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Is voluntary reduction of Councillor pay prohibited?

  • April 23rd, 2020


Politik has a fair summary of the convenient fallacy cited to protect Councillors from pressure to share the pain.


COUNCILS STILL HAVE TO PAY SALARIES
Local Government New Zealand says the Remuneration Authority should be left to set fair pay levels for local government elected members, and given the appropriate tools to do so to reflect the challenging economic circumstances imposed by the COIVD-19 emergency.
This comes as many elected members across the sector have sought to take a pay cut to reduce the burden on ratepayers, but have been prevented from doing so because this is not an option available under the Remuneration Act 1977. The Act empowers the Remuneration Authority to set zero salary increases in times of economic hardship, but it does not have the ability to allow elected members to volunteer for a pay cut. Councillors have gotten around this by making contributions to charities, but this does not reduce salary costs on councils or ratepayers.”

The untruth is not Politik’s fault. The Remuneration Authority has been a happy collaborator with local government in propagating this defence of the status quo – convenient superior orders – ” don’t blame us – the law gives us no choice”. 

Clause 12 of Schedule 7 of the Local Government Act 2002 looks conclusive at first sight.

12 Payments  –
If a determination is made, a local authority must make payment to the person concerned in accordance with the conditions of the determination.

 

But the Remuneration Authority Act 1977 and Schedule 7 of the Local Government Act 2002, actually give the Authority power to authorise voluntary reductions. Arguably they could prescribe for involuntary reductions, though not retrospectively. I think that the better interpretation would prevent them making involuntary reductions before 30 June 2020.  

The Remuneration Authority could amend its current detemination so that it says in effect that people can take up to the maximum in a “range”under Cl 6(3) (a) (iii) and (c) , to enable them to take less for a period or indefinitely.

That could be fair to ratepayers under cl 7(1) (c)(ii).

Read the relevant provisions below (omitting irrelevant paragraphs). The key words are in red text

Remuneration of members

6 Remuneration Authority to determine remuneration

(1) The Remuneration Authority must determine the remuneration, allowances, and expenses payable to—

(a) mayors, deputy mayors, chairpersons, deputy chairpersons, and members of local authorities:
(b) …

(3) The Remuneration Authority may do 1 or more of the following things under subclause (1) or (2):

(a) fix—
(i) scales of salaries:
(ii) …
(iii) ranges of remuneration:
(iv) different forms of remuneration:
(b) prescribe—
(i) rules for the application of those scales, ranges, or different forms of remuneration:
(ii)…

(c) differentiate—

(i) …
(ii) between persons occupying equivalent positions in the same local authorities, community boards, or local boards:
(d) make determinations that apply to individuals, or groups, occupying equivalent positions:

(4)

(5) The Remuneration Authority may issue separate determinations, at different times, for the different positions listed in subclauses (1) and (2).

(6) Clause 7A applies to determinations made under this clause.

7 Mandatory criteria for Remuneration Authority

(1) In determining remuneration under clause 6, the Remuneration Authority must have regard to the need to—

(a) minimise the potential for certain types of remuneration to distort the behaviour of the persons listed in clause 6(1) in relation to their positions as listed in clause 6(1); and
(b) achieve and maintain fair relativity with the levels of remuneration received elsewhere; and
(c) be fair both—
(i) to the persons whose remuneration is being determined; and
(ii) to ratepayers; and
(d) attract and retain competent persons.
7A Matters applying to determinations

(1) The Remuneration Authority may make a determination before or after the date on which the determination is to come into force.

(2) However, a determination must not come into force earlier than the expiry date of the determination that it supersedes.

(3) A determination must specify the date on which it expires.

(4) Despite the expiry of a determination, it continues in force to the extent that it is not superseded by another determination.

(5) The Remuneration Authority may amend a determination while it is in force.

(6) Despite subclause (5), the Remuneration Authority may amend the expiry date of a determination only if the Authority is satisfied that in all the circumstances there are particular and special reasons that justify a period of less than the term originally set.

If it appears that local authority remuneration is unfair, and higher in relativity with pay actually being “received” in the post Covid world (outside local government) for jobs of similar security, the Authority could consider it has a duty to amend the current determination. 

They must take into account the relative job security of local government employment (suddenly a much more important factor).  Let’s hope they will also consider the normal consequences in the private sector of demonstrated complacency, incumbent indifference to the ‘customer’, exposure of inadequate qualifications and inability to exercise practical leadership in a crisis. 

 

Comments

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  • Jack Marrow
  • July 10th, 2020
  • 8:21 pm

Council chief executive Geoff Williams said he thought it was “pretty unforgivable” some people thought council staff – already working hard and under unique circumstances – should “do all of that, and also take pay cuts”.

Really glad that our company
house painters west auckland does not leave their employees behind. Kudos

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