Employment Relations Amendment Bill

CHRIS TREMAIN (National—Napier) Link to this

Having heard eight excellent maiden speeches, I rise to address the second reading of the Employment Relations Amendment Bill.

Just a month after the election, Parliament is in urgency and we are putting through this legislation. We are delivering on the promises we made during the election campaign. Those promises were well canvassed throughout the election period and were, I might add, clearly part of the 100-day agenda that we took to the public and that is now being put through the House. It is excellent.

As stated in clause 4, “Purpose”, this bill introduces a 90-day grievance-free probation period. This proposal has been well canvassed around the country—particularly in 2006-07 when Dr Wayne Mapp first put forward the predecessor to the bill. This legislation will make labour markets a little more flexible and is part of the recipe that National proposed and is now implementing to lift economic growth.

The Hon Lianne Dalziel, formerly the Minister for Small Business, made a very interesting point earlier in the debate. She talked about her pride and joy, the Small Business Advisory Group. It is an important group that she selected and got up and running. That group put out a report about the key things that would help to drive small business across New Zealand. One of the top recommendations—in fact, I believe that it was No. 1 or No. 2—was to introduce a 90-day grievance-free probation period. Funnily enough, after that recommendation had been on the agenda for a couple of years, the same group returned a report to the House on the performance of the Minister and the Labour-led Government with regard to those criteria, and the Minister received a score of two out of 10 for the delivery of a number of key recommendations. I would not have thought that that was a great score, but the Minister was proud of her achievements and was happy to move on.

We are introducing this 90-day bill today. As I said, the proposal was well canvassed in 2006 when Dr Mapp first brought the predecessor to this bill to the House. That bill has been watered down quite significantly, but the proposal was again well canvassed during the election campaign. This legislation is opposed by Labour members in typical fashion as they seek to create myth upon myth about its possible horrendous outcomes. These myths are propagated to feather their own political nests. For example, the Hon Annette King suggested earlier that businesses would stop growing once they had 20 employees. Please! I shouted across the floor to the member that people do not go into business just to stop when they have taken on 20 employees. They are passionate about growing their businesses; they put their heart and soul into them. If they are fortunate enough to have a successful business that grows and grows, they are hardly going to haul on the handbrake because they have reached 20 employees. That is just insane and will not happen.

The classic myth—the myth of all myths—is that employers who have had employees on board for 89 days will then sack them. Once again, that myth has been propagated by just about every speaker on the other side of the House. It is unbelievable; it just does not happen. In the real world, if employees are even half good, employers wrap them in cotton wool and hold on to them because they add value to the organisation and help to take it forward. The last thing an employer would do is sack an employee on his or her 89th day.

I really think Labour is creating a whole raft of myths to scare people about this legislation, when in fact there is no need. People who start a small business invest a big chunk of their lives in it. They might mortgage their house or borrow money off their mum and dad to get into the business. They do the hard yards. They have to work as long as or longer than the politicians who work through urgency in this House. Once their employees have gone home, they have to work on their tax returns, their PAYE, and their fringe benefit tax (FBT)—maybe from 12 o’clock at night until 2 in the morning. They put their heart and soul into their business.

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

I will record quite a rare moment in the history of this Parliament by agreeing—briefly though it will be—with something Chris Tremain said. This is unheard of and is unlikely to occur again in the future. I too am proud of the values and the commitment shown by those who have given their maiden speeches over the last couple of days. Obviously, I have a bias towards the Labour members, as I am sure Chris Tremain has a bias towards the others. What is really interesting is that everyone who has made a speech, from whichever perspective, has come here believing they have a contribution to make. They have come here to contribute in a way that is indicative of the public service values we have in New Zealand.

I was reflecting on that after we heard the Green Party member Kevin Hague’s speech. I was thinking that if I were the Minister of Labour now and had just introduced this bill, and someone had asked me what I had contributed in Parliament, how proud would I feel to say that my first bill as the Minister of Labour—my significant contribution, my commitment, to improving the quality of life for ordinary New Zealanders—would take away employment rights from 700,000 New Zealanders every year? I feel for Kate Wilkinson because I am sure that when she became a member of this House she did not make that commitment in her maiden speech; it was not what she aspired to do. I regret that she is not able to give something to the more vulnerable people in our communities, but instead has chosen to use her time as Minister to take something away.

According to the speeches and rhetoric of National members, this bill purports to open job opportunities. The challenge that employers up and down the country face, and have faced for several years—it will diminish over the next little while, but not a lot—is to find skilled staff to fill their job vacancies. That is the challenge that every employer talks about. That is why Labour put so much emphasis on ensuring that that skills match was connected—that the people who were out of work were connected with the labour market. More fundamentally, we ensured that when employees went into a job, they were working in an environment where their contribution was respected and valued, where they were encouraged to make a stronger contribution in the future, where they were part of the business, and where they could contribute to and make better opportunities for their own families and other workers.

Kate Wilkinson said in her opening comments during the first reading debate tonight that this bill is not about taking away rights, but that was exactly the opposite of the truth. This bill is only about taking away rights. In fact, it even refers to section 67 of the Employment Relations Act, which has provision in it for a probationary period. It is referred to as a trial period, so in order to make this amendment look less foolish than it actually is—and, by crikey, that was a bit of a challenge—they have to take the word “trial” out of section 67 because otherwise it will be blindingly obvious, even to the National backbench, that we will have two trial periods in the same Act. As well as inserting the National Government’s term “trial period”, they have to take the existing words “trial period” out of section 67, and then remove the rights that go with that current probationary period or trial period. It is even referred to as a trial period in section 67.

We on this side of the House understand the issues that some people face in getting a job. We understand the issues that employers face when recruiting, particularly for small businesses. They may not have the expertise or the additional resources required to go through a rigorous recruitment process. That is why section 67 is in the Act. That is why there is specific legislative provision for a probationary period, where a person’s rights in the case of an unjustified dismissal are enshrined in legislation. But employees are clearly on trial during that probationary period. If employers do not know about it—and clearly the National backbench did not know about it—then the Minister of Labour now has it within her mandate to promote section 67 to ensure that it is used to give the solutions that she says are so apparent, which no one else in the employer work force seems to be aware of.

Taking away a worker’s rights, particularly in this time of financial stress and insecurity, is not just unnecessary but a cruel thing to do. There is no need to take away a worker’s employment rights when he or she is unjustifiably dismissed, which is exactly when their employment rights go. So it appears that unjustified dismissal is OK if it is within the first 3 months of someone’s job. That is just ludicrous.

I want to refer briefly to something one of the ACT contributors said, and I regret deeply that I am not able to recall his name just at the moment. He mentioned that this side of the House was pretty negative about employers. I want to put on record a correction about that misunderstanding of our view. This is not about bad employers, actually. This is about bad law that a small number of employers may be able to take advantage of. I am sure that the overwhelming majority of employers in New Zealand would like to recruit well, would like to recruit the best person for the job and be able to do that within their resources, and that the person turns out perfectly—but some do not, despite everyone’s best efforts.

I know that the overwhelming majority of employers not only want to but do treat their workforce more than fairly—in fact, very well—in all sorts of areas that are outside their legislative requirements. But what this bill does is say that we are prepared to have bad law in our country. We are lowering the standard of fairness that we currently expect in our workplace. That is what the law requires at the moment. It requires a dismissal to be fair, and this proposed amendment to the Employment Relations Act lowers the threshold to the point where it can be unjustified. In this bill, an explanation for a dismissal does not even have to be given by the employer to the employee. One cannot get more discourteous than that. What does that do to a young worker—when he or she is sacked and does not even know why? How does that make a young Pacific worker from Maungakiekie feel about his or her future role in New Zealand society? I ask the member Sam Lotu-liga how his constituents would feel if that happened to them. That is what the law says.

The law says that not only can they be unjustifiably dismissed but they do not even have to be given an explanation. But the Minister says that is OK because they agreed to it. It has to be an agreement between an employer and an employee. The choice for some workers is the choice between taking it or leaving it. If this is the law, then those unscrupulous employers know that the law says it is all right for them to behave in that way. We are often criticised in this House for our standards of behaviour. I agree with the criticism on many occasions, and I have been party to low standards of behaviour in this House, as I am sure every single member—except the newbies, who soon will—has been in the past. But we should not take that bad behaviour as an opportunity to pass bad law whereby unscrupulous employers—and there will be only a few—can say: “But Parliament said it is all right. Parliament said that this is acceptable practice.”

I conclude by asking the Minister of Labour whether this bill is really what she wants on her record as being the first piece of legislation bearing her name as the Minister of Labour. I cannot imagine that any member would say in his or her their maiden speech: “I would be proud to have in my name legislation to remove the employment rights of 700,000 workers for the first 3 months they are in their jobs.” Added to the list of broken promises, and the shambles of the House of the last few days, is $730 million over 5 years that low-paid workers have been jilted on, and now they get to lose their employment rights. This will be a hard Christmas for many New Zealanders.

PESETA SAM LOTU-IIGA (National—Maungakiekie) Link to this

I am here to talk about the Employment Relations Amendment Bill. I do not wish to repeat what has already been stated by both sides of the House; I want to add my perspective as the member of Parliament for Maungakiekie. I am glad that the former Minister actually asked about the Pasifika worker in Maungakiekie, because I have talked to hundreds of Pasifika workers in Maungakiekie.

DARIEN FENTON (Labour) Link to this

That was an interesting contribution from the member for Maungakiekie. May I tell him that I know many of the union members who work in Maungakiekie. In fact, I have represented them for many, many years; I can name them. There are the workers at Sanitarium, who were prevented from joining the union for years and years and years; the workers from Coca-Cola, who would not have a bar of this bill; and the workers from Pernod Ricard, in his electorate. There are rest home workers, cleaners, and school cleaners and caretakers. Come on—this bill is another kick in the guts for workers. That is what it is; it is another Christmas present from the National - ACT - Māori Party Government to the workers of New Zealand—happy Christmas! First, it was tax increases for low-paid workers. Then it was cuts to KiwiSaver. Now the recycled, hand-me-down, Wayne Mapp bill has been dredged up from the dark ages of Don Brash and his cohorts as some kind of economic silver bullet. Is the answer to New Zealand’s economic problems the ability to sack workers more easily? Hey, come on! Is that what being ambitious for New Zealand means? Is that what John Key meant?

The new Minister of Labour, Kate Wilkinson, is not ambitious. Now that she has got the ministerial warrant, the BMW, the big house, and the huge pay increase she is showing how unambitious she is for New Zealand workers. The first thing she is doing in her job is cut workers’ rights, and she is doing it under urgency. That is a disgrace. In the last Parliament Kate Wilkinson railed against urgency when Labour closed the KiwiSaver loophole—through a Supplementary Order Paper—which, of course, this bill opens up again. She said then, very sanctimoniously, that the amendment had not been subject to proper scrutiny. It had not been subject to consultation. It had not been subject to scrutiny by the Transport and Industrial Relations Committee. The public had not been permitted to submit on it and to give their views. She said: “It is a sad, sad day for democracy in New Zealand.”, and “This is a disgrace. It is a total abuse of process.” Well, hello—it seems that it is a disgrace and an abuse of process when Labour tries to improve the rights of workers, but when National, ACT, and the Māori Party want to take away the rights of workers it is not an abuse of process; it is just getting on with fixing the economic problems of the country.

The Government is right about one thing. These issues were debated in the last Parliament via Wayne Mapp’s members bill, but let us not forget that that bill was defeated. It was defeated when submitter after submitter—527 of them—came along and said, no, they did not want that in New Zealand. Workers marched and rallied in opposition to that bill. Perhaps that is why this bill is being rushed through under urgency. Perhaps it is because the National - ACT - Māori Party Government does not want to see workers rallying before Christmas. That would be embarrassing; it would remind New Zealanders of the real agenda of the Government they have elected.

The Māori Party was forced to abandon its support for Wayne Mapp’s bill after it saw the opposition to it. It is good that the Māori Party is not supporting this bill, but I say to the Māori Party that that is actually a pretty meaningless gesture because that party had a chance, in its confidence and supply agreement with the National Party, to make gains for workers.

JOHN HAYES (National—Wairarapa) Link to this

I have listened to nonsense all afternoon, including some from that member who just sat down. You see, when one looks down one end of a telescope, one forgets that there is another end. When one looks down a telescope, one notices a view. But if one goes to the other end of the telescope and looks down, one gets a different view. Those members on the other side of the Chamber, who were rejected by the people of this country—who were thrown out and pushed on to the Opposition benches—cannot take it. They do not like it. The people on that side of the Chamber are not considering the perspective that, first of all, under the existing law of this country, any employer who wants to remove a staff member finds that it costs tens of thousand of dollars.

In my Wairarapa electorate, when farmers employ new staff, give people a break, and bring them into their house, they may then find after some weeks that the person they thought they had is not quite the person they actually have, and they may want to end the arrangement. So they go to their lawyer, and what does the lawyer say? The lawyer says “Look, do not challenge this personal grievance. Just write the cheque out.” For a beef and sheep farmer in hill country, with big debt, the $20,000 cheque is far too much.

In this country we are moving into some very difficult circumstances, and I tell Mr Cullen that it was caused in part by the previous Government’s overspending. It was also caused in part by the international environment, and it is acknowledged that in this country right now we are heading into higher unemployment figures. In that context, we need to give every opportunity for people to be employed. Allowing employers, particularly of businesses that employ fewer than 20 people, to move into a no-blame arrangement for 90 days will encourage people to take up jobs, and it will encourage employers to give people jobs.

I heard on television tonight the suggestion that my colleague Anne Tolley should be lined up on the question of schoolteachers. One just has to think about the Ministry of Education as an employer; it employs many more than 20 people, so its employees will not be affected. A lot of fear is being spread by Darien Fenton and her colleagues, and it is completely unrealistic.

This legislation is good for employers in the Wairarapa, and it is good for employees because many more people will find real work opportunities as a result of it. I commend the Minister of Labour very highly on it.

Hon Dr MICHAEL CULLEN (Labour) Link to this

That speech clearly exhausted the member. He can retire into somnolence for the remainder of this sitting, running through into Saturday—but I always appreciate his Charles Laughton imitations in this Chamber.

Why is the Employment Relations Amendment Bill in front of us under urgency at the present time? The obvious answer, from the Labour perspective, is to say this is some deep-dyed plot whereby the National Party is in cahoots with Business New Zealand to ram it through. The problem with that theory is quite simple: Business New Zealand is opposed to ramming this bill through the House. The Council of Trade Unions is opposed to it, Business New Zealand is opposed to it—that is, the trade unions and the employers—but the National Government is in favour of it all by itself. Nobody else is in favour of ramming the bill through; the Human Rights Commission is opposed to ramming it through. It is being rammed through for a simple reason: Mr Key said before the election there would be 100 days of action. At the Business Committee on Tuesday, even Mr Brownlee did not know what the 100 days of action was going to be. There had to be something in it, and the National members have made up what is in the 100 days of action.

So we have this bill, a bill that could be passed at any time in the next few months and could go to a select committee; an education bill on something that could be done by regulation and does not even require a bill at all; and two law and order bills that could go to a select committee and do not require to be done immediately. The only things that had to be done quickly were the tax changes, because they come in on 1 April and there was a need to have a period of time before they come into force. This bill is about cosmetics, and on looking at the opposite side of the Chamber one can see the need for the cosmetics. Indeed, today I walked into one of the men’s toilets in the area frequently occupied by National members, opened a shoe box to look for the shoe polish, and found a huge pot of Shiseido face powder. Clearly a lot of people on the opposite side of the Chamber have been using a lot of cosmetics over the recent past.

Where did the notion of 100 days come from? What is the historic origin of the term “the Hundred Days”? The trouble with being a historian, as I am by profession, is that sometimes one knows things one does not really want to know. The term “the Hundred Days” comes from Napoleon. The time between the escape from Elba to the Battle of Waterloo was the Hundred Days. I have bad news for the National Party: Napoleon lost the Battle of Waterloo. National’s use of the term “100 days” is not a good idea, given the historical precedent. I advise National members to forget about it.

What is the real purpose of this bill? Well, it is not clear at all. We are told it is to encourage employment. Let me adopt a question I used in the KiwiSaver debate. What assumptions are being built into the Half Year Economic and Fiscal Update that will reduce the projections for unemployment as a consequence of the passage of this legislation? Is officialdom convinced, is Treasury convinced, that a single extra net job will be created as a result of this bill, rather than the recycling of some people on a 90-day basis through one job, which counts as one job?