Employment Relations Amendment Bill

Hon KATE WILKINSON (Minister of Labour) Link to this

I move, That the Employment Relations Amendment Bill be now read a first time. This bill amends the Employment Relations Act 2000 to implement trial employment periods for new employees of small and medium-sized businesses—those employing fewer than 20 employees—and to support Government policy on KiwiSaver, which is being enacted through amendments to the KiwiSaver Act 2006 by repealing those provisions of the Employment Relations Act that deal with KiwiSaver.

We are committed to getting New Zealanders into jobs and providing the right encouragement to employers to employ them. This is important in the current challenging economic times. Given the pressures that employers and employees at small and medium sized businesses are under, the Government believes that it is important that the measures contained in this bill are acted on quickly. This bill will increase the willingness of employers to take on new staff. Greater flexibility for employers will provide much-needed assistance. The Government’s policies on both KiwiSaver and the 90-day trial periods were well signalled prior to the election.

Firstly, the Government is making changes to the KiwiSaver scheme through the omnibus tax bill. One of these changes will require employer contributions to KiwiSaver to be on top of an employee’s existing pay when the employee joins a KiwiSaver scheme. This change will safeguard the ability of employers and employees to negotiate in good faith changes to this arrangement. There will, therefore, no longer be a need for similar KiwiSaver discrimination provisions contained in the Employment Relations Act.

Secondly, this bill provides for trial periods of up to 90 days for new employees who want to be given a go, and who want the opportunity to get their feet in the employment door, to back themselves to say “Give me a go and I will prove how good I am.” There are no provisions for trial periods in our existing employment legislation. In fact, we are one of the few countries internationally that do not have a trial period for employees. This bill will enable employees in small to medium sized enterprises—those with fewer than 20 employees—to determine a prospective employee’s suitability for permanent employment without the risk of legal proceedings for unjustified dismissal in the event that the employment relationship does not work out. It will encourage small businesses to give a new employee a go and to take on new employees.

Accordingly, under this bill a new employee who agrees to a trial period of up to 90 days will be unable to raise a personal grievance for reasons of unjustified dismissal. The introduction of the proposed 90-day trial period will encourage more small and medium sized businesses—which can find it difficult to absorb costs associated with giving new employees a go—to take on new employees. This will benefit many people at the margins of the labour market.

This bill is not about taking away rights; it is about giving opportunities. It has safety mechanisms to ensure that it is fair and balanced and is win-win for both employee and employer.

The bill will amend the Employment Relations Act so that an employer with fewer than 20 employees may agree in good faith with a new employee to a trial period of up to 90 calendar days as part of a written employment agreement signed by both parties at the beginning of the employment relationship. The trial period will be entered into only by agreement. No one is being forced into a trial period. No existing employees can be put on to a trial period; it is an option that will be available to employees wanting to be given an opportunity to work in small and medium sized businesses.

Thirdly, it is very specific in that it relates only to the ability to take a personal grievance for unjustified dismissal in the first 90 days of an agreed trial period. Other rights are specifically retained so that employees still have the same protections under the Act for unjustifiable action by the employer, whether or not they have agreed to a trial period: the same protections against discrimination, and the same protections against sexual and racial harassment and duress. These protections still remain.

The bill preserves the right of an employee to raise a personal grievance under the discrimination provisions of the Employment Relations Act. The bill also ensures that an employer and an employee may agree to a trial period only once. So if the employment relationship ends, and the employee is subsequently re-employed, the option of a trial period will not be available. That means that the trial period cannot be used as, for example, an 89-day rollover. In other words, the employer, under this bill, can employ an employee with a trial period only if that employee has not previously been employed by that employer.

The bill also specifically ensures that an employee whose employment agreement contains a trial provision is, in all other respects, including access to mediation and including being subject to good-faith provisions, to be treated no differently from an employee whose employment agreement contains no trial provision or contains a trial provision that has ceased to have effect. Mediation will be available; good-faith provisions will continue to apply.

Finally, we have stated that beneficiaries who agree to a trial period, and who find that the trial just does not work out for them, may then be able to return to the benefit without having to wait the stand-down period. That will give beneficiaries the confidence to step on to that employment ladder, knowing that if it does not work out through no fault of their own, they can fall back on the safety net of the benefit.

This bill responds to the needs of employers in uncertain times, whilst safeguarding the basic rights of employees. It is in step with international employment law, and it is a simple and common-sense response to the needs of New Zealanders. The Small Business Advisory Group report in 2003-04 has as its first and foremost recommendation a trial period for new employees.

This bill has already been extensively debated, and it was consulted on a couple of years ago, when there were 618 submissions to Dr Mapp’s member’s bill. This bill before the House addresses the concerns expressed during that consultation. The bill will give businesses the confidence to take on new staff, and it will give new employees the opportunities to get on the employment ladder. It will provide opportunities for those who might suffer disadvantage in the labour market—for example, employees who are new to the workforce or returning to the workforce after some time away, or specific groups at risk of negative employment outcomes. I commend this bill to the House.

Hon TREVOR MALLARD (Labour—Hutt South) Link to this

That is the first speech from the new Minister of Labour, a former lawyer for the Exclusive Brethren and now the list member for the Exclusive Brethren. And it is a shameful piece of legislation she is bringing in.

Hon Dr NICK SMITH (Minister for the Environment) Link to this

I am pleased to be part of a Government that is prepared to address all the elements of law that have been holding back this country of ours. Over the last 9 years, the Labour Party opposite added, at every possible opportunity, to the costs and compliance of those businesses that we need as a country to be competitive. I was interested to hear that Phil Goff said he would be holding the Government to account to ensure that it met its promises. Well, we very specifically promised we would introduce a 90-day trial period of employment, the same as that in Australia and as that which is held in the UK. In fact, every developed country includes in their employment law a period of trial.

I want to set out the reasons why I think this is an important improvement for New Zealand. I acknowledge Labour members opposite. I do not think a single member on the Labour benches has been involved in a small business that has employed 20 people. I could take my entire 10 minutes and list each of the union officials in the Labour Party, who believe that the unions are the A to Z of wealth creation. I say to members opposite that this Government’s employment laws are about proper balance, and the 90-day trial period is a change that we need to make.

Let me tell members some of the good reasons for this bill to become law. I served for 3 years as the Minister of Corrections. We all know that the most important element of reducing the reoffending rate for those who come out of prison is for them to be able to get into work. In fact, if we look at the statistics of those coming out of prison, we see that the reality is that getting back into work is the single greatest factor in reducing their reoffending rate. The very real problem that members opposite do not understand is that a small business of fewer than 20 employees constitutes the vast bulk of businesses in New Zealand. The opportunity of employing somebody straight out of Pāremoremo Prison is a very real risk that many employers are not prepared to take, even though it is in New Zealand’s interests that a small employer gives a break to a person coming out of prison. It is best for them, it is best for New Zealand, and it is particularly important if we are to reduce reoffending rates. The reality for many small employers is that they are not prepared to take the risk with those sorts of employees, such as new migrants, young people, and ex-prisoners. That is what makes this 90-day trial period so sensible.

I know that I am not allowed to use the “h” word, but to hear Trevor Mallard raving in this Parliament about the importance of such a bill going to a select committee is truly remarkable. We are talking about the change that is being made in this bill. Did members opposite send the KiwiSaver legislation to a select committee?

Hon PHIL GOFF (Leader of the Opposition) Link to this

That was an angry and out-of-control speech from Nick Smith. Of course, he has the right to be angry, because he was not given a trial period when he was deputy leader of the National Party. He did not get 90 days; he got 14 days, and he was sacked. But we do not need the protection of industrial law to stop that happening. The law at the moment states that one can be sacked for incompetence and irrationality, and that was almost certainly what Nick Smith was sacked for.

Nick Smith said that the Employment Relations Amendment Bill gives a trial period. That shows how little Nick Smith understands about the current law. Section 67 of the Employment Relations Act allows for a trial period. I tell Dr Smith that that was put into the law by a Labour Government. But the Labour Government did not say that during that 90-day period people could be sacked wrongfully, unfairly, illegitimately, and without cause. No New Zealander believes that any Kiwi should be able to be sacked for no good cause and to have no right of redress. That is why what Kate Wilkinson said—“This bill is not about taking away rights;”—is the opposite of the truth. This bill does one major thing: it takes away the right of the ordinary Kiwi worker, if a bad employer dismisses that person without cause in the first 90 days of employment, to the protection of being able to take up the matter as a personal grievance or to take it to the Employment Court. Which New Zealander does not believe that it is fair that every other New Zealander should have that right of redress?

We are fundamentally against this bill on that matter of substance. All New Zealanders who are wrongly dismissed are entitled to the protection of having an avenue of redress. That is the right—

SUE BRADFORD (Green) Link to this

If the Employment Relations Amendment Bill that is in front of us today is indicative of the National Government’s intended approach to both democratic process and the rights of workers, I think some of the people who so happily voted for Mr Key and his colleagues a few weeks ago may find themselves waking up to some rather unpleasant realities in the months ahead. There was no word in National’s 100-day plan that this would be one of the first things it did, nor was there any indication that a measure with such drastic impacts on literally hundreds of thousands of workers would be pushed through under urgency in the first week of Parliament, without any opportunity for public submission or debate whatsoever.

Although the Green Party accepts that a major select committee process did take place a couple of years back when Wayne Mapp’s Employment Relations (Probationary Employment) Amendment Bill was considered by the previous Parliament, that does not mean there should be no public process on or proper parliamentary consideration of the new bill that is in front of us today. Firstly, this bill is somewhat different from Mr Mapp’s original effort, and, secondly, even an abbreviated and shortened select committee submission and consideration process would have been far more democratic than the rush to judgment and the simple sham that is taking place in the House today.

On top of that, the Government has taken its new-found power to extremes in not even having the courtesy to supply other members of the House with a copy of the bill until very late last night, only hours before the commencement of this debate. To think we can have a really good consideration of this bill in those circumstances is ridiculous. Perhaps National has so little confidence in what it is doing that it thinks the ability of those of us who oppose this legislation to prepare for this first reading must be kept to an absolute minimum. Handicapping Opposition parties like this does not say a lot for National’s confidence in the capacity of its own members to debate the contents of this bill fairly and squarely.

As the Human Rights Commission said yesterday, and as Mr Goff has already mentioned: “Rushed legislation is potentially risky legislation. … The select committee process is an important check and balance where both employers and employees rights can be debated in a measured way. Submissions to select committees reinforce democratic principles of transparency, participation and accountability.” Shame on this shiny new Government for taking such a shabby approach in one of its first major legislative measures.

Turning to the content of the bill itself, I say the Green Party, of course, strenuously opposes this new law, which aims to give small and medium sized organisations employing up to 20 people the ability to fire staff at will during their first 90 days on the job. At any given moment, around 100,000 workers are in that position. The New Zealand Council of Trade Unions says that over 700,000 employees a year will potentially be affected. That means that a big percentage of New Zealand’s workforce will feel the impact of a law under which workers can be dismissed for almost any reason, without the right of appeal, in their first 3 months on the job. People who are in their most vulnerable phase of their employment will become even more defenceless than they are now, and will become prey to the depredations of those who practise less than scrupulous employment procedures. The bill will play into the hands of those employers who are lazy, mean, prejudiced, or simply ignorant about how to treat staff well.

DAVID GARRETT (ACT) Link to this

I rise to support the Employment Relations Amendment Bill for one reason and one reason only: it will foster and promote employment. I am able to say that because, unlike members of the House on the other side—and I know there are many unionists over there, and they are creating a wonderful show for the television audience and for union officers—I have practised employment law since it became a speciality in 1991. During that period I have handled approximately 150 personal grievance cases for unjustified dismissal, for both employees and employers—in fact, more often for employees. I cannot recall offhand any case during that period where the dismissed employee had been working for 3 months or less. There may be one—someone might find one in my name—but I could not think of one last night.

That is no great surprise, because when we did some research yesterday we found that the Department of Labour does not maintain accurate figures on length of service, but what figures it does have show that the vast majority—about 80 percent—of personal grievances are brought by employees with service of 1 to 4 years. The next most common—10 to 15 percent—involve employees with service of 10 or more years. The next most common involve those with service of 7 to 9 months. So about 3 to 5 percent of personal grievance cases are brought by employees who have been in employment for less than 3 months. If there are members on the other side who have some experience in employment law and personal grievances, they will know that that is the reality.

I listened to the Green member Sue Bradford, and what she said was very similar to the kind of scaremongering that happened after the Employment Contracts Act was introduced in 1991. What many people do not recognise is that that supposedly Draconian Act—“Draconian” is a favourite word of members on the other side—gave personal grievance rights to everyone. Prior to that Act, one had to be a union member to take a personal grievance. There were predictions then just like those made by the Green member; there were predictions of mass sackings, of unfair treatment, of oppressive conduct, and of all sorts of things. It did not happen.

It is not going to happen under this bill, either, for some very good reasons. The employer does not want to go through that process. It is a complete hassle and a diversion. If employers are sensible and well advised, when they take on employees they will get advice from an employment lawyer, who will tell them that getting rid of an employee for any reason—even for serious misconduct—will take 3 to 6 months or more and will cost $3,000 to $5,000 in legal fees, if they want to make sure they get it right. It has been a surprise to me in my 15 years in employment law practice how uncertain and unwilling employers are to dismiss someone without advice. They will need to take advice. Even if they get it right, the dismissal can be challenged under the law as it is now. That means that the employer is dragged to the Employment Relations Authority, or to mediation. Most competent employment lawyers will tell them to pay what we in the trade call “go-away money”—pay the employee $3,000 or $4,000 to go away. Any employer considering taking on staff who receives that advice—unless the employer is completely stupid—must absolutely, utterly need a new staff member before stepping up to the brink.

This bill will allow employers to take someone on and, as Government members have said, give them a go, secure in the knowledge that for 90 days only they can dismiss that person without being dragged to the Employment Relations Authority, or, as an alternative, being made to pay “go-away money”, plus lawyers’ fees of, say, $5,000 to $7,000. But it will not happen. There will be about the same number of cases as now—3 to 5 percent—and I will tell members why. If an employer goes down that route and uses this provision improperly, what happens? Firstly, as I have said, he or she will be up for 5 or 6 grand. The Hon Dr Michael Cullen said yesterday—in fairness, I have to say I think he had not seen the bill at the time—that there would be dismissals for pregnancy and those kinds of things. The bill makes it clear that that cannot happen. The discrimination provisions in section 103 of the Employment Relations Act are preserved. Unlike what the Green member suggested, it is actually not very easy to sack somebody for improper reasons such as pregnancy, sexual harassment, or racial grounds, and hide it as a poor performance issue. It is very difficult. I can say that because I have been doing employment law for 15 years, since the Employment Contracts Act came in and employment law became a specialty.

I will tell members why most employers will not misuse this bill. If they need to hire someone else, then what do they have to do? They have to go through the process again of advertising, of interviewing at least once, possibly two or three times, of taking a deep breath and employing someone new, of training him or her, of inducting that person into the firm, of giving him or her safety training—all those things. No rational employer wants to do that unless he or she has to. OK, there will be some ratbags, probably, just like there are ratbags now, who will take advantage of this law, but they will be few in number. They will be 3 to 5 percent of employers. As for the rest, someone like my mate down south who runs a liquor store could do with a new fork-lift driver at this time of year, but he will not employ someone at the moment, because he knows what he would have to go through if it went wrong.

Hon TAU HENARE (National) Link to this

Can I offer my congratulations to you, Mr Deputy Speaker, and the other Speakers, the Hon Dr Lockwood Smith, Eric Roy, and the Hon Rick Barker. I offer my congratulations to all new members of the House on both sides. I also offer my commiserations to those who never made it back to the House, either by their own desire or through the voters’ desire. My message to you is “Goodbye and good luck.”

But can we now concentrate on the bill, which is about people at the margins. Those guys over there would not know what the margins are, because they have been on good salaries and in nice cars for 9 long years. They have not worried about who has union membership. They do not care about the poor prisoner from Pāremoremo prison who is trying to get a job and trying to make a go of it. They have not cared about that for the last 9 years. For 9 long years they have not cared about the long-term unemployed. What they have cared about is trying to hold on to the limousines and the ministerial salaries. That is what they have been doing for the last 9 years. They do not care about the immigrants, and all we hear is cackle, cackle, cackle from the witches and warlocks across the way.

The Labour Party members have to have a cause célèbre. They have to have something to hold on to. But I am afraid that 6 months from now it will be just like the anti-smacking legislation. Nothing will have come of it. All the hatred and all the scaremongering in the world that happened then will have died away and the prisoner from Pāremoremo prison who has had a chance—a second chance even—will be grateful to the people who had a bit of vision. He will be grateful for that second chance. So is the bill—

Hon RUTH DYSON (Labour—Port Hills) Link to this

I begin my contribution by quoting some of the words that the Minister of Labour, Kate Wilkinson, used in her address in this first reading debate on the Employment Relations Amendment Bill. Kate Wilkinson is a list member of Parliament from Christchurch. She used to be a lawyer for the Exclusive Brethren, and that fact, combined with the fact that she is now the Minister of Labour and is promoting the very lack of employment relationships that Exclusive Brethren members have promoted day after day—through their practices in their own businesses and also through their writings—should be no surprise. The relationship between Kate Wilkinson, her former occupation, and this legislation comes as no surprise to anyone on the Opposition side of the House.

Kate Wilkinson said that this bill was not about taking away rights. Well, frankly, that is the only thing that this bill is about. The rest of it is just nonsense; it is rhetoric. The soft sell that Kate Wilkinson and her colleagues did around the country prior to the election will not wash anymore, because this is the time when the legislation comes under the hard scrutiny of the public. This is the time when people will see the reality of what those soft promises meant. This bill is about taking away employment rights.

I will read something to the House, and that is section 67 of the Employment Relations Act 2000. That section is headed “Probationary arrangements”. Section 67(1) states: “Where the parties to an employment agreement agree as part of the agreement that an employee will serve a period of probation or trial after the commencement of the employment,”. That provision goes on to state that this agreement must be put in writing. Then it states that it is not acceptable to unjustifiably dismiss an employee during the probationary period. That is what the existing probationary arrangements say. They are in the law now and they work very well.

So Tau Henare’s friends who are coming out of Pāremoremo prison—as he explained to us in his contribution—and finding it hard to get a job come under the existing provisions and can go to an employer and say: “Give me a try. I want to get a new life, and I want a job.” They can be covered under existing law—section 67, “Probationary arrangements”, of the Employment Relations Act 2000. Actually, the definition of probation is “a testing of the conduct or the character of a person as a candidate”, and, interestingly enough, it is as a candidate either for membership of a religious organisation or for employment. I found that very interesting, given who the Minister proposing this legislation is.

The very terminology in the law and in the dictionary backs up the fact that there is an existing provision that can be used by any employer, large or small, to employ, for a probationary period, a person who is hard to place in the labour market and might find it harder to get a job than others—as has been so eloquently described by National members, who suddenly give a toss about unemployed people. Those people can already be employed on a probationary period, so what is the difference between the existing legislation and the bill that Kate Wilkinson is proposing? There is only one difference between the existing law and the bill proposed by the member, and that is that her bill takes away all employment rights for unjustified dismissal. So employers would not have to be fair. They would not have to go through any sort of process. They could just sack people, perhaps because they did not like the colour of their hair, their eyes, or their skin, or because they did not like their attitude, or because they might be pregnant.

But, of course, Kate Wilkinson says that they can go to the Human Rights Commission, and that there are existing safeguards for those sorts of things. I am talking about the Human Rights Commission, which, only a couple of years ago, the National Party was describing as PC gone mad and saying should be scrapped. Suddenly National will load up the Human Rights Commission with cases that could easily be dealt with through mediation and the Employment Relations Authority if there was an unjustified dismissal.

All that is asked of New Zealand employers is that they be fair to their employees. That is clearly too high a standard for the National Government. To expect employers to be fair to their workers is clearly too big an ask. Well, I think it is a disgrace, and I can tell the Minister responsible for this legislation that both the content and the process we have seen is something that I never expected of her. I know that people in Canterbury would have expected more of her behaviour as the Minister, as well.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) Link to this

Tēnā koe, Mr Assistant Speaker. Eight years ago Professor Jane Kelsey wrote a book called Reclaiming the Future: New Zealand and the Global Economy, in which she talked about what happened to Māori during the last recession, of the late 1980s. It is a book that should be required reading for all members of Parliament as Aotearoa stares down the barrel of another recession. In that book Jane Kelsey reminds us that until 1987, per head of population there were more Māori than non-Māori working in Aotearoa. That was just 21 years ago. Yet the way the media paint it, Māori have been basically unemployed lazy dole-bludgers ever since Pākehā came to these shores. It is strange how much we are influenced by the media. The fact remains that just 21 years ago, more Māori than Pākehā were working, our families were stable, our kids were healthy, and crime was down.

Then, of course, the crash hit. The world came crashing in on us, and in just 6 years Māori unemployment went from 1 percent to 15 percent. Nearly half of all 16 to 19-year-old Māori ended up on the dole, and our whole world fell apart. Now it seems we are heading right down that same track, but that this time we are starting from a place far worse than 21 years ago, because for Māori, Māori unemployment is already more than twice that of non-Māori, there are four times more Māori beneficiaries than non-Māori, and Māori society has still not fully overcome the devastating effects of the crash of 1987.

Even after 9 years of great prosperity, the gaps between the rich and the poor were never closed, because Labour chose to close the programme rather than close the gap. Let all those from Labour who ponce on in pious and sanctimonious rage about mana enhancement and the perceived failings of the Māori Party hear this clearly for the first of many times over the next few years: the Māori Party was born out of the treachery of the Labour Party. The Māori Party was born out of the betrayal of 50 years of blind loyalty to a regime that took the Māori vote and spat on the Māori hand that offered it willingly. The Māori Party was born out of the theft of the foreshore and seabed. In 2005 the Māori Party took four seats from Labour. It held and increased its majorities in every one of those seats and took another seat in 2008. The Māori Party will take the other two seats in 2011. The Māori Party will remain forever a party in this House and a player in the governance of this country. Thanks to the treachery, the duplicity—

Hon LIANNE DALZIEL (Labour—Christchurch East) Link to this

As a former Minister of Commerce, I shall read the adequacy statement of the regulatory impact statement into the record, as I did for a previous bill: “It has not been possible for the Regulatory Impact Analysis Team to undertake an assessment of the adequacy of the Regulatory Impact Analysis and the Regulatory Impact Statement for this proposal within the time frames.” This is the second bill from the National - Māori Party - ACT Government that has not even tried to pay lip-service to the regulatory impact assessment process that is critical to quality regulatory frameworks. This is a Government that was so proud to appoint a Minister for Regulatory Reform, yet the first two bills it has introduced into the House do not even meet the benchmarks that were established by the previous Government. It is ridiculous.

I ask the House how this bill is going to turbocharge the economy. I heard National Party MPs talk about productivity throughout the campaign. What does this do to increase workplace productivity? How is workplace productivity improved when employees do not know whether they will have a job at the end of their first 90 days in the job? How is productivity improved when we let employers off the hook in terms of understanding how to get the best from their workforce?

From the Department of Labour’s website I got an interesting little document on workplace productivity. It has all of the productivity drivers that have been developed in collaboration between Business New Zealand, the New Zealand Council of Trade Unions, and the Department of Labour. The document refers to building leadership and management, organising work, networking and collaborating, investing in people and skills, encouraging innovation and the use of technology, creating productive workplace cultures, and measuring what matters. It is the productivity driver called “Creating Productive Workplace Cultures” that I thought was really important, and it states: “Positive relations between staff, teams and managers are the foundation of productive workplaces. A positive work environment motivates people and helps them commit to the organisation. People feel encouraged to ‘go the extra mile’. It’s also important to value people’s insights and experience. Their ideas can help your workplace to do things smarter and better. That means your business will become more innovative and productive over time.” This was developed using real-life examples, real business case studies from real businesses increasing productivity on many levels. Not once does it say “Create a climate of fear and put people’s jobs on the line for the first 90 days.” Not once in any of these productivity drivers do we see that suggested.

National knows that 96 percent of all firms employ fewer than 20 staff. That is why the Labour Government established the portfolio of Minister for Small Business and also the Small Business Advisory Group. When I was Minister for Small Business, the Small Business Advisory Group recommended this provision. I agree that the Small Business Advisory Group recommended the provision, but I asked the advisory group to think about that, and it did, because it is a little bit smarter than National would perhaps give it credit for. Although I could not persuade the advisory group to give up on that view, it did identify what the real issue was, and that was fear of fear itself. Every one of those people had an anecdote or a story about what had happened to their mate’s uncle’s third cousin. Some of them had stories of their own—stories of disappointment of pulling out the cheque book to pay a non-performing staff member who was dragging down the business. But they did not have to pull out the cheque book, at all; they just thought they had to do so.

The National Government, in its drive for productivity and its drive to turbocharge the economy, says that that is OK, and that it is OK for people to think that is the case when the current law already provides for a guide to probation periods that enables people to have a period of time where they are essentially looking out for all the issues that are of concern. I think it is letting employers off the hook not to teach them how to employ staff well from the outset. Employment relationships are all about establishing what the expectations are from both sides of the relationship. National just cannot stand it. The bottom line is that if employers understood what the law currently allows and were able to use it effectively, there would be fewer personal grievances and increased productivity. I call that a win-win situation.

This is an extremely lazy policy, and that is because it has not been through any process of scrutiny, at all. If the Government was so sure of itself, why would it not send this bill to a select committee for that scrutiny? Tau Henare said we needed to get it through quickly, to bring it in on time, but it does not come into effect until 1 April next year. What do those members mean, it has to be rushed through under urgency before Christmas? It is an April Fool’s joke for ordinary workers.

I remind this House that yesterday was international Human Rights Day, and what does the new National Government do to celebrate this day? It takes human rights away from ordinary working New Zealanders as its way of trying to celebrate human rights, and that is just ridiculous. Today the New Zealand Government is reducing the rights of workers based solely on the size of the business they work for. We can guarantee that employers would not want to increase their businesses to 21 employees; they would want to keep their number to fewer than 20 so that they could rely on this 3-month “get out of jail free” card. How ambitious is that for New Zealand? I do not think that is very ambitious for New Zealand; it is pathetic. Even Business New Zealand says the process is bad.

I remind the House of a story we heard back in the 1990s. I remind this House that the Employment Contracts Bill, despite Gerry Brownlee’s memory—even though he was not here at the time—actually did go to a select committee. I remember a mother coming to the select committee when the Employment Contracts Bill was before it. She pleaded the case for young people. She said that young people should be supported by an adult if they are going to be disciplined by their employer. She told the story of her son. I cannot remember how old her son was—I think he was 17 or 18 at the time. He was in his first job in a shop in Christchurch. He stayed after work on a Friday night for a few drinks, and he was smoking. He flicked some ash on to the carpet, and it burnt the carpet. The employer came in at the time and he sacked him instantly, on the spot. It was that young man’s first job. He had been looking for a job for a long time. That young man went away from that shop, bought a bottle of whiskey, drove himself down to a riverside, and took his own life. He killed himself because he could not stand the thought of going home and telling his parents that the first job he had ever got had been taken from him just through a foolish act and an employer who was not prepared to listen.

I know that members will think this is a very extreme example, and it is. But anyone in this House who thinks that it is OK to take away rights from the most vulnerable people, while pretending that this is for vulnerable people, needs to think very carefully about the consequences at the extreme, because these are the consequences that will occupy the minds of New Zealanders in the future when we see those cases repeated. Tragically, history does repeat itself, and we are condemned to those mistakes of the past if we do not learn from them.

NATHAN GUY (National—Ōtaki) Link to this

I am delighted to take a call on the first reading of the Employment Relations Amendment Bill. It is a very important bill for the Government to push through before Christmas because of the economic times we are currently in, where unemployment is rising and employees need to be given the chance to be employed.

We have just heard from the previous Minister for Small Business, Lianne Dalziel, who is now on the Opposition benches. She used to oversee the Small Business Advisory Group. She was talking up this legislation and saying how important it was. She said the No. 1 issue that was raised by that advisory group concerned the 90-day probationary period. It is fantastic that she alluded to that in her presentation and actually supported it. That just shows how that advisory group actually worked through the process of analysing how important the legislation we are debating this afternoon is to small and medium sized business with fewer than 20 staff. It is a great thing that we are addressing this issue today under the leadership of Prime Minister John Key. We will deliver for small and medium sized businesses, and we will give employers and employees the right to get on and create a very good working relationship. This was our pre-election commitment.

Unemployment across the country is forecast to rise up to about 6 percent, and it is tracking up now. [Interruption] It is interesting that the previous Minister for Social Development and Employment, Ruth Dyson, is chipping in from the other side of the Chamber. When she was in the ministry and unemployment was clicking up then, before we had the election, she came out with a random comment to say she was not too concerned about unemployment increasing. Since then, unemployment has carried on increasing. It is vitally important that unemployed people are given the opportunity to get back into some form of employment.

In my area I am delighted to now be representing the Ōtaki electorate, which encompasses the wonderful area of Kapiti and Horowhenua. In the last 12 months unemployment has risen in Kapiti alone by 44 percent—44 percent in the last 12 months in the Kapiti district. It just shows how important this legislation is going to be for small and medium sized businesses—for those employers to give people the opportunity to get into a job.

We all know that it is particularly difficult in recruitment to know whether one has a compatible person who will work through with the employer and employee. Businesses across the country are saying that is one of the things that causes them a great amount of concern. The other issue is bureaucracy. The example I want to use comes from when I was on the campaign trail. I was out in an area in my electorate called Shannon. There was a mum and dad business that had just got going. They had mortgaged their whole house to set up their business. They had taken a risk, and they were concerned about attracting the right people into their business and about whether those people would be compatible. This legislation will help to give those people time to work out that compatibility.

It is really important for the Government to progress this legislation through its first reading, second reading, Committee stage, and third reading. I look forward to having some ongoing dialogue with members on the other side of the House. Of course, all their union mates want to say: “Oh well, this is just going to be the right to hire and fire on the 89th day.” What an absolute load of hogwash. Anyone who has been involved in business knows that it is vitally important to upskill and to continue to train one’s employees. Why would any employers in their right mind, on the 89th day, want to kick out those people whom they have just trained and who are compatible in their business?

It is interesting that a whole lot of countries in the OECD have longer trial periods. It is interesting that the soon to be elected, if he has not been already, president of the Labour Party and former member of the New Zealand Amalgamated Engineering, Printing and Manufacturing Union said that it has a 6-month trial period. So I cannot understand why Opposition members are so concerned about this legislation.

Moving this legislation through will be vitally important when unemployment is tracking up. Vulnerable employees need to be given the opportunity to be taken on by employers. I have given an example of mum and dad investors who are petrified about taking the next step. They might currently have a wonderful innovative idea and they might be working out of their garage. We need to have more economic development in the region that I represent in Ōtaki, and in Napier where Chris Tremain is from. These people are really concerned about taking the next step of employing people and getting the right relationship between employee and employer. This legislation is vitally important to growing the economy, and we need to get on and endorse it. That is why I am speaking today very much in favour of it.

COLIN KING (National—Kaikōura) Link to this

It is a pleasure to be able to speak to the Employment Relations Amendment Bill. Hearing all those well-thought-out deliveries from this side of the debating chamber certainly reinforces my view. I would like to start by acknowledging the concerns that the Māori Party member Hone Harawira expressed. Those things that happened during the late 1980s were hugely concerning. If we do not learn from the lessons of the past, then we are indeed likely to make those mistakes again. However, I make the point that although I had the responsibility in Opposition, before National came on to the Government benches, of looking after the people in the trades training sector, it became clear to me that there was a substantial blockage within the employment system. As the honourable member Lianne Dalziel mentioned, employers had the perception that taking on new staff was not worth the risk and the worry. We might say that theoretically it is not a problem; that the problem is with the employers. Well, I am sorry, but there was a lot of issue there. Once that sort of thought takes hold, then we do not get people coming into employment as apprentices to be trained in the job.

It is very, very important that at least 20 percent of employers train apprentices. We work on the old 80:20 rule, but sadly we are not seeing that happen today. Too many employers look at the risks associated with the Employment Relations Act when taking on somebody, and they just do not do it. We have seen an exponential growth in that practice, which will have to be addressed in a very intelligent way, and it will be up to the National Government to do it, so as to be able to find ways through it. This bill is one of the first steps in achieving it. We are now seeing a lot of contracting out for services by businesses. Although that is a commercial decision, we could say, it is part of the impacts of the risk and the worry for a small to medium sized enterprise when taking on people whom the employer is not too sure of.

I will just put that thought there for the moment, as it is something that we cannot overlook. We do not want to dismiss it as ideological thinking and notional. It is something that this House needs to seriously consider. We have heard a lot of talk today about section 67, and that is appropriate. Effectively that is the present provision covering a probationary period, and when we check through it we see that it is reasonably prescriptive but not overly prescriptive. I would have to say—putting myself in the place of a person who is working in the business and not necessarily on the business—that it is hugely onerous. Working with a shovel in one hand and trying to wrestle off crocodiles and sharks with the other, through the grievance process, is not something one would welcome this side of Christmas. I am very, very supportive of this move.

Let us consider the way the Employment Relations Act came to the House. It went to a select committee. Six hundred submissions were heard on the legislation at that time. When the vote was taken at the select committee, it was split 50:50. We have had to experience an interesting change. When the legislation was introduced into the House, there was an organised theatre of demonstration outside the House—an orchestrated ceremony. Today all we have is the Opposition members on the other side of the Chamber whingeing, moaning, whining, and trying to fabricate something that is not a problem at the moment. If it does become a problem, then we can be sure that members on this side of the House will address it.

Let us turn further into the bill and to something that has not been talked about all that much—section 120 of the Employment Relations Act. Although members talk about the probationary period, there is the other side of the coin, which is the process of terminating an employment relationship. On that basis it is incredibly onerous, and that is the point that is made in this bill—the status quo and the problem. The explanatory note in the bill talks about the status quo and the problem: “At present there are no provisions for trial periods that exclude”—and I make that point—“the employee from raising a personal grievance for reasons of unjustified dismissal.” That is pretty straightforward. At present there is no provision to employ people without the risk that if they are dismissed, they can take a personal grievance case against the employer.

Just imagine, if one ever had the privilege of being self-employed, having to wait in fear and trepidation for 60 days that one may be asked to put in writing, within 14 days, the reasons why the employment was terminated. The average among us here might say that that is not too hard a request; it is pretty reasonable. It can appear to be very reasonable in an ideological world, but in the real world, at the coalface, it is incredibly onerous. As the ACT Party member said previously, when we break it all down, of the number of cases that were brought forward and that he acted on in respect of employment grievances, 80 percent were brought by employees with a length of service of 1 to 4 years, 5 percent were by employees with 10 or more years of service, and 3 percent by those with service of 7 to 9 months. So that leaves a fair structure within the Labour Party of 3 percent.

I put it to members that the value of this bill, when read within the context of the Employment Relations Act, provides adequate and sufficient safeguards for the employee and the employer. We should also bear in mind, if someone is in any doubt, that both sides of the relationship have to agree to this 90-day provision. That is reasonable. Employees also continue to be protected by the Employment Relations Act provisions. We talked about human rights the other day. Employees still have protection under those provisions and, barring personal grievances, they have access to mediation.

When we read this bill in the context of the Employment Relations Act, I can put my hand on my heart and say that members on this side of the House are very, very strongly in support of it, that the small to medium sized enterprises within New Zealand are strongly in support of it, and that it will work for the many, many people who have to re-enter employment or who are entering it for the first time.

At lunchtime somebody from the other side raised a question with me in passing. They asked me why we do not include shearers in the provision. Well, fortunately, because shearers are a scarce commodity today, they can get a job wherever they want. However, a lot of the other trades are not in such a privileged situation, and numerous parents, especially mothers—it is mothers who seem to go into bat for their children—have very strongly asked me why someone will not give their child a go. This bill does that very thing. So I encourage those members on the other side of the House to stop their blinkered thinking and to open up to the opportunities here. This National Government will take this country forward, and the first step—even if it is only a small one—is the Employment Relations Amendment Bill. I speak in support of this bill and recommend it to the House.

Hon PHIL GOFF (Leader of the Opposition) Link to this

I seek leave to table the report of the Labour Committee on the Employment Contracts Bill dated April 1991, which indicates that controversial legislation introduced after the election of a National Government in 1990 at least went to a select committee.

Hon PHIL GOFF (Leader of the Opposition) Link to this

I seek leave for the Employment Relations Amendment Bill to be referred to the Transport and Industrial Relations Committee for consideration, in order to allow proper parliamentary scrutiny and to acknowledge the democratic right of New Zealanders to make submissions on legislation, especially when it is controversial; and acknowledging that, anyhow, this bill does not come into effect until 1 April, so there is no reason why it should not go to a select committee.