Employment Relations (Probationary Employment) Amendment Bill

Dr WAYNE MAPP (National—North Shore) Link to this

I move, That the Employment Relations (Probationary Employment) Amendment Bill be now read a second time. Today Parliament has an opportunity, and that opportunity is to help people get a job. That is the whole reason why I moved the bill in the first place. I say to the House that it is why certain parties in Parliament—United Future, New Zealand First, the Māori Party, and ACT—actually voted for the bill at the first reading. If we go back and read the speeches of those parties’ members, we see that there was a common theme: how to boost employment, particularly for those struggling to get that first job. A common theme through this Parliament is that this bill is to help get people a job.

Without exception during the select committee process, employers and, indeed, many others said that the bill would make it easier to make that job offer, especially for small to medium sized business enterprises. For them, an additional person is a big decision. If they get that decision wrong, then it can be disruptive, not so much in terms of money but in terms of management, disruption, employment relations, and so forth. That is exactly what small employers said to the Transport and Industrial Relations Committee. In this country 95 percent of all employers are small to medium sized enterprises. This bill is designed to help them. That is why the Government’s own advisory group has said to this Government time and time again that the most important thing the Government can do for those employers is to give a probation period in our employment relations law.

What does the Government say? It just casually ignores that. Members on the other side talk about transforming the New Zealand economy. Well, why do they not do something that would make a difference? Why do they not listen to the people who actually do the employing? Why do they not take advice from those people?

The Transport and Industrial Relations Committee heard from a wide variety of people: employers, employees, business groups, trade unions, young people, and immigrants. In all cases there was consensus that this country needs to do something to boost employment, especially for people who find it hard to get that first job. Naturally, there was some disagreement about how that might best be done. The employers certainly said that this bill would make a difference—and bear in mind that these are the people who make the initial employment decision. Some passionate submissions from employers came on that very point. They said that this bill will make a difference. I refer parties in this House to this particular fact.

I have spent a lot of time on the radio and elsewhere saying that this bill is aimed at youth employment. Youth employment is substantially worse than general unemployment. It would not matter quite so much if the gap was narrow, but it is actually getting worse. Young people are finding it harder than older employees to get that first job. So the gap is widening.

I remind the House of this one stark statistic: Māori youth unemployment in the 15 to 19-year-old age group is over 25 percent. One in four young Māori who would like to get a job cannot get one. Why? The reason is that no one will offer them one. One would think that, in our environment of relatively low unemployment, people could get a job if they wanted to, yet 25 percent of young Māori cannot get that first job. They find there is a resistance, for whatever reason. It could be due to skills, presentation, background, or whatever, but they just do not get that initial job offer. The gap is growing and is getting worse year by year. I have heard the Minister of Māori Affairs say in this House that the gap is closing. He is wrong. The gap is actually widening, and this country has a very serious problem ahead of it.

Having listened to the speech made by Dr Pita Sharples, I understand that that was precisely the reason for the Māori Party actually voting for the bill at its first reading. Its members said they wanted to hear the arguments in the select committee. They also said they wanted changes made to the bill, and, in a debate with Mr Hone Harawira, I said I would make changes to it. They know that. They have had those changes for nearly a month. The changes reflect the concerns of the submitters. The Māori Party, the New Zealand First Party, and the United Future party have been listened to. I took their points on board, have made amendments, and will seek to table my amendments later today.

In the report back to the House I set out the reasons for those changes, because it was recognised that the bill was not quite right. I point out that the concerns came not just from employees, which was predictable, but also from Business New Zealand and the Employers and Manufacturers Association. They were concerned that there was not a fair process in the bill, initially, and they wanted a proper system of warning—some sort of notification—as to whether the probation period was working out. They wanted a mediation process that was prompt, efficient, fair, and reasonable, and that is exactly what many of the submitters who opposed the bill also wanted. I carefully listened to those submissions and have indicated in the numerous interviews I have had with Mr Hone Harawira and Mr Andrew Little—including on radio and television—that I would take their concerns on board. I have done so, and I will be tabling my amendments.

The Māori Party knows full well that its principal concerns are being taken into account, so I was a little disappointed earlier this week to receive a letter from the co-leader saying that the Māori Party was likely to oppose the bill. I make this observation: if the party said in August: “Oh no, we don’t need to hear any more of the submissions. We’re going to change because of some constituency pressure.”, then it does become difficult to change again. I understand that, but I say to the Māori Party to, at least for the future, allow the process to take place and judge the report by what has come out of the select committee. That is what the Parliament has it for.

I say to New Zealand First members—whose deputy leader, Mr Peter Brown, voted for the amendments that I have proposed—that they know full well that what we are really debating in the House today is the bill as it would be if it included the amendments I am putting forward today. That is how this bill would be put into the law. I say to them that if it is good enough to vote for the amendments in the select committee, then surely it is good enough to vote for them in this House today at the second reading.

I turn very briefly to those amendments. The first change is to confirm, so there is no doubt whatsoever, that probation periods would be a voluntary agreement—not mandatory but voluntary. If they did not suit particular employment situations, then they did not have to occur. The second point is that the period would be 90 days for long-term contracts and 30 days for short-term contracts, casual work, seasonal work, and the like. That was an issue of major concern for many people. The third point is that the period of notice would actually go to the pay period, so people would not lose their job literally the next day. They would get a proper week’s pay, or 2 weeks’ pay, to ease the adjustment. I think that is only fair. The next point is a proper process of dispute resolution—a warning, mediation, and, I might add, all discrimination issues going through human rights procedures.

The amendments I have put forward are fair and balanced. I have listened to, and the amendments reflect, the submissions. I ask those parties that have questions to vote for the next stage in this process—for the bill to proceed to the Committee of the whole House. I will be tabling the amendments I have drafted. They fully reflect the amendments set out in the report back to the House.

Hon MARK GOSCHE (Labour—Maungakiekie) Link to this

I think that for the Transport and Industrial Relations Committee this was an interesting process. At the end of it we obviously had diverging views, but on a couple of issues there was agreement.

One area of agreement was that the existing provisions within the Act are not well-known and that they should be better advertised. We felt there should be more education on, and, quite frankly, more use of, the existing provisions within the law for probationary employment situations. I hope that happens, because I think that many employers are looking for an opportunity to have a probationary employment period for their new staff—but not, the Government believes, with a total removal of the rights of those workers, as this Employment Relations (Probationary Employment) Amendment Bill would see.

The second thing we agreed on was what I think is a blight on the employment scene—that is, the advocates and lawyers out there who operate a sort of “no win, no pay” type situation. We should just have a look at that as a proposition. I know that some of the lawyers on the other side of the House are here to defend their mates, in good trade union fashion, and they will do so in their speeches as they did in the committee. But the primary remedy of the personal grievance procedure in our current law, and, as far as I am aware, through most of this country’s history, is reinstatement to the job. So if a person has been unfairly dismissed, that person should in fact be put back into the job.

But how would “no win, no fee” lawyers approach that as a proposition, because they would not get paid. They will not seek the primary remedy that at the end of the day is the most sensible thing, because it does not cost thousands of dollars for the employer, and because it does not inconvenience the worker who has been unfairly dismissed. I ask how that could happen in a “no win, no fee” situation in relation to advocates and lawyers—who have no place, in my view, in the industrial relations scene in this country. I think the research the committee has asked for will show that that has been a terrible blight on our industrial scene since it came in, in the Employment Contracts Act back in 1990.

I am not alone in this view; Roger Kerr agrees with me. The Business Roundtable says that these people are a blight. So it is not a left/right argument that we have here. It is just common sense that those sorts of parasites should not be in there doing damage to the employment scene, and many employers—and I agree—feel quite rightly that that process is an unfair imposition on them when it is done in that manner. We did agree as a committee on that.

However, we obviously did not agree on the rest. On the Labour side of the House we do not believe that workers who go into a new job should have all their rights removed for the first 90 days. But the member has now put up some amendments, because even his own supporters in the business community said that he had gone too far, and that what he had put up was absolutely over the top. He has made a last-minute effort to try to soften it, so let us have a look at that.

The Opposition continually goes on about compliance costs for employers. Well, could there be a more ridiculous compliance cost than this? Under Dr Wayne Mapp’s Supplementary Order Paper—I think it is—that he just sought leave to put forward, an employee can force the employer to mediate on the decision to sack that employee. The employer can be forced to go to mediation, and actually sit there and engage in mediation as to why the employee was sacked. But then the employer has the absolute right to say he or she does not care. The employee might have a convincing argument, the employee might be right—the employee might have been unjustly treated by the employer—but the employer wins, because Wayne Mapp’s bill says that the employer wins every time. There is no argument; it is a case of “Sorry, you’re wrong, I’m right—because I’m the boss and you’re not.” So people will have to go through that if this type of change is made to the bill—what a ridiculous waste of time! Workers know that if the boss has sacked them and they have no rights under the law, they are definitely sacked.

So Dr Wayne Mapp has put up a bit of window dressing, because his own supporters have said that even though he went to university, got a law degree, and became a professor, he did not get this right. That is what the business community told him, and he has tried to soften it by pretending there can be mediation—but only one side gets to make the decision. That is not mediation; that is nonsense. Everybody in the world can see that for what it is—just a pathetic bit of whitewash.

We heard a whole lot of interesting arguments, but it is a real shame that the facts get in the way of those arguments. We heard that New Zealand was suffering on the employment front because we do not have probationary periods as they do in Germany, France, and the UK. So I looked at their unemployment figures compared with our unemployment figures, and can members guess who is winning? This country here, with a sensible probationary period, is streets ahead in terms of unemployment and in getting people into work. It is terrible how these facts get in the way of a good argument, but that is what we have heard constantly from the other side, and that is what we are hearing during this debate.

Employers have been coming along and saying that it is really hard to get people to come and work for them, and we have heard that also from the rural industries. Federated Farmers representatives said that they were really able to attract only the dregs. Well, I do not think they said those particular words, but they did say that they were getting only the hard end of the labour market—the people who nobody really wanted. Apparently, then, the big plan to attract better people is to say: “Come and work for me for the first 90 days. Uproot yourself from wherever you are in the country, and come here. And if I don’t like you after the first 90 days, you are gone.” Well, that is really going to help those industries that are struggling to attract staff! It gives people no security of employment, yet Federated Farmers said that every one of its members would do it. But the logic is just not there. If they cannot attract staff now, why will having a punitive arrangement like this in the law help them to attract new people into their workplaces? It is just beyond belief that people cannot figure this one through logically.

In New Zealand we know that we have a youth unemployment situation that is worse than our adult situation, but punishing people by urging them to go and work for employers who will get rid of them if the employers do not like them—get rid of them for even the most unjust reason—will not resolve issues with the hard end of the employment market. We know that the people getting those young people at the hard end of the employment market into work do it with mentoring programmes, with training, and with all sorts of incentives, but not with a big stick like this one. It does not work; it never will; it never has. That will be the same for Māori and Pacific youth as it will be for Pākehā.

The fact is that successful outcomes in youth employment that have been run by this Government have been about a much more progressive approach around mentoring. And that involves getting people up out of bed, picking up kids and taking them to work, visiting them at the workplace, and checking with the employer that things are going well. That is how we deal with the hard end of unemployment, that is what has been successful in New Zealand, but the National Party, jumping to the tune of its business mates, has said: “No, no, no. We’ll just make it easier to sack people, and that will increase employment for those people.” It is nonsense.

Most New Zealanders can see that this bill would affect everybody. The Opposition says no—that it will be only for young Māori and young Pacific people, and so on—but the people who came and made submissions said that it would affect us all. The average New Zealander now changes jobs about six times in a lifetime, and this legislation would mean that for six times 3 months spent in changing jobs employees would be without rights. That is just ridiculous. How does that encourage the teacher currently residing in Auckland who wants to go to do some rural service in Masterton—

PAULA BENNETT (National) Link to this

I thought it was perhaps time that we dealt with some realities, and some realities for everyone—not the rhetoric, not the maybes, not the wishes, but actually some realities. I must pick up on one of Mr Gosche’s comments about unemployment being where it is, and I certainly agree that elements of those skill shortages cannot be ignored or underestimated, at all. But I ask the member to let us also not forget that, on average, 680 of those workers leave New Zealand permanently each week, and that is something we do not have in common with those other countries that have a probationary period.

Let us deal with some of the realities of what businesses, employees, and those who wish to get a job are actually working for. Before coming into Parliament I worked in the recruitment field, and on a daily basis dealt with businesses and those who were looking for a role. Some of them were looking for first-time roles, and some of them were looking for a change in employment, and I dealt with people from labour hire, through to middle and top management positions. So I was not dealing with just those at the upper level; I was dealing equally with those working in factories and, in labour hire, those doing all sorts of stuff.

I wonder whether Labour members have recently spoken to many new immigrants. Such immigrants were coming daily into our offices and asking for us to please get someone to give them a go.

DARIEN FENTON (Labour) Link to this

First of all, I want to acknowledge all the submitters. We had a very interesting select committee process, and it was good to hear their views. In particular, I want to acknowledge all the workers who rallied and marched against the bill, to remind this Parliament that more than business interests are involved when it comes to issues of employment.

I want to talk about some of the things that Dr Mapp said when he promoted the bill. He has promoted it as a silver bullet to deliver all kinds of wonderful things, such as helping workers find jobs for the first time and providing greater growth and productivity in the New Zealand economy.

He also said that we are one of only two countries in the OECD that does not have a probationary period. But when we examined this matter we found that many of those countries have far greater industrial regulation and workers’ protection than New Zealand. In fact, our industrial relations system remains one of the most deregulated in the Western World, and it is an extremely permissive environment.

Employers know—so do workers, actually—that already a range of employment practices allow employers to take risks, as some employer submitters said they wanted to be able to do when employing people. There are existing provisions for fixed-term agreements. There are existing provisions for probation periods—and I will come back to that. Workers can be hired as casuals and temporary workers. They can be hired through third-party agencies or as contractors. In fact, FinSec, the finance sector union, told us that around 25 percent of workers in the banking industry are employed as temporary workers. The bill would actually leave New Zealand workers with fewer rights than workers in many other OECD countries. Another reason given for the bill is that having a grievance-free period would enhance the employment of those less likely to find jobs, even though this bill would apply to all workers; it did not try to define just those whom some considered hopeless.

The Australian Council of Trade Unions took the unprecedented step of making a submission, based on its experience in Australia. It said that the full court of the Federal Court of Australia had examined the link between employment growth and access to unfair dismissal remedies. The Australian Government’s expert witness admitted that there is no empirical research to support the view that excluding classes of employees will result in higher employment. The court held that the suggestion of a relationship between unfair dismissal laws and employment inhibition is unproven, and entirely a matter for speculation. In any case, one does not deal with this issue, or with problems like this, by removing fundamental rights and giving all workers less protection. Two young workers, Jessie and Oliver, who came along to the select committee, asked how we can expect young people to be committed to work when they are treated as though they are disposable.

Another assumption is that the termination of employment within the first 3 months is unduly costly and time consuming, and that probationary employees, under the current law, are entitled to an undue level of protection—which they are not. Current legislation requires that the agreement must be in writing, and that dismissal cannot occur simply because of the trial period coming to an end. That is fair. In other words, employers have to manage. If they have concerns, they have to convey them to the worker, provide an appropriate opportunity for the worker to comment and improve his or her performance, and consider the worker’s explanation fairly.

I am also unaware that there is any evidence of a multitude of workers taking personal grievance claims within the first 90 days of employment. Even the Employers and Manufacturers Association (Northern) admitted that personal grievance cases taken in the first few months of employment are rare. What struck me about many of the employers’ submissions was their lack of knowledge about current probationary requirements, and their impatience with the requirement to be a fair and reasonable employer. In my former job I was the employer of 75 staff, so I am well aware of the responsibilities that employers have under the law. Yes, it can be inconvenient and time consuming, but workers should not be deprived of their economic livelihood easily and frivolously, and these are important decisions that impact on people’s lives.

Current probationary requirements mean that an employer cannot simply leave a worker to his or her own devices in a job, then assert after 90 days that the worker is not suited to the job and sack the worker. Caritas, the social justice arm of the Catholic church, put it well in its submission when it said that working relationships do not break down only because of a fault on the part of the employee. This bill assumes that the fault is always on the part of the employee. Business New Zealand suggested that probationary employment guidelines be introduced, including the need for regular supervision and feedback during probationary periods, and I believe that the recommendation of the majority of the select committee—that more be done to promote awareness and the effective utilisation of section 67 of the Employment Relations Act—is a constructive way forward.

Some of the concerns from union submissions that particularly struck me were those representing workers in highly dangerous industries. The Rail and Maritime Transport Union said that workers must be confident that they can speak out about unsafe work practices, especially in the rail industry with its inherently hazardous tasks. It is a fact that workers are far more likely to have accidents in the early days of a new job.

Other submitters said that the bill would foster negative workplace cultures. Workers under the threat of instant dismissal would be more likely to be reluctant to provide feedback, criticise unacceptable practices, or otherwise involve themselves in the workplace. They would be placed under pressure to conform to the workplace culture, and in so doing could, ironically, be identified by the employer as being not suitable, or as not fitting into the culture, by not showing initiative or energetic ideas.

Cheryl Chester-Dixon, who works with challenging behaviour in disability support services, talked about the small workplaces she works in, with inexperienced supervisors and a high turnover of staff and supervisors. In a high-stress industry, Cheryl believes that instead of sorting things out, employers in small workplaces like hers, who are busy, are just going to say that they have had enough and send workers down the road.

The Dairy Workers Union talked about its co-partnership with Fonterra and the major productivity initiative called Manufacturing Excellence, and about how any action by this Parliament or the employer to reduce employment rights is viewed by the unionised workforce of Fonterra as an attack on them. Any attack on employment rights undermines the framework by which workers constructively engage for productivity and economic development. They then become suspicious that all this Parliament cares about is economic growth for the few, not economic growth to be shared by all. The union’s submission states: “We should be supporting the drive for excellence in our companies and exporters by ensuring that the employment relations framework contributes to employment security rather than detracting from it.”

Some of my colleagues have already mentioned a genuine concern that came through the submissions. This was the activities of the so-called ambulance chasers—those advocates who conduct personal grievance cases on the basis of a “no win, no fee” arrangement. Although there is anecdotal evidence only about this problem, stories have tended to grow in mythology and in the employer community. But I do accept there are some genuine cases of frivolous claims being taken against employers to obtain a financial settlement. The select committee has recommended that there be further research into those arrangements, the impact on personal grievance claims, and any initiatives that might address the issue.

Finally, I acknowledge Dr Mapp’s tenacity in pursing his bill and his endeavours to find solutions, albeit ones that no one on this side of the House can agree with. I also note his statement that this is the No. 1 issue on National’s agenda for changes to employment law. It is helpful to have that statement, in order to remind all the workers who protested, rallied, and made submissions that, if given the chance, the National Party will relentlessly pursue the removal of basic workers’ rights.

PITA PARAONE (NZ First) Link to this

Tēnā koe, Mr Speaker. I stand on behalf of New Zealand First to participate in the second reading of the Employment Relations (Probationary Employment) Amendment Bill, which is sponsored by Dr Wayne Mapp. I also stand on behalf of my colleague Peter Brown, who was a member of the Transport and Industrial Relations Committee, and who is our party’s spokesperson on such matters.

First of all, New Zealand First gave serious consideration to this bill. In fact, part of that consideration was that we supported it on its first reading so that it could go to a select committee, even though we had concerns about it. I ought to say that our first opinion of the bill has certainly not changed. My colleague described it as being draconian, although it was promoted as helping people into jobs.

We are not quite sure whether that was in fact the case, but we recognise Dr Mapp’s attempt during the select committee deliberation to amend the bill along the lines that New Zealand First advocated. He suggested some amendments to address the concerns of many of us, and during that process New Zealand First supported the amendments. Nevertheless, they were defeated at the select committee, and all I need to say is that I respect the decision of the select committee. The bill would have required further amending if it were to go any further but, quite clearly, there did not seem to be any political support for the bill.

I say to this House that New Zealand First has met with the Minister; I suppose that is part of the baubles of power that people keep reminding my leader about. We discussed with the Minister some of the issues that were raised during the select committee hearing. The Minister has agreed to address the problem of employment organisations that take on frivolous personal grievance claims against employers on a “no win, no fee” basis. The Minister has also agreed to instigate a campaign to educate employers, in regard to the current legislation that provides for probationary periods in an employment agreement. Quite clearly—and this was alluded to by one of the speakers from the Government—many small employers are unaware of the current legislation. I refer specifically to clause 67 of the Employment Relations Act 2000.

The Minister has also agreed to an inquiry into casualised employment, with the intention of putting some rules in place to ensure fairness. The inquiry will be headed by a suitably qualified independent person. Negotiations between the Government and New Zealand First are ongoing, and we expect them to be finalised so that the Minister will be in a position to announce full details in the first half of 2007. That particular inquiry will certainly address the concern that New Zealand First has in relation to casualisation.

I will not take up any more of the time allocated to our party, other than to say that New Zealand First has decided not to support this bill going any further.

SUE BRADFORD (Green) Link to this

The Green Party is absolutely delighted with the statement made by Mr Pita Paraone just now, and that the Transport and Industrial Relations Committee has recommended that the Employment Relations (Probationary Employment) Amendment Bill not proceed. We understand that with Mr Paraone’s assistance there are sufficient votes in the House to make sure the bill does not go any further today.

This bill is a disgrace, harking back as it does to the National Party’s infamous approach to industrial relations, epitomised by the 1991 Employment Contracts Act. I am sure that if Dr Mapp succeeds with this bill, tonight he and his colleagues will be celebrating the first step towards achieving a renewed attack on the rights of workers. I am very glad that the number of MPs who have seen the reality of what is intended by the bill is sufficient to ensure it does not survive past this afternoon.

Although Dr Mapp’s motives are, on the surface, quite laudable—for example, his avowed desire to help young people and the long-term unemployed get a foothold in the workforce—the real danger lies in what lurks below the surface. Under the bill as introduced by Dr Mapp, employees during their first 89 days on the job would have none of the protections offered them by the current Employment Relations Act. The employer could sack the new worker at will and without notice. Dr Mapp and his supporters have said that the proposed 3-month probationary period would mean that employers who are traditionally reluctant to take on people without a good employment record, or without any employment history at all, would be much more willing to take the risk of doing so.

There are grave fallacies in that argument, and with the bill itself. Dr Mapp has assumed that employers are reluctant to take on those less desirable in the labour market, unless they can do so on a trial basis, without the protections of the Employment Relations Act. He and his supporters believe that a 90-day probationary period for all new employees would allow employers time to work out whether a new worker is suitable for the job without risking costly and drawn-out personal grievance procedures. Dr Mapp has often gone on to say that the 90-day rule would therefore help the most disenfranchised parts of the workforce—such as young people, Māori, Pasifika peoples, and migrants and refugees—as there would be less of a barrier to their employability. In contrast, the Green Party believes that it would, in fact, be those parts of the labour market who would suffer the most as a result of this bill going through, achieving quite the opposite of Dr Mapp’s professed intentions.

Should this bill succeed, it will strip those so-called risky employees of their legal protections. Such workers could potentially number in the hundreds of thousands each year. As one commentator noted in June, with almost 2 million people in our workforce at present and with every worker changing jobs an average of six times in their lifetime—often more—National’s bill could mean 300,000 workers without any rights at any given moment. Another way of looking at it is that all of us could face an average of 1 to 1½ years of our working lives without the legal protections enjoyed by everyone else.

Dr Mapp and others argue that probationary periods will increase productivity, but, again, the Green Party believes that they will have absolutely the opposite effect. Insecure, low-status workers tend to be less, not more, productive than their colleagues. Insecurity breeds mistrust and fear, not loyalty and commitment. Human resources professionals and business advisers spend a lot of their lives trying to train managers in the art of being a good employer. Does Dr Mapp not realise that his bill would in fact undermine all their efforts? Undervaluing and disrespecting one’s employees by seeing them as a high-turnover, low-cost commodity instead of honoured contributors to the business is an almost certain recipe for problems in working relationships, whether the business is large or small. We here in Parliament should be doing everything we can to encourage respectful relationships based on the kinds of principles outlined in the Employment Relations Act, not racing backwards to the future by eliminating rights at work for hundreds of thousands of people at a time.

Beyond questions of fairness, sound workplace management practices, and basic human rights, this bill is simply not necessary at all, if what Dr Mapp is really seeking to do is to allow employers the option of using probationary periods in some limited circumstances. As I pointed out in my first reading speech—and as many submitters and the Government have said, over and over again, as well—the Employment Relations Act already has provisions for probationary periods for new workers, and has had since 2000. Dr Mapp has said that if his bill were to pass the second reading stage, he has a number of amendments he would like to put up. I have not had a chance to look at these amendments before this afternoon, but we in the Green Party will continue to stick to the basic principle that all those in employment, not just some, deserve the protections offered by the Employment Relations Act.

Even if Dr Mapp were to amend the bill by restricting 90-day probationary periods only to those in their first job—and I do not think that is what his amendments propose—I would continue to reiterate the very clear position put up in my own member’s bill to get rid of the lower minimum wage for young workers: that under-18-year-olds deserve exactly the same protections at work as the rest of us. Equal pay for equal work is a well-established principle in this country when we consider matters of ethnicity and gender, but, sadly, it is still not the case when it comes to age. So many people in their first job are in that younger age group.

I would hate to see the concept of the probationary period slipped in, either through amendments to this legislation or through changes to my own Minimum Wage (Abolition of Age Discrimination) Amendment Bill, which some employers and others have suggested recently. All employed workers deserve to be treated with equity in wages, conditions, and statutory protections, not discriminated against on the basis of age and/or on the principle of how long they have been in the job. The bill we are dealing with today is really about stripping away the employment rights of the most vulnerable workers in the country. If it goes through, workers in high-skill, high-demand occupations, perhaps like some of those Paula Bennett talked about, would not have been affected, as she rightly said. For those types of positions, in the current labour market the new hire can usually hold his or her own in any negotiation with the employer. Instead, this bill would have created huge damage for those who are already most at risk: the young, the unemployed, Māori, Pasifika people, and refugee and migrant workers.

I especially acknowledge the Māori Party MPs, who went through a difficult process of their own in coming to a decision on this legislation. Along with my fellow Green MPs, I tautoko their ability and willingness to listen to the voices of so many of their own people, who have been saying loudly and clearly that despite the bill appearing on the surface to assist with overcoming Māori unemployment, in fact it would make things a lot worse for those workers.

The Labour Party must listen to the genuine concerns of the Māori Party, and of the Green Party, about the ongoing high rates of Māori unemployment. The answers to high jobless rates among tangata whenua and others lie elsewhere than in this bill. Minimum wages and conditions should be higher so that people who are living in endemic long-term poverty can more easily make the transition from welfare to work. The Job-plus subsidy should be expanded and, at a time of comparatively low unemployment, I think we should also be looking again at things like updated versions of the old Work Skills Development Programme for some people. There should be more Government support for local economic development, job creation, and small business assistance in regions of high unemployment. We should not be creating no-go zones for the unemployed or trucking them 120 kilometres a day to do temporary work in places like Tai Rāwhiti. Instead, we should be localising economies so that rural and provincial areas are nurtured back to life rather than “hollowed out”, in the fashionable jargon of today’s economic discourse. A high skill, high value economy will not be accomplished by plunging all, or even some, new employees into 3 months of total uncertainty whereby new employers can drop them like a hot cake with no reason on their part and with no recourse on the employees’ part.

Most of all, I congratulate all the individuals, unions, and church and community organisations who took part in meetings, marches, rallies, and pickets in the campaign against this bill. They knew that it was not enough just to sit quietly by and hope the bill would be defeated within the parliamentary precincts. MPs needed to hear the strength of their voices and their actions, and we did—wind, rain, and Boobs on Bikes inclusive. The Green Party joins them today in welcoming the demise of this ill-conceived, anti-worker bill. We look forward to continuing to work with them on somewhat more constructive issues in the months and years ahead.

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

Tēnā koe Mr Assistant Speaker. Tēnā tātou te Whare, tēnā koutou e te whānau o ngā kaimahi. Kia ora tātou katoa.

[Greetings to you, Mr Assistant Speaker. Greetings to us in the House, and the family of workers. Good health to us all.]

Some bills come up at just the right time, and this is one of them. This week marks the anniversary of the death of Sojourner Truth, the famous anti-slavery activist. Indeed, in the United States November is designated as truth month, and in Michigan there is even a Sojourner Truth day coming up on Sunday. But I have no doubt that all these were facts that completely bypassed my colleague Dr Mapp in bringing the Employment Relations (Probationary Employment) Amendment Bill back to the House. If the name “Sojourner” sounds familiar, it is because in 1995 the National Aeronautics and Space Administration named the Mars Pathfinder rover Sojourner, in honour of Sojourner Truth’s birth some 200 years ago.

Sojourner Truth was born into slavery and became the property of four more owners before she finally marched to freedom in 1826. From that time on she travelled the land, preaching the truth and working against injustice. According to the stories, everywhere Sojourner Truth spoke she made a lasting impression. It could have been because she was over 6 feet tall and had a powerful and booming voice, but it was probably also because of the power of her message. She was a seeker of truth, a fighter for human rights, and a campaigner against injustice.

So what can Sojourner Truth possibly have to do with Wayne Mapp and this bill? It is simple. In this truth month we look to her legacy as another example of the inspiration so many black activists have given to indigenous people about how to tackle systemic bias, and how to fight institutional racism, in order to effect change. Truth No. 1 asks: is the probationary period necessary?

GORDON COPELAND (United Future) Link to this

United Future is totally committed to doing all we can to ensure that as many New Zealanders as possible have a job. Earlier Mark Gosche commented that the United Kingdom, Germany, and France, etc. have probationary periods in their law, but also have higher rates of unemployment than New Zealand. I would like to say that it is rather cold comfort to people who are endeavouring to find a job, and who for a long time have been unable to work in New Zealand, to know that they are, at least, better off than people in Germany. I suppose they are, in that sense, but it is still very, very cold comfort. That is why United Future, in our election policy in 2005, suggested that there was a useful place in New Zealand employment law for a probationary period.

I want to tell members why we believe that a probationary period is important. We see it as being important for four different categories of people who, at the moment, find it very, very difficult to get into a job.

The first category is people getting their first job. I have been with a number of young people who have been endeavouring to get their first job, and I have experienced firsthand how difficult that can be for many of them. They tend to pick up the Dominion Post on a Saturday, with its employment supplement that has 640 jobs, or something of that sort. They go away with their hopes up that somewhere amongst those 640 jobs there will be one that they can apply for. They come back to me and say: “Well, I’ve isolated about 15 jobs that I think I could do, but in every single case the advertisement states ‘experience required’.” One has to ask how someone looking for a first job can have experience; obviously, that person has no experience. We feel it is important to allow those people to have an opportunity to overcome that problem. I will come in a moment to why employers insist in their advertisements that they require people who have experience, and how a probationary period might help that.

The second group of people we have in mind are people who are re-entering the workforce having undertaken courses for drug and alcohol treatment. These people are a very, very high-risk group of people when it comes to getting back into the workforce. If they are honest when the employer asks: “What having you been doing for the last 6 months?”, they say: “I have been in a rehabilitation programme.” Very often, when they get to that point in the conversation the interview is immediately terminated; that is the experience many of them have.

The third group, whom I think are in an even more difficult position, is prisoners who are coming back into the workforce having done their time in prison and, therefore, having paid society their dues in respect of their criminal activity and the like. A number of wonderful organisations in this country specialise in trying to rehabilitate these men—normally they are men; there are very few women in our prisons, thank God. Nothing is more important in that process than being able to get those people a job. I have met with people from several of those organisations, and they have told me it is extremely difficult to get those people back into work, because the employer says: “Look, you’re just too risky.”

The fourth group of people we have in mind are new immigrants and refugees. Again, I have personally spent time with those groups, and the people who work with those groups, and I know the great difficulty they have in getting their first job in New Zealand. That is particularly the case for people who have relatively poor English language skills. They have a tremendous struggle getting their first job in this country, sometimes to the point of their feeling total despair because no one is prepared to risk taking them on.

That is what this bill is trying to address. How do we mitigate the risk? How do we get an employer to take a risk with this people? It is not made any easier by the fact that a number of the employers, as they have told me, have taken risks with people in those four categories I have mentioned, only to find that 2, 3, 4, or 5 days or weeks after they start a job they simply one day do not turn up. That illustrates the fact that our present arrangements are kind of one-sided. We have a contract of employment between employee and employer, but if the employee opts out, he or she can walk away and that is the end of the matter. There is no come-back at all for the employer. It is unfortunate, because those people—and there are not many of them; I am not saying it is a big problem—make it more difficult for people who really want to do an honest day’s work for an honest day’s pay to get into the workforce.

United Future members believe that there is a risk involved from an employer’s point of view when he or she evaluates the situation and asks: “Am I prepared to take this person on?”. Therefore we believe, as does Dr Wayne Mapp, that it is important to address that reality and do something about it, rather than sit here with our hands folded, as it were, and say that we are not prepared to address this issue. Because if we do not address this issue, the reality is that it will continue.

Something else really, really disappoints me about the debate that we have had so far on this bill. I have noticed a tendency coming up more and more in this Parliament, and I think it is very disappointing, and it is this. Wayne Mapp comes up with a bill. It gets through its first reading, it goes to a select committee, submitters come along, and the Transport and Industrial Relations Committee produces a report, which states the reasons why the bill should not proceed—breach of human rights, overturning of employment law, etc. They are all listed on pages 3 to 5 of the report. Wayne Mapp listens to those submitters and he alters his bill.

How has he attempted to amend his bill? Let us look at what Wayne Mapp has put before Parliament. He is saying we should give this bill a second reading so that it can go to the Committee of the whole House, and he will put amendments to change what was originally put before this House to something different. Yet speech after speech so far from the opponents of this bill have referred to the bill as submitted. I think that is lazy and, in a sense, kind of dishonest.

So let us look at what Wayne Mapp proposes. First of all, he said probationary periods would be by agreement between the two parties. They will not apply to every job; they will not apply to everybody. We heard from Sue Bradford that they will apply to hundreds of thousands of people. That is a nonsense. They will apply to a particular situation whereby the parties themselves agree to them. They will apply to the sorts of people I am talking about who want their first job, or want to get back into the workforce after prison or rehabilitation, or have come to New Zealand as immigrants, or whatever. Those employees are happy to be taken on, on the basis that if it does not work out they will not be able to take a personal grievance against their employer.

Wayne Mapp has a specific amendment about this, and it is worth reading it out: “For the avoidance of doubt all issues other than personal grievances, including arrears of pay, discrimination under the Human Rights Act and issues arising from health and safety can be subject to proceedings under this Act.” In other words, there would no loss of rights under the New Zealand Bill of Rights Act or under the Human Rights Act in relation to this bill, if it were amended by Dr Wayne Mapp’s amendments. But here is the rub: Parliament will never even debate these amendments. No, we have made our minds up, and we do not want to be confused with facts or amendments—this is a dead loss!

Hone Harawira said we cannot do this because it might be risky. I ask Hone how will we ever know—

DAVID BENNETT (National—Hamilton East) Link to this

That was actually a very good speech, Gordon, and—

SUE MORONEY (Labour) Link to this

That speech was from the member who happily ate the chicken drumsticks from the New Zealand Public Service Association in Hamilton, never letting on to them for one minute his views on this particular issue, but that is nothing new. I hope that people in Hamilton were listening to the diatribe from that member, who said that he was portraying an issue that came forward from a Hamilton business person. Where was that submission before the Transport and Industrial Relations Committee? It certainly was not heard before the select committee, but there were very, very fine submissions that were heard by the select committee. I congratulate those people who felt strongly enough about this issue to come and put their views forward before the select committee.

It is an interesting time to be debating this Employment Relations (Probationary Period) Amendment Bill, because over the last 24 hours we have learnt that many of National’s policies are hidden from public view. Well, here is one that is up for consumption by the general public, and the public really should know about this. I hope that a lot of people are listening and taking note that when it comes to National Party policy, this is the sort of thing that National members come up with. Here is the sort of thing that they want to promote—and it is taking away workers’ rights.

The issues that are in front of the business community in this country at the moment are around not being able to get the appropriately skilled person in the right place, at the right time. What is the National Party’s answer to that? National members came up with this intelligent legislation—not! It is not intelligent legislation—that says to the business community: “We know how to resolve your skills shortage problem. We will just let you give less job security to those people who want to apply for your jobs.” That is not going to work. Lots of business people came along to the select committee and said to us that they did have skills shortages.

If anyone thinks that this is just an issue that Dr Wayne Mapp is pursuing because this bill happens to be in his name, then they need to be very clear that, no, this is key policy for the National Party. Some of National’s key policy is to take away job security from workers. We have been through this before, and we know exactly where the National Party is heading with this bill. Those members want to do away with workers’ rights. If anyone thinks that this is just Dr Wayne Mapp and his bright idea, then I will let people know about Don Brash and what he had to say in April 2003.

LINDSAY TISCH (National—Piako) Link to this

Thank you for the opportunity to take a call on this very important legislation, which is based on the premise that if we are to have successful businesses, grow the economy, and have productivity in the economy, then we have to have a skilled and competitive workforce, compliance costs that are within reason, and some assurance that people in business are prepared to invest and get a return on their investment dollar. When we look at business as a whole—and members have heard me speak on other occasions about the importance of business in our communities and the role it plays in our GDP—we see some very important facets in which, in our view, this Government has not performed. Labour members are under the misapprehension that all employers are wrong and are guilty unless proved innocent. They believe that employers will try to rip somebody off just for the sake of doing that. We have heard that tonight.

We have to build a very strong base for business so that there is some certainty and continuity. Businesses are built on customer bases. They are built up because somebody is prepared to buy or use the service that a business will deliver. Everything is driven by the market, so if we do not have a strong customer base, then we do not have a business. Some of the experiences that I have had of restructuring businesses over the years have occurred because of the fact that although many businesses are started, not many of them succeed unless the owners have done the homework and the preparatory work to set frameworks in place. One of the statistics that is always used in relation to trying to gain new customers is that it costs six times as much to try to get a new customer as it does to retain the customer one has in the first place.

So it is with employment. If somebody is making a contribution and is going to add value to a business, the employer will be prepared to put time and effort into that person—through training, seminars, and other incentives such as superannuation, mileage allowances, or whatever—to retain that person. Good employees in a business often become frontline staff, and they can be a real asset to the business.

But so many businesses these days are saying that it is not worth the risk. They are not prepared to take on anybody extra, because too many facets of compliance cost make it more difficult for them, and it is not really worth the effort. Business owners may then say they will run their businesses themselves, with their existing staff, or they may even cut back, making it easier for them to control their operations.

In looking at business growth, I have here a dossier put out by Business New Zealand. It talks about the seven pillars of growth, one of which is specifically about a business-friendly environment. It talks about New Zealanders wanting growth and what they need now to achieve that. A number of important bullet points follow. One that is highlighted is for a grievance-free probation period to be put into the Employment Relations Act. You see, one of the things that employers or prospective employers do when they invest in staff is make sure they have the right people to start with. Many I have talked with over the years, especially those who have been unemployed, say that it is very difficult to get jobs, because employers are reluctant to take them on. Those people are just asking for a chance, for an opportunity to get their foot inside the door, and that is the opportunity provided in Wayne Mapp’s bill.

The bill talks about giving people a 90-day probationary period. Earlier on, I was an advocate for a 180-day grievance-free period. In fact, that is common overseas. New Zealand is the only country that does not have that probationary period. If we want to grow the economy—if we want to have the productivity that everyone talks about—then let us make it easy for employers to get staff and train them. Taking somebody on is a big investment; it does not just happen. Employees have to be trained up in order to deal with the most important person in the business—the customer. Employees may well be in a workshop environment, but they still have a role to play in making sure that the quality of the goods the business produces is up to par with whatever the market expects and with whatever the competition produces.

I have some figures here that talk about the main sources of compliance in relation to employment. A pie graph shows countries with high employment areas, yet with compliance costs that are very low because they have adopted the sort of provision I am talking about. Austria, Belgium, Finland, and Sweden are countries that have provisions allowing for growth in their economies.

Agenda 2010 is a document I have talked about before in relation to the Commission of the European Communities. When I was in Germany last year—[Interruption] The member might like to listen to this, because I was a guest of the Bundestag, where I learnt that while unemployment is high in Germany, its productivity is three times greater than New Zealand’s. The document says that in respect of the challenges relating to employees, labour markets, and skill shortages—the challenges we have here—the other countries of the European Community are asking how to create incentives for businesses to grow and take on staff so they can contribute not only to their local communities but also to their regional communities and, ultimately, to the benefit of their whole country.

Agenda 2010 actually sets out provisions for the employment of staff. It talks about taking people on for a grievance-free period in order to give them skills. In fact, it goes so far as to state—which we are not advocating—that if employers employ fewer than five people, then, regardless, they can be dismissed at any time. We would never go to that stage. But in terms of being able to take somebody on and give them a chance, when we know there are sectors within the community that are disadvantaged, Wayne Mapp’s initiative in this bill is pretty significant. If we want entrepreneurial enterprise, if we want investment in the economy, and if we actually want to grow those things that are important, then this measure is the sort of measure that becomes important.

It is interesting that we have opposition from members on the other side of the House. They have never invested a dollar in business, nor employed anyone. They would absolutely not have a clue what we are talking about. They have never been risk-takers. They have a lot of theories, but they have never invested a dollar to say: “This is how it works.”, and been prepared to take a risk. They have all come from one side of the fence. They believe that employers are all wrong and are trying to rip everybody off.

Well, that is not the case. If there is no investment or no employers, then people have no chance to get a job. We are saying that the legislation advocated and promoted by Dr Mapp—and we have had feedback from around the country—is a measure to allow people to get a foot inside the door. If this Government is going to say that it will not allow that, then woe betide it, because in 2 years’ time when those members are out, and down the road—because we will be the Government—we will remind them about that. This is a Government that is anti-business and anti-employer. It does not understand what makes the world go around. In 2 years’ time—it might be less than that; it might be next year—we will say that if we want productivity, if we want to promote entrepreneurs, risk-takers, then this bill is the sort of measure that will make it work

Along with getting rid of those other provisions, we will lower taxation, sort out accident compensation, and reduce the Resource Management Act consent process—those sorts of things. They are the challenges that face business, and I commend Dr Mapp and those members of the National team who have spoken in the House on this bill. This is good legislation. It goes to the heart of growing the economy and giving ownership back where it belongs—to those people who are prepared to invest and make sacrifices. That is good for the economy and that is good for employers and their staff. We welcome it. In fact, this Government, by not voting for the bill, will be held to account in less than 2 years’ time.

DAVE HEREORA (Labour) Link to this

I would like to make a few comments in relation to the issues raised by the previous speaker. He talked about the Employment Relations (Probationary Employment) Amendment Bill as being Wayne Mapp’s bill. I have to say that a lot of worker groups have asked for my opinion on this bill, and, in doing so, have also referred to it as being Wayne Mapp’s bill. The first thing I said to them was that it is not Wayne Mapp’s bill but is National’s bill. The reason I told them it is National’s bill is that in the first instance it strips away workers’ rights. It strips away the personal grievance provisions and gives no insight into health and safety issues on the job while someone is employed. I made that very clear by getting the brand right. The brand is that this bill is the very essence of the National Party’s policy to strip away workers’ rights and reduce their terms and conditions of employment. That is the first thing I told people.

The second thing I want to comment on relates to Lindsay Tisch’s statement that this bill will give some certainty, continuity, and investment. Well, pray tell me how it will do that. The opening remarks in the explanatory note of the bill state: “The purpose of a probation period for new employees is to enable employers to take a chance with new employees”. How will that give certainty? It actually does the reverse of that. If employers promote the fact that they want workers on a trial basis for 90 days, then those workers will be employed for fewer than 90 days—in fact, for 89 days—before they get the sack. This bill contains no provision for them to find any recourse or redress if that happens; they will be gone down the road by lunchtime. I cannot see how the heck that member thinks this bill will promote any certainty.

The second thing Lindsay Tisch mentioned was continuity. Continuity means the opportunity to have security on the job. Well, how the heck will we get security on the job if we are saying that employees will be employed for only up to 90 days? Members know as well as I do that if there is a chance for some employers to keep workers employed on a casual basis, they will take it, so this bill is just a platform to achieve another extension of the casualisation of the workforce.

The third issue raised by Lindsay Tisch that I want to talk about is that he saw this bill as being an investment. How the heck can this bill be seen as an investment, when we all know that the only investment in employment is to train workers? How will training be introduced in fewer than 90 days? What sort of promotional opportunities and security will that give to employees? Absolutely none! Members know as well as I do that those three points that Lindsay Tisch raised are a lot of hogwash. There would be the opposite of certainty, continuity and investment under this legislation.

The other issue I have shared with workers who wanted my opinion related to the group of workers this legislation would attack. I spoke to a lot of Pacific Island and Māori workers, and predominantly to those groups in areas where trials have been introduced. Under the current Act there is an opportunity for trials to be held, but going along with that opportunity there are also protections in terms of personal grievance rights, health and safety provisions and, at the end of the day, the chance for redress through the courts if employees are sacked.

So I tell Wayne Mapp that I cannot see any reason why he is promoting this bill, other than because of the fact that it is at the very heart—it is the very essence—of the National Party’s policy to strip away workers’ rights. At the end of the day, that is the intention.

Hon RUTH DYSON (Minister of Labour) Link to this

I am delighted to say that Labour opposes the Employment Relations (Probationary Employment) Amendment Bill. It was introduced with absolutely no definition of a problem. Before any legislation comes to this House, we should have a clear view of the problem the legislation aims to address. This bill had no analysis, at all, of what it was trying to deliver. Then we had to watch the spectacle of the frantic attempts of its proponent, Dr Wayne Mapp, to water it down. Every single possible amendment to water it down was made by the proponent of the bill, and he still seems unable to muster enough support for it in this House. Well, I am proud of the House of Representatives if we reject this type of legislation, and I certainly hope we will not have to waste too much time in the future with bills that are as shallow and self-serving as the bill proposed by Wayne Mapp.

Labour proposes a positive workplace relationship, where workers are valued and treated fairly and where employers are able to utilise the talents of their workforces to improve their businesses. We are all in this together; we are not in opposition. The labour market situation in New Zealand is extraordinary. We have the lowest unemployment numbers in decades. The two biggest challenges facing us are, firstly, filling job vacancies and, secondly, improving our productivity. When I say “us”, I mean all of us—central government, businesses, and unions—working together to address those two critical problems. Those are the labour market challenges that this Government, with business and with unions, is addressing.

The OECD says that we are the third-ranked country in the world in general flexibility of the labour market. The World Bank this year rated our country as No. 1 in the world for ease of doing business. So the OECD and the World Bank think we have got it right, but National wants to turn us back to the bad old days of the Employment Contracts Act of the 1990s, where workers had their rights stripped and were treated as commodities rather than as valued contributors in the workplace and in our economy.

I mentioned the two biggest challenges facing our country in the labour market area, but there are two other issues I want to mention. The first is the issue of vexatious litigants and of employment relations consultants—particularly those referred to by my colleagues earlier: the “no win, no fee” consultants. The second, other big issue is the casualisation of workers. Those are genuine issues of concern, and I have committed our Government to working on both those issues after reading submissions and after discussion with my colleague from New Zealand First Peter Brown.

I want to acknowledge Peter Brown for his work during the process of the bill. He has engaged in discussion with me, and with members of the select committee, in a constructive, open, and direct way. He has an attitude of wanting to get things done, of getting problems identified and addressed, and of making real progress on issues of concern for New Zealand employers and New Zealand workers. I look forward to continuing that work in Parliament. I trust that we will have fewer ill-considered bills such as this one in the future. It spends the time of Parliament in a way that could be much better utilised in addressing the real challenges that I look forward to continuing to address as Minister of Labour.