR 456; and Child Poverty Action Group Inc v
Attorney-General
[2013] NZCA 402, [2013] 3 NZLR 729.
15 See, for example McAlister v Air New Zealand
above n 14 at [40] per Elias CJ, Blanchard and Wilson JJ
- Clauses
throughout the Bill provide for explicit Māori representation. For example,
cl 37 provides an obligation to ensure representation
of Māori employees,
cl 159 (2) (d) and (e) provide for Māori representation in mediation
services of Māori employees
and employers who are covered by an FPA, and cl
167 outlines that bargaining parties may apply to the Authority about how a
sufficient
level of Māori representation and input can be ensured. We have
considered if this distinction between Māori and non-Māori
is in a
manner that amounts to discrimination on the basis of race.
- We
have concluded that giving greater emphasis to Māori representation and
input in FPA processes and outcomes does not amount
to discrimination on the
ground of race. This emphasis is necessary to give effect to the Crown’s
commitment under te Tiriti
o Waitangi in a meaningful and practical
way.
Section 21 – Freedom from unreasonable search and seizure
- Section
21 of the Bill of Rights Act affirms that everyone has the right to be secure
against unreasonable search or seizure, whether
of the person, property,
correspondence or otherwise. The right protects a number of values including
personal privacy, dignity,
and property.16
- The
Bill provides that a representative of a union is entitled to enter the
workplace without the employer’s consent, if the
primary purpose of
entering the workplace is to discuss, with a covered employee or an employee who
may be affected by bargaining
for a proposed FPA, variation, proposed renewal or
proposed replacement. A workplace does not include a
dwellinghouse.17
- There
are a number of conditions on access.18 A union
representative exercising the right to enter a workplace may do so only at
reasonable times during any period when a covered
employee is employed to work
in the workplace, must do so in a reasonable way, having regard to normal
business operations, must
comply with any existing reasonable procedures and
requirements relating to safety, health or security and must at the time of
initial
entry or if requested, give the purpose of entry and produce evidence of
the union representative’s identity and authority
to represent the
union.19 Access to workplaces may be denied if entry
would prejudice the security or defence of New Zealand, or the investigation or
detection
of offences.20 Where a certificate of
exemption has been issued, access to the workplace may be denied on religious
grounds.21 The Bill provides that every person is
liable to a penalty who, without lawful excuse, refuses to permit a union
representative to
enter a workplace, obstructs entry to the workplace, or
wilfully fails to comply with conditions relating to
access.22
- The
Bill also gives new powers to Labour Inspectors.23 For
the purpose of determining whether an employee is covered by a FPA, a Labour
Inspector has the power to enter, at any reasonable
hour, any premises where any
person is employed or where the Labour Inspector has reasonable cause to believe
that any person is
employed (including the
16 See, for example, Hamed v R
[2011] NZSC 101, [2012] 2 NZLR 305 at [161] per Blanchard J.
17 Clause 56.
18 Clause 57.
19 Clause 59.
20 Clause 59A.
21 Clause 59B.
22 Clause 60.
23 Clauses 185H-185I.
premises of a controlling third party) accompanied, if the Labour Inspector
thinks fit, by any other employee of the department qualified
to assist or by a
constable. A Labour Inspector also has powers to interview and to require
production of specified records. An employer
or controlling third party must
supply the requested information immediately and is liable to a penalty if they,
without reasonable
excuse, fail to comply. A Labour Inspector is not able to use
any information or evidence obtained through the exercise of these
powers for
any purpose other than to determine whether an employee is covered by a FPA.
- Ordinarily,
a provision found to limit a particular right or freedom may nevertheless be
consistent with the Bill of Rights Act if
it can be considered reasonably
justified in terms of s 5 of that Act. However, the Supreme Court has held that
an unreasonable search
logically cannot be reasonably justified and therefore
the inquiry does not need to be undertaken.24 As such,
the question with respect to the search and seizure powers under the Bill is
whether they are reasonable. The reasonableness
of a search can be assessed with
reference to the purpose of the search and the degree of intrusion on the values
which the right
seeks to protect.
- Powers
to search and seize can relate to entering premises in order to conduct
regulatory or administrative tasks and to examine records
required to be kept by
a regulator.25 We consider that allowing union
representatives to enter workplaces without the employer’s consent, and
the powers given to
Labour Inspectors to enter premises, without the
employer’s consent, and to require production of records, engages section
21.
- However,
we consider that the search and seizure powers in the Bill are reasonable. There
are conditions to ensure that entry is done
in a reasonable manner, entry is
permitted for a limited purpose connected to an administrative or regulatory
function, the expectations
of privacy for a workplace are lower than for a
private dwelling, penalties for non-compliance are low and are civil not
criminal,
and a Labour Inspector may use any information produced only to
determine whether an employee is covered by an FPA.
- On
this basis, we consider that the search and seizure powers contained in the Bill
are reasonable and consistent with the Bill of
Rights
Act.
Conclusion
- We
have concluded that the Bill appears to be consistent with the rights and
freedoms affirmed in the Bill of Rights Act.
![2022_402.jpg](2022_402.jpg)
Jeff Orr
Chief Legal Counsel Office of Legal Counsel
24 Cropp v Judicial
Committee [2008] 3 NZLR 744 at [33]; Hamed v R, above n 16, at
[162].
25 Butler, above n 9, at 18.4.8.
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