Deductions for partial strike action

On 30 June 2025 an amendment to the Employment Relations Act 2000 received Royal assent and in so doing re-introduced the ability for employers to make deductions from employees' wages for participating in partial strike action.

A partial strike is defined as a strike in which the employees who are party to the strike do one or both of the following:

• continue 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 OR a reduction in the employees’ normal performance of work, normal output, or normal rate of work.)

• break 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.

What this means is that if employees' vote to exercise their right to partake in industrial action, including partial strike action, then their employer has the right to make a deduction from the wages of those employees.

However, the employer must not make a specified pay deduction if the partial strike is lawful on the grounds of safety or health; or the employee is paid by piece work; and the partial strike results in the employee reducing their normal output; or in respect of any period of the partial strike that involves a refusal to work overtime; or a refusal to perform call-out work if the employee would otherwise receive a special payment for performing that work.

If an employer intends to make specified pay deductions in relation to a partial strike, the employer must give notice to each employee who is, or will be, party to the strike that the employer will make those deductions. However, it is important to note that the employer may only give notice of a deduction if they have received notice of the partial strike.

When the employer gives notice of a deduction, that notice must be in writing and specify the relevant pay period or relevant pay periods in respect of which the employer will make a deduction; and be given as soon as is reasonably practicable; and before the first deduction is made or the end of the first relevant pay period specified (whichever comes first).

There are also rules that apply to how the deduction is calculated. One way is for the employer to calculate the percentage of the employee's usual hours they won't be working due to the strike. The alternative is to apply a 10% reduction in pay, regardless of how long the partial strike is in place.

Should an employer find themselves facing a partial strike and they intend to make deduction from wages they should seek advice as soon as practicable, and ideally before the strike action commences, to ensure that they comply with the requirements for implementing such a deduction.

 Photo by Claudio Schwarz on Unsplash