Simmonds Penny; Wood MichaelPENNY SIMMONDS (National—Invercargill): Thank you Madam Chair. I wonder if the Minister could talk to us a little bit more about the penalties and whether they are cumulative or whether if there is a fair pay agreement being negotiated and the employer misses several obligations in that that is counted as one or whether that will be cumulative as in non-compliance or breaching or whether it's going to be each time there is a fair pay agreement being negotiated—whether you can be penalised more than once during that time?I'm thinking of some poor employer who's having a particularly difficult time with their small business: they've lost a number of staff they've had some personal issues with death in the family and they might have missed the whole process or they might have missed part of the process—just how would the penalty system work? Do you get one breach because you've missed everything or are you going to get some sort of cumulative $20000 for missing this deadline and $20000 for missing not letting your employees know about something—just how would it work? It doesn't seem to have that level of detail here.You can imagine in a small-business situation where there could be quite a lot going wrong for that business at one time—they might have lost a big contract; as I said they might have had a family bereavement; they might have lost some particularly critical staff—all of a sudden they realise they've missed a whole lot of obligations and they don't know where they're going to be with this: whether they are going to be hit with a whole series of breaches or whether there is some way in which they can put their hands up and say I've got this wrong. Things were going badly for me in my business at this time." I think it does make a big difference in terms of how willing people are to put their hands up and admit where they've got something wrong—if they think there's going to be a reasonableness around how they're going to be treated—but not if they feel that there won't be any ability I guess to negotiate the situation they were in and ask for some way forward in terms of trying to catch up with meeting their obligations without being hit with penalty after penalty after penalty.Then in terms of the recovery of the penalties I was trying to look and find where there might be some ability for someone who's founded a business who has found themselves in that situation where this could be the brink for them if they find they've got a penalty of $20000 or maybe more than one of $20000—just is there some ability for employers to be negotiating how the recovery of these penalties might occur? I can't see anything in here that gives an indication that there will be any leniency. There's a little bit about penalty by instalments but that's only if the financial position of the person paying the penalty requires it which actually then means the employer has to divulge quite a lot of commercially sensitive information about their financial situation.So I am just interested to know how this might be handled in terms of whether the penalties can be cumulative; whether it's one set of penalties only per negotiations that occur; and what level of flexibility around the recovery of those penalties there might be. Thank you Madam Chair.Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): In the employment relations system disputes about the breaches of parties are generally dealt with at the lowest level possible. Usually this occurs through direct engagement between the parties in the first instance. That might occur at the bargaining table. It might also occur with the assistance of mediation. It is generally only after there have been significant other efforts to resolve those issues at a lower level that they might advance to the authority where these penalties take effect.In response to the member's specific question about whether there could be multiple penalties the answer in theory is yes. Any enforcement action will be considered on the basis of the facts that come before the authority. So if a person breaches an obligation at a certain point in the process it is possible that a further breach could occur later and they will need to be accountable for that. I know that clause 201(2) in particular enables a claim for two or more penalties against the same person to be joined in the same action. And again I note this applies to anyone who is engaged in the process not just employers.I also note two things in respect to the reasonableness. I've spoken at some length on a couple of occasions about the fact that clause 200 specifically provides the guidance about the authority acting in a reasonable and proportionate way. That is exactly how the authority sets penalties under the existing Employment Relations Act which has been in place for over 20 years. So it's effectively the same framework that will apply here. I also note that the financial penalties listed in the bill are maximums; they are not set penalties for particular offences and that's where the proportionality that is allowed under clause 200 comes into effect."