Law changes to collective bargaining

The duty of good faith does not require collective agreement to be concluded

Before the law change, parties bargaining for a collective agreement were required to conclude that agreement unless there was genuine reason not to. The change means that a collective agreement does not have to be concluded, however parties must still deal with each other in good faith. Employers will not be able to end bargaining or refuse to enter into a collective agreement simply because they object in principle to collective bargaining or collective agreements. The ER Act continues to have provisions for parties undertaking collective bargaining, including sections 4 and 32 that require parties involved in bargaining to act in good faith.

The ER Act says what parties must do to act in good faith, including:

  • deal with each other in good faith
  • be active and constructive in establishing and maintaining a productive employment relationship in which they are, among other things, responsive and communicative
  • unions and employers cannot undermine or do anything likely to undermine bargaining.

What happens if there is deadlock over an issue?

The Act provides some protections against parties that end bargaining by deadlocking on one issue. Specifically, either party can seek a declaration from the Employment Relations Authority (the Authority) about whether bargaining has concluded. The process is discussed in more detail below.

The Authority may declare bargaining has concluded

There is a process for one party to apply to the Authority for a determination that bargaining has concluded where there is no collective agreement.

The Authority must not make a determination that bargaining has concluded unless:

  • it is satisfied that the party applying for a determination has acted in good faith
  • it has considered whether the parties have tried to resolve the difficulties through mediation and (if applicable) facilitation under the Act, and
  • it considers mediation (or further mediation) or facilitation should not be ordered for any of the reasons set out in the Act.

If the Authority determines that bargaining has not concluded, it may recommend a process parties should follow to resolve the difficulties. Before going to facilitation, the parties must meet one of the grounds for facilitation under section 50C of the ER Act. For instance the parties did not undermine bargaining by failing to act in good faith or did not engage in unduly protracted bargaining.

If the Authority declares that bargaining has concluded, neither party can start bargaining again for at least 60 days after the declaration, unless they both agree. Where the Authority determines that bargaining has not concluded, none of the parties may make another application until any recommended process has been followed. If there was no recommended process, none of the parties can make another application for at least 60 days after the Authority’s determination, unless the other parties agree.

Criteria for the Authority when determining bargaining has concluded

The Authority must consider whether the party seeking the declaration has acted in good faith (as described in sections 4 and 32 of the ER Act). Where a party has not observed good faith relating to the bargaining and this has undermined the bargaining and the failure has not been rectified, the Authority cannot make a determination or declaration that bargaining has concluded.

The Authority must take into account whether parties have used dispute resolution processes set out in the ER Act.

The Act currently provides for how parties must undertake collective bargaining. Sections 4 and 32 require parties involved in bargaining to act in good faith and specify things parties must do to act in good faith. Changes to the Act will provide that the Authority must take into account whether or not parties have used the dispute resolution processes available to them to determine if collective bargaining has concluded.

Where an agreement has not been reached, the Authority is unlikely to determine that bargaining has concluded if the parties have not used the dispute resolution processes from the ER Act. However there are exceptions to this in section 50K(2)(c) or section 159(1)(b) of the Act.

Grace periods

When a declaration is made by the Authority the parties will not be able to start bargaining again for at least 60 days after the declaration (unless all parties agree to return to bargaining earlier). This is intended to give parties a break from bargaining and any associated strike action.

The grace period tries to balance the need for a break after difficult and protracted bargaining, with people’s rights to collectively bargain or strike for a collective agreement.

Timeframe for returning to the Authority where it is determined that bargaining has not concluded

If the Authority determines that bargaining has not concluded, parties must continue to bargain for at least 60 days before they can return to the Authority to seek another determination on whether bargaining has concluded. This process applies unless the Authority has recommended a particular process for the parties to follow.

This is intended to ensure parties try to make real progress to reach agreement before going back to the Authority.

Where the Authority recommends the parties follow a particular process to use to reach agreement, the parties cannot go back to the Authority before that process has been completed. If the recommended process is completed within 60 days and agreement still has not been reached, the parties may return to the Authority.

Removing the ‘30-day rule’ for new employees who are not union members

The ‘30-day rule’ required new employees (who were not union members) to be employed on the terms and conditions in the collective agreement for their first 30 days on the job – if their work was covered by a collective agreement. They could only add terms and conditions that were not inconsistent with (i.e. not lesser than the terms and conditions of the relevant collective agreement). After 30 days, the employer and employee could agree to change the individual agreement as they saw fit (unless the employee joined the union).

The removal of this rule means employees who are not union members can negotiate an individual agreement as they see fit from the start of their employment, even if there is a collective agreement that covers their work.

Employers will still have to give new employees a copy of the applicable collective agreement and proposed IEA. Employees can still join a union at any time and be covered by the terms and conditions of the applicable collective agreement.

When bargaining may be initiated

Under this change unions and employers will be able to initiate bargaining no earlier than 60 days before the expiry of the collective agreement. Where there is more than one collective agreement in force the parties will not be able to initiate bargaining before whichever of the following dates is later:

  1. 120 days before the date on which the last applicable collective agreement expires or
  2. 60 days before the first applicable collective agreement expires.

Continuation of collective agreements

Currently, a collective agreement continues in force for up to 12 months after it expires, only if the union initiated bargaining before the collective agreement expired and bargaining is still taking place. Under the changes a collective agreement also continues if an employer has initiated the bargaining.

Employer may opt out of bargaining for a multi-employer collective agreement

These changes let employers opt out of bargaining for a multi-employer collective agreement (MECA). To opt out an employer must give written notice to all other parties within 10 days of getting notice of initiation. The notice takes effect from the day each party gets it.

Employers can opt out where a new MECA is proposed, where a current MECA is being renegotiated, or where employers are cited to join an existing MECA. However, the ability to opt-out of bargaining only applies at initiation.

Where an employer opts out, the employer or union can then initiate bargaining for a single employer collective agreement (SECA).

Even if an employer opts out, they can still be cited as a party to any future multi-party bargaining. Currently, employers have 10 days from the initiation of bargaining to tell employees:

  • bargaining has started for a collective agreement
  • what work it covers
  • who all the parties are.

Changes to section 43 under the Act will give employers an extra five days – after the ten currently allowed. This will mean that where more than one employer is cited in the initiation of bargaining, employers will have five further days (after the ten-day opt-out period) to tell employees about the initiation of bargaining.

Employers may choose not to take part because:

  • they do not want to bargain together with competitors
  • they believe bargaining can be expensive in terms of the time and resources needed
  • they believe a MECA will not meet their organisation’s needs.

Written notice in advance needed for all strikes and lockouts

This change means unions or employers must give written notice of any proposed action, before it starts, to:

  • the other party (employers or unions)
  • the Chief Executive of MBIE.

(Currently only essential services, certain rail and passenger transport services and schools are required to give advance notice of strikes or lockouts related to collective bargaining.)

While notice must be given before the action takes place, the law does not say how much notice must be given.

The notice must include:

  1. the period of notice which is being given
  2. what the strike or lockout action is about
  3. whether the action will be continuous
  4. where the action will happen
  5. the date and time the action will begin
  6. the date and time the action will end, or what event will end the action.

A representative of the employees’ union must sign the strike notice on the employees’ behalf. Strike notices will not need to give the employees’ names if notice is being given for all employees who are:

  • members of the union that is party to the bargaining
  • covered by the bargaining
  • employed in the relevant part of the workplace
  • employed anywhere where relevant work is done.

Lockout notices must include the names of the employees to be locked out and must be signed by the employer or on the employer’s behalf.

If any action will affect essential services then 14 days’ notice to an employer and the Chief Executive of MBIE is required. A period of 24 hours’ notice to an employer is required in regard to any action that will affect certain transport services. The change also adds certain types of work with mammals and birds to the list of essential services, Part B of Schedule 1. This change requires 3 days’ notice for a strike in industries slaughtering and processing these animals. This protects these animals’ welfare in case of a strike.

A failure to give the required notice will mean the strike or lockout will be unlawful.

A strike or lockout notice may be withdrawn at any time by written notice to the other party and the Chief Executive of MBIE. However there is no minimum time to give notice of withdrawal of action.

Note: With the new specified pay deductions to cover partial strikes, employers will need to know when a strike ends so they know when to restart normal pay.

Copy of notice to MBIE

MBIE must be notified so it can offer parties mediation to help settle disputes early. The notice will be used for administrative and statistical purposes, such as making sure that MBIE gets a ‘form 3’ for the strike or lockout.

Specified pay deductions for partial strikes

Employers have the option to reduce the pay (salary or wages) employees would have received if there was no partial strike. Before the change, employers’ only choices in relation to partial strikes were to:

  • suspend the employees
  • lock out the employees
  • accept employees only doing part of their work.

Now, an employer has the extra options of either:

  • reducing an employee’s pay by a proportionate amount (using the four-step formula from the ER Act)
  • deducting 10 per cent from pay.

They cannot do both.

Meaning of partial strike

A partial strike is any strike (as defined under section 81) where the employee is still doing some work. The definition of a strike in section 81 does not change.

If the employee stops working altogether, this is a full strike (as such, a full strike could be 1 hour, 15 minutes or 5 minutes, so long as the employee completely stops working in that time).

Partial strikes can include situations where employees:

  • do not do a particular task but are otherwise doing their normal work (such as, not answering phone calls)
  • reduce the normal performance of their work but are still working (such as, ‘working to rule’)
  • break their employment agreement in some way but are otherwise working (such as, refusing to wear their uniform)
  • do not do some work that they usually do but are still working
  • reduce their normal output or their normal rate of work (for example, a ‘go-slow’).

Specified pay deductions for partial strikes

If a strike is lawful on safety or health grounds, an employer cannot make pay deductions.

Employers cannot reduce pay for piece work because a partial strike reduces employees’ output which means that their pay will reduce proportionately. Adding a pay deduction on top of this would doubly penalise employees.

An employer cannot make a pay deduction in relation to a partial strike that involves an overtime ban or the employees not doing “call out” work.

Notifying employees of, and working out, pay deductions

If an employer decides to reduce workers’ pay because of a partial strike, they must give the workers written notice before making the deduction. It is unlawful for employers to reduce pay without giving notice. Notice must be given in the pay period in which the pay deduction is applicable. This notice can also apply to future pay periods if action is taking place over more than one pay period. However the notice must say which pay periods are affected.

Employers can send the notice to a group of employees and it is not invalid if it goes to people who are not affected by the notice. This allows the employer to give notice as soon as possible.

The employer does not need to include the amount of the deduction. However, if an employer has already calculated the amount, it would be good faith to include it. Where employees think their employer has made an incorrect pay deduction, their union can ask the employer to provide information about the pay deduction. If the notice contains the amount of pay deduction, it should go to individual employees to protect their privacy.

If the employer uses the four-step calculation (rather than the flat rate of 10 per cent), any pay deduction must be proportionate to the time the employee would have otherwise spent doing the work affected by the partial strike. Information on the type of action being undertaken (e.g. the work that is affected by the partial strike) must be included in the union’s notification to strike. The employer must estimate how much time an employee usually spends doing the work not being done as a proportion of their usual hours of work for that day.

Employers must follow these four steps to make a pay deduction in response to partial strikes:

  1. Identify the usual hours of work for the day of the partial strike for the striking employees.
  2. Identify the work that the employees will not be doing because of the strike (using the information in the strike notice).
  3. Estimate how much time the employees would have spent doing the work affected by the strike on the day of the strike.
  4. Calculate this time as a percentage of the employees’ usual hours of work for the day.

The percentage reached in step 4 is used to work out the deduction from employees’ pay.

Step 1 Step 2 Step 3 Step 4
Usual hours of work for the day What work won't be done? (by reference to the strike notice) How long would it have taken to do the work from step 2? Calculate B as a percentage of A
A = B = C = (B/A)

The employer can only reduce pay using this calculation or using a flat 10 per cent. Employers cannot ‘average’ the time an employee spends on certain work over a longer period than a day; the pay deduction must relate to the work not done on each day of a partial strike.

An employer does not need to work this out for each individual employee. They can use a group of workers who do similar work. An employer cannot reduce the pay of some striking workers and not others. For example where strike action is a ban on answering phone calls an employer can work out the deduction using the amount of time all receptionists spend answering phone calls. But the employer must calculate different proportions for the time executive assistants and IT workers spend answering phone calls.

Employers can rely on the strike notice to determine who is on strike

An employer can rely on the strike notice to determine which employees are on strike and therefore whose pay they can reduce.

A strike notice will say which employees will be on strike. It can be expressed as all employees who are members of the union doing the bargaining, are covered by the bargaining, and are employed at the place where the work is carried on.

Employees who do not want to strike, but are part of the group listed in the notice, must talk to the union about excluding them from the notice.

Pay deductions can result in payments that are below the minimum wage

There may be times employees are paid below the minimum wage after deductions are made. For instance, where an employee is not doing a particular task, but is still working on other things, their pay may be reduced by the amount proportionate to the time they usually spend on that task, on that day. This reduction may take them below the minimum wage (for every hour that they work). Even if an employee is working all of their normal hours, they may end up being paid less than usual.

Resolving disputes on pay deductions

If employees think their employer has made or calculated an incorrect deduction, they must contact their union. The union must act on their behalf.

The union must ask the employer in writing for the information they used to calculate the pay deduction and as soon as reasonably practicable after the payday on which the deduction was first made. (Employees cannot ask for the information directly from the employer.)

The employer must respond to the union’s request in writing as soon as reasonably practicable. Their answer must include all the information they used to calculate the deduction and explain how the calculation or the flat rate deduction was applied.

If the union considers that the employer made a mistake, they must tell the employer in writing, as soon as reasonably practicable after receiving the calculation information. Reasons for raising concerns might include:

  • the employer has not correctly estimated how long an employee usually spends doing the work not being done, or the employee’s usual hours
  • the employer has incorrectly included an employee with a group of workers who do not have similar duties.

The matter must be dealt with as an employment relationship problem. In the first instance, unions and employers should attempt to resolve any disputes themselves. Where they cannot resolve the matter, the union can apply to the Authority.

The Employment Relations Authority (the Authority) can resolve disputes on specified pay deductions

The Authority can treat specified pay deduction cases as a high priority, dealing with them ahead of cases that have been to mediation. The Authority can send the parties to mediation, if it considers that will resolve the dispute.

The Authority will decide whether the employer has calculated the pay deduction correctly. If the Authority finds that the calculation was wrong, it can decide the correct deduction.

If pay deductions have already begun, the Authority can order the employer to pay staff what they are owed within a practicable timeframe (an order for wage arrears).

A union can apply to the Court for an interim injunction to stop a pay deduction until the dispute is settled.

A Labour Inspector will not resolve disputes relating to specified pay deductions.

Recovery of overpayments

Where employers cannot make a pay deduction in time, the Wages Protection Act 1983 allows them to recover overpayments.

To recover the money, employers must meet the requirements in section 6 of the Wages Protection Act. They must also tell staff of the overpayment within 5 working days of the overpayment being made. Employers must say how much money will be recovered. Employees must get individual notices about how much will be recovered to protect their privacy.

Examples of how specified pay deductions work

Examples where the employer can make a specified pay deduction

Refusing to do a specific task (partial withdrawal of employment). Reduction also takes employee under the minimum wage.

William is a hotel cleaner. He is paid $15.00 an hour. He works 6 hours a day and normally cleans three hotel rooms in an hour.

William is taking part in partial strike action, where the cleaners are cleaning hotel rooms but not en suites. He is still doing his 6 hours of work per day but is doing other work instead of cleaning the en suites.

This is a partial rather than a total withdrawal of employment because William has withdrawn his labour only for a particular task, but is otherwise doing his work. Because it is a partial strike, his employer can make a proportionate pay deduction or a 10 per cent deduction in pay for the day of the strike.

William’s employer calculates the proportionate pay deduction like this:

Step 1: Identify the usual hours of work for the employee on the day of the partial strike

6 hours per day.

Step 2: Identify the work that the employee is not doing because of the strike, using the information in the strike notice

Not cleaning en suites.

Step 3: Estimate how much time the employee would have otherwise spent doing the work on the day of the strike

William’s employer estimates that he spends 5 minutes cleaning each en suite. He would normally clean 18 en suites (three rooms an hour for 6 hours) a day. This makes a total of 1 hour and 30 minutes of work that is not being done.

Step 4: Calculate the time from step 3 as a percentage of the employee’s usual hours of work (from step 1)

= 1 hour and 30 minutes / 6 hours = 25%.
William’s pay may be reduced by 25% for the day of the strike.

Step 1 Step 2 Step 3 Step 4
Usual hours worked? What work won't be done? How long would it have taken to do the work from step 2 (in hours)? Calculate B as a percentage of A
A = 6 Not cleaning en suites B = 1.5 C = B/A C = (1.5/6)
C = 0.25

To calculate the new wage rate:

C × Wage rate = deduction
0.25 × $15.00 = $3.75

So William’s hourly rate of pay for the day of the strike is $11.25 ($15.00 − $3.75 = $11.25). This means William is being paid less than the adult minimum wage rate of $14.25 per hour. He will get $67.50 instead of his usual $90 for 6 hours work.

Go slow (partial withdrawal of employment). Reduction also takes employee under the minimum wage.

William is a hotel cleaner. He is paid $15.00 an hour. He works 6 hours a day and normally cleans three hotel rooms in an hour.

William is doing a ‘go slow’. Instead of cleaning three hotel rooms an hour, he only cleans two. This is a partial rather than a total withdrawal of employment because William has partially withdrawn his labour by reducing his normal rate of work, but he is otherwise doing his work. Because it is a partial strike, his employer can make a proportionate pay deduction or a 10 per cent pay deduction for the day of the strike.

William’s employer calculates the proportionate pay deduction like this:

Step 1 Identify the usual hours of work for the employee on the day of the partial strike

6 hours per day.

Step 2: Identify the work that the employee will not be doing because of the strike, using the information from the strike notice

Go slow, not cleaning the number of hotel rooms he normally would in a day.

Step 3: Estimate how much time the employee would otherwise have spent doing the work on the day of the strike

His output is reduced so that he is cleaning six fewer hotel rooms in a day. William would normally have spent 20 minutes cleaning in each of the six hotel rooms he is not cleaning. This comes to a total of 2 hours for the day.

Step 4: Calculate the time referred to in step 3 as a percentage of the employee’s usual hours of work from step 1

2 hours / 6 hours = 33.3%.

Step 1 Step 2 Step 3 Step 4
Usual hours worked? What work won't be done? How long would it have taken to do the work from step 2 (in hours)? Calculate B as a percentage of A
A = 6 Six fewer rooms are being cleaned B = 2 C = B/A C = (2/6)
C = 0.333

To calculate the new wage rate:

C × Wage rate = deduction
0.333 × $15.00 = $5

So William’s rate of pay for the day of the strike is $10.00 ($15 − $5 = $10). This means William is being paid less than the adult minimum wage rate of $14.25 per hour. He will get $60 for 6 hours’ work instead of his usual $90.

Refusing to do a specific task(s) (partial withdrawal of employment).

Noah is a secondary school teacher. He is expected to work at least 8 hours a day. The teachers are taking partial strike action where they do not attend parent/teacher interviews; they are otherwise doing their jobs as normal (that is, they are teaching or preparing lessons or marking for 8 hours on the day of the strike).

If the teachers were doing nothing instead of attending the interviews, the strike would be considered a complete strike of 2 hours. If that were the case, the employer could not make a specified pay deduction from Noah’s pay. Where there is a complete strike, employers can suspend the employee. Suspended employees may not be entitled to pay.

For partial strike action, Noah’s employer can choose to make a proportionate pay deduction or a 10 per cent deduction in pay for the day of the strike.

Noah’s employer calculates the proportionate pay deduction like this:

Step 1: Identify the usual hours of work for the employee on the day of the partial strike

8 hours per day.

Step 2: Identify the work that the employee will not be doing because of the strike, using the information from the strike notice

Not attending parent/teacher interviews.

Step 3: Estimate how much time the employee would have otherwise spent doing the work on the day of the strike

Interviews were scheduled for 2 hours on that day.

Step 4: Calculate the time from step 3 as a percentage of the employee’s usual hours of work (from step 1)

2 / 8 hours = 25%

Noah’s pay may be reduced by 25% for the day of the strike.

Step 1 Step 2 Step 3 Step 4
Usual hours worked? What work won't be done? How long would it have taken to do the work from step 2 (in hours)? Calculate B as a percentage of A
A = 8 Attending parent/teacher interview B = 2 C = (B/A) C = (2/8)
C = 0.25

Refusal to do a specific task(s) (group example).

Sam, Sophie and James teach English at the local high school. They are expected to work at least 8 hours a day and there are five 1-hour classes in a day. The teachers are taking a partial strike where they are not teaching year 9s on Thursday. Instead of teaching, they will mark assignments and prepare for future classes.

On a Thursday,

  • Sam teaches three classes with year 9s
  • Sophie does not have any year 9s timetabled with her
  • James teaches two classes with year 9s.

This is a partial rather than a total withdrawal of employment because the teachers have partially withdrawn their labour for one task but are otherwise doing their work. Because it is a partial strike, their employer can make a proportionate pay deduction or a 10 per cent deduction in pay for the day of the strike.

The teachers’ employer can treat them as a group to calculate a proportionate pay deduction because the teachers are all covered by the strike notice and all do similar work.

The teachers’ employer calculates a proportionate pay deduction like this:

Step 1: Identify the usual hours of work for the group of employees on the day of the partial strike

Add together the usual hours of work that day for each person to find the total number of usual hours of work for the group:
8 hours a day each × 3 employees = 24 usual hours of work in total.

Step 2: Identify the work that employees will not be doing because of the strike, using the information in the strike notice

They will not be teaching year 9s.

Step 3: Estimate how much time the employees would have otherwise spent doing the work on the day of the strike

Add the time each individual would usually have spent doing the work that is not being done. The teachers would usually spend 5 hours teaching year 9 students that Thursday (Sam’s 3 + Sophie’s 0 + James’ 2 = 5 hours).

Step 4: Calculate the time from step 3 of the employees’ usual hours of work (from step 1)

5 / 24 = 20.8%

An employer can reduce Sam’s, Sophie’s and James’s pay by 20.8% for the day of the strike.

Step 1 Step 2 Step 3 Step 4
Usual hours worked? What work won't be done? How long would it have taken to do the work from step 2 (in hours)? Calculate B as a percentage of A
A = 24 Not teaching year nines B = 5 C = (B/A) C = (5/24)
C = 0.208

Only doing a specific task (partial withdrawal of employment).

Bella is a fire fighter. She works 12-hour shifts. The fire fighters are taking strike action where they only respond to emergency calls and remain on call at the firehouse. She will not be cleaning equipment, training, doing community awareness or filling out paperwork. During this shift Bella’s team had two emergency call outs, which took 2 hours in total. This is a partial rather than a total withdrawal of employment because Bella has partially withdrawn her labour for some tasks, but is otherwise doing her work (staying at the firehouse on call, working out and – when on night shift – sleeping). Because it is a partial strike, her employer can make a specified pay deduction (either a proportionate pay deduction using the calculation or a 10 per cent deduction) for the day of the strike.

Bella’s employer calculates a proportionate pay deduction like this:

Step 1: Identify the usual hours of work for the employee on the day of the partial strike

12 hours per shift.

Step 2: Identify the work that the employee is not doing because of the strike, using the information from the strike notice

All work (such as paperwork, educational work, training, equipment maintenance. etc), except emergency responses.

Step 3: Estimate how much time the employee would have otherwise spent doing the work on the day of the strike

10 hours.

Step 4: Calculate the time from step 3 as a percentage of the employee’s usual hours of work from step 1

10 / 12 = 83.3%

Bella’s pay may be reduced by 83.3% for the day of the strike.

Step 1 Step 2 Step 3 Step 4
Usual hours worked? What work won't be done? How long would it have taken to do the work from step 2 (in hours)? Calculate B as a percentage of A
A = 12 All work except emergency call outs B = 10 C = (B/A) C = (10/12)
C = 0.833

Failure to do specific task (partial withdrawal of employment).

Jonny is a laboratory assistant. He works 8 hours a day. The laboratory workers are taking partial strike action, where they only answer every third phone call. This is a partial strike because the laboratory assistants are still doing other work instead of answering the phone.

Because it is a partial strike, his employer can choose to make a specified pay deduction (either a proportionate pay deduction using the calculation or a 10 per cent deduction in pay) for the day of the strike.

Jonny’s employer calculates a proportionate pay deduction like this:

Step 1: Identify the usual hours of work for the employee on the day of the partial strike

8 hours per day – or 480 minutes.

Step 2: Identify the work that the employee will not be doing because of the strike, using the information from the strike notice

Answering two out of three phone calls.

Step 3: Estimate how much time the employee would have otherwise spent doing the work on the day of the strike

Laboratory assistants get about 21 calls a day, each call takes 5 minutes.
21 calls × 5 minutes = 105 minutes a day spent taking calls
2/3 = 66.7% of calls not being answered.
66.7% of 105 minutes = 70 minutes.

Step 4: Calculate the time from step 3 as a percentage of the employee’s usual hours of work, from step 1

70 minutes / 480 minutes (8-hour day) = 14.6%.
Jonny’s pay can reduced by 14.6% for the day of the strike.

Step 1 Step 2 Step 3 Step 4
Usual hours worked? What work won't be done? How long would it have taken to do the work from step 2 (in hours)? Calculate B as a percentage of A
A = 480 Answering 2 out of 3 phone calls B = 70 C = (B/A) C = (480/70)
C = 0.146

Failure to do specific task (partial withdrawal of employment).

Example of calculation as a group and where the deduction takes workers under the minimum wage.

Alisha, Stacey and Jessica are carers. The three carers all earn the minimum wage of $14.25 per hour. Carers must handover 15 minutes at the beginning and end of their shifts. The carers are taking partial strike action each day, over a week, where they refuse to do handovers. This is a 30-minute partial strike per day because they are doing other work instead of the handover.

Because it is a partial strike, their employer can choose to make a specified pay deduction (either a proportionate pay deduction using the calculation or a 10 per cent deduction in pay) for the day of the strike.

The carers’ employer can treat them as a group to calculate the proportionate pay deduction because the carers are all covered by the strike notice and all do similar work.

On Wednesday

  • Alisha works a 4-hour shift
  • Stacey works a 6-hour shift
  • Jessica works an 8-hour shift

Note: Where strikes are for more than 1 day, even if the hours worked are the same, employers must still calculate the specified pay deductions for each day of the strike.

The carers’ employer calculates their proportionate pay deduction for Wednesday below.

Step 1: Identify the usual hours of work for the group of employees on the day of the partial strike

Add together the usual hours of work for each person to find the total number of usual hours of work for that day: 4 + 6 + 8 = 18 hours.

Step 2: Identify the work that the employees are not doing because of the strike, using the information from the strike notice

Two handovers per shift.

Step 3: Estimate how much time the employees would have otherwise spent doing the work on the day of the strike

Add together the amount of time each individual would usually have spent doing the work that is not being done. The group of carers would usually spend 1 hour 30 minutes doing handovers that Wednesday. (Each carer spends 30 minutes a shift completing handover so 30 minutes × 3 = 1 hour 30 minutes.)

Step 4: Calculate the time from step 3 as a percentage of the employees’ usual hours of work (from step 1)

1 hour 30 minutes / 18 hours = 8.3%.
Each carer’s pay can be reduced by 8.3% for the day of the strike.

Step 1 Step 2 Step 3 Step 4
Usual hours worked? What work won't be done? How long would it have taken to do the work from step 2 (in hours)? Calculate B as a percentage of A
A = 18 Handovers B = 1.5 hours C = (B/A) C = (1.5/18)
C = 0.083

To calculate the new wage rate:

C × wage rate = deduction
0.083 × $14.25 = $1.12

So carers’ rate of pay for the day of the strike is $13.13 ($14.25 − $1.12 = $13.13). This means the carers are being paid less than the adult minimum wage rate.

Commission or piece rates (partial withdrawal of employment)

Lisa is a car salesperson. She is paid commission on each vehicle she sells. She is also paid $200 a week as a retainer ($40 per day). She works 8 hours every day, 5 days a week. Lisa’s partial strike action is to not clean the cars on the yard. This is a partial strike because while she is not cleaning cars, Lisa is available for customers and is doing other tasks that are part of her job. Lisa spends approximately 1 hour 30 minutes every day cleaning cars. On the day of the strike, Lisa sells one car from which she gets $325 commission.

Lisa’s partial strike action is not already proportionately reducing her pay; so her employer can make a specified pay deduction (either a proportionate pay deduction using the calculation or a 10 per cent reduction) to her pay that day.

Lisa’s employer calculates a proportionate pay deduction like this:

Step 1: Identify the usual hours of work for the employee on the day of the partial strike

8 hours.

Step 2: Identify the work that the employee is not doing because of the strike, using the information from the strike notice

Cleaning cars

Step 3: Estimate how much time the employee would otherwise have spent doing the work on the day of the strike

1 hour 30 minutes.

Step 4: Calculate the time from step 3 as a percentage of the employee’s usual hours of work from step 1

1 hour 30 minutes / 8 hours = 18.8%.

Lisa’s employer can reduce her pay that day by 18.8%, including the pay she earns from commission.

Step 1 Step 2 Step 3 Step 4
Usual hours worked? What work won't be done? How long would it have taken to do the work from step 2 (in hours)? Calculate B as a percentage of A
A = 8 Cleaning cars B = 1.5 C = (B/A) C = (1.5/8)
C = 0.188

Lisa’s pay for the day of the strike would have been $40 retainer + $325 commission = $365. To calculate her pay after the proportionate deduction:

C × pay = deduction
0.188 × $365 = $68.62

For the day of the strike, Lisa can be paid $296.38.

Work-to-rule (reducing performance)

Ross is a bus driver. The bus drivers will be working-to-rule as an industrial action. This means drivers will adhere to all provisions of their employment contracts such as:

  • checking the bus for lost property after a shift
  • not driving a bus that has a defect
  • taking 5 minutes on terminal duties at the end of each trip
  • drivers taking the breaks they need
  • exhaustively completing the checks required between routes
  • not working any overtime for free.

The action means that some buses might run late. The action is to run for two weeks.

On Monday, Ross is rostered to do a split shift where he works for 5.5 hours in the morning (6am–11.30, has 4.5 unpaid hours off and then starts an afternoon/evening shift of 5.5 hours (4pm–9.30pm).

The route he takes is a circuit that takes about 50 minutes to complete, and he does it six times. On Monday, because of the work-to-rule action, Ross does not finish his final circuit before the end of his morning shift (he has only done five of his six scheduled circuits). In the evening, he completes only four of the six circuits he is scheduled to do. His employer considers that it is custom and practice for drivers to complete the scheduled circuits of their routes.

Because it is a partial strike, his employer can make a proportionate pay deduction or a 10 per cent deduction in pay for the day of the strike.

Ross’s employer calculates a proportionate pay deduction like this:

Step 1: Identify the usual hours of work for the employee on the day of the partial strike

11 hours

Step 2: Identify the work that the employee is not doing because of the strike, using the information in the strike notice

Three out of 12 scheduled circuits of his route.

Step 3: Estimate how much time the employee would have otherwise spent doing the work on the day of the strike

50 minutes per circuit × 3 = 2 hours 30 minutes.

Step 4: Calculate the time from step 3 as a percentage of the employee’s usual hours of work from step 1

2.5 hours / 11 hours = 22.7%
Ross’ employer will make a proportionate pay deduction of 22.7% to Ross’ pay for Monday.

Step 1 Step 2 Step 3 Step 4
Usual hours worked? What work won't be done? How long would it have taken to do the work from step 2 (in hours)? Calculate B as a percentage of A
A = 11 Three out of 12 scheduled circuits B = 2.5 C = (B/A) C = (2.5/11)
C = 0.227

Refusal to wear uniform (breach of contract)

Charlie is a carer in a rest home. She works a 10-hour shift. The carers are taking partial strike action, where they will not wear their uniform. Wearing a uniform is part of Charlie’s employment agreement.

This industrial action is a partial strike because Charlie is breaking her employment agreement but is continuing to work. As such, Charlie’s employer can make a specified pay deduction.

Because the strike action does not reduce the quality or quantity of Charlie’s work, it cannot be measured in time (step 3 of the calculation). If Charlie’s employer wants to reduce her pay, they will have to make a 10 per cent pay deduction for the day of the strike, rather than a proportionate pay deduction using the calculation.

Examples where the employer cannot make a specified pay deduction

Sick leave

Teachers are taking partial strike action where they will not attend parent/teacher interviews, but are otherwise doing their jobs as normal; as such, the action is a partial strike. Noah, a secondary school teacher, tells his employer he is sick on the day of the strike. Because Noah is sick during the partial strike, he is paid sick leave for the day. His employer cannot calculate a pay deduction for him. Although he would have participated in the strike if he had worked and he is paid for the day, he loses a day’s entitlement to sick leave. Therefore a specified pay deduction would doubly penalise him.

Ban on overtime (total withdrawal of employment)

Liam works part-time in a fast food restaurant for 10 hours every Tuesday, which includes 2 hours overtime. Overtime is paid at time and a half. This week there is a ban on overtime.

The changes make clear that no specified pay deductions can be made where a partial strike involves a refusal to work overtime or a refusal to perform call-out work that would otherwise entitle the employee to a special payment for that call-out work.

Ban on out of hours meeting (total withdrawal of employment)

Lucas is a primary school teacher. He is expected to work at least 8 hours a day, every school day. Every Wednesday from 6pm to 6.30pm the school has a staff meeting that all staff are expected to attend.

The teachers are taking partial strike action where they have a ban on all out-of-hours meetings. The union considers that this regular staff meeting is covered by this ban.

If Lucas is not attending the meeting, he is not doing any work for that time, so it is considered a complete strike for that 30 minutes. As such, Lucas’s employer cannot make a specified pay deduction, as these are only for partial strikes. In response to the industrial action, Lucas’ employer can:

  • accept the break in employment
  • suspend him
  • lock him out.

With a complete withdrawal of labour, employees may not be entitled to pay for the time they are not working.

Breaks at the same time (total withdrawal of labour)

Joshua and Oliver are court registrars. Joshua is rostered to take a paid 10 minute tea break from 10.00am to 10.10am. Oliver is rostered to take a paid 10 minute tea break from 10.10am to 10.20am. On Friday, the court registrars are taking strike action where they will all take their breaks from 10.30am to 10.40am. If they were not taking strike action, they would normally be answering public enquiries between 10.30am and 10.40am.

The registrars have worked through their break periods – not taking their breaks when specified is a breach of contract, and therefore a strike. The registrars are doing a 10 minute full withdrawal of employment; it is not a partial strike because they not doing any work during the strike. Because it is a complete withdrawal of labour, the registrars may not be entitled to pay for the time they are not working (the duration of the strike). Their employer cannot make a pay deduction because they are not on a partial strike.

Ban on call backs (partial withdrawal of employment)

Ruby is a pharmacist at the local hospital. She is paid $14.25 an hour for being on call. Ruby is expected to answer phone calls while she is on call. She does not get any extra pay for answering questions over the phone; however, she is paid an additional $160 each time she goes back to the hospital while she is on call back. Ruby works a 24-hour shift; she normally works 7.5 hours and is on call for the rest of the day.

The pharmacists are taking partial strike action where they will answer questions over the phone but will not go into the hospital. This is a partial rather than a total withdrawal of employment because they are partially withdrawing their labour for one task, but are otherwise doing their work.

However, because she is only paid for a call back when the work is done, she simply does not get paid for not doing this work – she is not getting $160 for a call back. Ruby will still get paid $14.25 an hour for being on call and answering phone calls. Her employer cannot make a pay deduction, as this would doubly penalise her.

Piece rates (partial withdrawal of employment)

Tom is a boner at a meat processing plant. The boners are paid by the number of animals they process; that is, by piece rates. As a partial strike action, the boners are not using any automated equipment to help the deboning process. Tom usually processes 750 birds a day and earns 55 cents a bird. On the day of the strike he only processes 425 birds. His employer calculates his pay for that day as $233.75, normally he would earn around $400 a day. Because he is paid piece rates, Tom’s partial strike action is already proportionately reducing his pay. His employer cannot make another pay deduction as this would doubly penalise him.