Employment Relations Amendment Bill (No 2)

Hon KATE WILKINSON (Minister of Labour) Link to this

I move, That the Employment Relations Amendment Bill (No 2) be now read a third time. I thank my colleagues for supporting the passage of this bill. I also thank the Transport and Industrial Relations Committee, officials, and submitters for their work on this bill. The employment reforms contained in the bill reflect the Government’s desire to install confidence in our economy and ensure that New Zealanders get the opportunities they deserve. We are focused on growing our businesses and creating more jobs.

I am proud to have led the passage of this bill through the House. These changes are moderate, pragmatic, sensible, and fair. They will help New Zealand’s overall productivity and give businesses of all sizes the confidence to seek new opportunities to invest and take on new workers. Over the past 4 months we have seen plenty of debate on these reforms. The focus has almost entirely been on the extension of the 90-day trial period and the requirement that unions ask permission before turning up at a worksite. The rest of the changes have not generated the same degree of attention, as they are widely supported.

I will spend some time discussing the importance of the trial period in particular. Shortly after the 2008 election, trial periods for businesses with fewer than 20 employees were introduced. Rather than have the sky falling in, as was hysterically proclaimed, employers of small and medium sized businesses gained the confidence to hire new employees. It is a fact that without the trial period hundreds of New Zealand workers would not have the jobs they currently do. What we knew was that employers wanted to grow their businesses and invest in more staff, but the fear of hiring someone unsuitable put them off. They did not want to face a personal grievance case if the relationship did not work out, so they simply chose not to hire anyone.

When we introduced the 90-day trial period the situation changed. This Government wants to see New Zealanders in work. We want them to succeed in life and we want them to back themselves to succeed in life. We want them to increase their standard of living and that of their families. We want businesses to flourish and invest in their communities, not to be too scared to hire someone out of fear it will derail their business.

The 90-day trial period has been very successful. An evaluation of the operation of trial periods revealed that 40 percent of employers who used it said they would not have, or were unlikely to have, hired that person without a trial period. Aside from this report I continue to receive positive feedback on this policy. One employer thanked us for introducing the trial period, as it allowed them to hire three new farm workers, all of whom were unemployed and two of whom had criminal records. There are countless other stories of labourers, retail workers, and even hairdressers getting jobs. Without the trial period these New Zealanders could still be sitting in the dole queue, but instead they grasped an opportunity they might not otherwise have got and they embraced it.

Extending access to trial periods is about giving all businesses the increased confidence to hire new employees. It is about giving people a chance. This is not a new policy; it is not untested. We know it works because the world has seen it work. We are not even close to leading the world in that regard. Trial periods, in some shape or form, are utilised throughout the developed world. This policy should have been introduced years ago. New Zealanders understand perfectly how a trial period works: they know that it is voluntary, they know it must be agreed to in writing. They know it is their choice as to whether they want to avail themselves of a trial period, and they know the benefits of it.

Skilled or experienced employees are unlikely to ever use a trial period; they will not need to. This policy is not aimed at them. It is aimed at those on the margins of the workforce, or those branching out into a new direction, who simply need an employer to back them in a new or first job. By extending this provision these people can confidently ask any employer in New Zealand to give them a chance. This is a policy of opportunity and I am proud to have overseen its passage through this House.

The bill also delivers on the Government’s manifesto commitment to make changes to union access provisions. It recognises employers’ rights to manage access to their workplaces in a reasonable way while still providing unions with the right to access their members. For many employers and unions this amendment will mean very little change to their current practices. This change is a common-sense approach and recognises that where some union representatives have abused the current law they will no longer be able to. Protections for union members are retained by ensuring that consent cannot be unreasonably withheld. Where an employer denies consent but does not provide a written explanation for the grounds for refusal within 2 days, the employer would then be subject to a penalty action.

The Government has made a number of improvements to the way the personal grievance system works, in order to address concerns raised by employers and employees earlier this year. We are focused on producing a system that is fairer and more consistent. The changes include fixing the test of justification so that the minimum requirements of a fair and reasonable process are clearer. The Employment Relations Authority will be able to filter out vexatious cases, which will help to reduce costs for users. The parties will also be encouraged to attend mediation before going to the authority. The bill provides greater certainty on the process and will reduce the time involved in resolving personal grievances.

The bill also provides clarity for employers and employees on what communication they may have during collective bargaining, and it will improve the operation and efficiency of the employment institutions used by employers and employees to help them resolve employment relationship problems. Finally, the bill strengthens the powers of labour inspectors and gives them a range of tools to enforce compliance with employment legislation. Penalties under the Act have also been doubled.

Overall, the changes in this bill will make New Zealand’s employment relations laws fairer for employers and for employees. They provide the foundation for greater economic growth and the creation of increased employment opportunities. I commend this bill to the House.

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

The first point that I would like to make just quietly is that I think it shows a certain lack of taste on the part of the Government to promote the Employment Relations Amendment Bill (No 2) today. If the Government had thought carefully about appropriate legislation to promote while we were having an unfolding situation on the West Coast, it would have gone for legislation that was not in the industrial relations area. I think it is sad that it has chosen to do so, because it is inevitable that we get into the sort of debate on this sort of legislation that divides us on the very issues that are important to the miners who are stuck there.

This bill is just a continuation of the National Government’s attack on the rights of wage earners and salary earners and their conditions. Most of the amendments are unfair. They are very unbalanced, mainly unnecessary, and certainly ideological. We can see that from the fact that they were announced at the National Party conference. These amendments are breaches of undertakings made by the Prime Minister, and they were brought forward without proper consultation. They are being made for political reasons, and they will not help our economy. Really, they are an attack on job security. It is the opposite approach to that being taken, for example, in Australia, which is the country that the Prime Minister lauds as the one that we want to catch up with. The amendments weaken processes around job security. They extend the range of reasons for dismissal. They restrict substantially the right to appeal. They restrict the right to reinstatement, which is the primary remedy.

Once again the Government used urgency to push through industrial relations legislation. It took the original 90-day fire-at-will bill through under urgency, and did not even have the select committee process. In the case of this bill it did have a select committee process. I might say that it is one of the first occasions where I have seen the chairperson of a select committee having to write and apologise for the behaviour of a senior Government member at a committee hearing. It shows that the committee was not well organised, and not well chaired, and this is a contrast to the committee on which I normally sit, the Education and Science Committee. I probably have deeper divisions with the individual who chairs the Education and Science Committee, but I have no doubt about his competence and his ability to safeguard the parliamentary process in a way that has not been done with this legislation.

The fact that the Minister chose to progress this bill under urgency, and push it through—even though the House probably took longer over it than would otherwise have been the case—is a sign, I think, of mismanagement. John Key has tried to sell these changes as being part of his plan to grow the economy, but he has done so without any evidence whatsoever that they are wanted, needed, or are likely to be effective. Frankly, the fact that these are the ideas he is promoting proves the fact that there is a lack of a real economic plan on the part of National for the recovery of our economy. One only has to look at the report from Standard and Poor’s yesterday afternoon, which also highlighted the lack of an economic plan and the lack of a recovery plan on the part of National, to the extent that the Government is making moves that will effectively increase interest rates and make us poorer. This is not because of anything that has occurred in the past but because it does not see a future for New Zealand going forward. This sort of attack drives down wages.

To be fair to National—and to Bill English, in particular—it has long been of the opinion that wage and salary conditions in New Zealand are too high and should be driven down, especially at the lower levels, and this is a tool that it is using to do that. This approach is consistent with the accident compensation changes, the holidays legislation—which I will not anticipate because it is on the Order Paper now—the removal of rights to unfair dismissal, and the changes to meal breaks. There are a lot of things that over a period of time have become important to New Zealanders, and are part of their core arrangements, and National has decided to run them down.

John Key announced—and the Minister Kate Wilkinson is implementing this for him—a restriction on union access. This means, for example, that a woman worker who is being sexually harassed by an employer has to ask that employer whether the union representative can come to talk about taking a case or getting union protection for that worker. The idea that one has to work through the harasser in order to get protection is something that I am surprised a woman Minister would be prepared to promote. What this bill does is increase the choice for employers by taking away the right from employees.

Kate Wilkinson’s policy options paper, dated 15 May last year, states: “There does not appear to be widespread evidence of union representatives exercising their current rights to enter workplaces in an inappropriate way, resulting in disruption for business operations or adversely impacting on the employment relationship between employer and union members.” It is fair to say that even Business New Zealand has said that restricting union access is not a priority for it and that it does not receive complaints from employers in this particular area. Yet the Prime Minister says that keeping union officials out of workplaces is likely to make the economy more productive. As someone with some experience of this area, I tell the Prime Minister that getting union officials in early in disputes, getting them in at the beginning, and using the problem-solving methods that union officials these days are much more likely to employ makes our economy more productive, while leaving areas to fester and to get worse is likely to cause lower productivity going forward.

The Government has chosen to extend the 90-day fire-at-will scheme, and I find that so hard to believe. People believe in trials, and people can accept trials, but people believe that if someone is dismissed, even within a trial period, that person has a right to a reason. It is pretty simple: it is a matter of honesty and it is a matter of directness. If someone is to be fired, no one is even suggesting that they should be given a good reason or an adequate reason, but most Kiwis believe in fairness. Fairness at work involves a person who is being sacked having the right to know why.

I finish with the point that I made right throughout the debate on this legislation, and this point probably comes more from my own economic and economic development background. I believe that this legislation will result in a sticky labour market. It will result in highly qualified people who should be shifting jobs—those who might be earning $100,000 to $200,000—and who can be more productive in another job and can contribute more to the economy and more to society by shifting jobs, choosing not to shift as a result of this legislation. They will not want to put their families at risk, and they will not want to put their houses at risk. As a result of this change I think we will have worse productivity, not better.

DAVID BENNETT (National—Hamilton East) Link to this

I want to take just a short call on the Employment Relations Amendment Bill (No 2). I congratulate the Minister of Labour, Kate Wilkinson, on her leadership in putting this bill through the House, and the members of the Transport and Industrial Relations Committee who did a fine job in going through the legislation and making any changes that were necessary. To all those who provided form submissions or submitted in person, who took their time to show their interest in the bill, I say very well done to them as well.

DARIEN FENTON (Labour) Link to this

I rise to speak on the Employment Relations Amendment Bill (No 2) with a very heavy heart. My thoughts and solidarity are with the Pike River miners, their families, their workmates, their fellow union members, and, of course, the Greymouth community. Although we are focused on getting the miners out safely, this tragedy has much wider impacts. The workers of Pike River Coal who were not in the mine at the time of the explosion are wondering if they will have a job in the future, and now face real uncertainty about their employment. The children and families of other miners in other mines are now fearful about their family members—their sons and fathers—going to work. It must be incredibly frustrating for search and rescue workers and their families. An accident like this shames us all. There will be a time for questions once the recovery of the miners is completed. It is a terrible time for all involved, and it will not be quickly forgotten.

I cannot understand, therefore, why the Government would think that it was appropriate to have this bill, and the employment relations bill to follow, debated in the House today. I believe that it is pretty crass and thoughtless to have today the third and final reading debates of these bills, which, whether the Government admits it or not, are stripping away workers’ rights. I can only think that it is because this Government does not really appreciate the contribution, and the terrible sacrifice, sometimes, that workers make in playing their part in our businesses and in the economy.

This bill is a backward step in New Zealand employment relations. The Government has failed to make the case that any parts of this bill, particularly the provisions on access, the 90-day trial extension, and the changes to personal grievance measures, are needed. The Minister of Labour’s own department, the Department of Labour, raised real questions about the necessity of any of these measures, and Treasury, even though it supported the bill in principle, stated that there was a real lack of robust evidence for it. It is bad lawmaking when we rush into something on the whim of an idea, without the proper research and without the background.

Thousands of submitters expressed opposition to this bill, but they were ignored; 22,000 workers marched and rallied, and John Key shrugged. Professor Erling Rasmussen of Auckland University of Technology said that New Zealand is now, under this bill, one step closer to an American hire-and-fire model. He also argued that it is difficult to see how the bill will improve the productive employment relationships of well-organised employers. He stated: “This appears to be a clear hand-up for disorganised, incompetent employers … This is not just a whittling away of employee rights; it heralds a fundamental shift in employer-employee relationships in New Zealand workplaces.” He went on to state that it was not “a trivial change to employment relations”, and that “Even under the hated Employment Contracts Act 1991, this was not a feasible option for low paying, high turnover employers.” Even the professionals are questioning the bill.

I noticed that in her speech the Minister called opposition to the 90-day trial period, and other measures, “hysterical”. I find that incredibly insulting. As I said earlier, the research by the Minister’s own department on the 90-day extension to the trial period was highly flawed. The department managed to speak to 3,000 employers but to just 13 workers, and even then the department failed to demonstrate that the people the Government was claiming would benefit from the provision of its measures—such as migrants, Pasifika, Māori, and young workers—had actually been given jobs they would not otherwise have been given.

One of the first workers to take a case under this bill, Heather Smith, a pharmacy worker, has called on Parliament to spare other workers the experience that she suffered under the 90-day fire-at-will law. As we go through the third reading debate, I tell members that she has said: “I don’t want what was done to me to happen for many more vulnerable workers in their first 90 days on the job. I was fortunate that the employer in my case made a mistake and enabled me to take a case, but if they had done everything according to the 90 day law”—in other words, if the employer had got the paperwork right—“I would have had no opportunity to question my sacking.” We can just consider for a moment the impact that that would have had on a young worker such as Heather Smith. She was not allowed to question why she got the sack, and would never have known the reason. At every job she went to from that point on, there would have been a question about her curriculum vitae and what had happened during that period of her work, because she had been with that employer for some time in another workplace.

People who get fired under this legislation will experience an ongoing impact on their life. Under this bill we are talking about real people and real examples, and the fact is that this law will impact on the most vulnerable: those who are least able to question their employers, those who are low paid, and those who are on a benefit are then sent to a job by Work and Income, and are not able to turn it down. It has been confirmed by the Minister of Labour and the Minister for Social Development and Employment that workers in that position cannot turn a job down, because a job with a 90-day trial period is treated like any other job. If workers turn a job down, they will be stood down from their unemployment benefit.

The Minister talked again about choice, saying that the scheme was voluntary. But what choice does a worker have in that situation? How can that be voluntary? That is utterly ridiculous, and, as I have said, the Government has completely failed to make its case. The provisions on the extension of the 90-day trial period are simply unjustified. We know that the only reason those provisions are being extended to all workplaces is that the Minister has been rolled by the ACT Party. That is what has happened.

I turn to the provisions on access. The Minister is right in saying that these two provisions have had a lot of attention, but that does not mean that there are not a lot of other concerns with this bill. If I have time I will go on to discuss those concerns, but first I will talk about what happens with access at the moment. The current law is very, very specific about the requirements of a union organiser or representative as they go on to a work site. There are a number of things they have to follow through. The provisions in the Employment Relations Act came about from case law that was developed under the Employment Contracts Act. People are fearful about these provisions because under the Employment Contracts Act, which was not nearly as strict as this legislation, there was terrible trouble. There were court cases up and down the country. I was involved in one to do with a hotel employer, who said that unions were like interfering mothers-in-law, and as such should never be allowed in the workplace. He used to go about asking who wanted to see the union, and put the names of those people up on the noticeboard. Then, when the union organiser came, the employer put them into a room, after calling them along one by one—people who were worried about their jobs. He exposed them in that way, giving them a message that the union was not welcome on the job. That is why people are nervous about access.

I am also interested in the whole provision on health and safety in relation to access, and in why the Minister decided, even though she had a draft Cabinet paper provided to her on 11 August by the Department of Labour, that access consent would not be required in situations of health and safety. We heard the example from my colleague Trevor Mallard about a worker being sexually harassed, but I ask about a situation of health and safety when a union representative is required to come on to the job and deal with a situation that is urgent and needing to be dealt with. There are many, many other things, which, if I had the chance, I would talk about. I am concerned about the changes to the test of justification, and about the removal of reinstatement as a primary remedy. Clearly, I do not have time to go into those issues, but they are concerns. This bill is so badly done that it will create a lawyers’ charter, and we will pay the price on this bill for years to come.

KEITH LOCKE (Green) Link to this

The Green Party will continue to oppose the Employment Relations Amendment Bill (No 2). It is very clearly anti-union legislation. While listening to National speakers over some time on this legislation, and the accompanying Holidays Amendment Bill, I have yet to hear any sign that they think unions are good or that they think unions should be promoted. I wish that sometimes National members would say that unions are good and that more people should join them. Instead, we have a bill that limits the power of unions, making it more difficult for people to join unions and to act effectively in a collective manner within them.

The basic fact of life is that unions are good for workers. If we look at similar industries, we find that the factories or offices that are unionised have better wages and conditions. That is the fundamental thing that happens, and it is a good thing. Sometimes there is a conflict of interest between unions and employers. Some employers are good employers, and some would rather pay the lowest wage rates possible and get that little bit extra for themselves. Some employers think we do not need unions at all, and will try to keep them out of the workplace. We saw the Government encouraging one particular set of employers in the film industry to do that. In the case of what is now known as the “Warners Bill”, the Employment Relations (Film Production Work) Amendment Bill, effectively the Employment Relations Act was being written out of conditions for workers in the film industry. In the case of any contracts that will occur, film industry management will now say that all workers are independent contractors. Workers will have to declare that when they sign contracts, and from that point the Employment Relations Act and all their rights as workers in a union sense will no longer apply.

That is the background to this legislation. The 90-day trial period, which is now universalised, will give more power to employers against workers and against members of unions. The Minister Kate Wilkinson, in her first speech on the bill, said she would spend most of her time on the 90-day trial period, but she did not mention the fundamental element of this trial period, which is that a person can get sacked for no reason, whatsoever. We know that the employer does not have to give any reason, whatsoever. The Minister did not mention whether, for example, in the State Service the Government will be allowing unions to negotiate on their contracts. Their members will be excluded from this 90-day provision. That is quite key, and I understand that the Government is doing the very opposite; it is telling chief executives not to allow an exclusion of the 90-day provision in the contracts. So this whole talk that the 90-day provision is going to be voluntary, and that unions can voluntarily exclude themselves from the 90-day provision, is quite wrong.

Will the Government exclude contracts that say a condition for a person to get a job is whether he or she can sign a contract that does not have a 90-day provision in it, or will that person be told that a condition for getting the job is that he or she must have a 90-day trial period? If that is the case, then it is not voluntary, particularly if Business New Zealand—and I understand it is doing this—is setting up model contracts that include a 90-day provision. People will not have a choice to go to a job with a 90-day provision or without a 90-day provision, particularly in a situation of growing unemployment. People will be forced to have a 90-day trial where they can be dismissed at will, without any reason given, whatsoever.

The Minister said that the provision does not apply to skilled workers. Why not? I am sure there will be employers who will say they want a 90-day provision in the contract, possibly when they are hiring people from overseas. The employer will say “Well, I haven’t seen these workers yet. I’m hiring them from the Philippines or China—or somewhere—on a work permit. I’ll make sure there is a 90-day provision so they can be sacked if I don’t like them.” But what does that mean for migrants coming in who are shifting themselves or their families to the other side of the world to get a job in New Zealand? They will be a bit scared of taking up jobs in New Zealand, because they could be sacked within the first 90 days. They will probably trot off to Australia, or somewhere like that, to the disadvantage of New Zealand in terms of skilled migrants coming here. The bill will reduce labour mobility; there is no question of that. If someone in a job has permanent employment and the right to personal grievance if he or she is sacked, then that person is liable to stay in that job, even if there is a job down the road that is a bit better in terms of skill, and in terms of money. Why risk getting sacked in the first 90 days? The bill will be bad for the New Zealand economy in terms of putting people in the right places, and in terms of the workforce having the proper level of labour mobility.

The 90-day provision demoralises people. It is demoralising for people to feel that they have no power in the job in the first 90 days because they can be sacked at will. It is demoralising if people are actually sacked, particularly with no reason given. It is demoralising for people to know that when they go to get another job, after being sacked within the first 90 days for no reason, and the employer asks why they were sacked from the previous job, they will not be able to say why they were sacked. They will say “Oh, I don’t know. The boss never told me, and under the law he didn’t need to tell me.”

There will be problems for many workers getting benefits. If Work and Income decides, even though no reason was explicitly given to a person, that somehow from its investigations—or from the employer, or whatever else—it thinks the employer had a case to dismiss the person, that person will not get a benefit. There will not be any fairness in the process of Work and Income determining that. Then Work and Income will send that person out to get a job, and will say that a condition for the person to stay on the benefit is that the person at least has to try for a job, and the job has a 90-day trial period. Then it is not voluntary, as the person has to go out and at least apply for that job with a 90-day trial period, otherwise that person will lose the benefit. So it is very bad in many ways.

The provision on union access is a provision for mucking unions about so that officials will spend half their time trying to get on to jobs rather than doing the work on the job. I think we have found with the tragedy down in Pike River that the best form of industrial relations is when everyone is working together. As I understand it, the Pike River mine is a unionised site, under the Engineering, Printing and Manufacturing Union. We have picked up from what is happening down there at the moment that the union, the workers, and the management—everyone—are working together in a very cooperative way. The other lesson of Pike River—and this is no criticism, whatsoever, of anyone—is that whenever there is a tragedy, people think “Well, let’s maximise health and safety; it is important to always maximise that.” To have strong unions working collectively together, working with the employer, and alerting people to health and safety concerns is always a step forward, and helps to avoid disasters.

A confident workforce is always a better workforce. People are proud of their skills rather than being terrified of what might happen to them in terms of their relationship with employers, or 90-day periods, or whatever else. A confident workforce with a strong union requires reinstatement as the primary remedy as well, because the people who will be sacked and will not be reinstated under this provision will probably be union leaders. That is what will happen. The company will say “I might have to pay a bit to the Employment Court for sacking this person, but at least I’ve got rid of the union leaders on the job, and perhaps I can get rid of the union altogether.”

Hon HEATHER ROY (ACT) Link to this

I rise to speak on the third reading of the Employment Relations Amendment Bill (No 2) on behalf of the ACT Party. I begin by congratulating the Minister, the Hon Kate Wilkinson, on this very good bill. The bill has three main components. The first component extends the 90-day trial period, which currently is permitted for employers with 20 or fewer employees, to all employers and workplaces. The ACT Party sees this as a very positive move. We are very pleased that the Government listened to the request of the ACT Party to enable this extension to occur. The second part to the bill makes changes to union access to workplaces, as we have heard from previous speakers, and deals with communications with employees during collective bargaining. The third component of the bill is the definition of the test for justifiability, for dismissal or an action by an employer. This clarification by the Minister will also make a significant difference to workplaces.

I again thank the Minister for listening to the ACT Party, particularly in relation to the 90-day trial period component to this bill. The sky did not fall in when the 90-day trial period was introduced for employers with 20 or fewer employees. Nor will the sky fall in now that we have a level playing field and all employers are able to engage employees on the basis of a 90-day trial period.

We heard a lot from members, particularly from the Labour members and the Green member, about fairness. I would like to take a moment to talk about fairness. Fairness means fairness for everyone—not just for employees and not just for employers but for everybody. For far too long, particularly under the previous Government, rights were heavily weighted in terms of employees. If the poor old employer had an employee who did not fit in or who was not able to fulfil the provisions that an employment opportunity might mean, the employer still had to maintain that employee. This bill addresses that unfairness.

We have seen already with the provision for employers with fewer than 20 employees to use a 90-day trial period that those employers are prepared to take a chance on employing somebody, because they know that if it does not work out, then they can come to an arrangement with the employee whereby he or she does not stay. That means that there are more, not fewer, opportunities for employees. Somebody who has had difficulty in getting work of any sort, somebody who has had difficulty with previous employment but who has managed to turn their life round, and somebody who might have developed skills in the interim since the last job will now have an opportunity, because employers will be prepared to give them a chance under these provisions.

We saw particularly with mum and dad businesses under the previous Government that a couple might have a very well-functioning business—it might be tootling along very well—but they were too scared to expand, because it meant that they would have to take on employees and they were not sure what they would do if things did not work out. When we saw the initial bill, which allowed small business employers to take on somebody with the opportunity of putting in place a 90-day trial, we saw people willing to take that risk. That has been of huge benefit, not just to employers themselves but to the employees to whom they have given a chance.

For the most part, those employees have stayed on. Why—and this was not explained in the Committee stage, particularly when Labour members had every opportunity to do so—would employers get rid of employees who are doing a good job? The answer is that they would not. Employers want to have a well-functioning business, they want to have a happy workplace, and they want to have employees with skills and experience and who fit in. That is also important, because it will give them the ability to increase their productivity. That is what the Opposition does not understand; it does not understand that productivity is important. This bill will help significantly those employers who have more than 20 employees.

The previous speaker from the Green Party said the House is yet to see any sign that we on this side of the House, the Government side, have anything good to say about unions. Well, I am yet to hear anything good said by the Opposition side of the House about employers. I am not quite sure who they think provides wealth in this country and who provides the jobs, but if there are no employers with the ability to make decisions that will benefit their businesses, why would anybody bother? Why would anybody take the risk? Why would they bother?

This is a very good bill. It addresses the three measures that I talked about, and the one that we have focused most heavily on is the 90-day trial period. The ACT Party is very proud to have made a significant contribution to workplaces in this country in that regard. We support this bill with great pride. Thank you.

RAHUI KATENE (Māori Party—Te Tai Tonga) Link to this

When one looks at the explanatory note of this Employment Relations Amendment Bill (No 2), one sees that the general policy statement comes across as extremely positive. It tells us that the purpose of the bill is to provide more flexibility, provide greater choice, and ensure a balance of fairness for both employers and employees in the principal Act while improving its overall operation and efficiency.

When we turn to the Māori Party employment relations policy, it appears that there is considerable room for comfort if we are to look at our policy in this proposed bill, all things being equal. Our policy states that we will support the right for employees to be treated fairly and with dignity, in a safe and healthy workplace. But the key statement is “all things being equal”. I refer to comments from a submission from Te Hautū Kahurangi o Aotearoa, the Tertiary Education Union of Aotearoa. It states: “This amendment will further turn the balance of power away from employees, in particular young and vulnerable employees, and those employed in low unionised work sites. Basically, the bill will allow employers to dismiss employees without reason or justification, clearly contradicting the concept of ‘natural justice’ built up in New Zealand employment law over time through case law.”

OK, so let us look at the current situation for the young and vulnerable employees that Te Hautū Kahurangi o Aotearoa refers to. These are the things that our membership also raises with us when they talk about employment matters. They talk about trade training and work experience, and about how we can support our young people into secure and sustainable employment. Our membership comes to us with some amazing ideas, like a skills barter system within communities. This would work something along the lines of a carpenter trading some of his or her skills for the skill of a plasterer, and vice versa.

Our members call on us to reduce the unemployment rate amongst Māori, and they ask us to fight anti-worker legislation. But, guess what? They do not ask us to extend trial periods to all employers. They do not ask us to specify the role and enforcement powers of labour inspectors. They want us to have a mechanism in place by which we resolve employment problems more quickly and more efficiently, and of course we want to be more effective in restoring the confidence of all parties in various aspects of employment relationships, such as the personal grievance system. We want to do this so that the negative impact of these problems on workplace productivity will be reduced.

But we also want to talk about the things that really matter to us, the things that we as a party believe are critical for us to advance, which have to be employment opportunities for our young people. If we look at the demographic profile of our population, we know that one in four babies born are now born into tangata whenua homes. But if we look a little further down the life cycle, we find that in the latest quarter the unemployment rate for young Māori aged from 15 to 24 has risen from 26.7 percent to 26.8 percent over the year, and for our Pasifika young people it has risen from 27.9 percent to 29.8 percent over that same time. In comparison, across all young people the unemployment rate is 16.2 percent.

This is the key issue that confronts our members, and it is the key issue that confronts us in this bill. For how can we—indeed, how can any members—willingly act in a way that we know will most likely exacerbate the fragile employment status of our most vulnerable? The Māori Party cannot support this bill.

HEKIA PARATA (National) Link to this

Tēnā koe e te Mana Whakawā. Tēnā tātou huri noa i tō tātou Whare. I am delighted to stand to take a short call on the Employment Relations Amendment Bill (No 2). In recent weeks in the Mana electorate we have been debating a whole range of issues that this bill speaks directly to. In particular, they are about how we grow and establish sustainable, long-term employment opportunities, and how we support businesses—small, medium, and large—to take risks on employing what otherwise might not be very employable young people.

We have an unemployment problem, which my colleague has outlined statistically and which we experience and observe in the Mana electorate. This bill encourages businesses to take on these young people, to give them an opportunity of employment, to invest in them, and to recognise that with this opportunity young people can join the workforce and participate positively in it.

I am delighted with this bill. I know small businesses in the Mana electorate that have taken that risk and have been delighted that they have done so. As a result, they are building their confidence and encouraging other businesses to do so. Jobs cannot be manufactured out of thin air; they are manufactured out of businesses that are prepared to take that risk.

As the previous speaker, Rahui Katene, also said, it is not in the interest of any employers to have bad relationships with their employees. It is in the interests of all businesses to attract, keep, and grow their business through good relationships with their employees. As a business owner in the past, I know that we relied absolutely on the quality of the people we employed and that it would have been a very costly matter to find that they did not work out. That is why small businesses are disinclined to take that kind of risk, and that is why this bill and the provisions within it help build a stronger, more sustainable, more successful economy to deal with the opportunities that otherwise might not be available for young and less qualified people.

I commend this bill to the House, and I congratulate the Minister of Labour on her leadership in this area. Kia ora.

CAROL BEAUMONT (Labour) Link to this

First, let me add my voice to that of my colleagues Darien Fenton and Trevor Mallard in relation to the situation in Greymouth with the Pike River miners. Our concern and our solidarity are with those workers, their families, and their community.

I stand to speak to what I consider to be one of the most disgraceful bills I have seen come before this House in my time as a member of Parliament, the Employment Relations Bill (No 2). It is yet another piece in a concerted attack by this Government on wage earners and salary earners in this country, and on their unions. There has been quite a bit of rhetoric about choice and flexibility. Somehow, giving employers the absolute right to dismiss for any reason, and without workers having any recourse, will create jobs! This is just an unbelievable, backward-looking, archaic attitude to work. I intend in this speech to talk about what reasonable employment legislation—and, in fact, positive employment legislation—could mean in terms of the future of our workplaces.

Let me start by talking about some of the particular aspects of this bill. Combined, they are unbalanced, unfair, unjustified, and unnecessary. This view was reinforced by many submitters and by the officials who advised the Government. Despite that, the Minister of Labour decided to ignore them and to push on with this legislation. I start by saying that this bill is actually contrary to the Act it is amending, and I find that a very strange thing indeed. It seems to me that the provisions in this bill do not recognise a fundamental object of the Act—that is, that there is an inherent inequality of power in employment relationships. That is a fundamental object in the Act. It is an Act that is designed to build productive employment relationships. I just do not see how the provisions of this bill create productive employment relationships. I will come back to that point.

Basically, work is about relationships. Generally we work with others, and we do so for a range of reasons. We go to work to earn money to live. We go to work so that we can contribute our knowledge and our skills. We go to work so that we have social contact with others and so that we are part of our community, our society, and the economy that then sustains us and our children. We go to work and we expect that we will be treated with respect there. In all my years as a union official, money was always an issue for people as they did not necessarily feel that they were paid fairly. But often the biggest issue was about respect and wanting to be treated with respect at work.

Employment relations legislation exists to outline our rights at work, to give us a clear signal of what we as a society think are basic minimums, to guarantee those minimum standards, and to say: “Look, it is not right to employ somebody for less than the minimum wage.” We do not accept as a country that it is right to do that. It is to establish processes and institutions with which to deal with employment relationship problems, and it is to provide security and certainty to employees and employers. That is what our legislation should be about.

Work has a very significant impact on our lives and our families. We want to come home safely and feeling that we have been treated fairly at work. I remember my father saying to me—I can remember this from quite a young age—that the idea was that one does a fair day’s work for a fair day’s pay, that that was part of the underlying fairness situation in this country, and that we had the sort of country where that was a basic tenet. I think we also have a view as New Zealanders that things improve. We expect wages and conditions to improve, and our history shows that that is exactly what has happened over an extended period of time. That came to a rapid halt under the last National Government, when we went backwards. We reduced wages and conditions under the last National Government and we are doing it again under this National Government. This goes against the notion that I think we should all share: we want things to be better for our children and our grandchildren—better than what we experienced ourselves.

This legislation is being brought forward by a Government that is supposedly ambitious for New Zealand and is bringing a brighter future to New Zealand, but this will not bring a brighter future to our workplaces. This is bringing forth a whole lot of provisions that are most unfortunate, most unfair, and certainly unbalanced. How can it be part of a successful, productive workplace to have provisions like having 90 days at work where workers have no rights, not even the right to know why they were dismissed if they are dismissed, and no right to challenge a dismissal if it is unfair? How can it be right to have barriers put in the way of workers’ access to union officials when they want them, if they have a grievance, or, as Trevor Mallard said, if they are being sexually harassed, or if they feel there is a serious health and safety matter, as Darien Fenton outlined? How can it be right to remove the right to reinstatement as a primary remedy to be argued for in situations of unjustified dismissal? It is the one remedy that takes workers back to the situation they were in before they were unfairly dismissed. How can any of those things be things we should aspire to in the workplace of the future? They do not create the sorts of positive, productive employment relationships that we need as a country.

The combined effect of these changes will mean that we have different labour markets for those who are skilled and unskilled, for those who are new entrants to the workforce versus those who have been around a while, and for those who are unionised and non-unionised. That will be really reinforced. It will also mean that the effects will be most strongly felt on those who are already the most vulnerable, the most disadvantaged, in the workplace. It will make it more difficult to improve wages and conditions. It will lead to increased disputation and it will continue the low productivity in our workplaces that is holding this country back. Low productivity is negative for both employers and employees.

Overwhelmingly, people did not support these changes. There were nearly 8,000 submissions, and most of the submitters did not support these changes. In response to a survey with a very straight question by the Council of Trade Unions, 80 percent of New Zealanders said it was not fair that people should be dismissed in the first 90 days of their employment. Even Department of Labour officials and Treasury officials questioned the value of this legislation and the evidence behind it.

I want to talk about the kinds of workplaces that we need to be looking at, because they are where a Government that was ambitious and wanted a brighter future would be looking. They are workplaces that are more productive and innovative, where they actually value people more, where the wages are higher, where the workforce has more invested in their skills, and where, as a consequence, we get better outcomes that provide greater profitability to employers and sustain the higher wages and conditions that we all want. Those workplaces will need a really determined effort to encourage things like greater capital intensity, investment in skills, and changing our people management, which is very poor. Evidence shows it to be very poor currently, and of course we will reinforce bad management behaviour by saying that the worst employers can behave abysmally and sack at will. We need to encourage innovation in our workplace processes and practices, and we need to have workforces that are well engaged. That requires unions. The bottom line is that that requires workers to have some sort of collective voice, some organisation where they can participate and raise their concerns, raise their ideas, and negotiate with the employer.

These unions that many on the other side are more than willing to vilify and use negative stereotypes about are actually key to changing the productivity and improving the productivity in our workplaces. To lift productivity in the workplace we need more industry standards and we need more industry collaboration, but, most of all, we need productive employment relations. We cannot increase productivity by edict—we cannot say: “You will be more productive.” We cannot lift productivity by cutting labour costs or by treating our workforce as commodities. We must invest in improving skills and improving wages and conditions, and we must give workers a greater say and commit to having an independent voice for our workforce. Not only is this bill unbalanced, unfair, unnecessary, and unjustified but also it will not lead to the types of productive changes we need in New Zealand.

Dr JACKIE BLUE (National) Link to this

I also express my support for the West Coast families facing this terrible uncertainty about their loved ones.

I am pleased to speak to the third reading of the Employment Relations Amendment Bill (No 2). This bill is very straightforward. The Government is firmly focused on providing greater choice and creating more opportunities for New Zealanders. The Government is working hard to lift the long-term performance of the economy, create more jobs, raise living standards, and deliver world-class public services to New Zealanders.

New jobs will not be created unless businesses have confidence and can expand and diversify. It is in businesses’ best interests that they have good relationships with employees, and employers hiring and firing at will in a repeated way, as members have suggested will happen, does not lead to good relationships in the working place, let alone productivity. The 90-day trial has encouraged employers to take on new staff and to give people who do not have a work record for whatever reason—such as students, migrants, and women returning to the workforce—the chance to enter the workforce. This bill is aimed at those at the margins and will give them that opportunity.

The changes in this bill are both pragmatic and practical with regard to the issues currently facing employees and employers. The bill will reduce compliance costs and give businesses more confidence to grow and take on the staff they need. It will help resolve workplace disputes fast and provide choices for employees. We want our businesses to have confidence to take on the new staff they need to create the productivity we need for this economy to go forward. I commend this bill to the House.

MOANA MACKEY (Labour) Link to this

Like my colleagues before me, I too extend my thoughts and sympathies to the miners in the Pike River mine disaster and their families. I think they can be well informed that Parliament is very aware of what they are going through, and our thoughts are with them as a collective. That is why I agree with my colleague Trevor Mallard; I think it was perhaps a tad inappropriate that the Employment Relations Amendment Bill (No 2) and the bill that is to follow it are being progressed today. Perhaps it would have been more sensitive and appropriate to progress these bills, which have relevance for those miners but which are also very political and divisive, at a later date. None the less, here we are.

Labour opposes this legislation. It is unfair, it is unjustified, it is not needed, and it will not have the outcomes that the Government claims it will have. In fact, we believe it will have exactly the opposite effect. First, I point out that this legislation represents yet another broken promise from this National-led Government. When we went through the election campaign, National MPs and candidates were at pains to point out that the 90-day fire-at-will period would apply to small businesses only: those with 20 staff or fewer. They said New Zealanders did not need to worry, because those would be the only people who were affected and the measure would not be extended any further than that. I sat in candidate meetings where National members and candidates were at pains to point out that this provision would not apply to people employed in much bigger companies. Well, here we are today, about to pass legislation that represents another broken promise from this National Government, because this bill extends the 90-day fire-at-will period to all businesses and all employees in New Zealand.

Listening to the members opposite, I note that they try to insinuate that trial periods did not exist before they came into Government. That is absolutely not true. Under the legislation that the previous Labour Government passed, trial periods were allowed, as we would expect. This legislation is not actually about trial periods at all, which is what members opposite are trying to claim, but about whether an employee has any rights at all during a trial period. That is where we part company with the Government on this particular issue, because Labour believes that if people are to be fired and have their livelihood taken away from them, then it is only fair that they are told why. I look forward to the final National member who is to speak on this bill telling us why those members think it is fair that someone can be fired and not be told why he or she is being fired.

My other question to National members asks how we can get more productive workplaces if we have legislation that states employees can be fired because, presumably, they are doing something an employer does not like, but the employer does not have to tell them why or give them any opportunity to correct that behaviour. Even if an employer does not want employees to correct their behaviour, the employer does not have to tell them what they were doing wrong so that when they apply for their next job, they will know why they were fired in the first place. How will workplaces be more productive, how will workers be more productive, and how will they be able to upskill and make the changes in their work practices that are needed in order to make their workplaces more productive, when they do not have to be told why they are being fired? This is a fundamental point about fairness and the difference between members on this side of the House and members on that side of the House. We say it is not fair to pass legislation that states people can be fired for no reason—it is not fair.

As I said, this legislation is not about trial periods. It is actually about legalising discrimination, because that is the only difference from the existing law. Most employees and employers have very good working relationships. They do not have to revert to employment law in order to carry out that relationship, because it works just fine. We have protections in place for situations where the employment relationship disintegrates and is not working. This legislation states that where, for example, during the 90-day trial period—or fire-at-will period—the employee joins a union, the employer finds out that the employee is a member of the union or of the Labour Party, the employer finds out that the employee is gay and has a problem with that, or the employee is a woman who gets pregnant within the first 90 days of her employment and the employer suddenly sees a whole raft of costs coming up and maternity leave—

MICHAEL WOODHOUSE (National) Link to this

I also add my voice of concern and support for the people of the West Coast in the Pike River disaster.

I want to pick up the issue of equality that Carol Beaumont talked about. She described this bill as disgraceful, and that it also promotes what she described as the inherent inequality in employment relationships. Indeed, that is what the object of the bill points out. Many of the stories from members on the other side about fat cat employers always focus on the extremely large organisations or the high-profile errant companies. Notice how, when the issue of tax cuts comes up, they quote the chief executive officer of Telecom. But what they do not mention is the plumbers, the builders, the start-up information technology companies, and the small manufacturers that are negotiating through the worst recession in 80 years. That is what our economy is made up of. Overwhelmingly it is built on small and medium sized organisations that bob along in the wake of the recession, and are increasingly frustrated by the way the previous Labour Government neither understood small business nor could get over its animosity towards small businesses that, through their own sweat and innovation, and risk taking, have bettered themselves, their families, and their staff.

Many small-business owners tell me that they agree with the inherent inequality as set out in the object of the bill. But many of them think it goes the other way. They tell me how disappointing the attitude of the Labour Party and its union affiliates is at the complete lack of empathy for the back story. It is easy to spew rhetoric that casts employees against employers, without ever understanding the back story—the 100 percent effort that is put into building a company, which will eventually employ staff, the poor diet, the rusty Toyota, not having time to date, spending all one’s weekends working to build the company while friends are out celebrating and partying, and being effectively married to that small business. Small-business owners put their time, their money, and their lives into the business, in the hope that eventually some day they, and by association their staff, will be successful.

When the fruits of their effort are seen, such as the improved opportunities to employ staff and increase their wages, and, yes, make profits for themselves, does the Labour Party celebrate the fruits of that effort? No; it is envy—“fat cat” comments, higher taxes, more red tape, and more envy. What Labour describes as a disgraceful bill I describe as a bill that makes common-sense, balanced, and flexible improvements to our labour laws. I strongly support them.