Tuesday, 4 December 2018

TUESDAY, 4 DECEMBER 2018

TUESDAY, 4 DECEMBER 2018

The Speaker took the Chair at 2 p.m.

Prayers.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

1. Hon SIMON BRIDGES (Leader of the Opposition—National) to the Prime Minister: Does she stand by all her Government’s statements and actions?

Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Prime Minister: Yes.

Hon Simon Bridges: Is it a new fashion for the Prime Minister to neither do morning media nor come to Parliament?

SPEAKER: Order! Order!

Rt Hon WINSTON PETERS: I can answer that question. I’m an expert on it.

SPEAKER: Well, the—

Rt Hon WINSTON PETERS: I am—I know.

SPEAKER: The Prime Minister might want to answer the question; I’m just trying to work through in my head whether there is ministerial responsibility to the House for it. I’m going to rule that there is, but I’m watching the tone very carefully.

Hon James Shaw: I raise a point of order, Mr Speaker. I understood that it is out of order to be questioning the presence of members in or out of the Chamber.

SPEAKER: There is a convention to that effect. The fact that it’s been breached is something that I’m not going to haul the Leader of the Opposition up on at the moment.

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, the facts are that the Prime Minister was required to have a meeting in Auckland with the President of Korea. By the way, because of a lightning break there, she was delayed by 45 minutes and just made it, and, of course, the circumstances would have also had an effect at the end of the function, which, as the member should know—

Hon Simon Bridges: She didn’t come last week, either.

Rt Hon WINSTON PETERS: —was followed by a lunch with respect to the Prime Minister.

Hon Simon Bridges: Why couldn’t she be here?

Rt Hon WINSTON PETERS: Now, that said—

Hon Grant Robertson: No, he doesn’t care about our relationship with Korea.

Rt Hon WINSTON PETERS: That said, the difference is—

Hon Simon Bridges: She didn’t—she almost didn’t go.

SPEAKER: Order! Order!

Rt Hon WINSTON PETERS: —there are—

SPEAKER: No, no. The Deputy Prime Minister will sit down, and the Minister of Finance will just be quiet, as will the Leader of the Opposition. [Interruption] No, frankly, it’s very hard to take questions seriously when there’s a barrage of interjection going back and forward.

Rt Hon WINSTON PETERS: The fact is that the Prime Minister has been so impressive in her first year in that role that all of the world leaders are calling her—

SPEAKER: Order! Order! The member’s answering—

Rt Hon WINSTON PETERS: And what went wrong with that?

SPEAKER: —for the Prime Minister. He will resume his seat. She would never say anything like that.

Hon Simon Bridges: Does she stand by her statement in relation to whether banning letting fees will see landlords increase rents to cover the costs, that she hopes that won’t be the case?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, the reality is anyone who knows the commercial market knows that rents—their decline or rise—are dependent on a thing called supply. Supply-side economics is what the National Party used to know about, before this new breed turned up.

Hon Simon Bridges: Does she still have hope her policy will not lead to higher rents when there are property companies emailing their clients, telling them to increase rents by $6 a week to cover the letting fee?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, having to answer this question weekly is getting tedious, but the reality of the market will not change. The reality is this Government is delivering the supply side of economics where housing is concerned, and they’re doing a thoroughly planned, smart job about it.

Hon Simon Bridges: Why does she think one property management company wrote to their clients in response to her saying she hoped rents wouldn’t increase as a result of letting fee costs being passed on to landlords, saying, “Well, that may be the case on Mars, Prime Minister, but here in little old New Zealand, with all the additional costs that have been heaped on to landlords in the last year, you can’t expect property management companies and landlords to just absorb the added costs and not pass them on to tenants by way of increased rents.”?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, the day where this country becomes a property developer’s and rack-renting landlord’s paradise is over—is over—because we intend to supply tens and tens of thousands of houses both in the private and public sector, at the greatest speed possible, and we can’t turn around three terms of Government neglect overnight, but turn it around we will.

Hon Simon Bridges: On the issue of housing supply, why is the Government building KiwiBuild houses in the Marfell suburb of New Plymouth that have a price tag of $450,000 when CoreLogic figures show the median house price in the area is just $326,000 and homes.co.nz says it’s just $271,000?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, because this Government does not intend to govern just for north of the Bombay Hills. All over this country there are regional cities definitely needing housing as well, and no one will go unattended.

Hon Simon Bridges: Does she expect KiwiBuild houses in Marfell to fill a gap in the market for first-home buyers when they are more than $100,000 above the median price in that exact area?

Rt Hon WINSTON PETERS: Anyone who understands the provincial market place will know that New Plymouth and Taranaki is one of the highest growth areas and one of the highest income areas in the country. That will have some possibility of influencing house prices. Now, if you were from the provinces and understood that, you would then do something about it.

SPEAKER: Order! Well, I might have been but it was some time ago.

Hon Simon Bridges: Does she agree with the Minister of Housing and Urban Development, Phil Twyford, who acknowledged that a price tag of $450,000 for a KiwiBuild house in Marfell would be out of reach of many residents?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, I’ve heard the words of Phil Twyford, who seems to have an enormous amount of presence of mind, experience, and vision when it comes to housing in this country, and if he made a comment like that, I’d pay serious attention to it.

Hon Simon Bridges: Why is the Government building $450,000 KiwiBuild houses in Marfell, New Plymouth, when a proposal had been received by Housing New Zealand to build 57 social houses on the same site for around $100,000 less per house and include a rent-to-buy scheme aimed at low-income earners, instead of a ballot process?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, the reality here is that there is a huge difference between private house ownership and social housing. I know that social housing was dramatically run down under the previous administration, and we are making a sizeable investment in that as well, but they are two different propositions. That would be obvious to any lawyer that had anything to do with property in their past experience.

Hon Simon Bridges: What does it say about the KiwiBuild scheme that of the first 10 KiwiBuild houses in Wānaka, of which ballots opened almost two months ago, there has been only one unconditional sale so far, and of the first 10 KiwiBuild houses in Te Kauwhata, of which ballots opened in October, no houses have been sold so far?

Rt Hon WINSTON PETERS: Supplementary—sorry. On behalf of the Prime Minister—ha, ha! Well, it occurred to me I could do a far better job asking myself the question myself, right? On behalf of the Prime Minister, the record laid out of purchases in both Wānaka and Te Kauwhata is not what the Leader of the Opposition said. That’s precisely wrong.

Question No. 2—Prime Minister

2. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her statements and actions relating to Karel Sroubek, including that information was “provided by his wife, for example, who I understand is the National Party’s informant”?

Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Prime Minister: Can I just say, on behalf of the Prime Minister, yes. And on the other matter, that question was put in this Parliament to the Leader of the Opposition and his colleagues, and we’re still waiting for an answer.

Hon Simon Bridges: Why did she assert last week that Mr Sroubek’s estranged wife “changed her tune in that she is a National Party informant”?

Hon Dr Nick Smith: He made it up.

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, that question was put to Parliament last week—

Hon Dr Nick Smith: He made it up.

Rt Hon WINSTON PETERS: —and there was no answer from the National Party—

Hon Dr Nick Smith: He made it up.

Rt Hon WINSTON PETERS: —then; not a mutter, not a murmur—

SPEAKER: Order! Order! The member will resume his seat, please. Stand, withdraw, and apologise.

Dr Nick Smith: I withdraw and apologise.

SPEAKER: And I will remind members that that interjection about any member is unparliamentary; about me, it’s even more so. Does the Prime Minister want to continue?

Rt Hon WINSTON PETERS: And when that matter was put to the National Party president, one Peter Goodfellow, he refused to respond.

Hon Simon Bridges: I raise a point of order, Mr Speaker. The Prime Minister has said it was in the form of a question. Well, it clearly wasn’t: “There was information that was provided by his wife, for example, who I understand is the National Party’s informant on this matter.” I mean, how am I meant to get straight answers when twice the Prime Minister said it was in the form of a question? It wasn’t.

SPEAKER: And the member might be disputing an answer, and there are ways of doing that, but doing it by way of point of order is not one of them.

Hon Simon Bridges: Was she aware that the first person contacted by Mr Sroubek’s estranged wife was a former Labour Party Cabinet Minister, and that the former Minister suggested contacting the Opposition spokesperson because her Government had already made it very clear it wasn’t going to change its mind?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, so she is the informant then?

Hon Simon Bridges: What does she say to the claim made by Mr Sroubek’s estranged wife and family that the Prime Minister’s Government’s statements have been “beyond appalling” and have caused immense stress for the estranged wife, and feelings of utter hopelessness?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister—who can say that personally she wasn’t directly involved in those statements. On behalf of the Prime Minister, can I say when that matter was put to both the National Party associate, and I’m happy to give that person’s name. The National Party’s associate—

Hon Simon Bridges: Talk some sense. Talk sense.

Rt Hon WINSTON PETERS: Oh, I’m getting to the sense of it all. It’s all here. When that matter was put to Mark Davey, who has campaigned on a National Party - associated campaign, and put to the president, Peter Goodfellow, they wouldn’t respond.

Hon Simon Bridges: What on earth is she talking about?

Rt Hon WINSTON PETERS: The Prime Minister is talking about your leak.

Hon Simon Bridges: Does she think tarnishing a victim’s reputation by inferring they are politically motivated and pushing her to feel utterly hopeless aligns with her kinder, more compassionate way of governing?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, can I say “compassionate” and “kindness” are her middle two names. And I just want to make this very, very clear: when a party has a penchant for leaks like their internal polls, like their PR to their caucus on how to handle questions from the media, and on this matter, they’re not to be trusted.

Hon Simon Bridges: Who in Cabinet leaked the Meka Whaitiri report early?

Rt Hon WINSTON PETERS: On behalf of the—

SPEAKER: Order! Order! No, the member will resume his seat. [Interruption] No, I’ve just ruled the question out.

Hon Simon Bridges: I raise a point of order, Mr Speaker. We’ve just had the Prime Minister go on a divergence in relation to leaks in the matter. That then, it seems to me, opened up my question, which I asked.

SPEAKER: The use of the word “leak” doesn’t mean that a whole pile of areas can be opened up in a way which is—[Interruption] Right, which member was that who made the noise? [Members stand up] Thank you. You can resume your seats. Now one at a time withdraw and apologise—Louise Upston first.

Hon Louise Upston: I withdraw and apologise.

SPEAKER: Melissa Lee.

Melissa Lee: I withdraw and apologise.

SPEAKER: The mere mention of the word “leaks” does not open up the possibility of any leak, especially in a question which denigrates a group of members of this House and was unauthenticated.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Given that the Standing Orders for the answering of questions mirror the requirements for asking, why is it then acceptable for the Prime Minister to have a lash at members of the Opposition for what are alleged leaks? I’d further ask you to have a look at the transcript of the answers that have been given by the Prime Minister today. It would be hard to see how any of those answers even slightly link to, let alone address, the questions that were asked.

SPEAKER: I will look at the answers. I mean, it is clear to me that the Prime Minister is not speaking with her normal voice today—[Interruption] Order! That has caused some problems in the House, but I’ll also indicate to the member that the rules for questions and answers are quite different; there is no mirror involved.

Hon Simon Bridges: Is she aware that in order to elicit changed statements from the estranged wife of Mr Sroubek to bolster the Minister’s decision, police and immigration officials turned up unannounced at her home, leaving her feeling extremely vulnerable, exposed, and under threat?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, the reality is that the Prime Minister was not aware of that. The second thing is that these are circumstances where the chronology of the events is critically important. For example, Mr Sroubek was travelling in 2009, when the Prime Minister was an Opposition member, not the Prime Minister. All manner of cases were being heard in the following years: 2013, 2014, 2015, when the Prime Minister was an Opposition member, not the Prime Minister. In fact, the reality is hundreds of people knew Mr Sroubek. Many of them were lawyers; they would have been from the mixed martial arts society; they’d have been people, for example, who were customs officers, police, and hundreds of others. To impute all of them as somehow guilty of his offence of lying to the system is simply wrong.

Hon Simon Bridges: When will the Opposition get the representations made to the Government on Mr Sroubek’s behalf?

Rt Hon WINSTON PETERS: The critical question is not when they will get them but when they should have had them, and my colleague the Minister of Immigration didn’t have the critical piece of information that he had travelled abroad not once but twice—

Hon Member: When are we going to get them?

Rt Hon WINSTON PETERS: Well, this question is before the House, on behalf of the Prime Minister, because the Minister’s decision has been called into question. When he made his decision, he put a number of codicils and caveats on his decision, which included the honesty of the applicant in the first place, and then he later discovered that a critical part of the information, which should have been known a long, long time ago, and which was known to the previous Government—because it was the subject of a court case—had not been passed on to him.

Hon Simon Bridges: Does the Prime Minister know personally any of the people who made representations on Mr Sroubek’s behalf?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, there’s no way that I can answer that question.

Hon Members: Oh! Oh!

Rt Hon WINSTON PETERS: Well, how would I know, you nitwit?

SPEAKER: Order!

Rt Hon WINSTON PETERS: Jeez.

SPEAKER: No, no.

Rt Hon WINSTON PETERS: I withdraw and apologise.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. You have, I understand, taken four supplementaries off the National side of the House for two members verbally expressing some exasperation at the somewhat unintelligible answers being given on behalf of the Prime Minister. If it was something else, then it would be useful, I think—

SPEAKER: No, no.

Hon Gerry Brownlee: I have another point of order as well.

SPEAKER: Well, you can have that one. I’ll just deal with this one first. So I have taken questions off for two members who interjected when I was speaking.

Hon Gerry Brownlee: And my other point of order is to ask for some clarification of the difference between Standing Order 380(1)(a), (b), and (c) and 386(2)(a), (b), and (c).

SPEAKER: 381?

Hon Gerry Brownlee: 380.

SPEAKER: And the other one?

Hon Gerry Brownlee: 386(2)(a), (b), and (c). They are identical.

SPEAKER: No; there’s no difference in those at all, as the member well knows, and I think he’s coming very close to trifling with the Chair, because he does know that rules around authentication apply to questions; they do not apply to answers. Rules of privilege apply to answers.

Hon Gerry Brownlee: Speaking to the point of order further—

SPEAKER: Well—

Hon Gerry Brownlee: Well, you said, sir, that there was no mirror involved in the reply to a question—in other words, the answer—but it is abundantly clear that it says, “arguments, inferences, imputations, epithets, or ironical expressions,” are forbidden. The answer given by the Prime Minister was full of those, and that is what led, momentarily, to there being some disorder in the House. And I think for us to be punished for someone else’s breach of the Standing Orders is unacceptable.

SPEAKER: Well, the member, as I indicated before—and if he’d listened, he would have heard that the Opposition was not punished for that; they were punished for interjecting while I was speaking. It is different.

Question No. 3—Finance

3. TAMATI COFFEY (Labour—Waiariki) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): Over the past few days, a number of reports have highlighted the solid fundamentals of the New Zealand economy. On Friday, the ANZ Roy Morgan consumer confidence index lifted 4 points, to sit around its historically normal levels. ANZ said the index shows consumers were feeling “pretty resilient” and that “a resilient consumer is, of course, good for near-term economic growth.” ANZ economists said that their confidence composite gauge, which combines consumer and business confidence, points to GDP growth between 2.5 percent and 3 percent over the next year.

Tamati Coffey: How does this forecast GDP growth rate fit with other recent reports that he’s seen?

Hon GRANT ROBERTSON: Last week, the New Zealand Institute of Economic Research said that they expect growth of about 3 percent a year over the next three years due to favourable conditions supporting growth. This follows publication of the latest GDP figures showing quarterly growth of 1 percent and annual growth of 2.7 percent—

Hon Dr David Clark: Serious momentum.

Hon GRANT ROBERTSON: —in the year to June 2018, about which I saw a report that represented this as serious momentum.

Tamati Coffey: What other recent reports has he seen which indicate serious momentum in the economy?

Hon GRANT ROBERTSON: This week, Statistics New Zealand released their latest terms of trade figures showing our terms of trade remain near historic highs despite the impacts of the higher international oil prices over the September quarter. In fact, the September quarter reading was the fourth-highest recorded in quarterly data since 1957. Building consent data was also strong for the year to October 2018, particularly in Auckland. Statistics New Zealand said that more than 13,000 new homes were consented in Auckland in a year, for the first time since the 1970s. I think we can all agree with Simon Bridges about the serious momentum in the New Zealand economy.

Question No. 4—Immigration

4. Hon MARK MITCHELL (National—Rodney) to the Minister of Immigration: Does he stand by all his statements and actions in relation to Mr Karel Sroubek?

Hon IAIN LEES-GALLOWAY (Minister of Immigration): Yes, based on the information and advice available to me at the time.

Hon Mark Mitchell: Does he stand by the statement that Karel Sroubek’s estranged wife has declined to participate in Immigration New Zealand’s review of his decision to grant Sroubek residency?

Hon IAIN LEES-GALLOWAY: Yes.

Hon Mark Mitchell: Is the Minister aware that on 5 November, immigration officials arrived unannounced at a house that the estranged wife of Karel Sroubek was staying at, known only to police as part of a police safety plan?

Hon IAIN LEES-GALLOWAY: I’m not aware of the details of how the investigation was carried out. That is a matter for Immigration New Zealand and the police force.

Hon Mark Mitchell: Did the Minister, prior to 5 November, have a discussion about the location of the estranged wife of Karel Sroubek with the Minister of Police or anyone from his office?

Hon IAIN LEES-GALLOWAY: No.

Hon Mark Mitchell: Is the Minister aware that the estranged wife of Mr Sroubek told immigration officials that she was happy to help but would like her lawyer and support person present and was frightened of the target on her back becoming bigger?

Hon IAIN LEES-GALLOWAY: I was told that the person in question declined to participate in the investigation.

Hon Mark Mitchell: Does the Minister believe the estranged wife of Karel Sroubek is a National Party informant, as stated by the Prime Minister, or a woman who is frightened of Mr Sroubek and sought help from the Opposition when it became obvious the Government was standing by its decision to grant Mr Sroubek residency?

Hon IAIN LEES-GALLOWAY: I only know the matters that are relevant to the decision that I made. Those are that Mr Sroubek’s estranged wife provided a letter of support for him, that media reporting then suggested that there was some question about that support, and that when asked to elaborate on that and participate in the investigation into those matters, she declined.

Question No. 5—Immigration

5. Hon MICHAEL WOODHOUSE (National) to the Minister of Immigration: Under what section of the Immigration Act 2009 did he determine that a new liability for deportation existed in respect of Mr Karel Sroubek?

Hon IAIN LEES-GALLOWAY (Minister of Immigration): Section 155.

Hon Michael Woodhouse: As section 155 deals with deportation liability if a visa is granted in error, who made the error, and in relation to the granting of which visa was the error made?

Hon IAIN LEES-GALLOWAY: “Administrative error” is a technical term defined in section 155 of the Immigration Act. In this case, the administrative error was when Mr Sroubek was granted a residence permit on 6 June 2008. He had been convicted of a crime in the Czech Republic and sentenced to more than a year in prison. This meant that he was not eligible for the permit. However, this is not an error in the ordinary sense. Immigration New Zealand could not have been expected to know Mr Sroubek’s criminal history because he was posing as Jan Antolik at the time.

Hon Michael Woodhouse: Is it not also true that the Minister made an error, as was confirmed by the Prime Minister in oral question No. 1 last Thursday?

Hon IAIN LEES-GALLOWAY: I made a decision based on the information available to me at the time.

Hon Michael Woodhouse: If it’s the case that Mr Sroubek’s residence visa of 2008 was granted in error, why, then, did the Minister proceed to grant residency on 19 September 2018, knowing full well from the 12-page summary in front of him that Sroubek, by his criminal record in the Czech Republic, was an excluded person?

Hon IAIN LEES-GALLOWAY: I considered the matters before me, which were a question of his liability under section 156 and 161. I weighed all the information available to me at the time and made a decision.

Hon Michael Woodhouse: Does the Minister consider it part of his job to know the Immigration Act, particularly the parts of the Act which require the application of ministerial decision, and if so, why did he state, “I don’t know every single detail of the Immigration Act. I didn’t look at that and say ‘Aha! He should be an excluded person.’ ”

Hon IAIN LEES-GALLOWAY: Because, like any sensible Minister, I rely on the expert advice of my officials—people who have committed their lives to knowing the Act inside and out and being able to provide expert advice.

Question No. 6—Regional Economic Development

6. Hon PAUL GOLDSMITH (National) to the Minister for Regional Economic Development: Does he stand by all his statements and actions?

Hon SHANE JONES (Minister for Regional Economic Development): Yes, other than when they’re wilfully misconstrued.

Hon Paul Goldsmith: What terms in the $9.9 million loan to Westland Milk Products from the Provincial Growth Fund are more favourable than could be expected from a commercial loan to a company in its financial situation?

Hon SHANE JONES: Yes, I am aware of that unwanted verbal emission from the West Coast. The loan that is yet to be fully settled, advanced as part of our economic development package in the West Coast area, will run for a longer period of time than they currently have access to in terms of their major bankers.

Hon Paul Goldsmith: When he said on the Q+A programme in relation to Westland Milk Products’ loan “Now, if it’s good enough … to have private-public arrangements in infrastructure—and the last Government had them as well—I’ve simply extended that thesis,”, what did he mean?

Hon SHANE JONES: I had in mind the Waimea Community Dam and irrigation—a $7 million grant, if I recall, from the Minister for the Environment, and then the allocation of some capital on commercial terms. The thread that I referred to is traceable back to a seed on the other side of the House.

Hon Paul Goldsmith: Has he consulted with the Minister of Finance over his new economic plan and, in particular, over the financial risks to Kiwi taxpayers?

Hon SHANE JONES: I have been known from time to time to seek the views of said finance Minister. I would point out to the House, however, that the manner within which the regional development strategy is being advanced has both links to the work on the other side of the House but a higher level of aspiration and willingness to do robust things on this side of the House.

Hon Paul Goldsmith: As he continues to extend his thesis about public-private arrangements, can we see an announcement that the Government will be co-investing with private enterprise in general manufacturing, supermarkets, petrol stations, and other businesses around the regions?

Hon SHANE JONES: The options that come from the various regions come as a consequence of stakeholders recognising, at long last, that there is a Government that is willing to invert the tired model where lots of promises are made but no capital is available. He of all people should know my stance about Australian-owned supermarkets.

Question No. 7—Regional Economic Development

7. DAVID SEYMOUR (Leader—ACT) to the Minister for Regional Economic Development: Does he agree with Westland Milk Products chief financial officer Dorian Devers, who said of the Government’s $9.9 million loan to the company, “the terms are attractive to us. We could have financed this in other ways but the terms we have been given from the PGF are more favourable. It’s a longer-term loan than we can get from a bank which is nice”?

Hon SHANE JONES (Minister for Regional Economic Development): It did come as something of a surprise to me that the chief financial officer was breaking wind, but I agree with him.

David Seymour: When will the Government reveal the precise terms on which taxpayer money is being loaned to a private business?

Hon SHANE JONES: In relation to the full details of said loan, I have no doubt in my mind that the recipient company will make a declaration as a part of its financial statements. I am loath, however—not unlike how the irrigation entity worked under the last regime—to give too much away, in an indiscriminate fashion.

David Seymour: Let me get this right. Is the Minister saying that he cannot tell the House the terms on which he is loaning $9.9 million of taxpayer money and, instead, we have to rely on a declaration from a chief financial officer which he has just described in this House as, shall we say, “flatulent”?

Hon SHANE JONES: The fact that that member’s using that term is totally appropriate.

Rt Hon Winston Peters: Can I ask the Minister as to what his reaction is to substantial new investment in the regions around this country being the subject of constant attack by two members of Parliament from Epsom?

Hon SHANE JONES: The reality is that we have a robust process for both receiving and approving proposals. Yes, it is different in terms of the last 30 years. Yes, it will challenge some of the purists. Yes, we will continue to do it and look forward to campaigning on it in good time.

Hon Damien O’Connor: Has he seen reports, or does he have opinions, on the $700 million, $350 million of which was taxpayer funding, for the Primary Growth Partnership fund allocated by the National-ACT Government?

SPEAKER: No, no—

Rt Hon Winston Peters: There’s a precedent.

SPEAKER: Well—

Hon Damien O’Connor: Come on—it was a report.

SPEAKER: Well, the member mentions why—I could probably give him a list. First of all, it’s a question designed to attack the other side, and those have been regularly ruled out. There’s a question of whether this member has any responsibility for that. We could get quite a long list of reasons why the member’s question was out of order.

Hon Damien O’Connor: I raise a point of order, Mr Speaker. I appreciate that. I was asking if he’d seen a report or had an opinion, and I did extrapolate out because I wanted to be clear what reports the Minister might have seen, and I know it—

SPEAKER: You can ask him a whole pile of questions about what reports he’s seen outside the House, but, inside the House, you actually have to ask some questions about things he has responsibility for, and that’s not one of them.

David Seymour: Another reason: there was no National-ACT Government; it was a confidence and supply agreement. I thought—

SPEAKER: Order! [Interruption] Order! That member has been warned previously about making disorderly points of order. He had no point of order. He knew he had no point of order. He will stand, withdraw, and apologise and is on a final warning for that.

David Seymour: I withdraw and apologise.

Question No. 8—Education

8. Hon NIKKI KAYE (National—Auckland Central) to the Minister of Education: How many secondary school teaching positions does he estimate will need to be filled by the start of the 2019 year?

Hon CHRIS HIPKINS (Minister of Education): The Ministry of Education’s analysis estimates that up to 200 secondary teaching positions will need to be filled by the start of the 2019 year. There have been 116 vacancies for secondary school teachers lodged with the Ministry of Education’s recruitment agencies. The ministry to date has recruited around 360 secondary teachers ready to be interviewed by schools, and 38 positions have been filled.

Hon Nikki Kaye: How does he reconcile that figure with the figures released by the New Zealand Secondary Principals Council and the Secondary Principals’ Association of New Zealand (SPANZ) that indicate there could be more than 1,400 secondary school teachers required by the start of next year?

Hon CHRIS HIPKINS: Quite easily: the figures that I quoted are based on payroll data and a fairly rigorous analysis by the Ministry of Education. The figures that are quoted by the Post Primary Teachers Association and SPANZ are based on a survey of schools with only around a third of schools actually responding to the survey. They then used that data to extrapolate out a projection for every school in the country, and that’s based on the number of vacancies a school have. Now, there will always be regular turnover within the teaching profession, as teachers move schools, for example. The estimate of around just under 200 is the number of extra teachers we will require in addition to those already in the workforce.

Hon Nikki Kaye: Can he guarantee that the 565 overseas teachers that the ministry says are ready for schools will resolve teacher shortages given that principals think he’s dreaming if he thinks there’s only 200 vacancies short?

Hon CHRIS HIPKINS: I’m confident that we’re doing everything we can. I’m not confident that it’s going to resolve all of the issues that have accumulated under nine years of neglect. Had the member been so concerned about teacher shortages, perhaps she could have done something about that in the nine years the previous Government allowed that to happen. There was a 40 percent reduction in the number of teacher trainees during her Government’s tenure, and we are now feeling the effects of that.

Hon Nikki Kaye: Can he confirm that he cut voluntary bonding payments in Auckland for teachers, and will he take responsibility for the fact that 50 percent of secondary principals surveyed say that it’s harder to fill vacancies than in 2017?

Hon CHRIS HIPKINS: In regard to the last part of the question, the responsibility for that rests squarely with the previous Minister of Education, because the number of teachers in the workforce today are a direct representation of the failure of the previous Government’s approach when it comes to initial teacher education and recruiting additional teachers. With regard to the voluntary bonding scheme, this Government has increased the number of teachers eligible for the voluntary bonding scheme.

Question No. 9—Health

9. Dr LIZ CRAIG (Labour) to the Minister of Health: What reports has he received on mental health and addiction?

Hon Dr DAVID CLARK (Minister of Health): Last Wednesday, I received the report of the inquiry into mental health and addiction, and this morning I released it publicly. The report urges the Government to put people at the centre of its approach to mental health and addiction issues. While I’m not here to announce the Government’s response to the inquiry today, I believe this is an approach that would find favour on both sides of this House.

Dr Liz Craig: Why has the Government moved so quickly to release the report?

Hon Dr DAVID CLARK: There is a huge public interest in these issues. Tens of thousands of people signed petitions calling for an inquiry, and the panel received more than 5,200 submissions. It’s important that we keep faith with those people and, by releasing the report within a week of receiving it, we’re doing just that. The release of the report will no doubt spark a fresh public conversation about mental health and addictions. I welcome that and in particular look forward to hearing the response to the report’s findings from those with lived experience.

Dr Liz Craig: When will the Government formally respond to the inquiry?

Hon Dr DAVID CLARK: It will take time for us to work through the report and to do justice to its recommendations and to do justice to the voices contained in the report. We’ve already identified mental health and well-being as a priority for the next Budget. We’ll be working through the detail on that, informed by the report. We’re working through the report’s 40 recommendations already, and the Government will respond formally in March next year. I want to be upfront with the public, though, that while some things can be addressed in relatively short order, many of the issues we are facing, such as workforce shortages—while we’re moving on them now—will take many years to fully address.

Question No. 10—Health

10. Dr SHANE RETI (National—Whangarei) to the Minister of Health: Does he stand by all his actions and policies around the meningococcal outbreak in Northland and the meningococcal vaccination?

Hon Dr DAVID CLARK (Minister of Health): Yes, and in particular the swift response to declaration on 8 November of a community outbreak of meningococcal W in Northland.

Matt King: Why did the ministry not act on the serious concerns raised by the Northland District Health Board as far back as May this year when they requested a meningitis vaccination campaign?

Hon Dr DAVID CLARK: The Government has acted swiftly on expert advice. The technical advisory group concluded that there was a community outbreak of meningococcal W in Northland on 8 November and recommended a targeted vaccination campaign. The Ministry of Health and Pharmac quickly secured 20,000 doses of vaccine in the face of strong international demand. Vaccinations will start next week. That’s a swift response in anyone’s book.

SPEAKER: Order! I’m going to ask Matt King to ask that question again.

Matt King: Why did the ministry not act on the serious concerns raised by the Northland District Health Board as far back as May this year when they requested a meningitis vaccination campaign?

Hon Dr DAVID CLARK: I reject the premise of the member’s question.

Dr Shane Reti: How does he respond to serious concerns expressed at the northern region GP conference on 19 May this year where the specialist presenting said “The thing that irks me is a very successful vaccine already exists out there. Our Ministry of Health has been very quick to sit on their thumbs. I honestly fear for this winter.”

Hon Dr DAVID CLARK: The conversations that took place throughout this year when concerns were raised were appropriate. The ministry and representatives from Pharmac and district health boards have looked to ensure that they were prepared, should an outbreak be declared, and, indeed, they have moved swiftly once an outbreak was declared.

Dr Shane Reti: I seek to table the article in New Zealand Doctor that reported the conference 6 June 2018—it’s behind a paywall, Mr Speaker.

SPEAKER: Is there any objection to that document being tabled? There appears to be none.

Document, by leave, laid on the Table of the House.

Question No. 11—ACC

11. Hon TIM MACINDOE (National—Hamilton West) to the Minister for ACC: Is he satisfied that ACC has presented a compelling case for increasing by 12 percent the motor vehicle levy that New Zealand motorists must pay; if so, what is that justification?

Hon IAIN LEES-GALLOWAY (Minister for ACC): I am considering ACC’s levy recommendations and will discuss these with my Cabinet colleagues in due course.

Hon Simon Bridges: Tax by stealth. He’s vulnerable.

SPEAKER: Order! Order! If the Leader of the Opposition wants to ask the question, he has priority. Does he want to?

Hon Simon Bridges: I don’t have any.

Hon Tim Macindoe: Why has the Minister repeatedly assured New Zealanders that ACC will have to make a very strong case when it proposed increasing the petrol levy by 2c a litre, when now he won’t rule out increasing the motor vehicle levy by 12 percent, which will raise the same amount of tax from motorists?

Hon IAIN LEES-GALLOWAY: Because ACC’s processes are statutorily independent from me as Minister—that’s appropriate. It would be entirely inappropriate for me to interfere with those processes, but, ultimately, this is a decision for the Cabinet to—[Interruption]

SPEAKER: Order! No, sorry. Mr Robertson, you will stand, withdraw, and apologise. I think we’ve had some very poor examples from the two most senior Government members in the House today.

Hon Grant Robertson: I withdraw and apologise.

SPEAKER: Mr Lees-Galloway. No, start again please.

Hon Simon Bridges: I raise a point of order, Mr Speaker. When he says “two most senior”, does he mean me and Grant Robertson? What about Winston Peters?

SPEAKER: Sorry? Would the member like to elaborate? What’s his issue?

Hon Simon Bridges: That’s all right.

SPEAKER: Well, there was an argument happening between Mr Robertson and himself. He was lucky not to be singled out in the way Mr Robertson was, and I used the time to indicate a general level of dissatisfaction with the senior members of the Government. Having, frankly, comments that are smart-arse from the Leader of the Opposition, by way of a disorderly point of order, in the way that I’ve just warned Mr Seymour of, is not at all helpful.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. It is surprising to hear you use language like that directed at the Leader of the Opposition, when you are at the same time calling for more order and decorum in the House, and I think, frankly, it’s inappropriate.

SPEAKER: No, I withdraw and apologise for my comment to the Leader of the Opposition, but I do want to reinforce the fact that I have had more than enough of points of order that are nothing but disorderly, and the Leader of the Opposition and Mr Seymour are the two worst offenders.

Hon Dr Nick Smith: What about Mr Peters?

SPEAKER: No. Mr Peters’ ones are generally by way of supplementary question rather than point of order.

Hon IAIN LEES-GALLOWAY: ACC’s process for determining its recommendations on levy setting is a statutorily independent process. It would be entirely inappropriate for me as a Minister to intervene in that process. Ultimately, the decision about ACC levies is one for Cabinet. Cabinet gets to take into consideration matters such as cost of living and the broader economic situation, and I can assure the member—as I have every time I’ve answered this line of questioning—that that’s exactly what Cabinet will do.

Hon Tim Macindoe: So in order to ensure that he can take the best information to Cabinet, has he sought assurances from ACC that they are doing everything they can to minimise their costs so that they don’t have to take more money from New Zealanders?

Hon IAIN LEES-GALLOWAY: Yes.

Question No. 12—Commerce and Consumer Affairs

12. JO LUXTON (Labour) to the Minister of Commerce and Consumer Affairs: What recent announcements has he made on market studies?

Hon Dr MEGAN WOODS (Minister of Energy and Resources) on behalf of the Minister of Commerce and Consumer Affairs: On behalf of the Minister, yesterday, the Prime Minister and I were pleased to announce that we’ll be asking the Commerce Commission to undertake an investigation into the retail fuel market. The Government is concerned about the high cost of fuel and the financial pressure it is putting on families and businesses. This is why we are taking action to understand the market conditions and to determine whether consumers’ interests are being promoted at present and, if not, what actions need to be taken.

Jo Luxton: Why has fuel been chosen as the first market study?

Hon Dr MEGAN WOODS: On behalf of the Minister, there are indications of competition problems in the retail fuel market, such as the more than doubling of petrol and diesel importer margins over the past decade. The previous Government attempted to look at the matter, but without the market studies power that this Government has given the Commerce Commission, they were unable to definitively conclude whether or not there is a competition problem in the market. This Government is committed to ensuring consumers are getting a fair deal at the pump.

Jo Luxton: What will the market study into fuel look like?

Hon Dr MEGAN WOODS: On behalf of the Minister, the terms of reference for the market study specify the study will be focused on factors that may affect competition for the supply of retail petrol and diesel used for land transport throughout New Zealand. These include matters such as the structure of the industry; barriers to competition; the extent of competition at the refinery, wholesale, and retail levels, including the role of imports; and features of retail petrol and diesel markets that are no longer in the long-term interests of consumers. This is a Government that is committed to asking the hard questions about this.

Bills

Reserve Bank of New Zealand (Monetary Policy) Amendment Bill

Second Reading

Debate resumed from 29 November.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Speaker. I will make some concluding points. This is an excellent piece of legislation, of course, from the Minister of Finance, and what I want to talk about now, having talked about the dual mandate—we’ve talked about the dual mandate previously. I wanted to talk a little bit about the decision-making process.

Whilst the Reserve Bank already makes its decisions collaboratively, what this does is set that into the legislation by creating the monetary policy committee. Importantly, that committee has, essentially, three elements. It has internal and external appointments, and they are important because they ensure the broadest possible range of expertise and knowledge is there, both, essentially, from within the bank but also from within industry. The third element, of course, is the Treasury observer, and that’s a very important role, because what it ensures is that there is a real connection between Treasury and the Reserve Bank, and I understand that already the Reserve Bank has been inviting senior Treasury officials to meetings. So this, again, enables better coordination between Reserve Bank policy against a background of Government policy.

This monetary policy committee absolutely needs to be operationally independent, but, at the same time, it needs to be democratically legitimate, and that is why the Minister of Finance has the ability and the power to make appointments to that monetary policy—[Interruption]

SPEAKER: Order! Order! Can I ask Ministers to leave the Chamber or to sit down if they’re going to have conversations. Thank you.

Dr DUNCAN WEBB: Thank you, sir. That ability of the Minister of Finance to, essentially, veto appointments to the monetary policy committee ensures that we strike an appropriate balance between operational independence and important democratic legitimacy.

It’s also important to recognise that this is a committee that is intended to make collaborative decisions, a committee of equals and not a hierarchical committee, and that’s why it would be inappropriate for the Governor of the Reserve Bank to be making those appointments. So that is broad-based decision making.

The second thread that I’d like to talk about is the increased transparency of the conduct of the Reserve Bank. A critical document will be the charter of the Reserve Bank: a document which will, essentially, set the direction in the operations of the bank and the monetary policy committee, and it is a document which must be consulted on—again, ensuring that there is democratic legitimacy in this very important, if technical, area of policy making.

Then we have the remit, which is, essentially, the direction set by the Minister of Finance for the bank. That remit must be set with the advice of the Reserve Bank, and the Reserve Bank must, in turn, consult on it. So we are moving from a situation where what the Reserve Bank does is, essentially, a mystery. It is done in the confines of the bank and all we get are the monetary policy statements and other statements, and no one’s quite sure how we got there. We’re moving into a situation where the machinery of the bank is there in the light of day for everyone to see.

Lastly, that charter will allow the bank to disclose its meetings and procedures. Exactly how that will be done is going to be left for the development in the charter, but what it does mean is that the way the decisions are made—the minutes of meetings and so on—will be able to be put out into the public domain so that people can gain an understanding of what goes on in these monetary policy committee meetings.

So what we have really is a set of tools which is both ensuring we have an independent, robust Reserve Bank, with the best possible expertise having input into those meetings, and also a system of democratic checks, consultation, and appointments, which ensures this organisation has the legitimacy to make the important decisions it will be making. For that reason, I commend the bill to the House.

ALASTAIR SCOTT (National—Wairarapa): Thank you, Mr Speaker. Well, the previous contributor, Duncan Webb, talked about democratic legitimacy, democratically enabling the Minister to appoint his favourite buddies to this committee. I would call it political interference. It takes away the independence that exists in the Reserve Bank of New Zealand (RBNZ) today. And it’s interesting when this previous contributor talked about independence. He says, “It is independent, but”—“It is independent, but”—and that only means that the independence is gone and that it is the democratic legitimacy, according to his words, that enables the Minister to appoint his or her people on that committee.

This bill is redundant. It is a total waste of the House’s time. It demonstrates, once again, the sanctimonious attitude that comes from that side of the House. They’ve got nothing better to do than make up rules that are just quite unnecessary. The wheel is spinning just fine. The targets for the RBNZ are set and there is absolutely no need to interfere, interrupt, confuse, and cause conflict by setting an employment target or a full employment target. What does that mean, in any case? What does full employment mean? Does it mean 69 percent, 70 percent, or 71 percent worker participation? We thought we had full employment last year, but employment continues to rise. So what is full employment?

The Government’s sanctimonious attitude is already demonstrated by bringing in legislation again, prior to today, where it is not necessary, and the consequence of doing it has other repercussions—unintended consequences, in other words. I’m not going to go into any depth, but I can talk about the removing of the tenancy fees. That was brought up in question time today: the unintended consequences—or the pretty foreseeable consequences of that.

SPEAKER: Order! Back to the bill, thank you.

ALASTAIR SCOTT: Sure. And, of course, in this way, this employment target is like picking a winner. It’s highlighted—to us, at least—the priority that the Government has around employment. But that is not necessarily what we need to have a stable and enduring and growing economy. At the end of the day, we want people’s standards of living to rise day after day after day. A certain level of employment is not necessary for that to occur.

The Governor of the Reserve Bank already has a tough job of targeting inflation and has a price stability concern. We’ve seen that in the last—well, in the last Parliament I was on the Finance and Expenditure Committee and we had the Governor of the Reserve Bank reporting in regularly about those two things, and they, at the time, had a difficult situation.

We had a raging asset price increase in housing, but, at the same time, we had a very soft and falling inflation rate. In fact, the predicted inflation rate was continually supposed to rise on the back of cuts and on the back of reduced immigration, but it didn’t happen. But the asset prices continued, and so we can see the difficult situation the RBNZ was in. Should they cut interest rates further to kickstart inflation, only to stimulate further the asset price bubble that was in the Auckland housing market? So already the governor has a very difficult job in balancing those two things: inflation and price stability. Putting another spanner in the works, if you like, is just going to make the job more difficult.

Employment is not influenced to any real degree by interest rates. Employment is all about enabling the employer to employ the next person. The employers employ employees. It’s not the RBNZ; it’s the marketplace. And it’s for this House to set in place structures to enable it to be easy for an employer to employ the next person. Interest rates are almost irrelevant. It’s to do with labour laws. It’s to do with 90-day trials. It’s to do with the ability of employers to take on part-timers or full-timers.

Hon Chris Hipkins: Cost of capital.

ALASTAIR SCOTT: Cost of capital is—what’s your point Mr—

Mark Patterson: The exchange rate. We’re an exporting country.

ALASTAIR SCOTT: That’s right. All those things—exactly. I’ll agree with that member. I’ll agree with that New Zealand First member. It is not just interest rates that affect employment. So are we going to go for a fixed exchange rate to satisfy the whim or the demands of New Zealand First, for example, because that is part of their policy? But, again, imagine trying to juggle all those balls in the air. So the point here is that putting employment as a target is only going to create conflicts. So other than all those other things, the stability, and the policy that the Government sets, that is what is going to drive employment up or unemployment down, whichever way you want to talk about it.

I know it is difficult and it’s always a difficult decision to employ another person. I have my own small business and it is always a concern, because one must take on the responsibility of an employer when taking on the next person; to be sure that their business will continue to grow, to be sure with a reasonable degree of certainty that the economy will perform as you hope and expect. These things are not related to interest rates. So putting in a target for the RBNZ—and they can, obviously, influence interest rates—just confuses the situation that they find themselves in. For example, we have a situation right now where we have high employment. We have high employment, and we have high asset prices, but inflation continues to be low.

Imported inflation—that is, the inflation that is caused by the strength of our currency, as mentioned; the cheapness of the goods that are brought in from offshore; the price of petrol—continues to drive down our headline inflation, our Consumers Price Index. So what is the Governor of the Reserve Bank to do about that? Should he or she cut interest rates to focus on the inflation aspect but knowing that employment is already very high and asset prices are very high?

And so the obvious can occur. We could have imported inflation where oil prices are high, costs are going up, inflation is at 4, 5, 6 percent, but we could still have a low employment rate. We could still have a sloppy asset price market. So should we be cutting rates or increasing rates? And so that is the conflict that this Reserve Bank has already got in the two targets that it has set, but now with a third, it is just going to be making things much more difficult.

I have talked very briefly about the independence of the RBNZ and the importance that the perceived independence of the RBNZ remains. Perception is reality. So by allowing the Minister of Finance to cut across the independence of the RBNZ governors for the purpose of democratic accountability—apparently, according to the previous speaker, Duncan Webb—just removes some of that independence. It increases the perception of political interference, and that is not a good thing. The RBNZ wheel is spinning. It ain’t broken. Why are we trying to fix it? It has done an excellent job of maintaining inflation at its target level. It continues to do so.

I see no reason to create an issue where there will be debate about the importance of interest rates compared to employment, compared to asset prices, and it’s completely unnecessary—remembering, of course, the point I started with at the beginning; that the interest rates can be set by the RBNZ, but the RBNZ is not the person or the entity that determines the level of employment. It is the marketplace and it is the employer that determines the level of employment.

Dr DEBORAH RUSSELL (Labour—New Lynn): Thank you, Mr Speaker. “It ain’t broken. Why are we trying to fix it?” Those are the exact words from Mr Alastair Scott, to help out our Hansard clerks there. It ain’t broken. Why are we trying to fix it? You know what, Mr Speaker? I agree that the inflation targeting, the general policy targets agreement of the Reserve Bank, isn’t necessarily broken, but it can be made better. We can do better. That is what this bill is attempting to do.

Listening to the speeches, in particular from the Opposition benches, what I have been struck by is the fear of change—the fear that we might try anything different, the fear that moving away from one target for the Reserve Bank might be somehow an irremediable step into some disastrous economic disaster, I suppose. But let me reassure the members of the Opposition. This is a sensible and incremental change that is being made to the Reserve Bank and it’s one that as a conservative party they ought to embrace. The nature of conservatism is not about no change whatsoever. The nature of conservatism is not simply about some idealised, very old-fashioned morality. The real nature of conservatism—the conservatism that comes to us from Edmund Burke—is about making change, and not change based on some ideology but change based on experience; piecemeal pragmatic reform informed by the experience of those who are able to see what is happening and to think of what could be done a little bit better. And that is what this particular bill is about.

So, rather than having this overwhelming call from the Opposition of, “It ain’t broke so don’t fix it.”, let me show you why we do actually need some change. Now, I agree that back when the Reserve Bank of New Zealand Act was first introduced we did need some serious work on inflation. I recall back in those days, as my husband and I bought our first home together, paying 20 percent interest rates. Inflation was out of control. I recall my mother talking about when she went to the supermarket she almost couldn’t keep track of what our ordinary consumer items ought to cost, because the prices changed so frequently. I mean, compare that to today. When we walk into the supermarket we know that a couple of litres of milk will cost about $4, a loaf of bread will cost about $3, a can of tomatoes about a $1.30, a pack of 32 tampons about $8. Those prices are predictable because we do have inflation under control, and it was totally out of control in the 1980s. So it was a good move to introduce the inflation targeting, but there were some costs that went along with it.

I asked the library to find some data for me—not just hand-waving but actual data of what happened to inflation rates and what happened to unemployment rates. So in the years between September 1995 and about September 2002, inflation went—it was around about 3.5 percent, then 2.4 percent, 1 percent, 1.7 percent in September 1998. This is the year to September 1998. It was negative 0.5 to September 1999, 3 percent in the year 2000, 2.4 percent, 2.6 percent. Inflation did indeed get under control, but what was happening to unemployment at that time? In the September quarter of 1995, unemployment was 6.2 percent. The previous year, September 1994, it had been 8 percent, September 1996 it was 6.5 percent, September 1997 it was 7 percent, 7.7 percent the year after, and on it goes. It got down to 5.5 percent by September 2002.

And what does that mean? That means people without jobs. That means people without a standing place in their communities. That means people who are disenfranchised. They are unattached to work, to places of employment. We know that having employment gives people a sense of place, a sense of standing, a sense that they have real standing as a person. It is a way of enabling citizenship—ensuring that people have meaningful work—and when unemployment is rising and is high we are disenfranchising our citizens. That is the problem that we face alongside inflation, and that is the problem that we are now trying to fix—just a bit.

This is not revolutionary change. We are not asking the Reserve Bank Governor and the committee there to do anything outrageous. For many years now, they have been considering employment and unemployment as they set the interest rates. They’ve been doing it as part of the interest rate discussion. What this new legislation does is bring that employment target right into the forefront of their thinking. So this is not a revolutionary change; it is an evolution. It is a small incremental change based on experience; exactly the sort of change that a conservative party ought to embrace, and I do not understand why the Opposition do not see its merits and its worth.

I want to raise one final point and I’m going to take this from something that Alastair Scott just said. He said, “We want people’s living standards to rise.” and indeed we all want to do that. But then he said, “A certain level of employment is not necessary for that to occur.” What an absurd thing to say. We know that employment matters to people. We know that employment makes a difference to people’s lives. He carried on to talk about making it easier for employers, to talk about employment as something to do with the market, and to ask the questions around, really, employment and labourers as a commodity to be supplied.

And, in fact, these are often the questions that are asked in economics. Is there a sufficient labour force? Do we have enough workers? Is the price for labour right? I say to you that we must turn those questions around the other way. The question is not: should people serve the economy as a labour force? But the economy should serve the people and the question we must ask all the time is: is the economy supplying enough jobs? Is there enough employment for all the people who want to work? Are we putting people front and centre of our decision making? And that is precisely what this amendment to the Reserve Bank of New Zealand Act does: it puts people front and centre. It says that employment matters. It says that we must consider the effect on people—not just on GDP, not just on interest rates, not just on all those technical things. Those are all important, and people are important too. That is the importance of this legislation. It is saying that whenever we make decisions about our economy, what matters most is the people.

That is why I support this bill. It is not wild, radical change, after all. Those radical, revolutionary countries—the United States and Australia—also have a dual mandate legislated for their central banks. This is not unprecedented change. It is small, piecemeal change based on experience, and it is change that puts people first. That is why I support this bill.

The question was put that the amendments recommended by the Finance and Expenditure Committee by majority be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 56

New Zealand National 55; Ross.

Amendments agreed to.

A party vote was called for on the question, That the Reserve Bank of New Zealand (Monetary Policy) Amendment Bill be now read a second time.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 56

New Zealand National 55; Ross.

Bill read a second time.

Amended Answers to Oral Questions

Question No. 10 to Minister

Hon Dr DAVID CLARK (Minister of Health): I seek leave to correct an answer given to a supplementary question during question No. 10 in the House today.

SPEAKER: I’m going to take that as the member seeking leave to make a personal explanation in order to correct an answer under Standing Order 358. Is there any objection? There is no objection.

Hon Dr DAVID CLARK: In respect of the meningococcal W outbreak, I described what I said was a swift response to the declaration of an outbreak on 8 November and indicated that a programme of vaccination would begin next week. I misspoke, and, as I’ve said on many other occasions, the vaccination programme actually starts tomorrow.

Bills

Employment Relations Amendment Bill

In Committee

Part 1 Amendments relating to collective bargaining and unions

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you very much, Madam Chair. Part 1 of the Employment Relations Amendment Bill deals with the collective bargaining framework and union rights in the workplace. Before I start my comments on Part 1, I refer members to the object of the Employment Relations Act, which is “to build productive employment relationships through the promotion of good faith in all aspects of the employment environment and of the employment relationship”—in a number of ways but including—“(i) by recognising that employment relationships must be built not only on the implied mutual obligations of trust and confidence, but also on a legislative requirement for good faith behaviour; and (ii) by acknowledging and addressing the inherent inequality of power in employment relationships; and (iii) by promoting collective bargaining; and (iv) by protecting the integrity of individual choice;”.

Part 1 of this amendment bill certainly helps to promote a number of those aspects of the object of the original legislation, and it does so by strengthening the collective bargaining framework and strengthening the rights of working people to participate in effective union representation. Part 1 includes new requirements around information about the role and functions of unions. That is important so that new people entering a workplace, or, indeed, entering the workforce for the first time, are able to make a genuine choice about whether or not they want to join a union. That should be a choice—absolutely. New Zealand has long upheld the principle of freedom of association. It should be a choice that people have, but it should be a genuine and informed choice, and the provisions in Part 1 ensure that people have access to information that is relevant, that is accurate, and I thank the members of the Education and Workforce Committee for ensuring that those provisions are as tidy and as employer-friendly as they can be.

Part 1 also reinstates the so-called 30-day rule. This is the rule that requires new employees to go on essentially the same terms and conditions as any collective agreement that is in place. That gives those new employees an opportunity to experience the terms and conditions of the collective agreement. It’s also the period in which they can provide information back to the union about their decision—about whether they want to join the union or not. Again, this supports the idea of an informed and genuine choice. Of course, at the end of the 30-day rule, if a worker wishes to go on to an individual employment agreement of different terms and conditions from those outlined in the collective employment agreement, that is absolutely their choice—a choice that this Government supports and one that is upheld in Part 1 of this bill.

Part 1 also deals with the duty of good faith to conclude bargaining. I want to be clear to the House about how this operates. The duty to conclude bargaining is not a compulsion to conclude bargaining. It is a duty to stay at the table, to deal with all the issues that are a matter of bargaining, and parties at the table ought to do everything they can to conclude a collective agreement, but if there are reasonable grounds on which an employer—or, for that matter, the union—wants to walk away from bargaining, then that is still supported by the duty of good faith. It’s certainly important that New Zealand upholds its International Labour Organization obligations to promote and support good-faith bargaining, to promote and support collective bargaining, and to do all it can to encourage and support parties to remain at the table and to conclude a collective agreement. Again, there is absolutely no compulsion element to the changes that Part 1 makes.

Multi-employer collective agreement opt-outs are also addressed in Part 1, and I want to address the changes that are included in Supplementary Order Paper 153 in my name. So what that Supplementary Order Paper essentially does is it brings what has long been regarded in case law into the legislation, and that is that the duty to conclude bargaining does not apply to multi-employer collective agreements, and that employers who wish to step away from multi-employer collective bargaining—again, on reasonable grounds, but that can include opposition to concluding a multi-employee collective agreement—can do so.

What this bill does is it requires people to come to the table. We think it is important, in a collaborative industrial relations framework, to bring people to the table and get them to stay at the table for as long as possible. However, it has always been clear in case law that the duty to conclude bargaining does not apply to multi-employer collective agreements. That was a cause for some uncertainty for a number of employers who submitted on the bill. I am very pleased that through the Supplementary Order Paper we were able to create that certainty by making it clear in the law what has been in place in case law for some time.

The bill also makes it a requirement that rates of pay be included in collective bargaining and collective agreements. It is one of the most fundamental purposes of collective bargaining for workers to come together as a collective and bargain their rates of pay. It therefore ought to be absolutely fundamental and included in our legislation that rates of pay ought to be included in collective bargaining.

One of the other matters addressed in Part 1 is the removal of pay deductions for partial strikes. It is the view of the Government that people taking low-level industrial action, such as working to rule or wearing a campaign T-shirt to work, should not be a cause for them to have their pay deducted. In fact, this has potentially caused people to step immediately to full industrial action, full strike action, rather than taking lower-level action, when there was a penalty involved in taking that lower-level action. Again, it is the view of the Government that this will encourage people to take lower-level action rather than going immediately to full strike action.

This part also restores the ability of unions to initiate collective bargaining ahead of employers. That restores some order to the initiation of collective bargaining. There have been instances of, sort of, duelling initiations—people seeing if they can get their initiation by one second past midnight rather than 20 seconds past midnight to be the first to initiate bargaining. This restores some order to the process and, again, acknowledges the inherent imbalance in the employer-employee relationship by putting the employee first in that process.

This part also deals with union delegates and their representatives, and union access to the workplace. Again, I’m very pleased to be making some amendments to that through the Supplementary Order Paper in my name, whereby where a collective agreement is already in place, union officials will have the right to access the workplace under the current conditions, which is that they must access the workplace in a reasonable way at a reasonable time, not impacting on the normal business of the workplace, and they must make themselves known to the employer—all the usual reasonable expectations of a union official accessing a workplace.

Where a collective agreement is already in place or one is being bargained, then the officials will have that right to access. Where there is not one in place—and that generally means that there is not a lot of union presence in the workplace as it stands—then union officials will have to seek the consent of the employer to be able to access that workplace. Again, this addresses some concerns that were raised by employers, and I think it has been roundly seen by both Business New Zealand and the Council of Trade Unions as an elegant solution to the concerns that were raised.

I’m very proud of Part 1. It enhances people’s rights to bargain collectively, it supports union activity to promote the well-being of workers in the workplace, and it helps to address that inherent imbalance in the employer-employee relationship, which is recognised in section 3 of the Employment Relations Act. I acknowledge that there are a number of Supplementary Order Papers on the Table, and I appreciate that members from the Opposition will want to debate those and consider those. I look forward to their contributions, and I look forward to responding to them.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. It’s an interesting debate that we’re going to have on Part 1 of this Employment Relations Amendment Bill. It’s been quite a long time coming to the committee of the whole House stage, because, clearly, there have been a lot of negotiations going on and occurring on the side of the Government coalition parties, and those discussions and debates and arguments have ultimately manifested themselves in the Minister’s Supplementary Order Paper that the National Party opposes.

Colleagues of mine on this side of the Chamber will, over the duration and course of this debate, detail, clause by clause, segment by segment, paragraph by paragraph, the particular issues that we have with Part 1 and, indeed, the whole bill. But for the Minister in the chair, this is actually something of a devastating humiliation, because he came to the Parliament earlier this year, in January, and introduced this bill in a way that was designed entirely to enhance the opportunity for trade unions to influence their power and muscle in our workplaces around the countryside and to grow union membership.

The provisions that provide most of those opportunities for trade unions are included in Part 1 of the bill. So this backdown that has occurred is something of an overpromising by the Minister in terms of his commitments made to his trade union friends and allies but not able to be delivered upon because of the influence of organisations such as the Employers and Manufacturers Association, Business New Zealand, the various chambers of commerce from around the countryside, and indeed the efforts of my hard-working colleagues in the National Party, who have been travelling around the countryside, educating, enlightening, and informing business people particularly of the issues that this bill contains.

This bill has as its primary purpose—and it says in the very first sentence that the new laws make it clear that unions are the winners. It says, and I quote, these are “a suite of changes to promote and strengthen collective bargaining and union rights in the workplace.” Really, this is nothing short of an opportunity for the parliamentary Labour Party to repay its debt to the trade union movement—the first possible opportunity, and the fact that it’s taken us almost a year to get to that point is telling in itself.

CHAIRPERSON (Hon Anne Tolley): Order!

Hon SCOTT SIMPSON: So in Part 1 we’ve got a number of provisions that will be dissected by my colleagues as we go through this debate. There are issues that pertain to provisions where union delegates will be paid to do union work on the employer’s dime, in an unspecified, unquantified—

Andrew Bayly: What?

Hon SCOTT SIMPSON: Union delegates will be given the opportunity to do union work—undefined, unquantified—on the employer’s dime and time. There are new rules to be pushed through the Parliament in terms of providing access to workplaces for trade union officials and delegates. Many of them will be able to access workplaces—even if the Minister’s Supplementary Order Paper is passed—without notice, without permission, and without consent, and that provides all kinds of issues for employers, for employees, and for the safety and well-being of people at work all around the countryside.

Then there are questions relating to union information being supplied to workers, to employees, that must be provided to those people by the employer, and it looks like the onerous restrictions that will be placed on the employer will not be as simple as the union actually just mailing out information to prospective members. The unions want to have the power and authority to have employers doing recruitment for them in an unpaid way and in a way that ensures that union membership can be maximised and grown.

This is undoubtedly a piece of legislation that is designed to, effectively, increase trade unions’ market share in our workplaces. Eighty-three percent of New Zealanders are not currently members of trade unions. This is a bill that is designed entirely to turn that around. The real question is: why?

CHAIRPERSON (Hon Anne Tolley): Just before I call the next speaker, can I just refer all members to Speakers’ rulings 49/1 to, probably, 49/7, which deal with imputing improper motives to Government actions. I would just bring that to people’s attention.

MARJA LUBECK (Labour): Thank you, Madam Chair. It’s with great pleasure that I take a call on this Employment Relations Amendment Bill. A previous speaker mentioned the word “humiliation”. What I think is utter humiliation is the fact that the National Party so clearly shows, in their speeches and, in fact, with all of the Supplementary Order Papers (SOPs) on the Table, that they have no idea about modern union movements and modern workplaces working together. It’s an absolute embarrassment—

Dan Bidois: Tell us about it.

MARJA LUBECK: —and I’ll tell you about it, exactly. I remember that Dan Bidois made a comment in his speech, and it was repeated by the member for the Coromandel, about unions being the winners and there being nothing in this for working people. What a bizarre statement. It’s as if they have no idea that unions are the voices of the working people. They are all one; you can’t disconnect them.

Most of these changes in this bill are simply rolling back the undermining changes made by consecutive National Governments over the last 10 years, and what these changes have done is actually hurt New Zealand people. They’ve hurt their families. They’ve created the working poor. The National Government turned their backs on workers. They locked New Zealand and their workers and their families into a low-wage economy. Now, lifting wages is a very important part of growing productivity, and unions are a crucial part to this growth. In New Zealand, as well as internationally, the decline of unions and collective bargaining has been strongly linked to the growth in inequality, and that is what we have seen over the years.

Now, I’d like to have a look at some of these SOPs. They are, actually, really quite pathetic. There’s one here—I don’t know; it must have a number. I’ve never talked about one. It says, “Hon Scott Simpson, in Committee, to move” the issue about paid time for delegates—oh, it’s SOP 111. Now, that’s a very clear example of the utter ignorance about what the role of a delegate is, and what the role of a delegate is in a modern union working with businesses. Have a look, for example, at the delegates at Air New Zealand. They play, and are playing at the moment, an absolutely crucial role in coming to a good, concluded bargaining that ensures that both sides of the party win out of this bargaining round.

What delegates do every day is they make the work better for everyone. We hear it from union members—

Hon Members: Ha, ha!

MARJA LUBECK: —and we hear it from union organisers. Whilst the Opposition can laugh, it is very clear that they absolutely do not have that conversation with unions. They don’t talk to businesses that encourage union membership, they don’t talk to delegates, and they don’t talk to organisers, because what they would hear is that the delegates absolutely play a crucial role in ensuring that issues are addressed before they become bigger than Texas. And how would some of these employers deal with all of the issues in the workplace if they had to individually deal with not only the issues but also the negotiations?

So the SOP states, “rather than the employer being responsible for compensation for activities that do not directly affect their business.” Again, that shows very clearly that the delegates dealing with issues completely affect that business. The other one is about union access. Now, we’ve heard a lot of scaremongering over the last few months about this “unfettered access”—never mind that it has been explained very clearly and eloquently by organisers that you can compare the role of a union official to a contractor. They don’t just wander in and do their business; no, they are usually very respectful, because they’ve built up that relationship with the businesses, where they come in, they sign in, and if there is a health and safety induction, they have gone through it. They report, they sign in, they do anything that a contractor does as well, and that has a very important place in a workplace because working people should have the right to access the support and the advice from their representatives without it being restricted.

So it is very ancient—I’m trying to find a word that is appropriate. But it’s an absolutely—

Hon Clare Curran: Out of date.

MARJA LUBECK: —out-of-date, undermining change that the National Government made—

Hon Clare Curran: Backward-thinking.

MARJA LUBECK: —backward-thinking; there’s a few good words there—between the period of 2011 and 2015, because that’s all it is. These changes only go back such a short amount of time.

So, like I said, there are lots of examples that we have from union officials being unreasonably blocked from access because of bad employers. Let’s face it: there’s only a few of them, but, still, these bad employers would try to block people having access to fair representation. So this bill is changing that, and I see I’ve run out of time. I’ll take another call. Thank you.

Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. Well, here we are—here we are. We’re at the stage of the committee stage when we get to look at the amazing or substantial changes that New Zealand First has managed to winkle out of this Labour Government to this Employment Relations Amendment Bill. You will recall Mr Shane Jones, the Minister. He wandered around the countryside and the regions and talked about trying to grow the economy of the regions of New Zealand, and then as he went around with his wad of cash—handing it out, hoping to get lots of applause—he was confronted. He was confronted by many of the employers that he was talking to, with rage and anger in relation to this legislation, because it might be OK for the Government to hand out money to businesses around the regions, but if they’re making it more difficult for them to engage in their normal work through changes to the industrial relations setting, then they were making that view very powerfully. So we had Mr Jones standing up, saying, “Oh, don’t worry, we are going to fix all this. We’re going to dial back, because, actually, I’m the real boss in this Government, and I’m going to sort it all out.”

And what have we got? What is the outcome of it all? Well, it’s a very, very thin Supplementary Order Paper (SOP) 153 here from the Hon Iain Lees-Galloway. This piece of paper, I think, would be easily interpreted as “Up yours, Shane Jones”. That is how I would describe this paper, because it’s basically, “We’re going to carry on doing exactly what we were going to do in the first place. We’re going to carry on, and we’re going to make a couple of little tweaks here and there.” There is one sort of semi-important tweak, which I’ll come to at some point, but, ultimately, there is nothing substantial in the changes.

If you look through what this legislation’s going to be doing—I mean, I could take, for example, clauses 21 to 23 in Part 1 about partial strikes on full pay. So, you know, you’re out there in Westport trying to make a living in a tough business, trying to keep the doors of the business open, and we find out that, now, employers will be forced to pay the full salary or wages of someone even if they’ve broken their employment agreement and are on partial strike. So you’re on partial strike, you’ve decided that you’re only going to turn up for half the day or you’re going to go slow or you’re going to go off and have meetings all through the day—don’t worry, the employer will pay for it all, as a result of this. The purpose of this is to give unions an advantage when dealing with businesses by allowing them to disrupt the business without any cost to unions.

So this is just one example of the many things that are going on and carrying on through this legislation, notwithstanding all the promises. You know, it might be a bit unkind, but people would say this is why Mr Jones is being regarded as two-faced by some people in the business community. The message has come through that “We’re going to help. Don’t worry, help is on the way. We’re going to amend the worst elements of this legislation.”, and then, finally, when we see the SOP, there’s virtually nothing to it.

When we look at the actual changes that are made, they’re pretty minimal, to be honest. There are a few things here and there in relation to reinstating the original bill provision that a union representative must request and obtain consent only if the workplace has a collective agreement or they’re bargaining for a collective agreement. So, yes, it tweaks the arrangements of people just turning up at businesses and without notice a little bit, and, yes, there is this idea that it’s not compulsory to conclude a MECA—a multi-employer collective agreement—provided that the opposition is based on reasonable grounds. But, of course, there are so many businesses up and down the country who are not clear what “reasonable grounds” are.

It doesn’t define what they are, so it’s still compulsory to come to the table even though—you know, we’re not talking about just an employer dealing with their employees that they know and that they respect. It could be an agreement in relation to cleaning, for example, that might be relevant to Auckland but might not be at all relevant to the realities of the West Coast or Ōāmaru or around Taranaki and all these different parts of the country where there’s so many different economic situations in place. This Government is ramming one straitjacket on to all of them and expecting the employers to be able to cope with that. So I just think this SOP is a great embarrassment to both this Government and New Zealand First.

DAN BIDOIS (National—Northcote): It is a pleasure today to be speaking on the Employment Relations Amendment Bill. Now, I first came across this bill while I was at Foodstuffs last year, and not many of the people at Foodstuffs were happy about this bill. They weren’t clear about what problem they are actually trying to fix. Then I got elected about six—

Hon Scott Simpson: Low union membership—low union membership.

DAN BIDOIS: That’s right. That’s right—low union membership. That’s what’s clear to us on this side of the House.

Then I got elected about six months ago, at the time that this bill was put into the select committee stage. I haven’t had a chance to sit on that committee, the Education and Workforce Committee, but I’ve gone around and interviewed a lot of businesses in that time, and it is again very clear that this bill doesn’t seek to solve any problem that is real in the market place, beyond giving unions greater power to, essentially, recruit members. This is, in a sense, a payback. I know that there’s a fine line of what we can say here in the House, but that is what the people out there in the market place are feeling—that this is, in a sense, a payback for what the unions have done for certain political parties.

But let’s come to the bill, because I think it’s a really important bill to understand. What I want to spend a bit of time on is this thing called a MECA. I’m not talking about Mecca as in the place in the Middle East; I’m talking about the multi-employer collective agreement. I’m going to be honest: a year ago, I had no idea what a MECA was, and nor do most employers. So we’re going through the clauses, and we’re going through the clause which deals with the MECA and the duty to conclude. Now, I know that we’ve got a Supplementary Order Paper (SOP) on the Table that narrows the duty to conclude only for those that are under a collective agreement or collectively bargaining a collective agreement, but I do want to just spend a bit of time—and I’d love to hear from the Minister in the chair, Iain Lees-Galloway, about how he sees this working in practice, because all of the businesses that I’ve spoken to can’t see how MECAs work on a practical basis.

Let me take any industry, whether it be retail, whether it be wholesale, whether it be the business that I used to work in, which is Foodstuffs—there are, as you know, Foodstuffs stores throughout the country, but each store has their own unique challenges, and the business world doesn’t feel, simply, that MECAs are a sufficient mechanism for what are going to be very unique and localised challenges across New Zealand. For example, in some Foodstuffs stores in, say, Hamilton, there may be some issues around the cafe, and what the employers want at that store is a better cafe, but then there might be a supermarket up in Auckland where there’s a brand new cafe in store. So why should a MECA agreement apply, essentially, to them when we’re talking about very unique circumstances?

I do want to talk a little bit more about Foodstuffs, because they made a submission on this bill regarding MECAs. They’ve said very clearly that it’s not practical or appropriate where there are very localised issues going on within their stores throughout the country. So they recommend a repeal of that, which is where I come to my SOP in my name, SOP 114, which, essentially, deletes clauses 13 and 14. This would, essentially, allow the employers to opt out and would not mean that you need to conclude a MECA. I think that this would address some of the issues that I’ve spoken about with large employers, but also medium as well, that don’t feel that an industry-wide approach is flexible. It certainly doesn’t speak to the employment arrangements that we have already. I’ve mentioned already in this House that we already have one of the most flexible, efficient labour markets in the developed world, and this clearly does not—[Time expired]

Hon CLARE CURRAN (Labour—Dunedin South): Thank you, Madam Chair. It’s a great honour, actually, to stand and speak on the Employment Relations Amendment Bill as a member of this Government and a proud union member. [Interruption] Listen to the boos on the other side, particularly from the last speaker, Dan Bidois, who must have led a very sheltered life to not really understand the value and the purpose of belonging to a union and to not understand what a multi-employer collective agreement (MECA) is. It might be of some interest to him to know that the nurses are covered by a MECA. In effect, the teachers are covered by a MECA. So perhaps when he gets up, if he gets up to speak again, he might have done a little bit more homework before he actually gets up to speak.

I want to address my comments to Part 1, particularly to Supplementary Order Paper 153, put forward by the Hon Iain Lees-Galloway, with respect to new clause 3B and clause 5, which is amending section 20, around union access. But I would like to make a comment that this is ultimately a bill that is about undoing wrongs. It’s about undoing the wrongs of the previous Government to those who earn a wage in workplaces where employers have disproportionate power over their working conditions. It’s a fairness bill. That’s basically what this is. It’s a fairness bill. There are lots of other things that can be implemented through legislation and will be, as this term goes on, but this is a bill which is about righting some wrongs, and it demonstrates the importance of the working relationship, the good close working relationship of this coalition Government with our coalition partner—

Todd Muller: What’s the wrongs?

Hon CLARE CURRAN: —and our confidence and supply partner. OK, so it restores the rights of working people to meal and rest breaks—a fairly fundamentally important wrong, which is being righted. It restricts the 90-day trial periods to—

CHAIRPERSON (Hon Anne Tolley): Well, those are in Part 2, so I’d like the member to focus on Part 1.

Hon CLARE CURRAN: So in Part 1 with regard to the ability for unions to access workplaces, I want to give an example, because I’ve been waiting for the examples to come from the other side as to what it is that is so wrong about union representatives having access to the people that they represent in their workplaces. I want to give an example in my own city of a rest home called the Woodhaugh Rest Home and Hospital in Dunedin, where there were accusations and claims being made of poor treatment of the staff—it got down to things like rationing the teabags—where the workers’ hours were being cut. They called in their union representative to act on their behalf. When the union organiser turned up to represent the union members, who were and are covered by collective agreement, she was told to wait. She was told to wait by the duty manager and half an hour later she was given an instruction that she had to leave. As she was walking out, a car pulled up and she was issued with a trespass notice and basically told that she wasn’t allowed back into that workplace for around 18 months.

Now, those people in that workplace who are on low wages were having their hours cut, and it had got so bad that even the teabags were being rationed—not just for them but for the patients, the people living in the rest home—and they weren’t allowed to have union representation. Now, that is a classic example of where the disproportionate relationship between employees and employers is being abused and where this bill will right that wrong.

Hon Dr NICK SMITH (National—Nelson): It’s a pleasure to take a call on Part 1 of this bill, because of all of the things that this Government is doing to slow the economy and to reduce opportunities for New Zealanders to get ahead, it’s these changes in Part 1 of this bill that should most concern New Zealanders. Before I get into the detail of whether it be the union access rules or whether it be the changes to the multi-employer collective agreements, I do want to dispute a key point that was made by Clare Curran and say that in the term of the last decade we saw wages rise by over $12,000 on average. What we also saw in that report from the Ministry of Social Development is that every one of the deciles over the last 10 years has improved in their income-earning capacity, and what I would challenge members opposite—

Hon Clare Curran: What is he disputing?

Hon Dr NICK SMITH: Well, I say to the member opposite that if we want to increase the incomes of New Zealanders, and not have it all eroded away by inflation—real increases in income as occurred over the last decade—the Government has simply has not made the case for change. That is, that actually the increases in incomes that have occurred in the New Zealand economy over the last decade have been some of the strongest in the OECD, that what we’re doing as a country is successful, and what this bill and this part proposes is slamming the brakes on the key elements of what makes New Zealand successful and competitive.

I particularly want to object to, and test the Government on, the provisions of clause 9, where the Government is quite blatantly screwing the scrum in favour of multi-employer collective agreements. What it is trying to do in clause 9 is actually force employers into multi-agreements. Let’s not kid ourselves that this is about protecting the downtrodden. This is about gaining advantage for Labour’s union mates.

Can I just give an example. For the first time in more than 30 years, we’ve had, this year, strikes on the port of Nelson—right at the time when our apple crop was going at the port, when it was at its most vulnerable period. We had people that are earning over $100,000 a year—not the poor and the downtrodden; those that are able to exercise maximum disruption—screwing the scrum. And what will this clause 9 do? This clause 9 will drive our port companies to move back to multi-employer collective agreements across that key transport sector. Why is that bad for New Zealand? Because New Zealand lives and dies by the success of its exporting industries.

The truth is that we have some of the most competitive and efficient ports in New Zealand. That’s enabled our exports to grow. That’s been at the core of New Zealand’s economic success, and what the Minister here is doing in clause 9 may play well to a few of his trade union mates, but it actually makes New Zealand collectively poorer and it does so by handing back the old powers that seed disruption. It’s why this year we have seen a level of industrial disruption that I haven’t seen in 25 to 30 years. That is taking us backwards.

So my simple test for members opposite is: why do we want to screw the scrum in favour of multi-employer collective agreements? Why is it that we don’t want the forces of competition to work effectively for our economy? Actually, those that cause strike action maximise the wages for those that may be at the port where they can disrupt, but they overlook the wages and the competitiveness of everybody downstream from the port that’s working in the orchards, working in the other components of the sector.

I just have not heard a cohesive argument, an intelligent argument, from Government members as to why they want to drive New Zealand towards more multi-employer collective agreements when, actually, in all parts of the economy we need to maximise competition. We want companies being innovative, including being innovative in their employment arrangements, to ensure that New Zealand remains competitive and grows its competitive edge, which is being undermined—undermined—by these provisions in Part 1 as they relate to multi-employer collective agreements.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you, Madam Chair. I thank members for the contributions on Part 1 so far. Members have largely addressed two issues: that of union access and of multi-employer collective agreements, and I’d like to speak to some of the points raised by members on each of those issues.

I’ll address the first: union access. I’d point members to section 21(3) of the Employment Relations Act, which states that “A representative of a union exercising the right to enter a workplace must, at the time of the initial entry and, if requested by the employer or a representative of the employer or by a person in control of the workplace, at any time after entering the workplace,—(a) give the purpose of the entry; and (b) produce—(i) evidence of his or her identity; and (ii) evidence of his or her authority to represent the union concerned.”

And also, subsection (2) of the same section says that “A representative of a union exercising the right to enter a workplace—(a) may do so only at reasonable times during any period when any employee is employed to work in the workplace; and (b) must do so in a reasonable way, having regard to normal business operations in the workplace; and (c) must comply with any existing reasonable procedures and requirements applying in respect of the workplace that relate to—(i) safety or health; or (ii) security.” Now, those subsections are unchanged by this bill, and, I hope, give members some satisfaction that there is no so-called “unfettered union access to the workplace”.

Of course union officials must present themselves to the employer, and of course they must give regard to proper health and safety practices. If an induction is required to a workplace then, of course, the union organiser must ensure that they are properly inducted and they understand the health and safety procedures of that workplace. But, of course, also it is important that union members are able to give effect to their right to freedom of association and their right to get support from a union official if they are in need of that support.

And if union members call their union and ask their official to come on to the workplace to deal with an employment matter or a health and safety matter, then they should be able to get timely access to that union official. I think the combination of the provisions that are currently laid out in the Employment Relations Act and that are included in this bill and the Supplementary Order Paper to this bill, in my name, strike that right balance between giving union members access to their union officials and ensuring that employers have the right and proper ability to control activity that goes on within their workplace.

I want to turn now to the question of multi-employer collective agreements (MECAs). A number of members have referenced this matter. Paul Goldsmith raised the question of multi-employer collective agreements sort of being a one-size-fits-all that are not capable of taking into account regional variations in labour markets. That is not the case. It is perfectly acceptable for a multi-employer collective agreement to include variations of pay rates or other variations that are agreed between the employer—or employers, in the case of a multi-employer collective agreement—and the union representing workers who work for those employers.

I’m aware that negotiations, in the past, for the nurses’ district health board (DHB) multi-employer collective agreement did consider the possibility of regional variation such as an Auckland wage. Now, that was determined not to be something that the parties wanted to explore, but it is something that they were entitled to explore and there’s nothing in the provisions of the Act or this amendment bill that preclude that from happening.

Mr Bidois made, I thought, a very thoughtful contribution also on MECAs and referred to his own experience from the supermarket world. And he asked, “How do these multi-employer collective agreements work on a practical basis?” And I would reference the nurses’ collective agreement with the DHBs. The New Zealand Nurses Organisation has a number of multi-employer collective agreements across the different parts of the health system—20 employers employing people to do essentially the same job. Both the employers and the employees see it as a much more efficient way to deal with the terms and conditions of their work to do it through a multi-employer collective agreement that applies to employees doing the same work that is covered by that MECA across all of those 20 different employers. So that’s the practicalities of how a multi-employer collective agreement works.

Let me bring it back to the supermarket situation. Now, Countdown has a collective agreement. I’ll grant the committee that it’s not a multi-employer collective agreement—because of the structure of the business, they are one employer that employs people all around the country. But FIRST Union has a collective agreement that covers workers in all 187 Countdown shops across the whole country. It works well. Countdown is very pleased with it. They are very proud of their relationship with FIRST Union, and it allows them to develop an enduring and ongoing relationship between the employer and their workforce to deal with matters that are not just the matters that are considered as part of collective bargaining, but to address the broader employment relationship.

And I know—yeah, there’s been tension. I have stood on the line during a lockout that occurred many, many years ago when Progressive Enterprises—the owners of Countdown—locked out their workers as part of an employment dispute. But the enduring relationship goes on, and both sides are very proud of it. So it can work tremendously well and it can work across the country. I do not accept that either multi-employer collective agreements or single-employer collective agreements are a one-size-fits-all approach and that they are not applicable across different parts of New Zealand, because the evidence tells us that they can and do work well.

I want to just address some of the matters raised by Nick Smith as well. He said that port companies will be dragged back to having MECAs. Port companies have never had a multi-employer collective agreement. There has never been a multi-employer collective agreement in the port sector. And I’ve heard a lot from the port companies about their concerns. I say to them: “This bill is restoring what was in place when Labour was last in Government.” There is no reason to imagine that the situation would be any different. In fact, through the Supplementary Order Paper, we are ensuring that that point of case law—that the duty to conclude collective bargaining does not apply to multi-employer collective agreements—is now enshrined in the legislation. That makes it much clearer. I think the port companies have absolutely nothing to fear from this. And, in fact, I encourage them to build a much stronger relationship with their unionised members.

Nick Smith also used the term “screw the scrum”. Why are we “screwing the scrum”? Well, I attempted to address that in my opening remarks—which included that the object of the Employment Relations Act is the statement that there is an inherent imbalance between the employer and the employee. The legislation is designed to address that imbalance, and that’s what multi-employer collective agreements are about. They are about giving more strength to working people; giving them the option of bargaining collectively, not just within their own employer but across their industry, for better terms and conditions that apply to unionised members across their industry, because we recognise, in this legislation—and the National Party never got rid of this section of the legislation, so when they were in Government they agreed that there is an inherent imbalance between the employer and the employee. We are giving effect to that object of the Act to overcome inherent imbalance, and multi-employer collective agreements are part of that.

Dr PARMJEET PARMAR (National): Thank you, Madam Assistant Chair, for this opportunity. It was really interesting to hear this from Minister Lees-Galloway in his first contribution—that he accepts that this legislation is clearly to support union activity. And we can clearly see that it’s all about union activity. Supplementary Order Paper (SOP) 153 in the name of the Minister—I’d like to comment on a couple of things in that SOP before I talk about the SOP in my name.

SOP No 153 amends clause 2(a). My understanding was that when the bill was delayed in coming up for the second reading, maybe New Zealand First would be able to advocate for businesses, but, no, looking at this SOP, New Zealand First clearly did not advocate for businesses. They clearly advocated strengthening this legislation for unions, because it is about delaying the introduction of the bill. And this delay to introduce the bill is not to help business but it is to help unions prepare their material that they will be providing through employers to new employees. This is to help unions prepare for new people signing up as members. And, clearly, they are really desperate, because we have seen the figures, because it’s only 17 percent of employees that are members of some union. So definitely they want to increase that number—80 percent of employees are not union members. This is to actually help unions, not to help businesses.

And then we look at the clause 5 changes proposed in this SOP No 153. So for health and safety reasons, as well, employees that are not union members will be able to ask the union to come and provide help at their workplace. So this is again to strengthen unions at all kinds of workplaces. So what is the role of MBIE under this Government? The Ministry of Business, Innovation and Employment—why can’t this Government think of providing more support to MBIE to respond to such situations? No. They don’t want to support MBIE to support employees in these kinds of situations. They want to actually provide more support to unions to be able to provide that support. And that is, again, clearly to strengthen the role of unions in various workplaces.

We know that union activity is not a new activity, but, nowadays, the kind of union activity that we are seeing is quite aligned with political activities. Clearly, here, we know that our unions are aligned with some political parties, and as a result of that, I’m not quite sure if this legislation is actually really addressing workplace situations. This is actually addressing the situation of unions, because unions, at the moment, are not going that strong.

That brings me to my Supplementary Order Paper 145, which is to delete clause 24, clause 25, clause 26, and clause 27. This is because the clauses as they stand provide a new ground for discrimination against a person involved in union activity by specifically inserting a new provision as to the individual’s union membership status.

Why would we clearly want to state that an employee is a union member? There can be two reasons for this. One reason is to avoid discrimination, as the Minister would like to interpret. “Yep, I am a union member. Don’t touch me, even if you are restructuring or doing anything else. Even if it’s some kind of disciplinary action that the employer wants to take, don’t touch me.”—that will be some kind of discrimination. But in this, there are two meanings. One is to clearly state that that employee is a union member to create that fear in an employer’s mind that if something happens to that member, that will be seen as a kind of discrimination. I would really like the Minister to explain how, actually, these clauses remove discrimination. In my view, actually, they’re adding to the discrimination that will happen and will create a big divide between employees that are members of some kind of union and employees that are not members of a union.

So this is clearly about political gain, and in these clauses—clause 24, clause 25, clause 26, and clause 27—how many times do we see the words “employee”, “employer”, or “business”? It’s all about unions, unions, and union activity. So, clearly, these clauses are supporting, of course, the whole motive of this bill—

Hon Aupito William Sio: Such an anti-union party—shame on them.

Dr PARMJEET PARMAR: —which is to strengthen unions. Shame on those Labour members sitting there and supporting unions and not supporting employers, employees, and businesses. It is the employer that takes the risk—[Time expired]

NICOLA WILLIS (National): Thank you, Madam Chair, for the opportunity to take a call on the Employment Relations Amendment Bill. In this contribution, I want to draw particular attention to one of the more egregious aspects of this bill, that affects the privacy of every single New Zealander, and that provision is new section 62A, in clause 18.

What that provision, essentially, requires is that any employer who signs an employee up to an individual employment contract in the future under this legislation will be required to give the personal information of that employee to the union. I stand with the Privacy Commissioner, who views that this approach goes both beyond what is necessary and creates a step backwards both for New Zealand’s privacy laws and for our employment laws. National has a remedy for this in the form of Supplementary Order Paper (SOP) 147 in my name, which will ensure that an employer gains consent from their employee before transferring their personal information to a union.

So, as it stands in the draft that the Government has prepared, this is what would actually happen: I’m a new employee, I sign up to an individual employment contract, my employer is now required to come to me and say “Here’s a form that I need you to fill in, outlining whether you’re going to join the union or that you’re not going to join the union.”, and then the employer is required to give that form to the union, giving my name and giving the fact that I haven’t joined a union. Then, of course, the union gets that information about me, and is absolutely welcome to come and ask me questions about why I haven’t joined the union and, potentially, do that in front of my workmates, embarrass me, and put me under pressure.

But what’s even worse is that if I don’t fill in that form—let’s say I’m an employee in my first few days of employment, I’m busy at work, I have family commitments, and I don’t get round to filling in the form. Well, the default position that this law sets out is that in that circumstance, the employer automatically tells the union “She hasn’t filled in the form, this is her name—over to you.”, and, of course, not only is this unfair on the individual employee in terms of jeopardising their privacy but it is also very unfair on employers.

They are employers, who, I’d like to remind members opposite, are, in almost all cases—at least the vast majority of cases—good people and good New Zealanders, who are often entrepreneurial and hard-working, who have set up a small business to advance a service or good in their community, and who are hiring good people that they want to do well by, that they want to give an opportunity to, that they want to pay an income to, that they want to support well, and that they want to remain part of their business into the future. What this law requires of those good employers is that, suddenly, they have a sub-duty. Instead of their duty being to look after their staff, their duty is now to promote the union by giving information about their employees to the union.

What an invidious position that places employers in, because, suddenly, the employee may go to the employer and say “Hey, look. How did the unions end up knowing that I wasn’t in the union?”, and the employer says, “Well, I’m sorry. I passed that information on.” The employee says “Well, why did you pass that information on? That’s my private information. The fact that I have not joined the union is none of your business, employer, and I do not expect you to be passing that information on.”, and the employer says, “Oh well, sorry, but that’s the law.”

Now, what Mr Lees-Galloway is going to stand up and say is “Oh well, look, there’s already an exemption clause. They can tick the right box on the form to explicitly say that they don’t give consent.” Well, I would draw his attention to the statement of the Privacy Commissioner about that, who said that “Requiring an individual to opt-out of having their personal information disclosed is poor privacy practice and is against an individual’s right to exercise some autonomy over their personal information.” So in SOP 147, the Government has the opportunity to correct this egregious error, because I believe that the vast majority of New Zealanders would view this invasion of their personal privacy as egregious and as wrong. It goes too far, and it is an unacceptable breach.

I agree with the Privacy Commissioner, who says that this is a step backward for employment law and for privacy and there is a questionable basis for having such a thing in the law. There is no reason for this—this advances no one’s rights.

CHAIRPERSON (Poto Williams): I call the Hon Lees-Galloway—Iain Lees-Galloway.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): It is a mouthful, Madam Chair. I want to very quickly speak to the points raised by Nicola Willis, because if it was as she described, I would be very concerned about the change that we are making. But, of course, it is not as she describes.

An employee will receive a form when they start a new job and it allows them to indicate whether they intend to join the union and to be covered by the collective agreement or not. Their intention, along with their name, will be passed along to unions by their employer. However, as Nicola Willis pointed out, employees will have the ability to opt out. They will have the ability to opt out, and if they—well, members ask “What if they don’t?” I think people will have—[Interruption]

CHAIRPERSON (Poto Williams): Order!

Hon IAIN LEES-GALLOWAY: No, it’s a fair question. It’s a requirement on the employer to provide the form and to get that form back and pass it on to the union if the employee has not opted out.

This is very simple. I have absolute faith in the working people of New Zealand to be able to consider this form and determine for themselves and apply their own personal choice, their freedom of association—their personal choice—to decide whether or not they want to join a union. Members ask “Why? Why are we doing this?” Because we want people to have an informed choice. We want them to know—

Andrew Falloon: Why not opt in?

Hon IAIN LEES-GALLOWAY: —what their options are. They wanted to know that they have—

CHAIRPERSON (Poto Williams): Order! Order! I apologise to the Minister. Members have asked the Minister questions and he is trying to provide those answers. It would be really good if we would allow that process to happen.

Hon IAIN LEES-GALLOWAY: Thank you, Madam Chair. We want people to have an informed choice. We want them to know if there’s a collective agreement on site. We want them to know if there is a union on site and to decide for themselves if they want to join the union or not.

I respectfully disagree with the Privacy Commissioner. I considered his points, but I respectfully disagree with him. The opt-out gives people the ability to withhold that information from the union if they so choose. It is absolutely their choice, and that is what is laid out in this legislation.

DENISE LEE (National—Maungakiekie): Thank you, Madam Chair. I’d like to talk to clause 4, which inserts new section 18A, which outlines that union delegates are entitled to reasonable paid time to undertake union activities. Now, for those of us on the Education and Workforce Committee, this particular clause was a great mystery because—I’ll call it the “out, then in, then out” clause. There was somewhat of a yo-yo series of activity with this clause.

When the bill was first introduced, the definition of “reasonable union activity” was undefined and vague. There were a large number of submitters—and we all heard them—rightly pointing out that leaving these terms open to interpretation could easily result in significantly different expectations and conflict between employers and unions. It was really not what people would like, expect, or look forward to.

Many submitters proposed that the bill should specifically define what is meant by “union activity”. Again, those of us on the Education and Workforce Committee heard from many particular submitters. They wanted to avoid any of these misunderstandings when it came to knowing exactly what the differences in interpretation would be. So that sounds like a great idea. We all could feel the atmosphere of that in the select committee and, lo and behold, the ministry agreed. We had recommendation No 1 in the departmental report, and that was to “Clarify [that] union activities are the purposes listed in section 20 of the Act, with the exception of seeking to recruit employees as union members.” So that was quite handy, I thought. The current legislation already outlines specifically what union activity involves. We approved that recommendation from the ministry and the Parliamentary Counsel Office put it into the working version of the report.

However, on 3 September, over a month after first receiving that departmental report—over a month later—we received the following letter from the ministry: “Since the time of writing the departmental report, further information has come to light about the current practice between union delegates and employers around paid time to undertake union activities. Most notably, further information has highlighted that some delegates received paid time to perform union activities which are broader than those activities listed in sections 22 and 23(a) and (c) of the Employment Relations Act 2000. Given this risk, the Government considers that the bill should not impact on existing practices, and proposes rescinding recommendation 1 in the departmental report. On this basis, it’s recommended that the bill does not define what a union activity is.”

Now, this seemed extremely unusual, and when we asked why this was, at select committee, we were told, “The Minister’s office had concerns raised.” I’ve got a question for the Minister: did these concerns originate from his office or were representations made to his office from other organisations that he thereby acted on?

If we look at section 20 of the Employment Relations Act, it outlines what makes up the current definitions for union business, and it’s quite extensive. Here is a few of those, and I’m quoting from the Employment Relations Act 2000, section 20(2): ”The purposes related to the employment of a union’s members include—(a) to participate in bargaining for a collective agreement: (b) to deal with matters concerning the health and safety of union members: (c) to monitor compliance with the operation of a collective agreement: (d) to monitor compliance with this Act and other Acts dealing with employment-related rights in relation to union members:”—and I’m just going to quote a couple more and then I have two more questions for the Minister—“(e) with the authority of an employee, to deal with matters relating to an individual employment agreement or a proposed individual employment agreement or an individual employee’s terms and conditions of employment or an individual employee’s proposed terms and conditions of employment:”—one more—“[(f)] to seek compliance with relevant requirements in any case where non-compliance is detected.”

Section 20(3) of that Employment Relations Act, in regard to unions business, includes “(a) to discuss union business with union members: (b) to seek to recruit employees as union members: (c) to provide information on the union and union membership to any employee on the premises.”

So what we’ve got—and I know that was extensive, so I have, on the basis of that, two more questions for the Minister. Why is this definition not appropriate for allowing paid time for union activities? What specific union activities are not included in that comprehensive definition that I just read out from the Employment Relations Act 2000? What other union activities should businesses have to provide paid time for? Where is the insertion back of this clause—where is it going? By sending the letter, is the Minister suggesting, or is the Government suggesting, that unions are in breach of the Employment Relations Act by undertaking union activity in a workplace where it is not currently permitted? Or, put another way, by preferring to not impact on existing practices, is the Government not enforcing the current legislation as it stands? I would like those questions answered by the Minister.

I think it was incredibly and thoroughly confusing to sit there on the Education and Workforce Committee and have an out-in-out clause, and, quite frankly, a really thoroughly unacceptable exchange between the Minister, the ministry, and our select committee, and I seek those answers. Thank you, Madam Chair.

ANDREW FALLOON (National—Rangitata): Thank you, Madam Chair, for the opportunity this afternoon to speak on the Employment Relations Amendment Bill. I don’t sit on the select committee that considered this bill, but I do feel compelled to take a call.

Dan Bidois: You should.

ANDREW FALLOON: Thank you, Mr Bidois. I do feel compelled this afternoon to take a call because of some of the contributions that have been made by members opposite, and particularly some of the extraordinary comments, I thought, made by Marja Lubeck, the first one of which was that “unions are the voice of working people”—unions are the voice of working people. Well, that might be true, Ms Lubeck, for 17 percent of workers who are signed up with the unions and who do consider that the unions are best placed to argue for them and to represent them, but it’s not the case for the other 83 percent of workers. In fact, it’s far higher when you do go into the private sector as well.

The second comment that she made was “Union delegates make life better for everyone.”—for everyone. Well, I ask Ms Lubeck: does that include the businesses that are, effectively, shut down when a union goes on strike. Does that mean the commuters who need to find alternative means of transport when the buses go on strike? And does that mean the exporters who are put at severe risk of losing contracts when port workers and others go on strike? So I tell the committee that the one thing, actually, that is going to suit their interests, rather than unions, is job growth. Actually, if you look at the last few years, that’s exactly what we’ve had. New Zealand, at the moment, has I think the third highest employment rate in the world. In the last two years, before this Government came in, 10,000 new jobs each and every month—

CHAIRPERSON (Poto Williams): Order! We are straying a little bit from the substance of this. Thank you.

ANDREW FALLOON: Thank you, Madam Chair; I was just coming to multi-employer collective agreements (MECAs) now, which are part of Part 1 of the bill. The problem with MECAs is, as the Minister has accepted, that they will allow for the same conditions across the entire country—the same paying conditions to be spread across the country. The problem with that is that it will potentially provide for the same paying conditions for a transport company in Temuka as for a transport company in Takapuna, and the same for a cafe in Mayfield as for a cafe in Mission Bay. And the issue with that, of course, is that those cafes and those transport companies don’t have anywhere like the same revenues, anywhere like the same cost structures, and, in the case of the cafes, anywhere like the same foot traffic. And so to be requiring them to pay the same regardless of where they’re situated, regardless of what their revenue is, is going to be a huge problem for employers in smaller and regional areas.

The next part I wanted to come to is new section 18A in clause 4, and this relates to union delegates being entitled to reasonable paid time to represent employees. Now, the problem with this particular passage of the bill is it never defines what “reasonable” is. It talks about a number of things that union delegates can undertake, work that they can undertake, but it never limits that; it never puts a limit on the work that they can undertake. All they have to do is notify the employer—notify the employer; not ask the employer, not request from the employer, but notify the employer—what the work is and when they’re going to undertake it.

The hilarious part of this—I really enjoyed this, Minister, so well done on that; it gave me a little laugh. The final part of this, which is new section 18A(5), in clause 4 of the bill, which is brand new, talks about “This section does not prevent an employer from providing an employee with enhanced or additional entitlements to spend paid time undertaking union activities on a basis agreed with the employee.” So not only does it require employers to pay a union delegate whatever they want—it requires that—it also enables them to pay them even more if they want to. How generous! How very generous of you, Minister, to include that particular element into the bill!

I just wanted to touch on, in my last few remaining moments, the Minister’s comments about the opt-out provision when new employees sign on with an employer. Now, the problem I have with that is that what he is saying is that if a new employee signs up, they’ll have to tick a box if they don’t want their personal and private information passed on to a union. If they don’t do that, as my colleague Nicola Willis has pointed out, that information will be passed on to a union, even if the employee doesn’t want it passed on. Why doesn’t the Minister—I asked the Minister; he didn’t address this before—make it an opt-in provision where the employee who’s signing up can opt to have their information passed to a union rather than, effectively, forcing employers to pass on an employee’s private information?

TODD MULLER (National—Bay of Plenty): Thank you, Madam Chair, and I very much appreciate being able to talk this afternoon, in my first call, to the Employment Relations Amendment Bill. And if there ever is a bill that talks to the fundamental philosophical divide that exists in this House, it is this bill. And when you think of the language that we’ve already heard from the Government’s side, framing up our current economic conditions that exist in this country, the current employment law that exists in this country, through the lens of righting historical grievances and wrongs, and the massive power imbalance that exists in this country—it defies belief when you actually consider the reality of this economy, that in one breath they’re extolling its virtues, its strengths, and its position in the OECD, yet somehow, in this piece of legislation, we are on the verge of a precipice of collapse because the power imbalance is so woefully, apparently, in the employer’s favour.

And it does make me wonder when I reflect upon their perspective how many of them have put their capital at risk to start a business? How many of them have actually worked through the issues of actually trying to develop a good or a service and take it to the market and need people to work with them? There’s very few. Most of them are looking at the ground, because they come from a theoretical perspective.

Now, the Minister for Workplace Relations and Safety’s contributions thus far I have found fascinating, because he’s clearly decided that the way to try and usher this period of debate that we’re having through the House is to lower the tone of his voice and to be, above all else, reasonable. What it strikes me as is that this is a strategy of “talk softly but carry a big stick”, because this bill is the big stick. It’s the big stick on New Zealand employers. It’s the big stick, actually, on provincial New Zealand, who have a whole series of small to medium sized businesses—often mum and dad businesses—trying to make their way in the New Zealand economy and through that the global marketplace. This is the big stick that he’s wielding. But he thinks that perhaps if the language is softened in terms of his response, the image that he will portray through those watching is one of eminent reasonableness.

Well, actually, the area that I’d like to talk about, particularly clauses 13 and 14, and the conversation that we’ve already started this afternoon about forcing employers to enter into multi-employment collective agreements if one or two of their employees would like that to be pursued, I think, has real risks in constraining growth and investment across regional New Zealand.

Now, I represent an area which is going exceptionally well. It’s the area of Tauranga, the wider Bay of Plenty. I represent an area which is very strong in terms of its kiwifruit as a sector, and I know that there is significant concern that this legislation is going to—incrementally, perhaps, at first—roll across the sector a whole lot of obligation in terms of a collective union approach, and I think that is a very porous impact for a region that is doing exceptionally well.

We are doing extraordinarily well in the Bay of Plenty. Where is the need for such regressive legislation? I don’t see it, and I am a strong supporter of this very considered Supplementary Order Paper 114 in the name of my colleague Dan Bidois that talks to, essentially, this challenge. His suggestion, of course, is to delete clauses 13 and 14, and I think if that happened, that would give some of the employers in my region, who are part of an industry which is one of the fastest growing in the country, some comfort that actually the Government has heard them and that there is no need to force such radical change into the employment arrangements of New Zealand.

And I found it very telling, the comments of the Minister when he reflected on the Port of Auckland and said they don’t have a collective agreement at the moment. He sees no reason why they would rush to that. He didn’t suggest in any way that this legislation would prevent that—of course, far from it; it encourages it. But then, right at the end, the sting of the tail, he said, “But, hopefully, the Ports of Auckland will consider that the benefits—[Time expired]

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. I want to just follow up on a couple of speeches that my colleagues have made in this debate on Part 1. But just following on from Todd Muller’s very good contribution, one of the things that became very apparent at select committee as the Education and Workforce Committee was hearing submissions on this bill was the number of employers who came and said, “Well, look, if the Government is determined to foist this legislation upon us, then what will inevitably happen is that businesses will modify their behaviour. They will change their way of doing business. They will adapt and adopt to maintain profitability and to remain competitive with the domestic economy and also internationally.”

One of the submitters was actually from the Port of Tauranga, and the HR manager from the Port of Tauranga came to select committee and said, “Well, look what will happen is if the militant port worker unions—who are traditionally very militant—decide to play silly buggers, silly games, then what we will do is just speed up our process of automation.” And then what she said was that, actually, there was hardly a single job at the Port of Tauranga that could not be automated. And, actually, therein lies the perverse nature of this legislation.

Todd Muller: Be careful what you wish for.

Hon SCOTT SIMPSON: Be careful what you wish for, Todd Muller says. Be careful what you wish for, because that is exactly what might happen.

But I want to just go back to a very thoughtful contribution from Nicola Willis around the basis of the submission from the Privacy Commissioner, and it relates to the clause that refers to, in Part 1, the need for an employer to pass on contact information of new employees who are not union members. Now, the Privacy Commissioner is not known for his extreme views. He’s a measured, considered person, who brings to the role, I think, a very careful view of the world and the Act that he administers. So when he comes to a select committee of this Parliament and gives a scathing submission that says, in part, that placing the burden on employees to opt out of sharing their details may unduly influence their decision. He said that a decision, once it has been made by an individual, to accept an individual employment contract—and that he sees no reason why their details should be provided to a union. A union, effectively, of course, is a third-party independent organisation, and no employer would consider for one minute providing personal contact details to a third-party independent organisation such as the local tiddlywinks club, or the bowling club, or something like that. But this bill, if it were passed, would place an onus on employers to provide that kind of information, and this is something that is deeply concerning.

And then what was the response—the response from officials in their departmental report to the issues that the Privacy Commissioner raised and his concerns? Well, their response was pretty soft, I have to say. One could almost be certain that it had come as a result of a conversation or two with a variety of people who might have shared the view of the authors of the bill. But what we found in the departmental report was something quite stunning: that our much-lauded Privacy Act of 1993 is, in fact, going to be subordinate legislation to this Employment Relations Amendment Bill—subordinate legislation. So our privacy practices that we hold dear and care for carefully, that we nurture as a nation and as a Parliament, are going to be subordinated by this trade union - friendly piece of legislation.

Now, most New Zealanders, I think, will be horrified to find that out—that the interests of the trade union movement are going to be put ahead of the privacy of New Zealand citizens, and their decision is going to have to be an opt-out decision if they don’t want that information passed on. Well, that is the same as used to happen with Reader’s Digest. They used to send out subscriptions and Reader’s Digests to people and say, “Well, we’re going to keep sending you those magazines and you’re going to have to keep paying for them unless you opt out, unless you tell us you don’t want to receive them any more.” Well, that practice has been long since made illegal and this process of having to opt out should similarly be made illegal.

ANDREW BAYLY (National—Hunua): Thank you, Madam Chair, I’m very appreciative. Hey, well, guess what? The unions are back in charge, aren’t they—they’re back in charge. You know, I find it fascinating that the very first piece of language used in reporting about this bill was “a suite of changes to promote and strengthen collective bargaining and union rights in the workplace.”—beautiful, beautiful! And Labour even went on to say and admit that “This law is about strengthening union rights and union members.”

Well, isn’t 2020 going to be fun, when we’ve got a Labour - New Zealand First Government standing up there—and now I can see the Hon Shane Jones is on the other side. They’ll be standing up on the hustings, talking about what a great thing this is for New Zealand, and how we are driving forward New Zealand and making it more prosperous by bringing about this change. Well, I think that’s going to be a really interesting argument, because this is a continuing process by this Labour - New Zealand First Government to remove the lid of optimism from business—the lid of optimism. And, you know, we’ve seen it. They’re imposing the costs on businesses: “They’re all right—they can pay for it. They’re good for it.”

The second thing is it is making it harder for immigrants to come into New Zealand to work in our good businesses in New Zealand, and now we’ve got these wide-ranging employment changes. That’s all going to be the framework that cuts to the core of how we operate in New Zealand, and I just think there’s an assumption around this.

The first thing I want to say is that I support the role of unions. They have a part to play it, albeit it’s interesting that in the market environment they’ve seen their union membership plummet because people didn’t see the need to join a union. There are only 355,000 people in the union movement, out of 2.7 million in New Zealand—that tells you what they see as the value of the union movement.

There are cases where we do not have good employers, but the corollary is also that not all employers are bad employers. The vast majority of the 530,000 businesses we’ve got in New Zealand, they are good. They are family-run businesses, hard-working mums and dads working there, employing their people—good people. They are part of the fabric of those businesses and, in most cases—most cases—they are doing a great job. There’s teamwork, and that’s how everyone survives, including political parties. That’s why—teamwork—and that’s why with the assumption that we need to make these wholesale changes, I do not believe the case has been made.

I want to talk about the issue around the MECA. We’ve heard a bit about this, but one aspect that we’ve heard a little bit about—my colleague Andrew Falloon from down in Timaru talked about it and he used the example of transport from Timaru to Takapuna, and that is right. In many businesses, people choose to work the way they want to work. I know that in my wife’s business—where most of them are women—often, the people who want to go to work early don’t want to take long lunch breaks because they want to get home to their children, and they have got the flexibility around that.

So the worst thing about the MECA award is how it can be imposed, and we know how the unions are going to go about doing it. They will find those businesses that are the wealthy ones who can make the changes, or the ones that are in a position where they have to agree to union demands. They will decide those changes, and then they will spread them across the rest of the industry and standardise the employment arrangements, and I don’t think that’s right. I don’t think that’s right. People should have the right to work out when they want to work, how they want to work, and on what basis they want to work.

The other thing that hasn’t been picked up on is that under new section 41(3) and (4) in clause 12, the unions actually have the right to initiate bargaining 20 days earlier than the employers. I don’t understand this, and I’d really like it if the Minister in the chair could deal with this. There’s been absolutely no explanation from the Government why union representatives should be able to begin bargaining earlier than the employer—20 days earlier, in both cases, and I refer to new section 41(4)—[Time expired]

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you, Madam Chair. I want to briefly speak to the point that Andrew Bayly just raised about clause 12. I did speak to this earlier but he may have missed it. There are two reasons, really, why we want to restore the right of unions to initiate first. One is to bring some order to the process. There have been examples of people kind of racing each other to be the first to initiate and we’d really rather just restore some order to the process. Then the second reason, ultimately, goes back to the point I made earlier about the inherent imbalance between the employer and the employee. Employment legislation, in many ways, seeks to overcome that imbalance and this is one way of doing that, by putting the employee first in that process.

Hon TIM MACINDOE (National—Hamilton West): The only thing I can say positively about that last contribution from the Minister in the chair is it saved me from the dubious pleasure of having to follow immediately on from my good colleague the member for Hunua, because I simply can’t shout as loudly as he can, nor do I think I can match his impeccable turn of phrase or his passion or his energy. But someone has to and I’m glad the Minister chose to do that. But that brief comment there from the Minister is absolutely extraordinary, and as my good friend the member for the Bay of Plenty noted before, the Minister seems to have adopted this idea that if he speaks slowly he will sound measured, and softly, he’ll sound reasonable, when in fact, as the member has said, he is looking to bash employers in particular over the head with a very big stick.

I do want to commend the fine work of the Hon Scott Simpson. He was kind enough to make some complimentary remarks about his National Party colleagues before, but I was with the Hon David Bennett at an event in Hamilton last Friday hosted by the Waikato Chamber of Commerce. I think it was meeting No. 40 or thereabouts that the Hon Scott Simpson has been holding around about the country where he has been going into small and large communities to meet with people who will be directly affected by these changes, to spell out what they mean, and to hear their concerns. And consistently he has been hearing that those concerns are widespread, deeply felt, and very, very genuine. It is remarkable, listening to those employers—particularly in my area—that they have not been treated to the same courtesy by members of the Government, who you would think would have been out there justifying the changes that they are inflicting on the country.

Let me also commend the excellent contributions—we’ve had so many, from so many other members—just in the last few minutes from Nicola Willis and, as I’ve mentioned, from Todd Muller. The reason why I have singled those two out is because both understand the workforces so well because they are of them. They come to this House bringing practical experiences—learnt experiences—of what really makes a difference and what helps to make our economy tick. What we’re hearing from the members opposite is theoretical claptrap, to be quite honest; it is not born out of actual experience.

One of the things that is particularly alarming that we’ve heard in the last few minutes—and I do ask the Minister and other members to focus on this—is the feedback that many employers, particularly in outfits such as the Ports of Tauranga and the Ports of Auckland, are saying that if these changes are to go ahead, then the practical outcome will be increased automation; in other words, exactly the opposite of what you would think a Labour-led Government would be wanting. It is going to put pressure on jobs in this country.

Why would we do that at a time when we have a near record level of employment? Why would we do that when the economy has been going so well under the existing industrial relations framework? Why put it all at risk? Other than—and I have to choose my words very, very carefully because the previous presiding officer said we can’t attribute improper motives—clearly the Labour Party and the Green Party, who I notice seem to be very, very silent this afternoon, campaigned at the last election with the strong backing of union members. I think I’m allowed to say that. They made certain commitments, and now—

Hon Scott Simpson: Their biggest financial donors.

Hon TIM MACINDOE: They may well have been the biggest financial donors, as Mr Simpson said, but I’m not linking the two, because I’m trying to stay within the Standing Orders. What, of course, we have now is a union regime that is saying, “Right, we have put you there. What are you going to do for us now?” And the answer is this bill. Nothing more clearly answers that question than this bill.

I waited in vain for the Minister, when he began his contribution on Part 1—when he was talking about the fact that Part 1 deals with the collective bargaining framework, in particular, to implement a suite of changes to promote and strengthen collective bargaining and union rights in the workplace—to go on and say who had been calling for these changes.

I represent the electorate of Hamilton West, and in my electorate I’ve got light industry. We’ve got retail. We’ve got large employment opportunities in health and education and social service provision, in, as I said I think, light engineering, in manufacturing; in other words, across the gamut. We’ve got the service sector for the dairy industry. I’ve got Te Rapa dairy factory in my electorate. There are a whole lot of people. And some of those workers are members of unions, and that’s fine; I absolutely respect their right to belong to those unions, and I hope that they derive some benefit from doing so. But there are many others who do not, and the Minister and his colleagues who have spoken—[Time expired]

KIERAN McANULTY (Junior Whip—Labour): I move, That the question be now put.

CHAIRPERSON (Poto Williams): Before I call Simeon Brown, as a member of the Education and Workforce Committee, I must remind members that we’ve had several arguments presented several times across the course of this particular debate. I’m looking for new material and new arguments.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair. I’d like to speak to my Supplementary Order Paper 143, which is in relation to clause 12 of the Employment Relations Amendment Bill. This Supplementary Order Paper seeks to amend by deleting clause 12 of the bill. The clause as it currently stands allows union representatives to initiate bargaining 20 days earlier than an employer. This will lead to a potential confusion as to what advantage is conferred by early initiation, which may detract from an efficient bargaining process.

In our view, good faith bargaining requires all claims to be considered and responded to before bargaining can reasonably be considered complete. I understand the Minister took a very short call in relation to this issue earlier and, essentially, said that he wants to bring some sort of order to the process.

Marja Lubeck: It always used to be like this. Unions always negotiated earlier.

SIMEON BROWN: My question to the Minister is—and I appreciate the interjection from Marja Lubeck, on the other side, but I’m trying to ask a question of the Minister in relation to clause 12, which is around what is the issue that is being raised here in relation to the ordering currently, where both parties can initiate? He alluded to some sort of rushed process whereby people try to go to collective negotiation first, both at the same time. I’d like to know from the Minister what evidence he had which shows that that is of some concern, or whether that is leading to bad outcomes in the collective negotiating process—whether that’s actually leading to employers and unions not concluding bargains or collective agreements which are actually of a conducive nature to a good employer-employee relationship.

I think what clause 12 does is it pits employers against unions. It gives an advantage to one over the other. And I was just reading through the departmental report. We asked this exact question in the select committee, and the response from officials was—and I assume the Minister stands by this—that the amendment is intended to allow unions to set the agenda of bargaining by initiating first, in order to address the inherent imbalance of power in employment relationships. And I challenge that statement there. I think of the employers in my electorate, many of whom are very small, many of whom are not large employers. Many of them are in retail or in light industry, small industry, marine-based employers in Half Moon Bay Marina, and predominantly, then, service based, whether that’s through the shopping centre - based sort of industry.

So I ask the question: why is this pitched in New Zealand in a way which is sort of trying to make it out that these employers are all big employers who are needing to be brought to task, or brought to bear to the power of the union? Why do we need to lead to a situation where our unions are trying to address the power imbalance, when, clearly, the vast majority of our businesses are small businesses—they don’t employ a lot of people—and we are, essentially, saying that a union can come along and has a 20-day advantage over the employer, over the business? That will, I think, lead to a breakdown in relations rather than actually being conducive towards bringing employers and employees together to try and actually lead to good outcomes here for the betterment of New Zealand.

I do agree with my colleague Andrew Bayly that there is a place for unions to negotiate these bargains, but there also needs to be recognition of the fact that employers, ultimately, provide jobs. They are the ones who actually provide jobs for workers, and they are the ones who pay the wages, and they are the ones who actually have to create the wealth so that people can actually have a job and earn an income and have a livelihood. And, yes, there can be bad employers, but we also need to ensure that we’re not leading to a situation where there is a breakdown in relationships between those employers and the unions which they work with. Many employers would say to me, “Yep, generally, we have a good relationship—[Time expired]

Hon NICKY WAGNER (National): Thank you very much, Madam Chair. I’d like to speak to Supplementary Order Paper (SOP) 111, in the name of Scott Simpson, which is to delete clause 4, in Part 1, which provides for a union delegate to conduct union activity during their working hours while retaining their pay. My story is also relevant to SOP 145, by Parmjeet Parmar, which talks about discrimination against employees.

The reason that I want to talk to this clause 4 is because recently I was unwittingly involved in a very unsavoury and bullying campaign by the RMTU—that’s the Rail and Maritime Transport Union. Not very long ago, I found a flyer in my letter box. The flyer was put into every other letter box in my neighbourhood as well. Now, I don’t know in this case whether the RMTU wrote that on their employer’s time, but clause 4 would have made that legal.

Whenever or wherever they wrote it, it was an appalling example of crude bullying which focused on targeting and pillorying the family of someone they didn’t agree with. Now, here’s the flyer, and this is what it says. I delete the name of the person and the company out of respect for their privacy. It says: “Why the blah-blah-blah company workers are on strike. We thought you would like to know that one of your neighbours, blah-blah-blah name, blah-blah-blah full address details, blah-blah role, at the blah-blah company, which is embroiled in an industrial dispute with the RMTU”. Now, it carries on with a pretty colourful list of the RMTU grievances.

This flyer is wrong in so many ways. Firstly, it’s wrong because it deliberately targets and outs an employee they don’t agree with to their neighbours. Secondly, it’s wrong because it provides their details and their home address to others. And thirdly, why is the RMTU doing this? What’s their motive? Why did they go to all the trouble of putting this flyer in my letterbox and all my neighbours’ letterboxes? Why would the RMTU want to breach someone’s privacy? Why would the RMTU broadcast details of their home address, and would they like that if someone did it to them? What does the RMTU want to happen next? Do they want me to invite this person to the neighbourhood street party? I don’t think so. Do they want me to give neighbourly support to this person because they know that bullying is highly damaging? Maybe, but I don’t think so. Or do they want me to join them in their bullying? Do they want me to, let’s say, picket the house or put nasty flyers in their letterbox, or do they want me to threaten and pillory their family? Now, I couldn’t possibly say, and I quote the Prime Minister: “You read between the lines.”

So I absolutely oppose this bill because I have recently and personally experienced the dangers of increasing the powers of the unions, and I support employers who would be horrified to think that anyone would run a bullying campaign like this, and, what’s more, that if this bill passes, they can do it on company time and the employers have to pay. My final question is: if the employers are paying unionists for this type of union activity, would that make them accessories to the crime of bullying?

JAN TINETTI (Labour): I move, That the question be now put.

LAWRENCE YULE (National—Tukituki): Thank you for the opportunity—

Hon Member: Oh, this will be good.

LAWRENCE YULE: —it will be good—to speak to this bill, the Employment Relations Amendment Bill. First of all, I do want to acknowledge my colleague in front of me, the Hon Scott Simpson, because, unlike many of you, he has been on the road for months. He has talked to employers all around New Zealand in around 40 meetings, and he gets it. He gets it. He has heard exactly what I’ve heard in my electorate. Every single employer I have spoken to—every single one—has said that all this type of legislation does—

Jamie Strange: How many?

LAWRENCE YULE: —is speed up automation—hundreds, Mr Strange. Hundreds. All it does is speed up automation as companies try to work around these new things. I find it ironic really that, coming from the other side, in an area where they proudly boast there is full employment—full employment—they would see that this could somehow be a good thing.

There have been two things that have really irked employers: first of all, the fact that unions can enter the workplace in a more significant way they can now, and the second was when the Minister came out on national TV and said that if employers could not pay the minimum wage, and the new minimum wage, they should get out of business. That is so far removed from how hard it is for employers to make money in small cafeterias, restaurants, all those things, and, Mr Chair—I’m coming back to the bill and Part 1, as you’re about to remind me—it’s really important that we understand the dynamic here.

I want to particularly come back to new section 62A, inserted by clause 18, which is what the Privacy Commissioner said. I’m coming back—and I know the Minister shakes his head—because he said, “I respectfully disagree with the Privacy Commissioner.” That’s what he said—stood up in this committee not a short time ago and said that. That submission from the Privacy Commissioner was scathing—scathing—and I tell you why it’s scathing, and I want the members of the other side to think about this. Why are unions treated so differently in this bill under the privacy provision than all sorts of other service providers? Why do unions have this part of the bill enacted for their benefit? Why don’t we say the same about superannuation trusts? Banking trusts? Medical insurers? No, we are choosing unions specifically to have a provision inserted in this bill that the only way of getting out of it is if you physically say, “I want to get out of it.”

If this side of the Chamber, as an example, to put a corollary back at you, put up a piece of legislation that said whenever a new employer does something, we automatically give the names and addresses and phone numbers of the National Party to that employer, there would be outrage on that side of the Chamber. But what you’re saying here is we will automatically, if they don’t sign, or if they say they’re happy to be contacted, give that information to the union.

So I have heard what the Minister said, and he respectfully disagrees, but I have not heard one reason so far as to what his differentiation is on privacy—not one—other than that there is an imbalance occurring; there has been an imbalance and we’re seeking to address that. So I’d like the Minister to stand up and tell me and the committee exactly why unions should be treated so differently and specifically in the privacy provision of this bill. As we look at rewriting the balance, as the Minister has said, I would argue that there is no need. The market at the moment is giving the balance. People in my electorate—if they don’t like the terms and conditions—they just go to another company, because there is that much of a shortage of skilled workers. That’s what they say to me. That’s what employers say to me: “We don’t need any of this. We don’t need the unions to be heavy-handing us. We are looking after and keeping our employees because if we don’t, we are not good employers, and they simply leave.”

So, in closing, my final plea to the Minister is this: can he please explain to this committee why the Privacy Commissioner made his views known, and why he thinks unions should be treated differently to banks, insurance companies, medical insurance companies, and every other Tom, Dick, and Harry?

JO LUXTON (Labour): I move, That the question be now put.

CHRIS PENK (National—Helensville): Thank you very much, Mr Chair, for the opportunity to contribute on the subject of the Employment Relations Amendment Bill. I’d like to speak quite tightly to the provision in clause 8A, which would insert a new section 30A into the Act. This is the provision about employer’s information-sharing obligations. It’s worth noting that the obligations would belong to the employer, not the information, so it’s not the employer’s information but rather the union’s information that the employer would be obliged to share, and that much is made very clear as we go through and look at the detail of that provision.

So the first thing that we see in the heading to section 30A, as it will become, is that the “Union may provide employer with information about role and functions of union to pass on to prospective employees”. I’d like to highlight the fact that it’s significant that it would be prospective employees who would have this information passed to them. No doubt the intention of the legislation is that prospective employees would have the opportunity to find out information about the union, such that that could be relevant to whether they enter into a collective agreement or not. But the difficulty with this is that what that actually means, if this provision is to be meaningful at all, is that the employer must share with the union the fact that someone is considering the possibility of working in that workplace. That might be something that is somewhat private to that person at that time, and there might be a number of good reasons that a person is not keen for a prospective employment relationship to be known, including, for example, that he or she is currently employed elsewhere and would not want that other employer to know about such prospective change of employment.

But if I could move now to new section 30A(2), inserted by clause 8A, we’ve got a subsection that I regard as somewhat nugatory. That’s a word I haven’t used in this Chamber before, and despite the fact that it has the word “tory” in it, I think it’s quite relevant and appropriate and significant in the context of this clause. It’s pretty meaningless, really. We’ve got a situation where the union can ask the employer to pass on certain information, and here we are told that the union must “specify the information” that it’s asking to be passed on. Well, it would be an extraordinary thing if the union were asking for information to be passed on but not actually saying what that information is—so, so far so good. That’s subsection (2)(a).

Subsection (2)(b) is to “specify the form … of the information”. Well, I don’t imagine that many employers would be passing on information, for example, in hieroglyphics, when passed to them by the union in, say for example, the English language or the Māori language or New Zealand Sign Language or another official language or equivalent, but nevertheless we’ve got that provision. We see as well that the union must provide information to the employer in the specified form.

So we’ve got all the ingredients there for information to be passed to prospective employees, notwithstanding the privacy implications of that, and then we’ve got this so-called request that can actually be refused by the employer only in pretty narrow circumstances. So to you, Mr Chair, I submit that actually what we’ve got is not so much a request but a requirement that can be refused in pretty narrow circumstances. The first is that the information is confidential. Well, that’s fair enough. I don’t know why such information would be confidential if it’s information about the role and functions of the union, but nevertheless we’ve got that, and I suppose we could regard that as additional protection and therefore not objectionable in itself.

But then we hear another reason that the information could be refused to be passed on, which is that the information could be about the employer. Well, it seems to me completely bizarre that we could even contemplate that the information would be about the employer, because the only information that they would need to pass on is information about the role and functions of the union. So there’s an element of self-contradiction in the way that this clause is constructed, and it’s somewhat baffling, and that’s before we even get to look at the question of who would be deciding the point in subsection (3)(b)(ii), which is whether it’s “likely to, mislead or deceive the prospective employee;”. We don’t know who gets to decide that; whether that’s the union or the employer—perhaps it’s the prospective employee himself or herself. The legislation is silent on that point.

We look at the phrase “is likely to,”. Well, that implies that some kind of standard of proof—again, whoever decides—of 50 percent or more. So it’s not just the possibility, for example, that deception or misleading would take place; it’s a determination of the likelihood, and that seems to me a pretty interesting threshold in the context of information that the employer is being asked to pass on. And then continuing to—[Time expired]

Hon PAUL GOLDSMITH (National): Very gracious of you, Mr Chair. Yes, look, I’d like to pick up on the comments from the Minister Iain Lees-Galloway—in particular, his reference to the imbalance between employers and employees being the primary driver for a lot of this expansion of union power. I suppose the obvious point to make is that the New Zealand economy is not like your typical British one, where the origins of the union movement developed with very large companies with thousands of employees working in the coal and other industries. It’s an economy based on very small businesses, with many of them being very small.

So if we look at Supplementary Order Papers 111 and 114, it becomes relevant, because if you look at a small business with three or four employees, a couple of whom are union members—for example, a little bookshop in the Mount Eden shops where I visit. They’ve got five employees, and they are really struggling to survive in a very difficult industry, with high rents, with—

Hon Scott Simpson: Retail is tough.

Hon PAUL GOLDSMITH: Retail is tough, everywhere you go around the country. So it’s a tough business. Every day, they are struggling to pay the wages bill, to find the GST in the months when it’s due, to pay the provisional tax—all the things that they’re doing. Whether it’s offensive or naive to think that the employer running around in those circumstances and struggling to stay afloat is all-powerful and the employees are somehow all weak—that’s just not a realistic description of how the New Zealand economy works—

Hon Scott Simpson: Ideological.

Hon PAUL GOLDSMITH: —and to say that that small employer with a handful of people and a couple of union members has to be liable for paying for the conduct of union activity during their working hours and to foot the bill for them to be doing whatever it is that they want to do, I don’t think is a reasonable thing. That’s why I support Scott Simpson’s Supplementary Order Paper 111.

Then, when we come to Dan Bidois’ Supplementary Order Paper 114, it is about removing clause 13, which draws all employers into collective agreements concerning more than two employers, and this brings in the regional setting. Again, I mean, everybody’s trying to work out which are going to be the two industries that are going to fall into these multi-employer collective agreements that so many employers are worried about. The Prime Minister, when she was under pressure to explain just what—there’s so much uncertainty across the business community about what impact this will have on their businesses, and we’ve combined all that uncertainty around—

Hon Ruth Dyson: Stop scaremongering.

Hon PAUL GOLDSMITH: Well, it’s not scaremongering, actually. It’s about, again, this assumption that businesses are just there to be milked and that they are powerful.

So all this uncertainty is out there about what impact this will have and what industries are going to be drawn into this old, nationalised agreement. It’s implying that you’re going to have to deal in the same way for somebody employed in Auckland as you will on the Hokianga Harbour or down on the West Coast or over in the Wairarapa, even though the circumstances of those businesses are colossally different. So if we go back to my example of the bookshop in Mount Eden, it has to be—

Marja Lubeck: Are we on Part 1 of the bill?

Hon PAUL GOLDSMITH: It is Part 1. [Interruption] I don’t know what you’re talking about. We’re talking about clause 13 in Part 1, and that is what we are focused on here. We want to ensure that our small businesses have the ability to survive and continue to provide the opportunities not just for employers but for the people who are growing and building those companies themselves. These small-business owners are already being confronted with the prospect—and you might say “scaremongering”; it’s not scaremongering—of a capital gains tax on those small businesses that they’re building. They are—

Clayton Mitchell: It’s got nothing to do with it.

Hon PAUL GOLDSMITH: The relevance to the bill—[Time expired]

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you, Mr Chair. I have addressed a few times already a couple of the matters that members are raising, but I do want to try and provide as much information to members as I can.

Paul Goldsmith described the inherent imbalance between the employer and the employee as “offensive or naive”. Scott Simpson interjected that it is “ideological”. It is none of those things. It is enshrined in our employment law. Section 3 of the Employment Relations Act says “The object of this Act is—(a) to build productive employment relationships through the promotion of good faith in all aspects of the employment environment and of the employment relationship—… (ii) by acknowledging and addressing the inherent inequality of power in employment relationships;”. That’s not ideology of the Labour Party or of the Government. It is not offensive or naive. It is enshrined in our legislation.

It’s been there since 2000. It wasn’t repealed by the National Party when they were in Government. It is acknowledged by New Zealand as a nation in our legislation; it is not acknowledged by the International Labour Organization. So when I say that many of the aspects of Part 1 of this bill are designed to give effect to acknowledging and addressing the inherent imbalance between the employer and the employee, that is not some ethereal notion; it is enshrined in the legislation. We are required by the legislation to consider those matters.

Paul Goldsmith is slightly confused between fair pay agreements and multi-employer collective agreements. Multi-employer collective agreements have been around since at least the year 2000—one could argue, in previous forms of New Zealand’s employment law as well, but they have been around since the Employment Relations Act first came into being in the year 2000. They exist. A number of people are covered by multi-employer collective agreements right now, right at this very moment in time, and, in fact, the changes that this bill makes, essentially, take us back to the situation pre-2015—so a situation that the previous Government was happy to leave in place for six years. So I encourage the member to perhaps just school up a little bit on employment law and understand what multi-employer collective agreements actually are.

Chris Penk raised a good point. He asked what happens—using the example of if a union provides information to the employer that’s to be passed on to the employee, and there is some dispute between the employer and the union as to whether that information somehow breaches this legislation. As with any breach of this legislation, I would encourage those parties to deal with each other in good faith, see if they can resolve the disagreement, communicate with each other, be responsive, and, ultimately, if necessary, go to mediation and use the usual processes to resolve that issue. A fair question—I hope that’s an answer to it.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. As my colleague Todd Muller indicated earlier on, the Minister’s been speaking quietly about a massive big stick which is going to be wrought across the collective heads of businesses up and down the countryside, and so whilst he’s attempting to answer questions, he’s still not really giving good justification or, indeed, any justification for why the changes are necessary at a time when unemployment is low, when businesses tell members on this side—and I’m sure on the Government side, as well—that the biggest challenge they have is to find and keep good quality staff members. Recruitment is very difficult.

What is really at issue here is recruitment of membership for trade unions, and one of the issues that I want to talk about in this contribution relates to my Supplementary Order Paper (SOP) 112. This is a matter that was raised consistently and regularly by submitters to the Education and Workforce Committee by people that we’ve been engaging with around the countryside and by businesses up and down the countryside, and it’s the matter of union access to workplaces in an unfettered, unreasonable way. Now, Minister Iain Lees-Galloway has indicated that he’s introducing his SOP 153 that makes some small changes in this area, but, essentially, what concerns businesses is the matters that are contained in clause 6 and clause 7 in Part 1, and they relate to allowing union representatives to visit workplaces without notice, in some cases without consent, and without the agreement of the business managers and operators.

Now, this is a matter that causes business managers and operators immense concern, for a number of reasons. The one that is raised most regularly and frequently is, of course, issues to do with health and safety. These are matters where businesses take health and safety incredibly seriously these days, and businesses don’t want just any Tom, Dick, and Harry walking on to the site unannounced and without forewarning or permission or consent, and then just going about the place, primarily engaging with staff to recruit union members.

Now, the difficulty here is that that kind of abuse of trust leads to a breakdown in the principles of good-faith bargaining and good-faith relationships between employer and employee, and the question really needs to be asked as to what’s wrong with the current situation, where businesses almost always provide an opportunity for union representatives to visit. The union representative will ring up or send an email and say, for example, “Hey, Dan Bidois, we’d like to come and talk to your staff at 10 o’clock, at smoko time next Tuesday, and we’d like to talk to them about union matters.”, and, inevitably, the employer will say “Yeah, that’s fine.”, because the employer knows who’s coming, when they’re coming, what they’re coming for, and what they’ll be doing, and there are no issues around that sort of thing. So businesses are naturally concerned about this proposed change, which—according to the bill, in clauses 6 and 7—would be reasonable.

Now, the difficulty with this question of reasonableness is that the reasonableness test is, of course, a bit like beauty—it’s in the eye of the beholder—and what is reasonable access to one person may be entirely unreasonable access to another person. These are the sorts of things that concern businesses and employers up and down the countryside. It was without doubt one of the issues most regularly raised with me as I was talking to business people up and down the countryside over the last several months, and they remain unconvinced of the need for change. The Minister has failed, in my view, to provide a case that is cogent or, indeed, compelling for change.

What will essentially happen here is that in terms of this bill when it’s passed—because the Government has a majority—some poor employer will become a judicial guinea pig for a judicial definition as to what is reasonable access and what is not reasonable access, and for what’s reasonable notice and what’s not reasonable notice. That is inherently unfair. So my Supplementary Order Paper 112 addresses that matter and simply provides an opportunity that means that union representatives, if they want to visit a site, must seek consent.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): At the risk of repeating myself, I will once again address the question of union access. The member Scott Simpson raised concerns about union officials entering the workplace in a fashion which is unsafe and creates undue risk in the workplace.

I remind members, again, of section 21(2) in Part 4 of the Employment Relations Act, which states, “A representative of a union exercising the right to enter a workplace—(a) may do so only at reasonable times during any period when any employee is employed to work in the workplace; and (b) must do so in a reasonable way, having regard to normal business operations in the workplace; and (c) must comply”—must comply—“with any existing reasonable procedures and requirements applying in respect of the workplace that relate to—(i) safety and health; or (ii) security.” Additionally, union officials have to make themselves known to the employer. They have to provide identification, if that is requested from them.

So I am absolutely certain—as I’ve said, I think, three or four times now in this debate—that that provides the right balance so that union members are able to get access to their official when they want to get access to their official. If they ask for their official to come in and deal with a situation in the workplace, the union official has the ability to access the workplace, but that is balanced with the very fair and reasonable right of the employer to have control of their workplace.

I think the combination of the existing Act and that question of reasonableness—that’s a word that’s been in the Act since the year 2000. It is something which employers and employees have been able to work easily with for 18 years, if not more. So I don’t accept the member’s points about “reasonable”.

Hon Scott Simpson: So why the change?

Hon IAIN LEES-GALLOWAY: We’re not changing the question of “reasonable”; what we’re saying is that union officials should be able to access the workplace when their members want them to be able to come on site, and we’ve balanced that by saying that where there is no collective agreement, where there is no ongoing union presence—in that situation, union officials have to seek the consent from the employer.

Mr Simpson, rightly, said, “Shouldn’t it work like this? Shouldn’t it be that the official calls up and says, ‘Hey, when’s a good time for me to come in? I was thinking maybe 10 o’clock on Thursday—is that around about smoko? That’s a good time to come in.’?” That’s the way it operates in the vast majority of times. Certainly, when I was a union organiser, that was the way I operated. You’ve got an ongoing—

Hon Members: Oh!

Hon IAIN LEES-GALLOWAY: —enduring relationship with the employer. Oh, what a surprise—read my bio. When I was a union organiser, that’s how I would operate. I would contact the employer, I’d let them know that I was coming, and you have an ongoing relationship with the employer as a union official. It’s not some one-off thing where you just charge into a workplace and cause mayhem and disappear again. You’ve got to have an ongoing, enduring relationship with that employer, and that’s why it is important to treat each other with respect and to deal with things in an open and communicative manner.

Of course there will be examples where the employer is not keen to work in that way, and that’s why we need to have the strength of the law to give people that opportunity, so that union members have their freedom of association upheld and the right to get access to their union official. I hope, having discussed this a number of times now, that that addresses for members the question of union access.

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Chair. I also want to refer to union access into the workplace, and I can assure the Chair that I will cover some new ground in my contribution, but just in the meantime, I think the intention of the bill has been canvassed in this House on a number of occasions. It’s there, in black and white, in the bill. It’s around strengthening the power of the unions in the workplace.

OK, it was no secret, but yet again, this afternoon, we’ve had the very Minister who said “as a former union organiser”—well, now we’ve seen it yet again. This bill is not about the workers, because only 17 percent of workers in New Zealand are affiliated or belong to a union, and they are not highly represented amongst small business, either. So when you have a union organiser—as with the Minister—so very, very determined to increase access into the workplace, uninvited and without permission, then all is unmasked as to what this bill is about. It’s not about the workers; it is about the unions and the power of the unions.

I’d like the Minister to answer this question. He has brought to the committee Supplementary Order Paper (SOP) 153, which modifies that access so that access to a workplace without permission can now happen, under his SOP, only where there are union members working in the workplace who have a collective agreement, but not for workplaces without union members. But I’d like to know what is the difference. Why is it that the union organiser can walk in unannounced and unbidden into a workplace?

Marja Lubeck: Because it’s their members.

Hon JACQUI DEAN: Oh, it’s the members. Oh, so it’s their members. I would like to have this question answered: why is it that union members and union organisers can’t meet outside of working hours? Why can’t that happen—why can’t that happen?

That is why I’m very pleased to see that the Hon Scott Simpson also has SOP 112 on the Table, which would seek to delete clauses 6 and 7 altogether. This bill should not be about a union organiser being able to walk through the doors in a processing plant which has union members with a collective agreement who are processing fruit into jam or into chutney, and where it is truly a dangerous place, nor should they be able to have unannounced access to into a business where there are clients, customers, or patients present, because—

Tim van de Molen: Children.

Hon JACQUI DEAN: —yeah, children—the employer and, indeed, the employees of those businesses may be conducting matters that are and should be private. If, as a customer or a patient, I walk into a business which has got union members working there, I don’t want someone walking in unbidden, because my privacy is impacted. I’m really interested to hear the Minister’s response to the privacy issues.

Health and safety is one thing, and I disagree with the Minister. I would say to the Minister that a union organiser walking into a factory which has got hot food processing going on does constitute a danger under the health and safety legislation—of course it does. Are they going to stop and put on the gumboots and the overalls and the hats and the earplugs, and all those things that we do when we visit processing factories—are they? Well, I don’t know, and I’d like the Minister to answer those questions.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 153 in the name of the Hon Iain Lees-Galloway to Part 1 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Amendments agreed to.

The question was put that the amendment set out on Supplementary Order Paper 111 in the name of the Hon Scott Simpson to clause 4 be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 55; Ross.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Amendment not agreed to.

CHAIRPERSON (Adrian Rurawhe): The Hon Scott Simpson’s amendment deleting clause 6, set out on Supplementary Order Paper 112, is out of order as being inconsistent with a previous decision of the committee.

The question was put that the amendment set out on Supplementary Order Paper 112 in the name of the Hon Scott Simpson to clause 7 be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 55; Ross.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Amendment not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 113 in the name of Dan Bidois to clauses 9 and 10 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 56

New Zealand National 55; Ross.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Amendments not agreed to.

CHAIRPERSON (Adrian Rurawhe): Dan Bidois’ amendment to delete clause 11, also set out on Supplementary Order Paper 113, is out of order as being inconsistent with a previous decision of the committee.

The question was put that the amendment set out on Supplementary Order Paper 143 in the name of Simeon Brown to clause 12 be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 55; Ross.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Amendment not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 114 in the name of Dan Bidois to clauses 13 and 14 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 56

New Zealand National 55; Ross.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Amendments not agreed to.

CHAIRPERSON (Adrian Rurawhe): The Hon Mark Mitchell’s amendment to replace section 62A(3)(b) in clause 18, set out on Supplementary Order Paper 147, is out of order as being inconsistent with a previous decision of the committee.

The question was put that the amendments set out on Supplementary Order Paper 147 in the name of the Hon Mark Mitchell to clause 18 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 56

New Zealand National 55; Ross.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Amendments not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 145 in the name of Dr Parmjeet Parmar to clauses 24, 25, 26, and 27 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 56

New Zealand National 55; Ross.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Amendments not agreed to.

A party vote was called for on the question, That Part 1 as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 1 as amended agreed to.

Part 2 Other amendments

CHAIRPERSON (Adrian Rurawhe): Members, we now come to the debate on Part 2, which is clauses 29 to 41 and the schedule.

Hon NIKKI KAYE (National—Auckland Central): It’s good to take a call on this bill. I actually stood up in the previous part, so I’m looking forward to lots of contributions in this debate.

Firstly, can I just acknowledge that I represent Auckland Central. It has the largest number of businesses in New Zealand, and I have been aghast at some of the statements that have come out from members opposite regarding what this bill will or will not do. Here is the reality—and I am talking to this part. If you look at the front page of this statute, it is so very clear what this bill is about: it’s about union rights. This is not about fairness. This is not about reasonableness in terms of the relationship between the employer and the employee. It is far more detrimental to New Zealand than that. We know, in Auckland Central, that we have major issues at the moment in terms of the economy, in part because we have fuel taxes, we have uncertainty around overseas investment rules, we have uncertainty around immigration, and now we have a set of prohibitive rules in law that are passing through this House that are opposed by a lot of businesses, and if you look at some of the things that they seek to do, they are not only taking New Zealand back but they are also ridiculous in the absurd when you look at some of the detail.

I want to start with the 90-day trial period. I want Willie Jackson to please stand up and talk about youth employment. The reality is that while this Government pulled the bill back in terms of the 90-day trial as a result of lobbying by Mark Patterson, who’s sitting in the back seat there—so I hope he takes a call—when we got the data in select committee and asked about who was going to be most impacted, the bigger businesses, the ones that have more than 20 employees, are the ones that give the greatest number of chances to young people to get into employment. So I want the Prime Minister to come down and participate in this debate. I want her to talk about kindness. I want her to talk about kindness and what it means to snuff out, in a piece of legislation, a huge number of jobs for young people. I would like her to explain that. I would like Willie Jackson to explain that, because the reality is there will be fewer jobs for young people as a result of this bill.

I’d also like a conversation about kindness in terms of the reinstatement of certain employees in workplaces where we may have young people, vulnerable people. That’s why I support Nicola Willis’ very sensible Supplementary Order Paper (SOP) 144, and part of the reason that this SOP has been put up by this side is because we actually care about early childhood centres. We actually think it is reasonable to have a very decent debate about the fact that if you get reinstatement wrong, the reality is it is entirely inappropriate to have certain people going back into workplaces where there are young children—particularly early childhood education—but also where it comes to older people in rest homes, and that is why I back Nicola Willis’ amendment in this regard.

The other issues that we have raised in this legislative process are not just about young people and they’re not just about vulnerable people. They’re also about the basic rights of employers as well to get on and create wealth to fund our public services. That’s why provisions that are—as I would describe them—freedom to roam by unions in workplaces are totally wrong, from our perspective. The reality is they are the 1970s, and we are being taken back to the Dark Ages by this legislation, and, again—I can’t say this in this Chamber—let’s cut the … The reality is the Labour Party are not doing this for vulnerable people. They’re not doing it for young people. They’re doing it because of the unions, and this is about greater union rights. Whether it is freedom to roam in workplaces, whether it is reinstatement provisions, whether it is the inflexibility around meal breaks, or whether it is 90-day trial periods and snuffing out jobs for young people, we need the Labour Party to be honest with people like my constituents, in Auckland Central, where they’re going to not only put a handbrake on economic growth but they’re also going to hurt some of our most vulnerable.

DAN BIDOIS (National—Northcote): I am, frankly, appalled at how quickly we are rushing through this bill when it affects so many of our Kiwi businesses out there. We have just finished the debate on Part 1 today. We’ve been discussing the privacy of information, the compulsion to conclude multi-employer collective agreements, the access that union workers have to a workplace, that union workers have paid time off, and the grounds for discrimination under Part 1. We had so much more to contribute in that debate, and it’s just—

CHAIRPERSON (Adrian Rurawhe): And that debate has concluded. That debate has concluded.

DAN BIDOIS: Well, can I please talk to Part 2 of the bill—

CHAIRPERSON (Adrian Rurawhe): Well, if you don’t, this will be over as well.

DAN BIDOIS: OK, Mr Chair, I will continue on to Part 2 of the debate, which is around the 90-day trial period. As my colleague the Hon Nikki Kaye mentioned, this is something that employers across the country have talked to us about: the ability to get people into work and give them a shot. We note that the Government has made a change in that they’ve allowed for businesses with fewer than 20 employees to still continue to use this bill. The issue that I have that I’d like to ask the Minister is: where does the arbitrary number of 20 come from, and what happens when there’s 19 employees, or 21—you know, can they use the bill? Why is it that we’ve got, essentially, an arbitrary figure of 20?

Now, if you look at the data on the number of businesses in New Zealand and the distribution of employees, you’ll realise that 97 percent of businesses in New Zealand have fewer than 20 staff. So my question to the Minister—and it’s an earnest question—is: why are the 3 percent of businesses different? Why is it that you must, in fact, have this arbitrary figure of 20? I would like the Minister to answer the question as to why we’ve kept this arbitrary figure.

We have Supplementary Order Paper (SOP) 115 on the Table under the name of the Hon Scott Simpson which, in fact, deals with this very issue of the 90-day clause, and I would urge the Minister and the Government to consider this, because the feedback that we have had from employers right across the country is loud and clear. In fact, if you go to the submissions—and I wasn’t on the Education and Workforce Committee—Retail New Zealand made a submission on the 90-day trials, and they said themselves that it’s going to negatively impact those workers most in need of employment opportunities—the most in need of employment opportunities. So I would urge the Minister to address that point of why we have this arbitrary figure of 20, because, clearly, those 3 percent of enterprises do employ—including, I should say, my old employer of Foodstuffs—a fantastic array of young workers, and I think the public of New Zealand and the business community of New Zealand certainly need to know about that.

Now, there are other fantastic SOPs that we’ve talked about, including the one from Nicola Willis, who’s got SOP 144, and that deletes the clause where the primary remedy is reinstatement, and this is something that I have had a lot of feedback on in my community. In many cases, reinstatement is not the best remedy for the worker or their employer, in fact. This was certainly backed up in the submissions, and in the Employers and Manufacturing Association’s submission that was made they talked about the restaurants where the tension—the relationship between employer and employee has broken down, and it just doesn’t make sense in order for—

Hon Andrew Little: What if the employer’s got it wrong?

DAN BIDOIS: —reinstatement to be given as the primary remedy. I’ve got a case—Andrew Little, if you listen, I’ll tell you the case in my own electorate of a small restaurant in Birkenhead, where the owner of this restaurant has come to me and has said, “Look, I’ve got to get rid of this worker. It’s not working out, and I’m worried that they’re going to take a personal grievance.” I’ve said to him “Look, OK, you do what you do.”, and he’s said to me, “Look, it’s”—[Time expired]

SIMEON BROWN (National—Pakuranga): Thank you, Mr Chair, for an opportunity to talk on Part 2 of the Employment Relations Amendment Bill. As we progress this bill through the House, I think it’s important to note that this bill is going to make an enormous difference on employment relations—an enormous negative difference on employment relations—in New Zealand. When it comes to Part 2, specifically I’d like to discuss clause 29, which deals with the employment agreements which contain provisions for trial periods for 90 days or less. What this provision seeks to do is to reduce the number of employers who will be able to use these provisions in their contracts to those employers who employ “fewer than 20 employees at the beginning of the day on which the employment agreement is entered into”.

So when we were debating this in the Education and Workforce Committee, this issue was raised by a number of submitters around how do you calculate 20, and when do you calculate it by? So—

Hon Andrew Little: The number that comes after 19.

SIMEON BROWN: Mr Andrew Little says that it’s the number which comes after the number 19, but that’s about the extent of his understanding of employment relations and the impact that numbers like this actually have on employment relations. Does that mean 19 part-time employees, or could that be 10 full-time employees and nine part-time, or could that be 10 full-time and nine part-time? So this is the complexity of the employment law that we have in New Zealand and the types of businesses which employ a whole wide variety of different types of people.

I’d like to highlight, in particular, the work done by Hospitality New Zealand, who represent a huge number of employers up and down our country, who work with a range of different types of employers, and who have a huge amount of seasonality in their type of business and in their type of work. At different points in the year, they may have five people working for them and at other points they may need over a hundred people working for them, and so the ability for them to be able to plan and the ability for them to be able to know what types of contracts they’re able to enter into at times of the year with different employers is dramatically impacted by a piece of legislation which says an employer who employs “fewer than 20 employees at the beginning of the day on which the employment agreement is entered into”. This—

CHAIRPERSON (Adrian Rurawhe): Sorry to interrupt the member, but it’s come time for me to leave the Chair for the dinner break.

SIMEON BROWN: We’ll be back.

Sitting suspended from 6 p.m. to 7.30 p.m.

CHAIRPERSON (Hon Anne Tolley): Kia ora tātou, everyone. When we rose for the dinner break, we were considering Part 2 of the Employment Relations Amendment Bill. Simeon Brown had the call and he has two minutes and 26 seconds remaining, should he so wish.

SIMEON BROWN: I do so wish. Thank you, Madam Chair.

As I was speaking prior to the dinner break I was discussing the provision, which is clause 29 in this bill, which relates to the trial periods for 90 days or less, and that this restricts the current trial period provisions to those employers who have less than 20 employees. I was bringing to this House some of the concerns which have been raised with me as a constituency MP, as the MP in Pakuranga, and also some of the submissions which were raised during the select committee process and the issues there. One of the key issues that I did raise was around the fact that a large number of businesses will be impacted by this hard and fast 20 employee rule, which means that as they fluctuate in size, sometimes quite dramatically—at the moment we’re at the beginning of the summer peak tourism season and a lot of businesses who operate in the tourism sector have to hire a lot of people very quickly but only for a short period of time, and that restricts their ability to be able to use these provisions. The impact of that is that they will choose not to employ younger people, those who may have a work history or a range of other things which they would otherwise overlook. Those people are the ones who will lose the opportunities to be able to take up jobs in those sectors.

Also, I think of a cafe up in Howick, in my electorate, which, again, hires young people which it would otherwise have a second guess over in favour of someone more experienced. They use these provisions. They have just over 20 staff and will be restricted by this provision which is currently being put through this bill.

We have a number of questions. I guess the other question is why is it not raised as being a full-time equivalent or 20 employees? Why is it not 20 full-time equivalents, because a range of businesses will have a range of different mixtures of employees? I’d like the Minister to address the question of why he chose 20 employees rather than 20 full-time equivalents, because I think that was raised by a number of the submitters who did talk about the mixture and the flexible arrangements that they try to provide for their staff. Sometimes part-time staff are younger people and so their full-time equivalent might only be 19, but they may hire 30 to 35 individuals. Currently, within the provisions of this clause they won’t be able to use this trial period once they hit 20 employees. So my question to the Minister is to explain why he used the word “employees” rather than “full-time equivalents” to ensure that those businesses which do have more flexible arrangements are able to do that.

So that was one of the comments which were raised by Business New Zealand and also by Hospitality New Zealand in their submissions. Their argument was actually, “Look, let’s raise the bar from 20 employees to 50 employees because that will cater for a wider variety of small to medium employers.” I notice that the language in the provision is for small to medium sized employers (SMEs). They do make up the vast majority of employers in the country, but there are a range of other businesses which might not be large—might be just over 20, might be 30—but they don’t have a very large HR department like a large corporate might. They came to us and they said, “Well, we’re not exactly large but we’re not considered under this definition of small to medium, but we rely on being able to use the 90-day trial periods to be able to take on people who we might think, ‘Yep they’ll do a good job let’s give them a go. Let’s try them out and see how they go’, with the hope to then give them a full-time permanent position in the firm.” They’re not big firms. They don’t have massive HR departments who can go through and do huge reference checks, do the psychometric testing and all the other things that the other big corporates are very fond of doing these days through their HR practices. But they aren’t small to medium either under the provisions in this bill. So they sit within that gap, essentially. So they were asking, “Well, let’s increase the number to 50.”, which then allows for there to be some more flexibility, a sort of more realistic number, which reflects the makeup of the New Zealand business environment and the type of businesses that we operate here in New Zealand.

I think it’s important to reflect on the type of businesses we do have in New Zealand. We do have a lot of smaller medium businesses, trying to get ahead, working hard. They’re often exporting, and they do their best. They’re the ones who are making New Zealand the money; that bring their money into the country. They’re the ones who provide the jobs, they’re the ones who keep the economy running, and they’re the ones who ultimately pay tax to ensure that the Government can provide all of the services that it does for society. So the question they’re saying is, “Look, we’re doing everything we can. We’ve got enormous compliance in place already. Give us some flexibility here so that we can continue to provide employment opportunities. We can take young people on. We can give people opportunities to get their first job, then to succeed, and then to be able to move forward.”

So the question is why did he choose 20? Why is it not full-time equivalents rather than employees? And how does he think this is going to work in the complexity of the labour market out there in a wide variety of different industries, noting particularly the concerns from the hospitality and tourism sectors, who go through huge—and horticulture, I think they would also be very big on that as well—fluctuations throughout the year in their industries. They have to take on a lot of people all of a sudden, and they have a lot of concerns. I’d like the Minister to address some of those now. Thank you.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you, Madam Chair. I thank the member Simeon Brown for his contribution and for his questions, and I note a number of members have raised the question of the 90-day trial period, so I’m happy to address that aspect of Part 2 of the bill. The member had a key question, which was: why 20, and why is it employees rather than full-time equivalents? The answer is pretty straightforward, actually: the National Party.

When the National Party introduced—[Interruption] No, hear me out. When the National Party first introduced 90-day trial periods, they were only for small and medium sized businesses. They set the cut-off point at 20 employees, and so, for simplicity’s sake, we decided to return to the original way these were introduced. So we took our lead from the way the National Party, in Government, introduced 90-day trial periods.

Now, I have heard from members opposite and, as I’m sure members can imagine, I’ve heard from a number of submitters and people that I’ve had conversations with that they see 90-day trial periods as something that helps them to hire people, and it helps people in a vulnerable position to get employment. Unfortunately, there isn’t a huge amount of research into this.

It would’ve been very helpful to the cause of 90-day trial periods and the people who support them if the previous Government had done a little bit more research on this, but what they did do is they got Treasury—got Motu—to do a piece of research. I’ll quote Isabelle Sin, who I think is Dr Isabelle Sin—who’s a Fellow at Motu—saying, “My research shows that the 90-day trial period isn’t helping people get jobs, … However, it also doesn’t make people less likely to leave secure jobs and doesn’t make employment relationships less stable. Overall, my research suggests the 90-day trial policy isn’t doing much at all.” The press statement goes on to say, “The study discovered no evidence that the policy increased the probability that a new hire by a firm was a beneficiary, a recent migrant, a youth under the age of 25, Māori or Pasifika under 25, or a recent education leaver. On the other hand, it did not substantially increase short-term hiring or make workers less willing to change jobs.”

So the upshot I take from that research is that 90-day trial periods failed in their intended purpose, which was to provide employment opportunities for people who are more vulnerable. But by the flip side, it also makes the point that the negative consequences don’t seem to be that obvious, either. So one might ask the question, quite reasonably: if there’s no harm, why remove them or restrict them, as the National Party originally introduced them, to only being available to people who employ fewer than 20 people—that is, it creates the opportunity for people to be unjustifiably dismissed. That is a risk in our employment relations policy that this Government is not prepared to stomach, because we have seen examples of those poor employers—the ones who are on the fringes and are not representative of the majority, at all—who see a loophole in the law and exploit it, and the vulnerable people who are affected by that are those working people that the National Party claimed to be supporting in introducing 90-day trial periods.

So, obviously, people know that there was some conversation across the Government about exactly what the right formation for this policy would be. Where we landed was that we would keep 90-day trial periods in place for small businesses. We do accept that smaller businesses are not going to have an HR department, so they’re not necessarily going to have access to HR resources. They might need a little bit more support in their recruitment practices. But if those larger businesses—those who employ 20 people or more—don’t have an HR department of their own, they ought to be able to get the advice and support they need to run robust employment processes, to be able to find the people that they need, and to put them in and continue their employment.

We’re not opposed to probationary periods on this side of the House. Probationary periods are still included in the Employment Relations Act. Employers have the ability to put people on a probationary period to test their ability to do their role, and if they’re unable to complete the functions of their role, it’s absolutely justifiable for them to be able to dismiss that person. But what they cannot do under the probationary period is unjustifiably dismiss someone, and that is the risk that lies with 90-day trial periods. That is why this Government is restricting the use of 90-day trial periods.

Hon SCOTT SIMPSON (National—Coromandel): Thank you very much, Madam Chair. You were speaking so softly, I could hardly hear amongst the enthusiastic calling of my colleagues.

I do want to have an opportunity in this Part 2 debate to raise a question relating to new section 125 in clause 39, and this is to do with the provision that requires that reinstatement be the primary remedy for personal grievance. This is a matter that has caused employers some concern. Just to put some context around it, this situation often occurs or, sadly, sometimes occurs—“often” is probably an exaggeration—where, for one reason or another, the employment relationship between employer and employee does break down, and that can be deeply problematic. It can be a matter that causes both the employer and the employee, and associated workmates and colleagues, a considerable degree of angst. There are obvious matters that lead to a lack of confidence and respect and trust that occurs in such a situation. Sometimes these situations have occurred as a result of performance review, and none of it is pleasant for anyone involved.

So what tends to happen is a personal grievance occurs. That can be a long, drawn-out process that can sometimes take months, and taking many months often involves expensive lawyers, litigation, and an emotionally trying time for everybody involved, not the least of which are the people who are personally involved, because they are diverted from the business, the work, that they are employed to do or are undertaking as a business owner or operator.

What this section seeks to do is, at the end of a broken employee-employer relationship, where it’s proven by a court or authority that it was a justified personal grievance or an unfair dismissal, then the primary remedy for that will be reinstatement. Now, the difficulty with that is that it creates all sorts of challenges for a situation that is broken—a relationship that is broken—if an employee is to come back into that workplace. It’s not unlike, for instance—a bit of analogy—some of us who have known people who have been involved, or who have had the misfortune to be involved, in a Family Court situation where there’s been a breakdown in a matrimony, or a relationship problem. What would then be likely to occur in the industrial relations equivalent of that would be like the Family Court judge saying, “Well, Mr and Mrs Bloggs, it’s the decision of this court that you get back together again.”, and that’s simply not a tenable sort of process or situation to have occur. Similarly, in the workplace there are equally problematic issues around that.

Now, in new section 125, it does say where it’s “practicable and reasonable,” and, again, we come back to definitional issues that exist in other parts of this bill around what is reasonable and what’s practicable. Those are matters that are not defined, they’re not set out, they’re not quantified, and, again, some poor employer is going to find themselves acting in the capacity of a judicial guinea pig—probably at considerable expense, time, effort, and energy—to assist in defining the common law, the case law, around what is actually practicable and reasonable, irrespective of whether it provides for any other remedy as specified in section 123 of the primary Act.

So I do have some questions around that. I think that there is potentially a perverse outcome, and Minister Iain Lees-Galloway might like to spend a little bit of time addressing that. I guess the countervailing argument would be that if reinstatement is the likely outcome of a broken employee-employer relationship, then there may be some employees who would say, “Well look, no, I don’t want to have that opportunity. I don’t want to take the risk of being reinstated. The relationship has broken down irrevocably, and that would be a very bad thing.”

So I’m hoping that at some stage this evening, the Minister will take a call and talk us through the rationale for making reinstatement the primary remedy for unfair dismissal. If that’s the result of a personal grievance, then I think that we could have an explanation as to why.

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Chair. I want to speak in this opportunity to Scott Simpson’s Supplementary Order Paper 115, which has the effect of deleting clauses 29 and 29A. I want to make a couple of comments around the position of the new Minister for Workplace Relations and Safety—the former union organiser—on the impact of 90-day trials and say to the Minister that he has found some research and in the researcher’s view, the 90-day trial provision—which, yes, was brought in by the former National Government—has had no material impact on the opportunities provided, particularly for more vulnerable workers, young people starting out, etc. Well, you know, academics are wonderful, obviously, and their research is useful, but I suspect what is more useful is to actually get out there and talk to businesses about their real experiences and do that in the context of the 90-day trial provision.

As a spokesperson for small businesses—as, indeed, we all are, as National Party members, because we do get out every day of every week and talk to small-business people in our constituencies and around New Zealand—I say that small businesses, and business, frequently rely on the 90-day trial to give people an opportunity. The concept that an employer would take on someone on a 90-day trial basis only to set the clock ticking and then, at day 88, out of the blue, decide that “No, don’t want that person—gone.” is simply not believable, because employers take on people because they want to give people a job, they want to grow their own business, and they want to take a chance on people. In the case of regional New Zealand and in the case of smaller centres, they may know the family and they may know the neighbourhood. It might be someone that they knew from school. You know, small communities are like that. That’s part of the cohesion of small communities, and that is part of the way business is done in regional New Zealand.

So an employer takes on someone who might not have the skill set, but they’ve got the right attitude—and, as we who’ve been involved in business all know, attitude is actually the very first thing an employer looks for—and then they can train the person so that they do have the skill set and the aptitude and the desire to continue in whatever role it is. So the notion that the 90-day trial has not been effective in giving people jobs is just nonsense. I am disappointed to hear it from the Minister—incredibly disappointed—because it is a—

Hon Member: He’s quoting research.

Hon JACQUI DEAN: Yes, research—he’s quoting research. Well, I can say that each and every one of us also conducts research, but we don’t do it in Wellington universities and we don’t do it in Auckland universities. We do it in regional New Zealand. We do it all around our electorates, and we talk directly to the employers and to the people that are being given a chance.

Personally, I know of several young people who have had an indifferent career at school, shall we say, who have been given a chance, and sometimes it’s a bit of a rocky road with some young people. They might have to go through several attempts at getting good employment, but when it happens, it is a wonderful, wonderful thing to see a young person happily established. I know a young guy who’s now a tyre-fitter. He loves it. He drives around in his truck, he’s paid well, and it is because an employer gave that young man a chance, and that is happening all around New Zealand.

JAN LOGIE (Green): Thank you, Madam Chair. It’s a pleasure to take a short call in the committee stage of this bill, and I guess I’d like to pick up from the previous speaker, Jacqui Dean, and talk a little bit to the 90-day trial provisions in this legislation. It did interest me, you know, the view that research from chatting to some people around the regions should be considered in the same light as peer-reviewed research from a quite well-respected economic thinktank. That’s unusual, but I guess this House has places for many voices.

I do want to just put the point though that what we’ve heard is that employers are telling us their feeling is that they wouldn’t employ these people unless there was the 90-day trial—you know, that these people wouldn’t be given a chance unless there was this ability to get rid of them in 90 days if the employer didn’t like them. But, actually, before the 90-day trials were put into law, people were given a chance for their first jobs. All of us in this House—before we’d been employed, somebody gave us the chance and employed us. That’s just a dynamic that happens. If you need a worker and you need a job done, then you look at people and you employ them and you take a chance on them, because even if you’ve got lots of experience, there’s a chance there. But, equally, the employee is taking a chance on the employer that it’s going to be a respectful workplace, where they’re able to contribute and not be treated badly. You know, we take chances on both sides of that, and that’s just how it works.

We’ve heard this view that employers wouldn’t give these jobs out unless there was this incentive, but that’s not borne out by the research—it’s just not. On the other side—and this is where I do think there are limitations on the research—the research is saying, “Well, actually, we’re not sure that it’s doing any harm either.”, but that’s looking at specific measures, from what I heard from the Minister saying that it’s not necessarily making employment less stable. So that’s looking at it across the system.

We’ve heard from employers a perception, but we’ve heard from people who were fired because of the 90-day rule. We’ve heard that from professionals, and we’ve heard that from people in entry-level jobs right throughout the system. There was a very powerful submission from a member of the Public Service Association who was a National Party member—or a supporter, if not a member—who said that he had previously supported this legislation, but, as a professional who had been let go without any reason whatsoever under the 90-day trial, he’d actually had a first-hand experience of this policy that was not favourable for him or his family. He’d been lucky enough to be able to walk into another job afterwards, but he warned this House against this provision from experience, and he was not somebody who initially had any view on this.

So I do think we do need to hold back, and that’s why the Green Party doesn’t support the 90-day trials at all. Our preference, which we’ve said all along, would be to get rid of it altogether, because we don’t believe it helps anyone.

We’ve come to a negotiation. We think this is absolutely an advance on where we’re at the moment, and there’s no doubt about that. But it’s not where we would have gone if we were developing the law ourselves. We think that this still provides a level of uncertainty, and, particularly for me, the concern is that when we have to do so much more to improve health and safety in our workplaces, this has a chilling impact on people being up to speak up and alert their employer—[Time expired]

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. What an excellent choice—it really is. It gives me great pleasure to follow Jan Logie, the previous speaker. Actually, I have had experience as an employer, and I’ve had an experience in utilising the 90-day trial—quite extraordinary. I’m not sure anyone else from the other side has, but anyway. I tell you, doing research like that is really very, very useful. You find out how difficult it can be.

Actually, you would think by the rhetoric that employing a person is some way just to be mean to people, to take them on and then employ them for 80-odd days, and then just burst their bubble at the last minute—far from it. It costs money to take people on. Every time you turn over an employee, there’s a significant cost to that—

Hon Member: You’re not getting anything in return.

STUART SMITH: —and people will only take that step when they have to. Yes, they do need a return. That’s absolutely right—they do. It’s a symbiotic relationship. It’s ironic that indentured labour has been outlawed for many years, but it seems from some of the speakers that they want the reverse of that: indentured employers, where they have to keep people on when they are poisoning the well, often, and that can be the case where it is making it very difficult to retain other staff because those staff are not functioning well. So I can’t understand why people would be averse to that.

In most cases that I’m aware of where 90-day trials have been used—and that’s very frequently when you had the opportunity—it has given far more people choices and chances that they would not have had otherwise, and I think it’s a great shame that this bill seeks to reverse that. Speaking in support of Supplementary Order Paper 115, in the name of the Hon Scott Simpson, those two clauses—clauses 29 and 29A—absolutely need to be deleted, because it’s a significant impost on business.

I say that the 50-employee number that was suggested by many employers who submitted is actually quite an elegant solution, and the Minister’s rationale for having 20, or 19, was that it was the National Party’s idea. Well, we did know that Labour is not keen on, or capable of, extending good work further, but, you know, it was a good idea at the time it was extended, and that number was lifted up. Going to 50 is an elegant solution, I think. It is a significant impost on businesses to have an HR department to manage these things, and you do need to do that.

Once an employer gets up to a certain level of employees, it’s a significant cost to operate that business. Being an employer is a difficult situation to be in at times, as is being an employee, but I think there’s no experience in life like having to fill out your own GST return, or like having to lie awake at night wondering how you’re going to pay all the bills and how you’re going to pay for your employees, and that is what business is about. That often happens. Often, it’s another business that is not paying you on time, or you’ve got shipments going overseas somewhere and you’re having an issue getting payments back into the country and having them held up in the banking system. All of these things happen and it causes a cash-flow bind, but you’ve still got to pay your employees.

So the 90-day trials have nothing to do with that, but you have enough things on your plate when you’re an employer. The last thing you want to do is take on people that are not suitable for the job. Often, it’s the probation period that the Minister mentioned earlier, where if the person is not capable of doing the job for whatever reason, then you’re able to dismiss them or send them on their way. That is only part of it. It’s also about a culture and a team, and it’s incredibly important that you have people that will work together and be far more productive and happy in an employment situation. That means picking team members that will work together, and you don’t always know that when you do the interviews, because people do change during that period. Sometimes it takes three or four weeks to really see what the person is really like and how they operate in that team environment.

Some of these jobs are quite difficult. Quite often, I know, in the wine industry situation, I see people turning up to work outside without clothes—

Hon Members: What!

STUART SMITH: —suitable for the day—not warm enough for the day—in case the weather changes—[Time expired]

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you, Madam Chair, and—

CHAIRPERSON (Hon Anne Tolley): Sorry, I just got caught on the people turning up for work with no clothes!

Hon IAIN LEES-GALLOWAY: I did a bit, too. I thank members for their multiple contributions on the 90-day trial period. I listened closely, and I don’t think anything was raised that I didn’t address in my earlier contribution, but earlier in the debate, members did raise the issue of reinstatement as the primary remedy in cases where a dismissal has been found to be unjustifiable. Now, this is a restoration, again, of something that was in place when Labour was last in Government. I don’t recall when it was repealed by National—whether it was in the 2009 changes, or if it was in 2015—but this had been in place successfully for a long period of time previously without any of the concerns that members have raised.

I just want to clarify for members exactly what this bill does: it restores reinstatement as the primary remedy. Reinstatement is a remedy that is available right now. It is certainly an option that the Employment Relations Authority can find that someone ought to be reinstated to their role. What we’re saying here is that reinstatement should be the primary remedy, and the point of that is to get the conversation back to being one about how we can put this relationship back together again. Rather than saying, “How big a payout is it going to take to see someone off and never darken their employer’s doorstep again?”, let’s see if there’s a possibility to restore the relationship. Of course that’s not going to be the case all of the time, and, I dare say, probably not even the majority of the time, but it is about just changing the nature of that conversation. I would point out that reinstatement can only be imposed if the person is found to have been unjustifiably dismissed.

Scott Simpson raised the question: what if someone is reinstated against their will? Reinstatement is only an option if the employee indicates that reinstatement is something that they want.

The authority must make an assessment of whether it is practicable or reasonable to reinstate someone, and I want to raise the matter that Nikki Kaye raised. She was concerned about people who had been dismissed from an early childhood centre or maybe dismissed from an aged-care facility because they posed some threat to the children or the residents that they were taking care of. First of all, I suspect that if that was the case, in all likelihood that would not be an employment matter—that might be a different matter altogether. It may well be an employment matter, though, and if it was found that that person did pose a risk to those people, it would absolutely be something that I would expect the Employment Relations Authority to take into account. It would be highly, highly unlikely, and I would dare to go so far as to say impossible, for reinstatement to be an appropriate course of action in that situation. Certainly if the person, through an employment matter, was found to pose a risk, it would be highly unlikely that the dismissal would be found to be unjustified.

Dan Bidois also raised that reinstatement is not always the best remedy. It’s absolutely true that reinstatement will not always be the best remedy; it is simply the primary remedy.

Scott Simpson questioned the terms “reasonable” and “practicable”. “Reasonable” and “practicable” are found throughout our employment relations legislation and throughout our health and safety legislation—legislation that was introduced and passed through all its stages in this Parliament, led by a Government that the National Party was leading at the time. This is normal language. It’s well understood by the courts. It’s well understood by everybody who understands employment legislation and health and safety legislation. It’s been around for a very, very long time.

So, just to reiterate, this is about restoring reinstatement as the primary remedy—not as the only remedy and not as a compulsory remedy—and it’s simply about changing the conversation from one of “What does it take to get out of this relationship?” to being one of “Is there any opportunity to restore the relationship?”

ANDREW BAYLY (National—Hunua): Thank you, Madam Chair. I want to talk about the vexed subject of meal and rest breaks—a very important issue, particularly for MPs—and I want to ask: when did you lot last have a meal break?

Hon Member: Oh, I didn’t.

ANDREW BAYLY: Did you get a meal break? I just heard from a member beside me who was saying that he didn’t have time for a meal. What about a rest break during the course of the day? Have we had them?

Well, I’m so glad that this bill caters for this very subject, because if you look at new section 69ZD, “Employee’s entitlement to, and employer’s duty to provide, rest breaks and meal breaks”, in clause 35, it is a beautiful series of prose. So what’s interesting? Just look at the hours. Now, if you work between two and four hours, I understand, you’re entitled to a 10-minute rest break—a very good thing. If you work between four and six hours, you have a 10-minute rest break, plus a 30-minute meal break—very good. If you work between six and eight hours, you have two 10-minute rest breaks and one 30-minute meal break, and over eight hours, you have two 10-minute rest breaks and one 30-minute meal break—very, very good.

But then we move on to their timing in new section 69ZE—particularly subsection (4). So if you work the same two to four hours, this is what I find fascinating—the specification of when you should take these is just fabulous. Between two and four hours, you must have your rest break during the middle of the work period of two to four hours. If you work between four and six hours, you must have your rest break one-third of the way through the work period, and your meal break is at two-thirds—very good. If you work between six and eight hours, you must have one of your rest breaks halfway between the start period and the meal break, and, of course, the meal break must be in the middle of the period and the second rest break must be between the meal break and the finish time. These are wonderful things.

I just can’t believe the detail we’ve gone into through this. But my first question I want to ask the Minister is: who is responsible for this? Is this the Labour members, is it New Zealand First members, is it the Green members who have gone to such extremes to write this stuff into the Act?

The next issue I want to talk about—[Interruption] Well, that raises some speculation, doesn’t it? The next thing I want to talk about is: what about contracting out? Of course, now we turn our minds to new section 69ZEA(1) in clause 35. It’s very interesting, actually, under subsection (1)(a), that “An employer is exempt from the requirement to provide [the said] rest breaks and meal breaks … if—(a) the employee is engaged in—(i) the protection of New Zealand’s national security; or … an essential service”.

So that’s my second question: what is an essential service? Some would say that being an MP is an essential service.

Stuart Smith: A wine waiter.

ANDREW BAYLY: A wine waiter can be essential at certain times, I must admit. But what is an essential service?

I think the issue about that is very, very important, because if you think about businesses, there will be elements of a process in that factory that will be absolutely essential in that if you do not conduct it and complete it, the factory process will stop. So do you define it on the importance of the process to the factory? Do you define it, when it comes to a service, as the critical element of delivering that service? Or is it just around some nebulous definition of “essential service”, and how do you construe that and who determines that in time? As we all know, in time, many jobs are going to be lost to the New Zealand economy and we’re going to have robotics involved, and, of course, the nature of jobs changes over time. So I’m very, very interested in knowing how that’s going to be defined.

The main thing, I think, turning over the page—which is, of course, subsection (2) of new section 69ZEA—is what about an agreement to contract out of this? It only references national security and the public safety, and I think that question needs to be asked.

Fourth question: when can someone mutually agree to contract out?

MARJA LUBECK (Labour): Thank you, Madam Chair. I was glad that we moved on to Part 2 of this bill, because the Opposition speeches so clearly show that they have no understanding of industrial relations, nor any understanding of employment law. But, I have to say, we’re on Part 2 and it’s still the same case, which, in a way, is quite concerning, because they have been making quite a big thing about going through the country and clarifying this bill when, in effect, what they’ve done—and we know this for a fact—is they have even more confused businesses and other people in the country on what this bill actually does.

I too have gone around the country—not that I’ve made such a big deal about it. I’ve visited several of my colleagues in their electorates, spoken to the chamber of commerce—and I see the member for Coromandel laughing. Do you know what one particular employee representative said to me: “Oh, now that you put it this way, that totally makes sense. But the National Party representative never told me that.”—that was about the probationary period, it was about access, it was about 30 days, and it was about 90 days. So the very concerning thing is that that part of the Opposition obviously does not understand what this bill does.

I also have to say that I am really mystified about why they are so scared of the unions. Why are they afraid of fairness and balance in the workplace, because that’s exactly what—

CHAIRPERSON (Hon Anne Tolley): Well, I’d just ask the member—it’s very—

MARJA LUBECK: —the unions do. The unions hold the line for their members, and—

CHAIRPERSON (Hon Anne Tolley): Order! Order! I just ask the member to address Part 2.

MARJA LUBECK: Sure, sure. So I’m talking about the parts where mention was made about the rest and meal breaks, and the astonishing part from the member that spoke just before me is that it’s so disrespectful to talk about his job—his cushy job in an office, in a chair—not thinking about, for example, the meatworkers, who are working in either boiling heat or freezing cold conditions, in gumboots and on concrete, for hours on end, doing repetitive, strainful work. They need a break, and because the National Party legislated that out of the law, their employer takes advantage and makes them work continuously—non-stop—under these circumstances.

We are bringing this back. Who would argue that rest and meal breaks are just the common decent thing to do—people have a meal, something to drink, and maybe a few minutes’ rest. But, hey, the National Party obviously does not like workers—like they don’t like unions—and they would rather have people working non-stop, without any break at all.

Nobody mentioned the fact that when the 90-day trials were first brought in, the National Party pushed that through, and guess what? There wasn’t even a select committee process—did you hear all that? No select committee process, no public submissions—the National Party drove through 90-day trials without evidence, against evidence from the Ministry of Business, Innovation and Employment that it would not create extra jobs, and totally without any opportunity for the public to bring submissions through. Obviously, at that time, the National Party was looking after its mates who own businesses and who wanted to employ workers, but not quite adhere to the law that was in place. So what this bill is doing is it is righting a lot of the wrongs.

Now, we have heard a lot of repetitive arguments from the other side about 90-day trials—we heard so much of it. Reinstatement—Minister Iain Lees-Galloway has talked very eloquently and extensively to try and clarify. But the next speaker pops up and it’s like they haven’t heard anything at all—they just repeat the same thing over and over, thinking it might stick.

Now, I’d just like to mention the removal of reinstatement, because that one is very close to my heart. It is actually taking away people’s human rights. It is one remedy that will restore the worker to the way they were before they had the unfair dismissal. And let’s be clear about this: this is not about anybody being sacked for any reason; this is about somebody who has been found to be unjustifiably dismissed. It might mean that they have gone through the Employment Relations Authority, the Employment Court, the Court of Appeal, or even higher up, and still they have been found to be unjustifiably dismissed. It could take three to four years, and after that time, you say that they should still just get a little bit of money and just, you know, move on—no. This is absolutely unfair. If there’s anything that they are entitled to, it’s to have their job back, because they never did anything wrong that warranted them losing their job. As a primary remedy, it is just a matter of natural justice, and it is actually completely consistent with International Labour Organization conventions.

The Minister has already pointed out that there’s still quite a high threshold for reinstatement. For example, in 2009, out of hundreds of cases that were brought, there were only nine people reinstated, so there goes your scaremongering. Ultimately, we’re talking about someone who has lost their job when they never should have lost it. They should get their job back, if they want to.

So what this bill very clearly addresses is fairness, it’s respect, and it’s dignity. I hope the other side will start reading the bill and actually understand what it’s about, and maybe learn a little bit about employment law. But I do thank Minister Iain Lees-Galloway for taking this fantastic bill through the House. Thank you.

HAMISH WALKER (National—Clutha-Southland): Thank you, Madam Chair. I just want to thank that previous speaker—Marja Lubeck. I actually just googled her name and, funnily enough, she’s a former union delegate—funny that.

She also asked whether the National Party members have ever worked in a freezing work job. My first job out of school was as a commercial fisherman, with 18-hour days. Possum-trapping, goldmining—I’ve actually employed people. I just want to talk about Part 2. I had a business for 3½ years, and I can still remember employing my first staff member. It was a very proud day for me. This staff member earned a lot more money than I did. I can still remember that after about a week, I decided to take her out for lunch, and what do you know? My card was declined. Why? Because this worker was getting paid; I wasn’t. I was taking the risk.

Marja Lubeck: Oh, so sad!

HAMISH WALKER: Well, that’s pretty sad, to be honest—you reacting like that. I find that very sad.

I just want to take the opportunity to break this bill down and actually talk about some of the real consequences of the bill for employers and employees in places like Balclutha, Lumsden, Lawrence, and Queenstown. This bill takes away flexibility from the workplace.

I was talking to a lady last week. She is terrified of the bill. She booked an appointment, came into my office, and she said, “Hamish, I’ve always been a Labour voter, until now.” I said “Why is that? Why have you always been a Labour voter till now?”, and she said, “Under current employment law, I can pick up my children because I get to the school gate bang on 3 o’clock, but now the flexibility of the meal breaks are being taken away.” This lady doesn’t have meal breaks. She has a lunch break, but she’s quite happy to work through her meal breaks when there are customers in the store. Now, she will be turning up at 3.20, and her kids—who are five, seven, and nine—will be left at the gate by themselves, because this Government has taken away flexibility from this.

So that’s my first question for Minister Iain Lees-Galloway. Minister, is there some room for the employer and employee to negotiate some flexibility around this sort of situation? She’s an incredibly hard-working lady, and she just wants to know if she can have some sort of arrangement like the good relationship she’s got with her employer at the moment so that she can pick up her kids at 3 p.m.—incredibly, incredibly concerning.

Just last week, I visited a business, and I met the manager of this business, who’s been with the company for three or four years. The business owner employs a number of staff. He introduced me to his manager. He said “See this guy here? If it wasn’t for National, this guy wouldn’t have been given a chance.”, and I said, “Why is that?” This guy had served seven years in prison and been a drug addict—not quite as bad as the one you let in recently, Minister, but almost—but the reason why this guy got a chance was the 90-day trial.

The legislation we’ve got currently gives people a chance. It gives vulnerable people a chance, and, I hate to say it, but I actually do agree with some aspects of the previous Green member’s bill. I recently visited the citizens of Roxburgh, and they said, “Yeah, Hamish, two or three people we have met over the last few years have been taken advantage of, but for the other 30 or 40 people that have been given a shot and given a chance because of the flexibility under the 90-day trial, you just cannot go past that.”

So just some questions for the Minister. The first one’s around the flexibility for the lady who will have to leave her young children at the school gate—because you’re taking flexibility out from this—and also the 90-day trial. Minister, surely, if you want to look after the most vulnerable people, please leave in the 90-day trial.

My third question, while I’ve got a chance, is that I noticed last year that $260,000 was given to the Labour Party by unions—

CHAIRPERSON (Hon Anne Tolley): Order!

HAMISH WALKER: $260,000.

CHAIRPERSON (Hon Anne Tolley): Order! Order!

HAMISH WALKER: Sorry, Madam Chair.

CHAIRPERSON (Hon Anne Tolley): I’m sorry, you cannot refer to that and impute motives to the Government.

HAMISH WALKER: I’m sorry, Madam Chair. I take that back. It’s probably a good place to leave it. So two questions to the Minister, and I look forward to hearing from him answering these questions.

MARK PATTERSON (NZ First): Thank you, Madam Chair. It is an absolute pleasure to stand up on behalf of New Zealand First to speak on Part 2 of this Employment Relations Amendment Bill, and just in the nick of time, too, because it is time for the voice of reason—which New Zealand First obviously have been—after that emotive contribution from the member for Clutha-Southland on this particular part. I might say he has some previous on this. He’s out scaring farmers as well, which is unfortunate.

I had the pleasure of sitting on the select committee on this bill, the Education and Workforce Committee. What a fascinating process it was, and we heard both sides very clearly come through. We heard from the unions and the employees and workers’ groups, who did outline some power imbalances and the fact that they had been disadvantaged by those power imbalances. The gap between those at the top and those on the bottom in New Zealand has been growing, and that’s something that this Government is absolutely committed to addressing. But, on the same token, we also heard the employers. They came in with their version of events and we listened, and I think this was the select committee process absolutely working as it should. You get various views come in, you boil down the arguments, and you come out with what I think, in this case—and New Zealand First certainly thinks—is a very good outcome for all concerned.

Certainly, also one of the mates of the National Party from Business New Zealand, Kirk Hope—I would actually quote him. “Kirk Hope said the changes resulted”—I modestly say—“from NZ First’s influence in changing the Bill and business would be grateful for its input in striking a better balance between [employers and workers].” So I think that when you’ve got the likes of Kirk Hope and Business New Zealand coming out—and whilst he credited New Zealand First for those outcomes—it’s actually the coalition working as it should. This is where we saw it, we saw that with the multi-employer collective agreements, and we saw it with the union clarifying those union access issues.

On the 90-day trial, which we took a keen interest in early on, we do note that the Motu report and the evidence is pretty ambiguous. There’s not really any one way or the other that the 90-day trials have had an effect on employment, but, anecdotally, and just our gut feel, as champions of the regions—and many of those small businesses are in the regions—is that those businesses with under 20 employees that don’t have the access to HR departments could benefit from this, and it would give people that have been marginalised in society the chance for a start in a business and the dignity of work. That actually accounts for the something like 97 percent, I think, of businesses that are small to medium sized enterprises with under 20 employees. So I think that’s a win for those businesses. It’s a pragmatic step.

But then those bigger businesses, the ones with over 20 employees—they’ve certainly shown a competence in building their business to quite a scale. They should have the ability to be able to handle their HR and they should have the ability to marshal their new employees through into solid employment. So we felt we struck a pretty good balance there.

On the rest breaks, or smoko as we used to call it in the old days, the previous contributor, once again, was trying to put some scare tactics in. Basically, we’re just returning the law to what it was previously. I’m not sure what the year was, but certainly under the previous Labour Government, this was a provision in the law. The world did not collapse, and I think that in the days when we’re looking at things like mental health, etc., we need workers to have the ability to have a break. By the vast majority, this will be done through negotiation, and will be considerate of the nature of the work. That is just the way that it will happen, and on the odd chance that they can’t come to an agreement, then there will be an ability for workers to have their smoko. I think that’s a fair go for Kiwis, and New Zealand First certainly support that. Thank you.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you, Madam Chair. Members have raised questions about the rest and meal break provisions included in this bill. Andrew Bayly just raised the matter generally and asked about the definition of an “essential service”—a very reasonable question. I direct the member to part A of schedule 1 of the Employment Relations Act. He will find the definition of “essential service” in there, and—

Andrew Bayly: And how encompassing is it?

Hon IAIN LEES-GALLOWAY: Well, I encourage the member to have a look, and if he’s got any further questions, feel free to come back.

The member Hamish Walker asked an important question. He asked an important question: is there any room for negotiation? This is a point that has come up a lot, which is: are we creating a situation here where rest and meal breaks are tightly prescribed, where everyone has to take their meal break at the same time, and where there’s absolutely no room for negotiation? In response to that, I would direct members to clause 35 in Part 2 of the bill, which inserts new section 68ZE into the Act. It says, “Timing of breaks as agreed (1) If an employee and employer have agreed on the times at which the employee is to take rest breaks and meal breaks during the employee’s work period, the rest breaks and meal breaks are to be taken at those times.”

So the first port of call is: work it out. Work it out between the employer and the employee, and figure out what makes sense and what works for both parties. In the case of Mr Walker’s example, if the arrangement works for his constituent, then I encourage him, tomorrow morning, to get on the phone or write a letter and tell his constituent that she will be able to continue doing what she’s doing right now, because if that’s what works, she can figure that out with her employer.

Only in the absence of an agreement are the rest and meal breaks to be taken in accordance with the applicable provisions, and, again, all of those applicable provisions have those terms—and I know Scott Simpson doesn’t like these ones very much—“reasonable” and “practicable”. Where reasonable and practicable, they should, basically, be taken at around about the middle of the work period. But, first and foremost, this is something that employers and employees can work out between them, and it’s enshrined here in the legislation. So I do encourage members, if they’ve been misinformed—and, certainly, if they’ve accidentally misinformed any of their constituents, I strongly encourage them to get on the phone and make sure that their constituents understand exactly what this legislation does.

Dr PARMJEET PARMAR (National): Thank you, Madam Chair, for this opportunity to add my voice to this debate. Before I get on to discussing my view on how I see the partial removal of the 90-day trial period, I want to respond to the member who took a call and said that there are people working in different industries—and the example she used was the meat industry—and they deserve to have a rest break. In my view, that argument was embarrassing. In the businesses that are employing 95 percent of our population, employers definitely want to look after their employees, and they do give them rest and meal breaks. It’s not like people are working non-stop, without having rest and meal breaks, and to project employers as being like that is, I think, totally inappropriate. It’s embarrassing our employers that employ—I repeat again—95 percent of our population.

When Minister Iain Lees-Galloway tried to give an explanation of why he is limiting the 90-day trial period to only small and medium businesses, it clearly showed that he is going in the wrong direction, because we started from small and then we extended it to the whole sector. But now the Minister wants to go in—

Hon Tracey Martin: It doesn’t mean he’s wrong.

Dr PARMJEET PARMAR: —yep—the wrong direction. He’s definitely going in the wrong direction. The Minister used the research and read it from his iPad, whereas members like the Hon Jacqui Dean and other members, those who took calls from my side—I fully endorse their comments that they had gone out and spoken to people.

We have heard a lot of discussion around how businesses see this partial removal of the 90-day trial period, but I want to make my contribution with regard to an employee perspective, because, yes, I have been an employer before and I’ve employed people, but I have seen the other side too, through my other roles. I have seen people literally crying and begging, wanting to get a job, and especially new immigrants. It’s really important for new immigrants, because the first thing they want is a job. They want a good school for their children. If they have a job, they can look after their families. I had several people—this is before I became a member of Parliament—come to me and say that the biggest barrier they face is that employers are asking for local work experience. So where do they produce that local work experience without getting an employment opportunity?

That is why the National Government listened to them and introduced the 90-day trial period, because then we were taking that risk away from the employer that my colleagues have already spoken about with regard to the employer perspective. Employees got the chance to prove themselves, and if it didn’t work, then that gave them the experience and that gave them the exposure to the work environment here in New Zealand which they could use as their first work experience here in New Zealand to apply for their next job. And 90 to 95 percent—what I heard from people was that their employer was very happy to be their referee. That was the most important thing those people wanted when they came to New Zealand, and it’s not only for new immigrants; it’s for women. You know, we take breaks when we have children. We want to get back to work. Who is going to look after them when they’re trying to get into employment after having a big break in their work history? Again, employers can be hesitant, so this 90-day trial period gives them the opportunity.

So the question I ask the Minister—it’s not about business; it’s about employees. The Minister is creating unequal employment standards for people. People that will be working in small to medium enterprises where employees number less than 20 will have different employment standards than those who are working in big companies, which will not be able to utilise the 90-day trial period. Why is the Minister is creating unequal employment standards for people—

Kieran McAnulty: He’s already answered that.

Dr PARMJEET PARMAR: No, the Minister has not answered, and I would like to get a specific answer. If the Minister stands up and again says that, oh, we have to read the Employment Relations Act—

Kieran McAnulty: The member should read the bill.

Dr PARMJEET PARMAR: You know, the Minister should know the Employment Relations—

CHAIRPERSON (Hon Anne Tolley): That member should take a call if he wants to contribute.

Dr PARMJEET PARMAR: The Minister should not stand up and say that we should read the Employment Relations Act, because I really want to know from the Minister why he is creating unequal employment standards for people, and not just the standards but unequal opportunities as well. Why should people trying to get their first job experience only apply to small to medium enterprises to utilise this 90-day trial period? It’s unfair. Why can’t they apply for a job in a big company and also utilise this 90-day trial period—why not? I want an answer from the Minister, because we know that people out there are looking for job opportunities in all kinds of businesses, not only in small businesses, and we know that big businesses are big and chunky employers.

KIERAN McANULTY (Labour): Thank you very much, Madam Chair. I could not resist the invitation to speak on this bill and to speak after Dr Parmjeet Parmar, the previous speaker, whose contribution touched on 90-day trials and big, chunky employers. I’m not too sure if big, chunky employers are in the bill, but I tell you what is in the bill: it is a clear and very evident clarification as to what this bill is about.

Part 2 clearly outlines the answers that the members on the other side are seeking from the Minister and that the Minister has on numerous occasions answered, and an example of that is 90-day trials. The Minister took the opportunity to clarify independent research as to why 90-day trials were not effective on the things that the members opposite are claiming—giving young people a chance, because young people never got a chance before the 90-day trial, and giving those who otherwise would not be given the opportunity a chance. This independent research that the Minister has quoted on a couple of occasions now clearly refutes those claims. Also, what the Minister said when he took one of his numerous contributions was that those people that are apparently being given a chance can still be given a chance—as it clearly outlines in Part 2—in a probationary period.

As the Minister said, the difference between a 90-day trial and a probationary period is very clear. It still gives the employer the opportunity to take a chance on a prospective employee, but at the end of that trial period, if they are not up to grade, they provide a very clear and reasoned explanation as to why. In fact, this Government argues that a probationary period is much better and much more effective at providing a young person with a chance who hasn’t previously had employment experience, because at the end of it they get feedback on where they’re currently not fitting the bill.

This Government argues that at the end of that period, if the focus is on giving young people an opportunity—like the Opposition claims is their focus—then surely, at the end of that period, giving them some feedback and some guidance and some areas on which they need to work is more effective at giving these young people a chance. It is my view that due to the arguments put forward by this Government—and by the Minister, in particular—on especially the issue of the 90-day trials, surely for the people watching at home, it couldn’t be clearer.

DENISE LEE (National—Maungakiekie): Thank you very much, Madam Chair. I appreciate the chance to speak on, specifically, clause 39, “Section 125 replaced (Remedy of reinstatement)”. I’d like to further underscore some of the comments that my colleague the Hon Scott Simpson made earlier but raise a couple of different points and a couple of different questions to the Minister.

Now, those of us who sat on the Education and Workforce Committee and heard many submissions, of which I was one, heard from several different submitters in regards to reinstatement and some of the difficulties that this section will impose for them. Now, what’s interesting is that most don’t dispute the idea of reinstatement, but they do have deep concerns about what this particular amendment will do. I’m going to refer in part to the Simpson Grierson submission and their very thoughtful contribution, not only in this section, of course, but in many instances. What we know is the current wording of section 125 of the Act provides that the authority may provide for reinstatement, and what the amendment’s doing here, of course, is saying that it must be the primary remedy.

The current wording, Simpson Grierson and others have argued, is working well and should be retained, not with the new amendment. When reinstatement is sought as a remedy, to state the obvious, it’s not always the appropriate remedy to go after. In Simpson Grierson’s experience, they’ve said that a disproportionate number of employees seek reinstatement for tactical reasons only, and they do that in order to strengthen their bargaining position at mediation or in settlement negotiations, rather than out of a genuine need to return to their former role. Now, what this does is add on significant costs and procedural delays. Now, that’s a reality and that’s come from Simpson Grierson and also employers, and I’m going to refer to some of those employers soon, having heard them in person.

So if this bill was to pass and have reinstatement as the primary remedy wherever practicable and reasonable, there will undoubtedly be unintended costs and implications for employers. Now, that stems from the fact that, by nature, trust has broken down between the employee and the employer, and there could be, as a flow-on effect, an unnecessary burden on other staff if in fact the primary remedy is reinstatement. Some of those other staff could have been directly affected by misconduct or in other situations. So what we’ve seen from different submitters and we know from, for instance, Port of Tauranga, Tourism Industry Aotearoa, Business New Zealand, Hospitality New Zealand, is that most who have been dismissed prefer to move on.

Now, how do we underscore that particular statement or something that the submitters said? We just need only go and look at some Ministry of Business, Innovation and Employment statistics, and we did that in the select committee. So we asked for the ministry to provide us with evidence of dismissals and reinstatements, and what they provided us with was a chart, and I’ve got that here. What they’ve said is that in 2013—from the Employment Relations Authority—there were two permanent determinations for reinstatement; in 2014, eight; in 2015, four; in 2016, five. That’s not a lot. That’s not a lot at all. So in respective years: two, eight, four, and five. What we may deduce from that is that it’s actually quite difficult for all for reinstatement to be a remedy let alone the primary remedy, and that’s why we oppose this particular amendment.

MATT KING (National—Northland): Madam Chair, thank you. I’ve worked so hard to get this call. Now, I’ve been listening to the contributions from across the Chamber and I’ve been listening to the interjections. With some of the things that they’ve been saying to me, I’ve been wondering how many of those good people from across the Chamber have actually been in business? Then I realised, yes, they’ve been in business. They’ve been in the fertiliser business, because they are producing it on an industrial scale.

You know the old saying: if it ain’t broke don’t touch it, OK? They’re seeking to fix a problem that isn’t there. In the last two years: 245,000 jobs created, third-highest employment rate in the developed world, 80 percent of workers are in full-time work, and wages are rising at twice the rate of inflation. That sounds like a problem that doesn’t need fixing. This bill illustrates to me that this Government is being run by the unions.

So we’re experiencing unprecedented numbers of strikes, and I want to talk about in Part 2—this bill will significantly increase the cost to business owners, remove flexibility, and it will definitely put jobs in danger. It will give unions rights they’ve never had before. What it does is it pits employers against employees. It’s going to create a little bit of trench warfare. People are going to dig in. Now, I’m a guy that’s been an employer and an employee and for 20 of years of my life I was both. So I’m speaking from personal experience. I’ve run a number of businesses.

I know that the Hon Iain Lees-Galloway hasn’t run his own business. It’s patently obvious. He’s made a few statements in the media about businesses and people that are struggling, and I think they’re arrogant statements—when you’re talking about people running businesses and trying to get by and he just says, “Well, they should close down.”

Jan Tinetti: I raise a point of order, Mr Chairperson. I was just wondering, Mr Chair. This is Part 2 that we’re talking about.

MATT KING: I’m talking about businesses. Now—

CHAIRPERSON (Adrian Rurawhe): Order! The role of the Chair is to chair and to decide on points of relevance. I’ve just come to the Chair in the last 30 seconds. It is inappropriate to interrupt another member while they are speaking on this bill. Let’s leave me to do that job—OK?

MATT KING: Thank you, Chair. Now, I’ve run several businesses in my time and I have actually lain awake at night wondering how I’m going to pay the bills, the rent, the wages, and I can tell you this. When you’ve got an employee, if you get a good employee, you hang on to them. Having good staff is everything—having good staff is everything. I’ve frequently gone home with less money in my pocket and my bank account than my lowest paid employee. That is absolutely a fact.

Now, if you want to get a sort of study on the 90-day trial, just pick up the phone and call the average business owner and ask about the 90-day trial. I can speak from my own experience. I ran a business and I had six staff and everything was ticking along nicely, and this young guy walked into my business—I’ll call him Jason, because that’s what his name is—and he said he was 17 years old, no skills, nothing really to offer, and he wanted a job as an apprentice mechanic. I thought to myself, I don’t need another mechanic, I don’t have the work for him, he has no experience, he has no skills—I won’t risk it. But I had the 90-day trial period, so I took him on. Well, actually what happened was I said I didn’t have any work and he said to me, “I’ll work for free just to get experience.” So for that week he came in and he worked all week for free, and all I did was take him and shout him lunch—quite a decent lunch. And I thought, “Well, we’ll just give him some experience.”

At the end of that work I realised he was a pearler and I was going to keep him on. I created a job for him, and I knew that if it didn’t work out at the end of 90 days, or even less than that, I could let him go. I knew that I could do that. I took him on, on that basis. And you know what? That guy is now a qualified, certified bike mechanic. I put him through all his training, paid for it all, and took him on. He can now get a job anywhere in the world, because bike mechanics are in short supply. He can get a job anywhere in the world, that guy. The only reason he’s in that situation is because I knew I had a 90-day trial period to fall back on, and that’s why. I’m speaking from experience here, but I say pick up the phone and call the average business owner in Northland and ask them about the 90-day trial period and you’ll get your answer. Thank you.

Hon PEENI HENARE (Minister for the Community and Voluntary Sector): I move, That the question be now put.

JO HAYES (National): Thank you, Mr Chair. I stand to talk about the 90-day trial. I was an employer as well, and Mr Chair will be familiar with the organisation that I’m going to talk about, because this organisation isn’t too far away from the home of the Chair. I just want to talk about the opportunity that I had to actually employ two young Māori women on a 90-day trial. They came to me with no qualification whatsoever of what I was looking for. I said to them I was quite happy to take a bet on them. They seemed to be very enthusiastic about the job; it was a receptionist job. I only needed one person, but I took the gamble and took both of them on. And the result of that was that one of them ended up being a health promoter, because, after their first month of their 90-day trial with me, I had a meeting with them just to see how they were going—just to see whether or not I had made a good decision on being able to employ these young women.

They found that they were unable to get into the workforce, because, number one, they didn’t have any qualifications. No employer out there wanted to take a gamble on them, and I did. The other one came to learn how to run a PABX system, which is a telephone system. Her family had a business and she wanted to work for them. They didn’t have an opportunity to train her in the role that she wanted to be trained in, and so she applied for the job as receptionist in the hope that I would be able to help give her some of those skills.

Nowhere throughout the whole interview with these young women—we knew about the 90-day trial but we never ever discussed it with them, because my idea of employing them wasn’t to actually get rid of them after 90 days, like some people across the other side of the room are talking about. It was never about that; it was always about giving them an opportunity. And I think this is what the 90-day trial is all about: it’s about giving them an opportunity.

When one starts to look at employment of those that have no qualifications, that can’t get on to the employment ladder, then we have to try all ways of being able to open up opportunities for them. And I’m pleased to say that the young woman that came in to learn about telephone systems within organisations—she carried on. She did a little bit more training in other areas of human resource management—all of those things we were able to offer her on top of her employment role. So when I stand here and I look at the changes that this Government want to do around the 90-day trial, I’m actually really shocked. I’m shocked because it does disadvantage those young women.

That’s why I stand here tonight supporting Supplementary Order Paper 115, in the name of Scott Simpson. We want to make sure that young women like these young Māori women—these are the most vulnerable women that we’re talking about. We must give them an opportunity. We must be able to offer them that. We must be able to do what I did and put them through educational training to get qualifications. That’s what a 90-day trial gives an employer an opportunity. It was never ever about unions or anything like that; it was always about the person, and I think, in this Chamber, when I look at this bill and I look across the other side of the Chamber, that’s what’s missing in this bill—it’s the people factor; it’s the experience that most of us on this side of the Chamber have got in employing other people into their organisations.

When I looked through that, I looked at the meal breaks—the rests. We worked in a kaupapa Māori organisation, and we ran that. We had kai when it suited us, when it worked in for the organisations, because sometimes we hosted people. Those young women that were on reception got to learn those skills—although it was pretty easy because they came from a marae background; so they knew that side of the entertainment or manaakitanga. So the skills those young women brought along to our organisation, we learnt, we grew from. Our organisation just wasn’t about the mahi; it was also about the waiata, it was the tikanga of Māori, and we were pleased to be able to offer these young women that opportunity in an employment situation.

As an employer, I would never take on people unless I’m able to give them some money and some sort of training into furthering themselves. I’ve always worked like that, I always will do work like that, and I can say that this 90-day trial that the Government is taking away from people like these young Māori women, especially in organisations with over 20 staff—I had 21 staff, which would have meant I would have missed out under this legislation.

NICOLA WILLIS (National): Thank you. I rise to take a contribution on Part 2 of the Employment Relations Amendment Bill, but before I do so I just want to reflect on the contribution of the previous two members who have spoken with what could be described as lived experience. I want to address Chlöe Swarbrick directly, who has scoffed throughout the contribution of these members, and I would say that that kind of scoffing is indicative of the attitude of some of the members present when it comes to what goes on in the workplaces of New Zealand and the attitudes of employers and their intentions towards their employees. Chlöe is welcome to take a call to respond to that if she believes that’s unfair.

Actually, what both Jo Hayes and Matt King have spoken about is the good intention of employers who want to do the best by their employees, and what this part doesn’t allow for is that good intention.

I want to address a particular group of employers in New Zealand, and that is early childhood providers, because they are particularly impacted by three aspects of Part 2. They are impacted by the 90-day trial provisions, they are impacted by the rest and meal break provisions, and they are impacted by reinstatement being a primary remedy.

Hon Member: What are they telling you?

NICOLA WILLIS: What they tell me is that they stand to compromise on the service they deliver for children because of the aspects of this bill. They talk to me about what the 90-day trial provisions mean in practice when you are looking after young children. You can have someone come in with a great qualification who seems OK, and then you see them at work with the kids, you see them at work with your team, you see them interact with parents, and you say, “This is not a good fit for this childcare centre, and we do not want to compromise the care or education of children present. We will let them go.” They also see people who come in who don’t have qualifications, who say “I love children. I’ve always wanted to work with them.” And they say “Oh, I’m not sure.” They give them a go. Those people end up being some of the best educators in our early childhood services.

Let’s talk about the rest and meal breaks. What they tell me about rest and meal breaks is that this is a workforce that is predominantly female. Often what they want to do is attract women who’ve got children at school or children in early childhood themselves, and what those workers sometimes say is, “I don’t want my lunch break; I want to leave early so I can pick the kids up from school.” But what this bill does, in Part 2, is it says if the union comes in and says, “No, these are going to be the prescribed rest and meal breaks.”, then those workers will not be able to have that flexibility into the future. These are the genuine fears of early childhood services.

I went to Christchurch. I met with Annabel’s Educare in Somerfield. I met with Courtyard Montessori, Fundamentals early childhood centre, Poppies Preschool, and Portobelo Preschool. The people in these preschools were genuinely concerned about the impact this bill would have, and in particular this provision, which we want to address in Supplementary Order Paper (SOP) 144 in my name, and that is about reinstatement as a primary remedy.

So this is the scenario: an early childhood service has concerns about the way that one of their employees is working with children and families. They take a dismissal against that employee, they get some of the process wrong, and you know what? That sometimes happens. Not all the i’s are dotted; not all the t’s are crossed. I don’t make an excuse for that. The i’s should be dotted; the t’s should be crossed. But then what happens is the court says, “Actually, because you didn’t get the process right, you have to reinstate this employee.” In the meantime, the risk to the children, the risk to the other workers, the risk to the parents is that that person comes back into that service and brings in a negative attitude, is unhappy, makes it harder for other people to do their job, or harder for other people to provide good care and education to their children.

So what SOP 144 does is provide a simple remedy. It says that instead of making that the primary remedy, what you can do is that your reservations about a returning employee can be reflected, you can consider their effect on others in the workplace, and you can consider whether it is, in fact, appropriate for the primary remedy to be this. This is about safety. It’s about employers making good decisions about the services they are providing, and about employers making judgments about the people they employ and the impact they have in their workplaces.

So when it comes to early childhood educators—some of the businesses in our community who most understand the realities of what it is to have good people working with some of our most vulnerable citizens—they are uncompromising in their view that this bill is a step backwards, and in particular—[Time expired]

JAN LOGIE (Green): Thank you, Mr Chair. So there are just a few points I want to clarify about this piece of legislation, the Employment Relations Amendment Bill, for anyone who’s listening. Some of the points the Minister Iain Lees-Galloway has previously covered, but the Opposition doesn’t seem to have heard them, so I will actually just do my best to clarify them and hope that it kind of cuts through.

One of the first points I did want to point out, though, is that I’ve also been an employer, and I’ve employed, I think, probably, maybe 30 or more young people in their first job ever. I managed to do that before there were 90-day trials.

Hon Members: What!

JAN LOGIE: I know. You would not think that it was possible that anyone could give a young person a chance in a job without a 90-day trial, but lived experience coincides with the research, as well. [Interruption] I don’t know, but, you know, I just wanted to point that out, and I would also point out that, unfortunately, one of those young people I had to fire for dealing drugs on the premises. I managed to do that without a 90-day trial—extraordinary! So I do just want to point out to New Zealanders who think that this legislation means that no person who’s not had a job before is ever going to get a job—it’s not true—or that it’s not going to be possible to fire anyone—not true. It’s absolutely possible to dismiss people. You just have to give a reason and follow the process. I also point out that there is a probationary period built into this, so it’s not even just that you can fire somebody and follow a due process but there’s actually a probationary period built into here.

I do just want to point out that some of the discussion we’ve heard tonight is that “Actually, if somebody is not quite a good fit in those 90 days, then the good thing to do is to get rid of them.” No concept about, actually, “Maybe you want to look at how you might make the workplace work better for that person.” or “Has their training been up to the standard that you expect?”—that maybe you want to put some investment into their development, and that, actually, if you did those things, you might get a really good result for your business in the long term? No, it’s automatically going to the idea that “Actually, we don’t want to invest in these people. We want to get rid of them. That’s the best solution.” and I challenge that. That is not my experience as a staff member, and that’s not been my experience as an employer.

So I think it’s important in this discussion that we challenge that kind of thinking, because in New Zealand we know that, actually, we’ve got some issues with management in this country, where we need to do more work around developing good management so that we increase our productivity. One of the things about good management is a concept of your staff as an asset and the idea of actually supporting them and developing them to improve their productivity and their sense of value in the workplace. So I really challenge the Opposition on the rhetoric that we’ve been hearing from them tonight in terms of accuracy but also an underlying view that I think undermines good productivity and good business in this country.

The other point I wanted to pick up on as well is the idea that we’ve been hearing about migrants, women who have had children, youth, and young Māori people—and I’m just waiting to hear, “Gays are not going to get jobs without 90-day trials.” We’ve been hearing this, and I just want to acknowledge that that is speaking to and entrenching views of discrimination. People are naming those groups because these are groups who are discriminated against, and if you’re pointing them out as a justification for the 90-day rule, then you are actually reinforcing that basic discrimination, because you’re saying that, actually, they don’t deserve a job as a right compared to an older man—compared to a white male, who has not been on anybody’s list of discussion in this committee. So I think there needs to be some very careful thinking from the members of the Opposition about the kinds of underlying values in their contributions to this debate.

DAN BIDOIS (National—Northcote): Excellent. It’s a pleasure to take another call this evening on what is Part 2 of the Employment Relations Amendment Bill, and I want to speak to a new Supplementary Order Paper (SOP) that has not been discussed tonight. It is SOP 146 and it’s around getting rid of clause 39A of this bill. So what does clause 39A talk about? It talks about amending the principal Act to allow the Governor-General to “add, delete, or amend categories of employees.” in schedule 1A, and I just want to walk though exactly what we mean by schedule 1A just to understand what exactly the Governor-General is able to add, amend, or delete.

So, going to schedule 1A, it’s very clear that it defines employees who are in the service industries—so that is the cleaning or food or caretaking industries—and that applies to education, healthcare, age-related residential sectors, the public or local government sectors, and any airport or facility with aviation ability. I bring this SOP forward today because, essentially, what this bill as it’s been written allows is it allows the Governor-General to make additions or subtractions to schedule 1A, and I think that that is actually against the fundamental principles. Things like schedule 1A and changing schedule 1A should actually be brought to this House—Parliament—and it should be Parliament’s decision to amend, change, or delete schedule 1A. So I would like to hear from the Minister about exactly what the rationale is around giving the Governor-General that authority, because I believe that that is undemocratic and that we should bring this to Parliament.

I do want to speak also to SOP 144 in my colleague Nicola Willis’ name because, again, going back to the primary remedy being reinstatement, what we need to do is to actually do it on a case by case basis. That is why this is around deleting that clause, so that if an employer and an employee have a disagreement and they fall out—like the example that I demonstrated in the committee earlier tonight, in Birkenhead, where, essentially, a restaurant manager wants to get rid of somebody. The relationship has broken down. So, under this law, if the employer or the employee go to the authorities and they go through the process, and the authority rules in favour of the employee, then the damage for that will be, essentially, reinstatement. We think that, of course, if the relationship has broken down, that is just unworkable. So we’d like to, again, seek advice from the Minister around why we need this primary remedy of reinstatement, and why we do not just have an agreement in the law that says it will be done on a case by case basis, depending on the circumstances of the case in question.

That is completely consistent with the submissions that were raised in the Education and Workforce Committee. The Employers and Manufacturers Association also raised this, as well as the Hospitality Association of New Zealand. It seems like it is quite common that employers and employees have disagreements and they fall out, and it is far better to, essentially, have a reward or a payout, let the employee go free, and let the employer get on and get their business done.

So I would like to seek some further clarification from the Minister on Nicola Willis’ SOP, but also, going back to my SOP around why the Governor-General has authority over access to changes in the employees’ schedule in schedule 1A versus bringing this back to Parliament. Thank you.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you, Mr Chairman. I’ve been listening intently to the debate and I’ve heard the contributions on 90-day trial periods, reinstatement, and rest and meal breaks. And although I have been looking for opportunities to participate in the debate, I haven’t yet heard anything new that I have not already previously addressed. I did hear Matt King, I think, get very close to admitting to breaching the Employment Relations Act. I won’t hold that against him, but at least it was new.

The one new point that has been raised was by the member Dan Bidois, which was the reinstatement of the ability to amend schedule 1A, which lists the occupations, the groups of workers, who have access to the provisions under Part 6A of the Employment Relations Act.

That is because as conditions change we need to have a mechanism by which we’re able to respond to changing economic conditions, and if groups of workers become vulnerable or, indeed, if we determine that groups of workers no longer need access to the provisions afforded them under Part 6A, then we need a mechanism that is faster than the legislative process. Doing that by Order in Council still requires a process. It would still require an application to be made for that application to be considered by the Ministry of Business, Innovation and Employment, and it would ultimately come to me as Minister for a decision to then make a recommendation to the Governor-General to pass an Order in Council to make amendments to that schedule. But the reason is that as things change we need a mechanism which is more responsive to those changes than the full parliamentary process, which thus far has not produced any results in terms of delivering changes to that schedule.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. I appreciate the opportunity.

One of the matters that we haven’t discussed much tonight has actually been the Minister’s Supplementary Order Papers (SOPs). There are 11 that are set out in his SOP paper that the House is now considering as a committee. The first one relates to the delay of the introduction of the bill and that it would move the day that the legislation would become effective from March to 6 May. I’m keen to know what the reason for—

Hon Iain Lees-Galloway: I raise a point of order, Mr Chairperson. It will certainly be an interesting debate when we debate the commencement clause. But it’s not part of Part 2.

CHAIRPERSON (Adrian Rurawhe): Yeah, that’s correct.

Hon SCOTT SIMPSON: Fair enough. We’ll look forward to continuing that a little later on.

So in that case, then, what I will do is I’ll leave those matters for the meantime. But one that does relate to Part 2 is the question of the changes to the 90-day provisions. One area that I want to concentrate on relates to the definition of 20 employees or less. Now, under the bill it will be that businesses that employ fewer than 20 people will be still able to use the 90-day trial periods. There were submissions made at the select committee around the definition of when and how that 20 number was to be made up. So for instance, are there issues that relate to full-time employees, part-time employees, contractors, casuals, or whatever? I’m keen to hear the Minister’s explanation as to how that 20 is made up. In my electorate of the Coromandel there are a great number of businesses, particularly in the hospitality sector, that are seasonal. So at this time of the year, as Christmas and summer approaches, most of those businesses are now gearing up to a peak employment period to match the customer demand as people from all over the country come to spend their summer vacation in the beautiful Coromandel. So if one was to think about a cafe, for instance, at the top of the Coromandel peninsular—say at Colville, very good cafe, I can heartily recommend it—during the winter months the number of employees is very low. But over the summer, obviously, the number of employees increases dramatically.

The question that arose at the select committee was, well, when will the timing for the calculation of the 20 employees kick in? Is it in the middle of winter or is it the middle of summer? Is it the peak or the low of whatever seasonality that the business has? What the officials came back with and what we decided on at select committee was to include a provision, new section 67A(2) that says “…fewer than 20 employees at the beginning of the day on which the employment agreement is entered into”. Now, the challenge with that is that there is clearly then an opportunity for gaming that timing. So an employer who wanted to take advantage of still being able to use the 90-day trial period would, if they were hovering around 18, 19, 20, 21, or 22 employees, around that sort of fringe area, surely then, if they wanted to extend the use of the 90-day trial period to their businesses, wait a day, or a week, or a month to offer a new employee a new agreement, until the day at which they are under 20 employees. The day that they have 18 or 19 employees will be the day.

So I think that there are some challenges around, again, the definition of that and the potential for gaming, for want of a better term, by those employers who might be employing 20 or 21 people. Maybe they have a bit of a sinking-lid policy. They get down to 18 or 19 and then they want to be able to take advantage of the 90-day trial period. If that’s the case then this is a potential area for—abuse is probably the wrong word, but certainly gaming if they wanted to try it. I’m keen to know what the Minister’s views are on that situation.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 56

New Zealand National 55; Ross.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 153 in the name of the Hon Iain Lees-Galloway to Part 2 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 56

New Zealand National 55; Ross.

Amendments agreed to.

The question was put that the amendments set out on Supplementary Order Paper 115 in the name of the Hon Scott Simpson to clauses 29 and 29A be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 56

New Zealand National 55; Ross.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Amendments not agreed to.

CHAIRPERSON (Adrian Rurawhe): Dan Bidois’s tabled amendment deleting clause 35 is out of order as being inconsistent with a previous decision of the committee.

The question was put that the amendment set out on Supplementary Order Paper 144 in the name of Nicola Willis to clause 39 be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 56

New Zealand National 55; Ross.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Amendment not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 146 in the name of Dan Bidois to clause 39A be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 56

New Zealand National 55; Ross.

Noes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Amendments not agreed to.

A party vote was called for on the question, That Part 2 as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 2 as amended agreed to.

A party vote was called for on the question, That the schedule be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Schedule agreed to.

Clauses 1 to 3

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you very much, Mr Chair. Just a brief call because I noticed during earlier debates that a couple of members signalled their interest in the commencement clause, clause 2, and the changes proposed on Supplementary Order Paper 153 to change the commencement of certain sections of the bill from coming into force four months after the date of Royal assent, to a more precise date, 6 May 2019. The two reasons for that were it was as a result of submissions from employers; certain employers felt that it would be helpful to them to have a bit more time just to adjust to certain provisions of the bill and also that having a set date at the beginning of a week—i.e. a Monday—was more useful to them. There’s nothing more to it than that.

CHRIS PENK (National—Helensville): Thank you very much, Mr Chair. I also thank the Minister for Workplace Relations and Safety for pre-empting, no doubt, some discussion on this subject, and I also want to take a moment to thank him for his constructive response to a question I raised in a previous part of the debate. It seems like a long time ago. I’m tempted to say it feels like 90 days ago, because, by this stage of the evening, 90 days is about the only time frame that my mind is capable of handling. We’ve had, I feel, a debate for about 90 days. The whole thing has been somewhat of a 90-day trial, and I’d like to just address some suggestion about the commencement date in my remaining 90 days that I have to speak.

But if my suggestion that 90 days be the commencement date isn’t adopted and if no quarter is given in that regard—and I’ll just pause for a moment to allow the subtlety of that to ring round the Chamber, which it’s doing very silently—I’ll move on to a particular suggestion that I have in relation to the commencement date that I wonder if the Minister might contemplate. Quite simply, it’s actually not, in all seriousness, that the bill will come into effect 90 days after this House passes it or, indeed, it receives Royal assent but, instead, that the commencement date be four months from the date of Royal assent in the case of all the different provisions.

I acknowledge that that’s the case for the following sections: section 4, sections 9 to 11 inclusive—it doesn’t say “inclusive”, but that much is obvious—16, 8A, 17 to 19A, 29, 30 to 34, and 35 to 37. So I feel as though we could actually do a pretty good job of standardising the effect of the bill if we were actually to apply that particular time frame to the other sections in the Act, which, actually, are stated to be different. Sections 24 to 27, for example, which relate to discrimination in relation to union membership and involvement in union activities—it’s some six months.

I wonder if, given the desirability of having legislation that’s very clear, accessible, and easy to understand, we shouldn’t just standardise them all so that when people ask themselves around the water cooler or when they’re taking their meal breaks—if you’ll excuse the particular analogy—then they’ll be able to say to themselves, “Well, I wonder when the Employment Relations Amendment Bill will come into force. I know there were some really good speeches last night on that by Chris Penk, and some others too, and I wonder when that’s coming into force.” And it’ll be quite a long conversation. It might exceed the length of time available for the meal break if the person at the water cooler, praising my speeches in this way—possibly related to me; possibly even me—would have to give quite a complex answer in terms of the number of different sections that I’ve already outlined and don’t intend to do so further: those ones that come into effect after four months as opposed to those which come into effect six months after the date of Royal assent, and, indeed, the provisions that come into effect the day after the Royal assent.

On that latter category, which is, of course, the rest of the Act, which, of course, aren’t enumerated because there’s no good reason to do that except for the sake of clarity, I suppose. But, actually, in that case there will be very little time for employers, employees, and other interested parties—for example, including and in particular unions that might have a role in collective bargaining and so on and have different abilities to access workplaces and so on, as is the specific intent of the bill. And so some period of time for everyone to get their heads around that to ensure that they comply with the law would seem to me very beneficial.

It would be unfortunate indeed if there were accidental or unknowing breaches of the provisions of this legislation for reasons of perhaps acting in good faith but being unaware of the swiftness with which the matter is being contemplated by Parliament, such that instead of the day after Royal assent, some four months after, or perhaps six months after, would be more sensible and more helpful to all concerned.

There is a lot going on in the bill, and the Minister would no doubt acknowledge that because he’s taken the time to respond to a number of different points. And so I feel as though if we give the rest of New Zealand the time to catch up and understand these things, perhaps over a period of four to six months, that might be easier for all concerned.

NICOLA WILLIS (National): Well, I’d like to start by thanking the Minister for Workplace Relations and Safety for selecting the date of 6 May 2019 when these changes will happen. The Minister has a keen sense of history, it is clear, because it was of course on 6 May 1937 that the Hindenburg disaster occurred. A Zeppelin fell to the ground and 36 people were killed. Well, 6 May 2019 in New Zealand will be a date that creates sighs in many, many workplaces around this country, creates furrowed brows, creates that feeling of frustration that small business owners tell us about when yet again they have to go through paperwork and changes that make their businesses go slower not faster; that make it harder to employ people, not easier; that make it harder to do a good job by their employees.

Of course, 6 May 2019 has a particularly nasty side effect, doesn’t it, because what do the summer holidays and the Christmas holidays look like for employers up and down New Zealand? They look like the time when these people will have to prepare the paperwork, prepare all of the changes that will need to be made so that they are ready by 6 May 2019.

I would like to ask the Minister about one provision in particular and that’s the one that relates to sections 8A and 17 to 19A—so addressed here in clause 2(a)(iv)—“(which relate to employers’ obligations in relation to new and prospective employees who are not union members):”. So this is to commence on 6 May 2019. These are the provisions that have been discussed a lot during the course of this debate because they relate to employees having their information handed over to unions if they don’t sign up for the union.

So what I want to know is: is the Minister confident that by 6 May 2019 his officials will be able to come up with a form that adequately communicates to employees exactly what information will be handed over when they fill in that form? Will they be able to make sure that that opt-out box is big enough by 6 May 2019? And actually, will they be able to design a form that is simple enough that employees up and down the country will, in fact, fill it in? Of course, if they don’t fill it in, the fall-back position is that their employer will tell the union that they haven’t filled that form in and will tell the union that they can go and give them a visit. So it’s very important that we have assurance that 6 May 2019 provides enough time for officials to think through these issues which have significant consequences for the privacy of New Zealand employees.

I’d also like to know from the Minister why we have the arbitrary distinction between clause 2(a), which relates to 6 May and then in clause 2(b), the sections 24 to 27, which are to come into force six months after the date of Royal assent and why those provisions are seen differently from the other provisions. And why, in fact, it is that the rest of the Act comes into force on the very day after the date of Royal assent? Why is the Minister distinguishing between all of these bits?

I’d also like to ask the Minister whether in fact he has considered whether 6 May 2019 was the right date to get, because let’s remember some history. In 1997, it was 6 May that the Bank of England became independent from politics. So perhaps this is the day that the Labour Party’s employment policies will become independent from what is good for employees? This is also the day in 2001 when Pope John Paul II entered a mosque for the first time, which, of course, was a very special occasion for global faith; quite different from the not auspicious occasion that it will be in New Zealand. In 2010, this was when the Dow-Jones index plummeted a thousand points in just 36 minutes.

So this has not been a day in history that seems to have any relation and it leaves employers scrambling over their summer break, over their Christmas holiday, to prepare for a raft of changes, and we know from experience, don’t we, members, that where there are lots of files to be prepared, where there’s lots of work to be done for officials, if this doesn’t go right we know who will get blamed, don’t we? It won’t be the Minister who will stand up and say, “Look, you know, it was me who made the decision to make this all happen on 6 May 2009.” No, we know that he’s got form, so he’ll say, “Actually, you know, the officials, they didn’t get it done in time.” So I really want assurance that this is going to provide time for officials to get all of these things together to ensure employers are properly informed, that they have what they need to abide by the law. If they don’t, we can be sure that they will suffer, that their employees will suffer, so it’s very important that this commencement clause is dealt with appropriately.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. We’re at that part of the debate where we are now discussing the title, the commencement, and the principal Act. I wanted to thank the Minister Iain Lees-Galloway for pre-empting my question on this, because I did attempt to raise it in an earlier segment of the debate inappropriately, and I apologise for that.

But still, given that this is a bill that is designed entirely to strengthen the role of trade unions in the industrial relations environment and to increase union membership and power and influence, surely there would have been pressure from the trade unions on the Minister to get this bill done and dusted as quickly as possible. So not wanting to call into doubt the veracity of the Minister’s proposition as to why the date for commencement has been moved from a date sometime in March to 6 May, quite specifically, I am still a little concerned about the reason for that, and I would be appreciative of a further analysis of quite why that delay was. On this side of the Chamber, we suspect that that’s probably a question that relates to the relationship that exists between New Zealand First and the other coalition parties, and that they have probably gone about asserting their influence in terms of slowing this down.

But if the Minister is correct—and I take him at his word that the reason for the delay to the specific date of 6 May is exactly as he has suggested, to coincide with a Monday—then that’s a good thing. It does give businesses a greater opportunity to prepare for the administration and paperwork and changes to employment agreements and conditions that will be required. I know from my own commercial days of being in business, running businesses, and employing people that it is a time-consuming and sometimes quite complicated process for employees and HR people and, indeed, managers and operators of businesses. These are not simple transactions that are short documents; they are quite lengthy. Some people find them quite intimidating, the actual documents themselves. In fact, I can well recall long-term employees who simply, when presented with new employment agreements, literally did not open the envelope that they came in because they just don’t want to get their heads around it. For many people, this will be a challenge.

But I do want to suggest that if Monday, 6 May is a more appropriate business day, then maybe consideration should be given by the Minister to delaying just a little further, because for many businesses these days, the end of the financial year occurs on 30 June. That means that 1 July is the first trading day of the new financial year for an increasingly large number of New Zealand businesses. As it happens, in 2019, 1 July does fall on a Monday, and for many businesses that would be far more efficient and far more effective than a date in the middle of May or early May that seems convenient only because it is a Monday. If you’re really concerned about that, Minister, then I would suggest that a more appropriate date, if time is not of the essence—and it would seem, in this case, that it’s not—then 1 July would be a very good alternative and something worthy of consideration.

I had no idea that the date of 6 May was as inauspicious as it actually turns out to be, and I want to thank my colleague Nicola Willis for her diligent research into that date. For no other reason than that, it would be a very good thing to do to change the date.

I want to conclude this little portion of the debate just in terms of the title of the bill. This Act is to be the Employment Relations Amendment Act 2018. Surely, given that this is all about growing trade union strength and power and influence, it should really be called the “Trade Union Retention Bill”. Or maybe it should be called the “Trade Union Membership Enhancement Bill”, because what we do know is that trade union membership over the last 30 or so years has declined rapidly because people, literally, are not interested in joining trade unions. There’s no value proposition for many of them who don’t want to spend the $500, $600, $700, $800 or more a year that it costs to belong to a union.

So this is really a bill that’s designed to grow union membership and to encourage that money flow back to the trade unions. So “Trade Union Retention Bill” or “Trade Union Membership Enhancement Bill” would be, in my view, far more appropriate.

SIMEON BROWN (National—Pakuranga): Thank you, Mr Chair, and thank you for the opportunity to talk to the Employment Relations Amendment Bill, on the title and commencement clauses. I just want to ask a few questions around why the Minister in the chair, Iain Lees-Galloway, chose the date of 6 May. He seems to have just gone through his calendar and looked for a nice-looking May Day and thought, “Oh, well, that’s a Monday, on a May Day, and we’ll choose that one.” So he plucked it out of the air, popped it in the bill, and said, “Well, that’ll be nice and convenient for businesses.” Well, I’ve just had a look on the IRD website to work out when businesses’ tax is due next year, and it seems to me that 7 May is tax day. So did he consult with the Minister of Revenue to work out whether there were any other conflicts or anything else that businesses might have to be doing around that date?

Well, 7 May seems to be quite a busy day for quite a lot of businesses, and they’ve got these law changes that they’re going to have to deal with on the Monday, with tax due on the Tuesday. So I’d like to ask the Minister: what consultation did he undertake when choosing this May Day Monday when he decided to pop that in Supplementary Order Paper 153?

Hon Scott Simpson: Mayday! Mayday!

SIMEON BROWN: I think a lot of businesses will be saying, Mr Simpson, “Mayday! Mayday! We’ve got all this happening, and we’ve got our tax due on Tuesday so that this Government can keep spending it on a whole lot of wasteful expenditure that it keeps popping money into.” That’s just another point that I think needs to be looked into, and I’d like the Minister to actually take a call and tell the committee why this date was chosen, rather than just giving some sort of floppy answer about why he decided to pluck a date out of the year.

I also have a number of suggestions for what the title of this bill could be more accurately described as. It’s currently the Employment Relations Amendment Bill, which is quite bland—very boring—but we could probably make it a little more accurate if the Minister was to take on board some of the suggestions that I might be able to persuade him of. The bill talks a lot about union rights and union privileges and trying to support the unions—and, I mean, I don’t know why but the word “union” should be in there. I see the Minister Tracey Martin across the other side of the Chamber. She gave me a chocolate fish once for being able to mention the word “union”, I think, 21 times in five minutes. The chocolate fish is still sitting on my desk up there. I haven’t eaten it; it reminds me every day about how this Government is very, very supportive of the unions, and it will sit there for a little bit longer. But, surely, the word “union”—

Hon Scott Simpson: Like the Government, it’s got a use-by date.

SIMEON BROWN: That’s right: like the Government. I did remind her when she started to suggest giving chocolate fish in the mail, that there could be some health and safety risks associated with that. That’s partially why I haven’t even consumed it yet, but I’d rather just look at it.

But, anyway, why is the word “union” not anywhere in the title? Surely, that should be recognised, and the fact that unions will now have unfettered access to the workplace? They’re going to be able to go and recruit members. They’re going to be able to have more powers around multi-employer collective agreements, and a range of other union rights, which are sort of littered throughout this piece of legislation which the Minister is seeking to progress. So why is that not recognised in the bill? Surely, the name could be the “Employment (Union Power Increasing) Amendment Bill” or “Increasing Union Power Amendment Bill”—“Employment (Access for Unions) Amendment Bill” or “Employment (More Union Membership) Amendment Bill”. These are names which could more accurately reflect the actual intent which is inside this bill.

We know that this bill is designed to increase membership. It is designed to increase revenue for the Labour Party’s union mates, and that’s what this bill will do. So I think this bill should be clearly describing the actual impact and the actual effect that it’s designed to have upon New Zealanders and actually have that in the title. And let’s be honest; this bill should just be honest. Everything this bill does, if you read a nice bland title like that, you could think, “Well, this is just making a few changes around the edges of our Employment Relations Act.” But this is going to the heart of it. It’s about increasing the unions, it’s about making mayday for employers, mayday for businesses, and I’d like the Minister to now take a call and explain why he’s going to be causing all sorts of mayhem.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 56

New Zealand National 55; Ross.

Motion agreed to.

A party vote was called for on the question, That clause 1 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Clause 1 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 153 in the name of the Hon Iain Lees-Galloway to clause 2 be agreed to.

A party vote was called for on the question, That the amendments be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Amendments agreed to.

A party vote was called for on the question, That clause 2 as amended be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Clause 2 as amended agreed to.

A party vote was called for on the question, That clause 3 be agreed to.

Ayes 63

New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Clause 3 agreed to.

Bill to be reported with amendment presently.

Bills

Misuse of Drugs (Medicinal Cannabis) Amendment Bill

In Committee

Clause 1 Title

Hon Dr DAVID CLARK (Minister of Health): Thank you, Mr Chair. The Government is committed to improving access to medicinal cannabis by establishing a medicinal cannabis scheme and amending the Misuse of Drugs Act 1975. The scheme, overseen by an agency, will ensure that medicinal cannabis products are able to be commercially produced in New Zealand. We know that there is a global shortage of products with known quality, and it will ensure that all medicinal cannabis products that are created in New Zealand are of a suitable quality.

The Misuse of Drugs (Medicinal Cannabis) Amendment Bill 2017 introduced an exception and a statutory defence for terminally ill people with less than 12 months to live to possess and to use illicit cannabis and to possess a cannabis utensil. It provides a regulation-making power to enable the setting of standards that medicinal cannabis products must meet, and it deschedules cannabidiol, also referred to as CBD, so it is no longer a controlled drug. I propose to make a number of changes to improve the bill through a Supplementary Order Paper (SOP). These changes will improve the workability of the bill and reflect concerns made by submitters.

The Supplementary Order Paper that I am bringing to the committee will do several things. Firstly, it will increase the number of people eligible to use illicit cannabis by replacing the references to terminal illness in the exception and statutory defence provisions with references to palliation. I want to acknowledge Jenny Marcroft from the New Zealand First Party for her good advice and work around this to ensure that we have a definition that is used internationally. It will expand the scope of that palliative care defence for the use of illicit cannabis. I want to thank Ms Marcroft for the very constructive way in which she has engaged with that and pass on my thanks to New Zealand First.

Secondly, it will move the exception for people requiring palliation to be able to possess and use illicit cannabis to section 8 of the Misuse of Drugs Act so that it is located with similar provisions that already exist in the Act.

Thirdly, it will allow regulations to prescribe standards for all stages of cultivation, production, and manufacture, and criteria for when the regulations will apply. The technical detail of the standards will be published by the Director-General of Health.

Fourthly, it will control only those substances naturally found in cannabis that are related to THCs and are capable of producing a psychoactive effect.

Fifthly, it will revise the definition of cannabidiol products to allow no more than 2 percent of the total CBD, THCs, and related psychoactive substances’ content to consist of THCs and related psychoactive substances that are naturally found in cannabis. It will require regulations to allow the use of cannabis varieties that were previously established in New Zealand without authorisation.

Finally, I want to thank the Greens for that particular provision, recognising that there are strains established in New Zealand, which would not necessarily need to be imported, that may contain additional properties when we’re setting up a scheme, and that we may wish to use locally but also, potentially, export in the future.

And, finally, my thanks also to the Green Party of Aotearoa New Zealand for their work around developing a provision that would require the regulations to come into effect no later than a year after this provision of the bill comes into force.

So those are the changes proposed in my SOP. I do believe that they make the bill a better and stronger bill. I want to thank members of the coalition Government who have engaged on this so constructively, and our confidence and supply partners, to ensure that we have a bill that achieves what it set out to achieve: to actually make sure that we have the compassionate defence, as it should be, allowing people in the final stages of life who find comfort in illicit products to access those products themselves without fear of prosecution. It will ensure that we have the correct standards around our own scheme that we’ll set up in New Zealand, recognising the international shortage of products that meet the guidelines that doctors want to prescribe. The bill will also deschedule cannabidiol, referred to as CBD, to make sure that it’s no longer a controlled drug.

So, taken together, the factors in this bill make it the most progressive piece of legislation that’s been put through this House and significantly will improve access to medicinal cannabis for those who need it.

I want just quickly, before we get too far into this debate, to comment on some of the other SOPs brought before the House—

CHAIRPERSON (Adrian Rurawhe): Sorry to interrupt the Minister, but it has come time for me to report progress.

House resumed.

The Chairperson reported the Employment Relations Amendment Bill with amendment and progress on the Misuse of Drugs (Medicinal Cannabis) Amendment Bill.

Report adopted.

The House adjourned at 9.56 p.m.