State Sector Amendment Bill

We were saying that this bill is shockingly misnamed, and I am pleased that the Minister of State Services, Trevor Mallard, is here as the Minister in the chair. This small amendment bill has 13 pages of amendments in it, and the United Future party has signed up to it without those amendments having had select committee or parliamentary scrutiny—the public process.

We say that this bill should be called the “Let’s Override the Parliament Bill”, because it gives enormous power to the executive to restructure Government departments. It could be called the “Let’s Get Rid of Christine Rankin Bill”, because that is its purpose. Trevor Mallard did not like her, and wanted her to be fired. Because he did not want her to get the big golden handshake he restructured the civil service, just to get rid of one person. That is what that Minister did. We could also call the bill the “Time Doesn’t Matter to the Socialists Bill”, because the cause of this bill is over 2 years old. The Minister of Māori Affairs realises that that is so, and nods his head in agreement. Christine Rankin is long gone, but we are still sitting here with this bill, which gives the Government the power to get rid of her through the restructuring of the civil service.

I would like Trevor Mallard to take a call and explain why the executive should have that power, and to explain why 13 pages of amendments should be rushed through Parliament with the doormat’s—the United Future party’s—support, rather than going through the select committee process. I would like the Minister to take the call and explain—

The CHAIRPERSON (Hon Clem Simich): I ask the member to desist from using that sort of description of another party in this Chamber. In fact, I ask him to withdraw it.

I withdraw it. The United Future party is the “Agree With Everything This Government Does, Whatever it is, Party”.

💬 Opposition Members: Doormat!

I could not possibly say that. Members of that party just agree with everything the Government wants. They may speak against what the Government wants and oppose it vehemently in this Chamber, but then they vote for it. That is probably what we will see today, although I do not think they have examined the ramifications of doing that.

I would like the Minister in the chair to take a call and explain this bill and its title, rather than riding roughshod over the United Future party, which is very friendly to him. Why does he not put in the title what the bill is intended to do? Or have we got it wrong? Is it not the case that under this bill the executive can restructure a department without coming to Parliament? Is it not the case that under this bill chief executives can be fired without the Government following the proper process? The Minister just sits there.

We in the National Opposition oppose this bill, and for very good reason. I commend Mr Hide for his description of what the bill’s title should be. In speaking to the title, I say the bill could very aptly be named the “Ill-conceived State Sector Amendment Bill”, and I shall proceed to tell members why I say that.

There are some guidelines for the formulation of a bill. First, one has to ask whether the legislation is actually needed, at all. Secondly, one should consider the need to involve lawyers early in the policy formulation stage. I would like to refer to the New Zealand Law Society’s submission on this bill, because, in my view, it addresses a very, very critical part of something that has been totally overlooked in the formulation of this bill. The submission states that the proposed provision overrides contracts by means of statute, and that that point of principle requires careful consideration. It goes on to state that whilst Parliament has the power to pass laws that alter the terms of existing contracts, that power should be used with caution and sparingly. That comes from the New Zealand Law Society. I do not see any reference to those issues that are present in the bill, because there is no commentary on it.

That is why I refer members back to the title “Ill-conceived State Sector Amendment Bill”. There is no reference to the Law Society’s submission on the bill or to the matters it raises, which are of significance. I will read out to members a little more of what the society has to say. It states that the legislation involves a statutory interference with private rights that arise from negotiations undertaken and concluded pursuant to other statutory provisions. Here I would like to refer members to another basic principle in the formulation of legislation: the legislation that is being formed must fit appropriately into the general body of existing law. The question could well be asked as to whether that has been considered in this case. Again, the bill has no commentary to explain those matters or to address the concerns put forward in the Law Society’s submission.

I refer to another crucially important point in the society’s submission—the last point that it makes. It states that the Crown is not only promoting the legislation but also will be the contractual beneficiary of it. Because no reference is made to the serious concerns raised by the submitter—there is no commentary—this bill is ill-conceived, so hence my suggestion that it should be called the “Ill-conceived State Sector Amendment Bill”.

I have further reasons for calling this bill ill-conceived. In 2001 there was a 6-page Supplementary Order Paper on it. We now have Supplementary Order Paper 107, which at 13 pages is exactly the same length as the bill itself, and it has a Bills Digest covering it. There is absolutely no commentary on any of those documents. When one has a Supplementary Order Paper that is exactly the same length as the bill itself, I ask how one could possibly suggest that the legislation has been well conceived. I refer back to my suggested title of the “Ill-conceived State Sector Amendment Bill”, because the Supplementary Order Paper is the same length as the bill itself.

I would also like to raise another matter. The Public Service Association made a whole lot of recommendations in its submission. These amendments have all been done to satisfy the concerns raised by the Public Service Association. Was there no consultation on the policy that was being established prior to the drafting of the bill? Again, I say this is the “Ill-conceived State Sector Amendment Bill”. If the proper guidelines had been followed and met, lawyers would have been involved at the outset and those matters would have been addressed. I say to members again that the Crown is not only promoting the legislation but also will be the contractual beneficiary of it.

I would also like to refer members to another issue that was raised, and that is the issue of transparency and accountability.

I want to make some relatively brief comments. First of all, it is good to see the member in the Chamber, and I apologise for not recognising her as a member of Parliament when we were at a recent function. But I will catch up with the new National Party back-benchers at some stage.

💬 Simon Power: How is this related to the bill?

I am being nice to the member.

💬 Simon Power: That is unusual!

That is right, and because the member is relatively new I think it is probably worth explaining one or two points.

The essence of this bill—the piece that she focused on, and the bit that we care the most about—goes to a fundamental question about whether a public servant or a State sector employee should get redundancy pay as well as a job when there is a nominal change of employer, through the amalgamation of agencies. That is the guts of it. Should they get redundancy pay as well as a job?

💬 Sandra Goudie: That is contractual interference.

Well, the member is absolutely right. There is contractual interference in this case; we are interfering with a contract. We say that we should not pay out probably hundreds of millions of dollars of redundancy to the staff members in Work and Income New Zealand because the name of that agency changed. That is what we are on about here.

💬 Sandra Goudie: The Public Service Association addressed it.

One cannot address it by way of a backdated precedent. The member has suggested that every individual contract with every person who was an employee of Work and Income New Zealand should be debated and dealt with in every case, when there are tens of thousands of employees. Frankly, the member is bonkers. Legislation is the only way of doing something like that.

I want to make one more point, as National Party members have criticised the redundancy area of the bill. I want to remind them about the Tourism Board, and how it had a bunch of incompetents on it—Murray McCully’s mates—and paid $400,000 to an individual when he resigned. This Government stands up for probity, and that lot are opposed to it.

I wish to follow the Minister’s comments and address some of the concerns raised by my colleague the MP for Coromandel, Sandra Goudie, and to get a little more specific about why the title to this bill—the State Sector Amendment Bill—does not reflect the actual position that is being stated.

This bill effectively exempts public sector organisations from a series of rules that apply to the way private sector organisations are restructured, or if different companies within a parent company are transferring employees from company to company, or entity to entity, within an umbrellaed company structure. There is no way that private sector organisations would get away with trying to pull the stunt that the Minister is trying to pull while sitting in that chair and promoting this bill. Because of the facts surrounding Christine Rankin’s removal from Work and Income New Zealand, the Minister is trying, by promoting this ill-conceived State Sector Amendment Bill, to exempt the Government from the very provisions it put in place under the Employment Relations Act, and the very provisions that members on this side of the House told the Government would occur in exactly this type of situation.

I cannot believe for one moment that the Minister in the chair could seriously want members of this House to deprive employees and workers of their rights to claim redundancy entitlements because they happened to work in the public sector, and decide that the public sector needs to be reformed in a way that makes its entitlements different from those available in the private sector. How can United Future members sit there and allow two standards of redundancy compensation to apply—the difference between private and public sector—and sanction the removal of redundancy provisions in the public sector because this Minister took his time some months ago to remove Christine Rankin from a position in Work and Income, and was required to legislate that restructuring in a way that avoided the provisions of the Employment Relations Act? That is why this bill should not be called the State Sector Amendment Bill, but the “Trevor Mallard Exemption to the Employment Relations Act Bill”.

That is a serious concern, and it is a double standard when one considers that if in the private sector, two entities, both owned by the same parent company, were to undergo the transfer of employees from one company in a structure to another company in a structure, this Government would be crying foul if those employees were prevented from bringing technical redundancy cases. This Minister should get to his feet and explain why Parliament should pass legislation that devolves from those employees the rights they are entitled to under legislation promoted and passed by this Government in the last term.

This bill should be renamed the “Double Standards for Redundancy in the Public Sector (To Get Us Out of a Tight Spot With Christine Rankin) Bill”. It is unacceptable for the Committee, and, in particular, United Future, to sanction such a differentiation between public sector and private sector employees. It is being done in a way that seems unprincipled, and is nothing short of desperate retrospective legislation to get this Minister out of the tight spot he created by supporting the passing of the Employment Relations Act through the House in the last parliamentary term. These are serious legal questions, and that Minister should get to his feet and answer them.

I have been brought to my feet in some excitement by the comment made by the Minister in the chair, because, if I heard correctly, this bill will deal with that long-running sore that the Minister was so hot about in 1999. According to his comments, this bill would in some way change the outcome if Mr Murray McCully again had to deal with dud directors or dud employees—I think he referred to the Tourism Board as the example.

💬 Hon Trevor Mallard: I did not say it applied to Crown entity boards.

From what the Minister told us, I understood that this bill would have made some difference to the dumping for $400,000—

💬 Hon Trevor Mallard: No.

The $400,000 was explicitly mentioned. That is what I heard from the Minister. When I heard that and looked at the title of the bill, I started to think that I must have misunderstood. I thought: “We should be voting for this bill.” It occurred to me that if there were a way of getting rid of these rorts—these claims by duds, this abuse of the legal system, these horrendous golden farewells, these things that inflame ordinary people, directors, business people, and Ministers alike—and if the Minister had had the courage to bring in something, even if he was sliding it under the title of State Sector Amendment Bill, and had the courage to do something about the abuse—

The CHAIRPERSON (H V Ross Robertson): The member may not question the courage of any member of the House, let alone a Minister.

I am sorry. If the Minister had had the openness and fortitude to do what he said he was going to do in 1999—that is, get rid of the law that held businesses to ransom when they were getting rid of a dud senior employee—we would certainly be voting for it. ACT would be absolutely into this bill if the Minister were doing anything more than just making an empty political speech.

I have scanned the bill as best I can, and see that there is a clause in it that would perhaps justify the title “State Sector (Ministerial Decree) Reorganisation Bill”. That might be a little bit of an example. There is the provision that states that the Minister can by Order in Council do things that, up until now, we thought would require reversion to Parliament. But I certainly do not see anything to do with the address the Minister gave us two speakers ago, when he referred to Mr Murray McCully. But if I have misunderstood the bill—if there is something in it that does address the issue—then the misnaming of the bill will certainly not stop us from reconsidering our opposition, because it is a very long-overdue reform that the Minister—

💬 Hon Trevor Mallard: ACT should support this bill. It does not support double-dipping for public servants.

We do not support double-dipping, but we certainly would support the Minister if this bill contains what he implied it contains—that is, the ability to return employment to at-will terms. What I understood from the Minister’s intervention is that he supports at-will employment for senior executives, as does every sensible economist, employment lawyer, board of directors, and senior employee. They know that when they are taken on, there is an allowance in their enormous salaries to reflect the risk of being dumped, should they be found unsatisfactory.

If this bill actually contains something along the lines of what the Minister intimated, then we certainly would need to reconsider our opposition. From looking at the actual words, and not the Minister’s description, the best we can tell is that it does nothing of the sort. In fact, it expressly preserves all the existing rights and entitlements. The effective reorganisation is said not to affect existing rights and entitlements—other, of course, than the minor redundancy he is trying to tackle. That, presumably, concerns those sorts of technical redundancies that the Government imposes on the private sector—the redundancies that the Hon Margaret Wilson was very happy to try to trigger with her proposals for a law that would attack transfers or reorganisations of private businesses. But for the State sector the attitude is: “Oh, no, we can’t do that.”

💬 Simon Power: Different kettle of fish.

It is a different kettle of fish. No, we will take State employees and make sure that they do not get the kind of windfall opportunity that the employees of The Dominion Post got, for example.

I move, That the question be now put.

The CHAIRPERSON (Hon Clem Simich): I note that the Hon David Carter has been seeking the call for some time, but members have been clearly indicating that they wish to move on to the bill itself.

Thank you, Mr Chairman, for observing my persistence. I certainly want to talk to the title “State Sector Amendment Bill”, because in my mind that title does not reflect the true ramifications of this legislation. We see a lot of amendment bills going through this Parliament, and in many cases they involve minor amendments, but I want to argue that this bill is not about a minor change to the State sector, and therefore should be called the “State Sector Restructuring Bill”. The history of this legislation was detailed when the Minister himself took a call about a quarter of an hour ago to explain why we are discussing the State Sector Amendment Bill. This bill is about the ability of the Government to significantly restructure our State sector and not have to bring that restructuring back to Parliament for Parliament to debate it.

When Mr Mallard took his call, he said that this bill was a relatively minor piece of legislation—I think he used the word “innocuous”. He talked about a situation occurring whereby if a public servant “got a nominal change in his or her role”, then that person should not be entitled to redundancy. That is why this legislation was rushed into the House at the time we had the Christine Rankin issue on the table. The Minister shakes his head—he has forgotten. That is why the Minister introduced this legislation and gave it a 5-week period in the select committee before it had to be reported back. It was because there was an important issue around a certain embarrassment for the Government associated with a certain person called Christine Rankin. The Government restructured her job, restructured the department, and took that as an opportunity to get rid of her. That is why this legislation should be called not the State Sector Amendment Bill but the “State Sector Restructuring Bill”, because that is the sort of power it gives the Minister.

The Minister can take the next call to explain why the select committee was given only 5 weeks before the bill was rushed back into the House—where, lo and behold, it sat on the Order Paper for two long, laborious years before Mr Mallard thought: “I think we should try to finish it off. We’ve got ourselves into an embarrassing situation with the State Sector Amendment Bill, and we now need to at least complete the process we started.” That is the issue with this legislation. It is not about a minor amendment to State services. It is not about changing the redundancy possibilities or provisions for employees of the State sector when there is a nominal change in role. Christine Rankin was not faced with a nominal change in her role.

💬 Hon Trevor Mallard: Her contract had expired.

That Minister wanted to get rid of her—so did Mr Maharey—because she was so effective.

💬 Hon Trevor Mallard: Ha! Ha!

The Minister laughs again. He should be ashamed at the way sickness and invalid beneficiary numbers have increased under that Government. Christine Rankin would not have let that happen; she cared too much about the people. She was not going to cast those people into the benefit trap, whereby the Government hopes they will vote Labour for the rest of their lives because they do not know any better. She wanted to actually help people and give them an opportunity to make a commitment.

I say to Mr Mallard that that is what this legislation is all about. It is about making sure that the Government does not get into an embarrassing situation when it has someone who is actually good at their job and performing so well that it goes against the interests of this Government, which quite likes seeing people trapped on a benefit. That is why I am arguing strongly that this legislation be meaningfully named by calling it the “State Sector Restructuring Bill”.

I move, That the question be now put.