Delegating law-making powers

Parliament makes laws by enacting primary legislation (Acts of Parliament). However, it is often not appropriate or possible for an Act to include all the details necessary for it to have its intended effect. For this reason, Parliament will often include in an Act a provision that delegates to another person or body, often part of the Executive, the power to prescribe these necessary details.

The Act that delegates this law-making power is known as the “empowering Act”. The specific provision containing the power is the “empowering provision”. The product of the exercise of this power is “secondary legislation”.[1]. Although many other names are used (for example, delegated legislation, subordinate legislation, regulations, proclamations, Orders in Council, bylaws, rules, codes), these names do not, by and large, provide a principled way of distinguishing between different types of secondary legislation. The key questions with secondary legislation are what can be delegated, who exercises the delegated power, and what safeguards apply.

The following competing considerations need to be balanced in determining what is appropriate for Parliament to delegate under an Act:

  • The legitimacy of the law—Important policy content should be a matter for Parliament to determine in the Act through an open democratic process. Too much delegation, or having delegated powers that are too broad or uncontrolled, undermines the transparency and legitimacy of the law. However, it is not necessary for Parliament to do everything—as Parliamentary time is scarce, this time is best spent on the policy issues, not details.
  • The durability and flexibility of the law—Delegation can be important to how a law (and the regulatory system it is part of) performs over time in terms of responding to changing or unforeseen circumstances or allowing minor flaws to be addressed. Delegation can give an opportunity for experimentation. Delegation can also allow emergencies to be dealt with quickly, which can be important at least for short-term solutions.
  • The certainty or predictability of the law—If too much policy content is delegated or delegations are given to different decision makers without clearly scoped mandates, clarity about what is required by the law can be undermined.
  • The transparency of the law—Layers of secondary legislation can create complexity and fragmentation in a regime, making it difficult for readers to find and understand the law. However, too much technical detail in an Act might make it difficult to navigate.

Particular attention should be paid to empowering provisions that empower a delegate to augment or override or authorise exemptions from, primary legislation. Such empowering provisions should be assessed in the context of the general principles governing secondary legislation. However, they can increase the risk of undermining the separation of powers and so always require careful consideration to ensure that they are both needed and appropriately circumscribed. This is dealt with further in Chapter 15.

One important check on secondary legislation within Parliament itself is the Regulations Review Committee (RRC). When a Bill is before another committee, the RRC may consider any empowering provision in that Bill and report on it to that committee. Officials preparing legislation must therefore be prepared to justify why a power is proposed to be delegated and the scope of that power.

This chapter will help identify those legislative matters that are appropriate for Parliament to delegate (i.e., as secondary legislation), to whom the power should be delegated, whether a power should be identified as a power to make secondary legislation, what form the secondary legislation might take, and what matters the empowering provision should address.

 

[1] Note that the Legislation Act 2019 removed the previous distinction made between secondary and tertiary legislation.

Part 1

Is the matter appropriate for secondary legislation?

Legislation should not delegate a power to make secondary legislation in respect of matters that are more appropriate for an Act.

As a general rule, matters of significant policy and principle should be included in an Act. Secondary legislation should generally deal with minor or technical matters of implementation and the operation of the Act. However, there are difficult choices on the continuum between significant policy and technical detail.

Some matters, such as those that affect fundamental human rights in a significant way, are clearly appropriate only for an Act. However, the decision will not always be clear-cut, and some matters may be appropriate for both primary and secondary legislation. Secondary legislation often involves some policy, but this should be at a lower level than the policy in the Act.

The following matters should generally (or in some cases always) be addressed in primary legislation:

  • matters of significant policy;
  • matters significantly affecting fundamental human rights;
  • the creation of significant public powers such as search and seizure or confiscation of property;
  • the granting or changing of appeal rights;
  • variations to the common law (especially when a common law right is to be entirely taken away, or replaced, by legislation);
  • the creation of serious criminal offences and significant penalties;
  • the authorisation of a tax, borrowing money, or spending of public money;
  • the creation of a new public agency; and
  • procedural matters if they, in effect, set the fundamental policy of a legislative scheme.

Most of the items above are subsets of the basic idea that significant policy should be in an Act. Although “significance” will vary from case to case, some indicators are that the policy answers the key questions in the problem addressed by the legislation, that the policy has the potential to give rise to wide-spread public interest or controversy (whether political or otherwise), or that (without this policy decision being made) it would be otherwise unclear what the overall implications of the Bill are.

The following matters should also generally be addressed in an Act but in limited circumstances (as discussed further below) may also be appropriate for secondary legislation:

  • amendments to another Act; and
  • retrospective changes to the law.

The following are examples of subject areas that may be appropriate for secondary legislation:

  • the mechanics of implementing an Act, such as prescribing fees, the format and content of documents, or certain lower-level procedures;
  • large lists and schedules of minor details;
  • technically complex matters;
  • commencement dates;
  • subject matter that requires flexibility or updating in light of technological developments in an area;
  • material required to respond to emergencies or other matters requiring speedy responses; and
  • material that requires input from experts or key stakeholders.

It is not appropriate to empower secondary legislation that involves significant policy:

  • to fill any gaps in an Act that may have occurred as a result of a rushed or unfinished policy development process;
  • to avoid full debate and scrutiny of politically contentious matters in Parliament;
  • solely to speed up a Bill’s passage through Parliament; or
  • simply to follow a past practice of using secondary legislation on that subject.

Part 2

Should the delegated power be identified as a power to make secondary legislation?

If the delegated power is, in substance, a power to make the law or alter its content (rather than just apply the law to a particular case), the empowering Act should identify the power as creating secondary legislation.

Whether a power to do anything under the empowering Act will result in secondary legislation needs to be carefully considered. If the power is of a legislative character, the power should be expressly identified (using the standard wording) as a power to make secondary legislation.

Whether or not a power is classed as legislative also affects:

  • what safeguards apply to ensure transparency and accountability. If a power is legislative, the Legislation Act 2019 generally automatically applies publication, presentation, and disallowance safeguards– see 5. If a power is not identified as legislative, there is likely still to be a need for transparency and accountability, but the safeguards discussed in chapter 16 are usually used instead (for example, an exercise of a power may be subject to review or an appeal).
  • It may also affect the interpretation of the power. If a power is not expressed to be legislative, then the courts could infer a narrower scope to the decision maker’s powers, and be more inclined to take a “hard look” at the decision. For example, the courts may be reluctant to interpret the power as allowing the decision maker to prescribe rules that apply to a class of persons.

Whether or not a power is classed as legislative is a legislative design question that focuses on whether the power will have legislative effect. This turns on the intended nature and scope of the power. It does not turn on the description or form of the instrument, who the decision maker is, or the importance of the instrument.

The key question to be asked is whether, taken as a whole and considering how the power is intended to operate in practice, Parliament will delegate a power to make law or alter its content.

In considering this issue and deciding whether or not a power should be classed as legislative, it may be helpful to consider powers in legislation more generally. Powers in legislation can be broadly divided into 4 categories:

 

Sometimes the question of whether or not a power may have legislative effect is straightforward - some regulatory powers fit clearly into the legislative, administrative, judicial, or guidance categories outlined above. For example:

  • powers to commence, amend, replace or repeal other legislation should be classed as legislative:
  • powers to create criminal offences or set maximum penalty levels should be classed as legislative:
  • powers to do something that only gives effect to a transaction should be classed as administrative (and not legislative). For example, an instrument to effect a taking of land for public work:
  • powers to take enforcement action should be classed as administrative (and not legislative):
  • powers of a court, tribunal, or similar judicial body to determine or record how the law applies on a case-by-case basis should be classed as judicial (and not legislative).

However, the categories do not have rigid boundaries. They overlap and similar policy outcomes can be achieved by more than one type of power. In this case, policy-makers need to choose what type of power best suits, or is most appropriate for, the particular policy and legislative context. The following rules of thumb may help in these less clear cases:

Scope of application:

  • powers should generally be classed as legislative if they set legal rules that apply generally on a class basis (for example, to the public or classes of the public) or set a framework to be applied again and again:
  • powers should not generally be classed as legislative if they are only exercised in relation to one or more named persons (however, see Chapter 16 on exemptions for countervailing considerations) or they apply only to a particular case (unless the particular case effectively determines the basic scope of the Act):

Scope of discretion

  • powers should not generally be classed as legislative if they will be made under a narrow discretion or will apply only to a particular person (these are administrative, or, occasionally, judicial):

Nature of power

  • powers should generally be classed as legislative if they:
    • regulate conduct for a class of persons (by mandating, requiring, prohibiting, restricting, or otherwise setting rules) where non-compliance will incur a sanction
    • set rules for a class of persons – where compliance is a prerequisite for something under the empowering Act – for example, setting procedural requirements for a class that apply to obtaining or exercising a legislative right or obligation
    • create, alter, or remove a right for a class of persons where there is a mechanism for enforcing the right
    • set the amounts of fees or levies
  • powers should not generally be classed as legislative if they will set or state a strategy, policy, or intent that will influence decision-making but not themselves set enforceable rights or obligations (these are persuasive instruments) (for example, a government policy statement that a decision-maker has given effect to):
  • powers should not generally be classed as legislative if their effect could be achieved by a natural person without legislation (for example, buy or sell assets, enter into contracts, set or change the terms of a trust):
  • powers should not generally be classed as legislative if they concern constitutional conventions or the internal machinery of Government:

Impact on empowering Act

  • powers should generally be classed as legislative if they change the scope of the empowering Act – for example, by altering the general categories of who or what it applies to or when or where it applies:
  • however, powers should generally not be classed as legislative if they are powers merely to assign something to a category, or give it a particular status, where the empowering Act already creates the category or status and sets out the law that applies in relation to things in the category or with the status. For example, an instrument that declares an area of land to be a national park:

In determining whether a power should be classed as legislative or not, it is relevant to consider whether the power ought to be subject to the safeguards imposed by the Legislation Act 2019 for secondary legislation (publication, presentation, and disallowance). However, a wish to avoid one or more of those safeguards is not, on its own, an indication that the power is not legislative. If other indications point to it being more appropriate to class it as legislation, but it is appropriate for one or more of those safeguards not to apply, it should be classed as legislation and exemptions considered (see 14.5).Caution should be used in looking at pre-2021 empowering provisions as a guide to how to class powers as legislative or not – the Secondary Legislation Act 2021 applied the above framework to existing powers, but generally took the approach that if Parliament had previously expressly classified something as a “disallowable instrument”, that approach should be grandfathered because the power and safeguards had been designed on that basis (even when the power would not be legislative on the above framework).

Part 3

For what purposes may the power to make secondary legislation be exercised?

The empowering Act should clearly and precisely define the permitted scope of secondary legislation and the purposes for which it may be made.

It is normal to specify in an empowering provision that the named delegate is empowered to make secondary legislation on a defined range of subject matters and for defined purposes. This ensures that the resulting secondary legislation is within the limits intended by Parliament. Before settling an empowering provision, it is advisable to consult those who will implement the Act and make the secondary legislation. This will help to identify the extent of the powers that are needed and in what circumstances those people anticipate exercising the powers. Generally, officials should have a clear idea of the scope and content of secondary legislation when the empowering provision is being developed.

A power to create secondary legislation should be wide enough to enable an Act to be effectively implemented. Some flexibility in an empowering provision is often justified as it can be difficult to be sure exactly how the Act’s requirements will be legally operationalised. However, flexibility needs to be balanced against the need to have clear boundaries about the scope of the power so that it is not unfettered. The RRC may criticise an empowering provision if it is drafted so broadly that its boundaries are uncertain.

A rushed or unfinished policy development process does not justify a broad or relatively unfettered empowering provision.

Part 4

Who will hold the power to make secondary legislation?

The person delegated a power to make secondary legislation must be appropriate having regard to the importance of the issues and the nature of any safeguards that are in place.

There are no absolute rules as to who should be delegated a power to make secondary legislation. Traditionally, secondary legislation is often made by the Governor-General in Council, on the advice of a Minister, or less commonly, is made by the relevant portfolio Minister(s). A power to make secondary legislation may also be delegated to an official or a Crown entity with the relevant technical expertise and accountability for the area of law, or to a local authority.

Key factors to take into account are the extent of policy or value judgements required, the expertise required of the person making the secondary legislation, the degree of political accountability required (reflected in the importance of the issues in question), and what safeguards would apply as a consequence (for example, disallowance, Cabinet scrutiny, or drafting and certification by the Parliamentary Counsel Office (PCO)).

The more significant the power, the more likely it is that it should be exercised by the Governor-General in Council. That will ensure that a full range of safeguards will apply (including Cabinet scrutiny and drafting and certification by the PCO). The more technical the exercise of the power, or the more limited the group it applies to, the more likely it is to be appropriate for delegation to another agency (see Chapter 18.2, which also deals with this issue).

In practice, Cabinet is (almost) always involved before the Governor General makes secondary legislation, while the policy contained in secondary legislation made by a Minister is usually noted by Cabinet, if significant, in accordance with the requirements of the Cabinet Manual (see paragraphs 5.11, 5.12 and 5.13).

It is unusual to delegate a power to make secondary legislation outside of the Crown or public sector, such as to an industry or private body. In some situations however, (generally coregulatory or occupational regulatory regimes) non-Crown bodies have a recommendatory role in the making of secondary legislation by a Minister or an official, or may make secondary legislation that is conditional on approval by a Minister or an official.[1]

 

[1] See for example, rules made under section 67 of the Registered Architects Act 2005, and approved by the Minister under section 69 of that Act.

Part 5

Is the secondary legislation subject to appropriate safeguards?

All secondary legislation should be subject to an appropriate level of scrutiny, a good process, publication requirements, and review.

Safeguards provide a vital check on the exercise of the delegated power to promote:

  • a good law-making process (through, for example, requirements to have regard to certain matters or being satisfied that a test is met);
  • transparency (through transparent processes and decisions);
  • participation (through consultation or requiring confirmation, concurrence, or consent); and
  • accountability (through, for example, disallowance via the RRC).

Safeguards can take a variety of forms. They can be substantive preconditions or procedural requirements. They can apply before a power is exercised or provide a remedy after it is exercised.

Safeguards are not, however, a substitute for clearly and precisely defining the permitted subject matter of the secondary legislation and the purposes for which it may be made (see 14.2). Safeguards are not a sufficient remedy for a vague and sweeping empowering provision that gives the decision maker too much discretion.

Standard safeguards that generally apply to secondary legislation under the Legislation Act 2019 are:

  • presentation to the House – this ensures Ministerial accountability and is an essential part of ensuring Parliament can scrutinise what is done with the power it has delegated; and
  • review by the RRC and potential disallowance by Parliament; and
  • publication (if the legislation is drafted by the PCO, the legislation must be published in full on the New Zealand legislation website. If the legislation is not drafted by the PCO, the maker must comply with the applicable publication requirements under the Legislation Act 2019 – for empowering provisions created on or after 2021, these are generally set out in the Legislation (Publication) Regulations 2021).

There are limited classes of cases where the standard presentation and disallowance safeguards do not apply (see sections 114 and 115 of the Legislation Act 2019). Specific presentation and disallowance exemptions can be added to Schedule 3 of that Act, but these exemptions will need to be carefully justified to the RRC. (In the case of publication, exemptions or alternative forms of publication can be added to the Legislation (Publication) Regulations 2021).

In the case of publication, the need for an exemption may be justified if the sensitivity of the information will make it inappropriate to publicly disclose it (for reasons such as commercial sensitivity, safety, or national security). The threshold to justify exemptions from publication is high given that secret law undermines the rule of law and Parliament’s oversight. 

Even if an exemption is justified, it should generally only involve the minimum exemptions (for example, a deferral of publication of commercially sensitive secondary legislation while the information remains commercially sensitive).

If a publication exemption is justified, a presentation exemption may also be appropriate. However, it needs to be separately justified on the basis that presentation to the House would create an unacceptable risk of undermining the publication exemption (taking into account the particular nature of how information is disclosed if it is presented to the House).

Exemptions from disallowance need to be justified on a case-by-case basis. To date, the RRC has not supported any general principles justifying these exemptions since they undermine the residual authority of Parliament to oversee its delegation.

One rare scenario that may justify a disallowance exemption is if Parliament intends the maker of the secondary legislation to act without any Parliamentary oversight. An example is the setting of judicial or parliamentary salaries by the Remuneration Authority. In a subset of these cases, a presentation exemption may also be justified as presentation is a symbolic act of accountability to the House.

Additional safeguards apply automatically to secondary legislation that is made by the Governor-General by Order in Council. It must be drafted and certified by the PCO, will receive Cabinet scrutiny, and will be subject to the Cabinet Manual’s 28-day rule (meaning that the legislation must not come into force earlier than 28 days after its notification in the Gazette, unless there is a waiver).

Other bespoke safeguards may also be appropriate. However, these can increase the complexity of the process (particularly the time and cost) and so need to be carefully designed to ensure that the benefits are captured without too much cost. Examples of these safeguards include:

Pre-making safeguards:

  • The instrument may be made only on the recommendation of a Minister (or on the recommendation, approval, confirmation, concurrence, or consent of some other person). For example, Orders in Council are always made on the recommendation of a Minister (regardless of whether the empowering provision provides for this).
  • Other preconditions may be included – either substantive tests or criteria or procedural requirements:
    • The decision maker itself may be required to have regard to certain matters or be satisfied that a certain test is met.
    • If the approval or recommendation of another person is required, safeguards may also be attached to that approval or recommendation (for example, the recommending Minister may be required to consult with certain people before making the recommendation, to have regard to certain principles or other matters, or to be satisfied that certain criteria are satisfied).
    • Certain things may need to be shown, or certain circumstances may need to exist, before the secondary legislation is made.
    • Consultation requirements may be included (see Chapter 19).

Post-making safeguards:

  • A “sunset” clause may be included (that is, the legislation only remains in force for a limited period of time).
  • The reasons for the exercise of the power may be required to be published with the secondary legislation.

Part 6

Will the secondary legislation be confirmable?

In exceptional cases where additional parliamentary scrutiny is desirable, consider whether secondary legislation should be confirmable.

A confirmable instrument is secondary legislation that is automatically revoked at a particular deadline unless it has been confirmed by an Act of Parliament. The confirmation process is designed as an additional layer of scrutiny as it requires proactive confirmation by Parliament.

The confirmation process should be applied sparingly and only where it is necessary or desirable to give particular types of instruments additional layers of parliamentary scrutiny.

For further information (including when it might be appropriate and when it might not be appropriate see Supplementary Material: Confirmable Instruments.

Part 7

Will the secondary legislation have retrospective effect?

If secondary legislation may have retrospective effect, the empowering provision must clearly authorise that in clear and unequivocal terms.

If secondary legislation is intended to have retrospective effect, the reasons for that must be capable of clear articulation and the empowering provision must authorise that effect in clear and unequivocal terms.[1]

 

[1] See Chapter 12.1 for guidance on legislation having retrospective effect.

Part 8

Will the maker of the secondary legislation be able to subdelegate some of the legislative power?

If secondary legislation may be made by a subdelegate, that must be clearly authorised in the empowering provision.

The identity or office of the person to whom the power to make secondary legislation is given is a key factor in the particular legislative scheme. Careful consideration should therefore be given as to whether that person should be able to subdelegate a legislative power.

If the power to make secondary legislation is able to be subdelegated, the empowering provision must clearly identify that intent. Usually, the policy intent is best achieved by giving a clearly defined administrative role to a person under secondary legislation, rather than by a further subdelegation of legislative power.[1]

Consideration needs to be given to the scope of the power delegated and its intended effect to determine whether it is legislative or administrative. The test set out at para 14.1A above applies here also – is the subdelegated power intended to confer a law-making power? If it is, the standard wording must be used to ensure the power is appropriately conferred and the usual safeguards for secondary legislation apply.

 

[1] See however safe work instruments provided for under the Health and Safety at Work Act, which provide for two levels of secondary legislation.

Part 9

Will the secondary legislation be inconsistent with rights in the New Zealand Bill of Rights Act 1990?

Legislation should not empower secondary legislation that is inconsistent with the New Zealand Bill of Rights Act 1990.

Secondary legislation that is inconsistent with the New Zealand Bill of Rights Act 1990 (NZBORA) will generally be invalid because it falls outside the empowering provision. This is because an empowering provision will generally be interpreted, in accordance with section 6 of NZBORA, to empower only such secondary legislation as is consistent with NZBORA. The only circumstance in which secondary legislation might be valid despite inconsistency with NZBORA is if the empowering provision unequivocally, or by necessary implication, permits rights-infringing secondary legislation. In such a case, the empowering provision (and the secondary legislation it empowers) will prevail over NZBORA because of section 4 (which says that provisions inconsistent with NZBORA are not for that reason invalid or ineffective).

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