Consultation
Shop Trading Hours Act
Deadline for submissions was Friday 25 January 2008, and the consultation is now closed.
EXISTING LEGISLATIVE FRAMEWORK
Sale of Liquor Act 1989
The restricted trading days are Good Friday, Easter Sunday, Christmas Day and before 1pm on Anzac Day. The general conditions that apply for on-and off- licences are that no liquor is to be sold, supplied or delivered by licencees on these days. These restrictions primarily apply to hotels, taverns and retailers (including supermarkets and bottle stores). However, a range of exceptions from those conditions mean that a number of premises are allowed to trade on those days, such as:
- people residing or staying on-licensed premises (such as lodgers or hotel guests) who can buy liquor on restricted trading days
- a range of entertainment venues (such as restaurants, nightclubs, theatres, chartered clubs and sports clubs) that can provide liquor on their premises, and
- sale of grape or fruit wine is permitted from wineries on Easter Sunday, as long as it is made on the premises or made from grapes or fruit harvested on land on which the premises are based.
- Trading restrictions during Easter, under the Sale of Liquor Act 1989, have remained unchanged. This may be due to:
- the special character of the restricted trading days for many citizens and concerns about allowing the sale and supply of liquor by hotels, taverns and retailers on days considered to be sacrosanct
- the social concerns relating to alcohol abuse and its impact on families and the incentives for citizens to spend time apart from families at hotels or other premises if trading was allowed on the restricted days, and
- general concerns about the risk of retail activity undermining the social, cultural and religious significance of the four-day Easter weekend.
When the issue of liquor trading restrictions was last considered in 1999, general Sunday trading restrictions were removed, with the exception of Easter Sunday, but a new restriction was added to restrict trading on Anzac Day (before 1pm).
Shop Trading Hours Act Repeal Act 1990
The Shop Trading Hours Act Repeal Act 1990 (the 1990 Act) restricts most shops from trading on Good Friday, Easter Sunday, Christmas Day and before 1pm on Anzac Day. This is not, however, an absolute restriction on trade as the exemptions under the Act enable some shops to open. Examples of shops which are considered to provide an "essential service" are[1]:
- dairies and service stations, and
- shops selling prepared or cooked food ready to be eaten immediately.
The 1990 Act retains exemptions for shops in centres covered by area exemptions granted by the Shop Trading Hours Commission under s18(2) and s20 of the Shop Trading Hours Act 1977 (the 1977 Act). These exemptions were granted by the Commission through an application and hearing process. The types of exemptions allowed for under the current legislation are not consistent from region to region or within a region. When the 1977 Act was repealed, the mechanism through which applications for new exemptions or variations for existing exemptions could be considered and granted was removed. Therefore, existing exemptions are based on criteria applied under the 1977 Act which may no longer be relevant today.
Non-compliance with the shop trading legislation has become an issue, particularly in some of the tourist areas on Easter Sunday. Although there is no excuse for these breaches, there is some sympathy when neighbouring towns have exemptions, for example, Rotorua versus Taupo and Wanaka versus Queenstown.
Recent decisions by the courts also suggest issues with the effectiveness of the penalty regime. The cost of enforcing compliance significantly outweighs the penalties that are imposed (fine levels are statutorily set at an amount that does not exceed $1,000), which raises questions about whether the sanctions are sufficient to make the restrictions effective. Given the number of convictions that result in discharge without a fine, the courts are effectively sending the message that they do not consider breaches of the shop trading restrictions to be a serious matter.
There have been nine attempts to change the shop trading legislation since the introduction of the 1990 Act. In all cases, except in 2001 when garden centres were allowed to trade on Easter Sunday, Parliament voted not to change the restrictions.
Holidays Act 2003
The purpose of the Holidays Act 2003 is to promote balance between work and other aspects of employees' lives. The Holidays Act 2003 provides public holidays to recognise days of national, social/and or religious significance, and employees required to work on public holidays receive a compensatory minimum payment of time and a half (and an alternative holiday if it is a day that they would normally work).
Easter Sunday is not a public holiday under the Holidays Act 2003 in contrast to Christmas, Good Friday and Anzac Day, which are public holidays. As a result, employees in areas where shops/premises operate under exemptions from the Shop Trading Act Repeal Act 1990 or Sale of Liquor Act 1989 do not receive any additional compensation or entitlements for working Easter Sunday unless this is provided for in their employment agreements.
Although Easter Sunday is the actual day of religious significance, the public holiday was transferred to the following Monday (sometimes referred to 'mondayisation') to give greater opportunity for employees to observe the holiday, as at the time the public holiday entitlement was established (1936) most people did not work on Sundays.
Options
Balancing Competing Interests
There are three decision areas presented in this paper. In order to balance the often competing interests of business owners, employees and the wider community you are asked to consider each of the three decision areas as part of a package. The need for stability and finding the balance between choice, and protection of employees underpin the proposed options.
Stability - Any future changes to the legislative framework needs to be enduring, have a clear public policy objective and be fair for both businesses and individuals. A clear rationale for either maintaining restrictions or liberalising trading over Easter Sunday is required.
Balancing Choice and Protection - The future of trading restrictions relies on striking an appropriate balance between imperatives relating to "choice" and "protection." This involves considering the needs and interests of employer (including retailers and on-licensed premises), consumers, employees, the general public and other groups in society.
The three decision areas are:
- What to do about restrictions under the Shop Trading Hours Act Repeal Act 1990 and Sale of Liquor Act 1989?
- What to do about the status of Easter Sunday?
- Consequential issues, such as what to do about the enforceability and penalty regime for the Shop Trading Hours Act Repeal Act 1990, and the issue of adequate employee/leaseholder protection against the compulsion to work/trade on Easter Sunday.
After reading the options you will be asked a series of questions about these options. Balancing the often competing interests of business owners, employees and the wider community may mean considering a combination of options. For example, making Easter Sunday a public holiday could be done in combination with either leaving restrictions as they are (Option 1) or altering restrictions for Easter Sunday (Option 2) or removing restrictions for Easter Sunday (Option 3).
What to do about restrictions under the Shop Trading Hours Act Repeal Act 1990 and Sale of Liquor Act 1989?
Option 1: Retain the status quo
Possible benefits
- continues to recognise the special character of the days by making trading the exception rather than the rule on Good Friday and Easter Sunday
- there is no evidence of widespread support for removal of restrictions under the Sale of Liquor Act 1989.
Potential issues
- does not address the inconsistencies in the legislation or public perceptions about the anomalies in the legislation
- does not address the inadequacy of current penalties under the Shop Trading Hours Act Repeal Act 1990
- non-compliance with the Shop Trading Hours Act Repeal Act 1990 will continue to be an enforcement issue.
Option 2: Reinstate the exemption-making provision for shop trading to exempt specific areas from trading restrictions and enable sale of liquor exemptions to be considered at the same time.
Would require adding the power for the Minister of Labour, or local authorities, to exempt specific (geographically defined) areas from the trading restrictions on Easter Sunday
Possible benefits
- would define clear criteria for the review of existing exemptions
- would address concerns that current exemptions are based on criteria which are no longer relevant today
- would address the anomaly of some shops in specified towns/areas being able to trade while others in similar towns/areas are not
Potential issues
- reactivating the exemption mechanism would require administrative procedures to be followed and discretion to be exercised which may result in criticism by non-exempted businesses or areas
- potential risk of increased confusion and uncertainty around which towns and cities have exemptions
- if the criteria are not sufficiently specific and exemptions are readily granted the intent of maintaining Easter Sunday as a restricted trading day would be undermined.
Option 3: Remove the trading restrictions under the Shop Trading Hours Act Repeal Act 1990 and Sale of Liquor Act 1989 for Easter Sunday
Possible benefits
- would maintain alignment between the Shop Trading Act Repeal Act 1990 with the Sale of Liquor Act 1989 on Easter Sunday
- would remove most of the disparities with the area exemptions under the shop trading legislation as most of the current exemptions are for Easter Sunday
- would reduce non-compliance problems under the shop trading legislation
- businesses could choose whether to operate, based on personal or communal interests and behavioural change may be widespread but not universal.
Potential issues
- undermines the value placed on the social, cultural and religious significance of Easter Sunday
- many liquor and shop employees would no longer be able to observe Easter Sunday free from the requirement to work
- some businesses may be compelled to open because their competitors are trading or because leaseholder arrangements add pressure to trade.
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What to do about the status of Easter Sunday?
Option 1: Retain the status quo
Possible benefits
- there would be no additional costs for businesses with employees who work on Easter Sunday.
Potential issues
- has no impact on current inconsistencies between the Shop Trading Hours Act Repeal Act 1990, Sale of Liquor Act 1989 and Holidays Act 2003
- workers who currently work on Easter Sunday would not receive any additional compensation for working on that day, unless it was a provision of their employment agreement.
Option 2: Increase the number of public holidays to 12 by making Easter Sunday the 12th public holiday
Possible benefits
- making Easter Sunday a public holiday would provide some protections to those employees required to work on Easter Sunday, and allow them to either observe the day free from work, or to receive compensation for working
- retailers with exemptions from restrictions on Easter Sunday may reconsider opening if it is made a public holiday, as they would be required to pay their staff time-and-a-half and provide an alternative day's holiday; this may result in workers continuing to have Easter Sunday free from work.
Potential issues
- any additional public holiday entitlements would have
corresponding cost impacts for employers.[2] The
industries most likely to be affected by this option are:
- retailers
- service industries (including emergency services)
- 24 hour/7 day a week industries
- public sector employers in, for example: Corrections, District Health Boards, Ministry of Agriculture and Fisheries, Customs, Police and Ministry of Social Development, and
- agriculture and manufacturing.
Option 3: Maintain the number of public holidays at 11 by making Easter Sunday a public holiday, subject to 'mondayisation' arrangements similar to Christmas and New Year holidays when they fall on Sunday
Possible benefits
- making Easter Sunday a public holiday would provide some protections to those employees required to work on Easter Sunday, including employees outside the retail and liquor industries who currently work on Easter Sunday. This would allow them to either observe the day free from work or to receive additional compensation for working
- maintaining the number of public holidays at 11 by making Easter Sunday a public holiday but subject to the same "mondayisation' arrangements that exist for Christmas and New Year would help lessen the costs of having an additional (12th) public holiday and could help mitigate some of the negative reaction from businesses
- retailers with exemptions from restrictions on Easter Sunday may reconsider opening if it is made a public holiday, as they would be required to pay their staff time-and-a-half and provide an alternative days holiday; this may result in employees continuing to have Easter Sunday free from work
Potential issues
- any additional public holiday entitlements would have
corresponding cost impacts for employers. The industries most likely to be
affected by this option are:
- retailers
- service industries (including emergency services)
- 24 hour/7 day a week industries
- including public sector employers in: Corrections, District Health Boards, Ministry of Agriculture and Fisheries, Customs, Police, Ministry of Social Development, and
- agriculture and manufacturing.
- employers may seek employment arrangements such as using casual employees or employees who do not normally work on Sundays to reduce public holiday costs and avoid paying for an alternate holiday
- employees outside the retail and liquor industries who currently work on Easter Sunday would receive public holiday rates and a day off adding to the cost of the wage bill
- could cause some confusion about public holiday entitlements, in terms of which day is the public holiday.
Option 4: Treat Easter Sunday as if it were a public holiday for employees of businesses affected by new amendments to the Shop Trading Hours Act Repeal Act 1990 or the Sale of Liquor Act 1989. This would not apply to those that are currently able to trade under an exemption or exception.
Possible benefits
- treating Easter Sunday as a public holiday for affected retail and liquor employees is a targeted approach which would involve reduced costs compared to adding an additional holiday for all employees who work on Easter Sunday
Potential issues
- a targeted approach to providing public holiday entitlements to affected retail and liquor employees only could be perceived as unfair by other employees required to work on Easter Sunday, and would create an additional anomaly to the status quo.
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Consequential Amendments
If further liberalisation proceeds then consequential amendments to accompany the removal of trading restrictions for the Shop Trading Hours Act Repeal Act 1990 would need to be considered.
These are:
- adequate employee protection against compulsion to work on Easter Sunday
- adequate leaseholder protection against compulsion to open on Easter Sunday, and
- increased penalties and improved enforcement powers for breaches of the remaining trading restrictions.
The Ministry of Justice do not consider that consequential amendments would be required to the Sale of Liquor Act 1989 because of existing penalties under this Act and the remedies available to the Liquor Licensing Authority in respect of the licence.
The Department of Labour has two concerns regarding the penalty regime in the Shop Trading Hours Act Repeal Act 1990:
- fine levels in the Act for breaching the Act are statutorily set at an amount that does not exceed $1,000. The Department questions the significance of these penalties as a deterrence to offending and re-offending. Retailers appear to consider the fines minimal compared with the costs associated with not trading and include fines as a cost of doing business on a restricted trading days, and
- powers of Labour Inspectors to enforce the Act. The current Act does not have specific enforcement provisions. This has caused difficulties, particularly when retailers have refused to provide their details, as Labour Inspectors do not have the right of entry into a business trading under restriction or provisions to deal with obstruction.
Options
Option for Employee Protection
The Department of Labour believes that the best option for employee protection would be the protections recommended by the Shop Trading Hours Working Group in 2003, which are:
- employees in shops opening to trade on Easter Sunday would, on each occasion, have an absolute right to refuse to work on that day unless they expressly agreed otherwise
- an employee's express agreement to work could not be specified in their employment agreement or be a condition of their employment
- where employees chose to exercise their right not to work on Easter Sunday, then employers would be able to engage casual staff, on each such occasion, to work solely on that day
- the protection would apply only to shops opening as a result of the new exemption or amendment, and not to shops who may already open to trade on Easter Sunday, and
- where employers wished to open to trade on Easter Sunday, they would be required to give employees reasonable notice of their intention to open so that they could determine employee availability for work on that day.
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Option for Leaseholder Protections
The Department of Labour believes that the best option for leaseholder protections is the standard leaseholder protections recommended by the 2003 Shop Trading Hours Working Group, which is:
- where retailers' leases provided for mandatory opening on available trading days, nothing in the lease could be read as requiring the retailer to open on the newly liberalised days (unless the retailer could already open then) for the duration of that lease or until its renegotiation.
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Options for Penalties
The Department of Labour believes that there are three options to address concerns regarding fine levels for breaches of the Act, these are:
- increase the penalty maximum consistent with employment relations legislation. The Department would suggest in the case of an individual a penalty not exceeding $5,000, or, in the case of a company or corporation, a penalty not exceeding $10,000.
- introduce a minimum penalty. The Department would suggest $1000 for repeat offenders and shop owners who have previously been warned not to open.
- provide Labour Inspectors the power to impose instant fines. The infringement fee may be set in the Act. The standard type of model for infringements of this type, however, is for the Act to enable infringement fees to be issued, and the amount of the infringement to be set via regulation. The Department would suggest a fine of no less than $500 and not more than $3000.
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Option for Increased Powers of Enforcement
The Department of Labour believes that the Shop Trading Hours Act Repeal Act 1990 could be more effectively and efficiently enforced if the Act specified that Labour Inspectors are responsible for enforcement and provided that Labour Inspectors could exercise entry and inspection powers similar to those they have under the Employment Relations Act 2000.
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