Holidays Bill

A substantial number of submissions were received on this part, particularly around the costs that it will impose on businesses up and down the country. I know that Labour members do not care about that, but I want to go through some of the costs that people talked about regarding this part, which relate directly to the cost of having to pay time and a half and double time for public holidays.

The first example is one given by the Restaurant Association of New Zealand, quoting Panda Catering—a catering company that many members will know because it caters at a range of corporate events around the country. In fact, it has the catering contract for many of the stadiums and rugby venues around the country. We were given the example that at a rugby game on a public holiday, of which there are many, the wages rate that Panda would have to pay will go from $15 an hour to $37.50 an hour under this bill. That will mean that those costs simply have to be passed on through higher costs for the food and drink that is sold at the event.

Again, that might not interest the Labour members who are sitting there—

💬 Jill Pettis: I remember when I was a kid—

The member for Whanganui does not give a toss about it, because she would be up there pigging out in the corporate box, but for people who are there in the stadium, having to go and buy a hot dog is an extra cost.

💬 Jill Pettis: At least I would get an invite. That member doesn’t even get an invitation.

That is just so typical of the socialist from Whanganui: she is OK, to hell with everybody else.

The rest home industry came before the select committee and quoted extra costs of 1.5 percent on its payroll nationwide. I am glad the Minister of Health is in the Chamber, and I hope she will take a call, because the rest home industry went to the Ministry of Health and said that this legislation would add 1.5 percent to its wage bill—that is without the 4 weeks leave; that is just the cost of Part 1, which is the double-time cost—and that its wage bill was the largest cost in running a rest home. The Ministry of Health went and talked to the Minister, and the Minister said: “Too bad. No adjustment to your contract.” I ask the Minister whether that is right.

💬 Hon Annette King: You talk through a hole in your head.

The Minister says that is wrong. Is the Minister denying that?

💬 Hon Annette King: I have never met them.

The Minister needs to listen carefully. They did not say they had met her; they said they had met the ministry, and the ministry said: “No adjustments in contract.”

💬 Hon Annette King: The member needs to be honest.

So the Minister is saying that the rest home industry lied? That is fine. When I have finished my speech, I will take that up in a phone call to the rest home industry to find out whether the ministry did say that. The Minister says the industry lied, so perhaps it will get the 1.5 percent increase, and perhaps the Minister could get on her hind legs and say that. I bet she does not. The ministry will not reimburse rest homes. The rest home industry told the select committee that it will mean offering fewer services to people who live in rest homes.

Golden Bay Cement came before the select committee and its representatives told us that this bill would add $250,000 to their payroll. They said that cost would be passed on to every builder and tradesperson throughout the country. Air New Zealand came before the select committee, and this is an interesting one. Air New Zealand is largely Government-owned, and it believed that this part of the bill would add several million dollars to its cost structure.

What does the member for Whanganui think about that? She does not care, because taxpayers pay for her to fly around. It does not matter to her. When she flies to the corporate box, she does not care about the cost of getting there or about the cost of eating or drinking while she is there. She does not care at all about that because, as far as she is concerned, someone else is picking up the tab.

But it is even worse for Air New Zealand. Its representatives made the point that clause 7 was completely unworkable. Clause 7 states that the average ordinary weekly wage of employees must be calculated before they go on leave. However, what is the ordinary weekly wage of air hostesses who work different shifts all over the place? They do not have one. So in this bill the Labour Government has decided that an ordinary weekly wage is the weekly wage that employees were paid for the last 4 weeks. The incentive, then, for every air hostess who is going to take a holiday—or on anyone who works variable shift work—is to work the maximum amount before taking any holidays. If they work the worst shifts—if they work the dog shift—for the month before they go on holiday, it means that when they are on leave, they will get the maximum amount of pay, and it will cost the company the maximum amount while those employees are on leave. I wonder whether the Minister will take a call and tell us about the economic logic of that for companies that pay people for shift work.

That does not affect just Air New Zealand, which the Government probably does not care about because it thinks that is fine, it also affects Tegel Foods, which is another company that came to us and talked about that very issue. This bill runs totally opposite to what the Government chirps on about in relation to work-life balance. That goes out the window. All shift workers know that before they take a holiday—whether they are a cleaner at a hospital, or work at Tegel Foods, or for Air New Zealand—that if they swap their shifts around and work nights, if they work the graveyard shift for the month before their holiday, they will stack up maximum wages. If they then take their leave, the company will have to pay them the maximum wage from those 4 weeks while they are on holiday.

So much for work-life balance! What will it do to the Minister of Health’s budget when cleaners start realising that this is the way to maximise their holiday pay, and they start to see that they can get substantial increases in holiday pay by swapping shifts? What will that do to the budget in her hospitals—and does she care? Probably not.

But for private enterprise up and down this country, that matters a great deal, and I hope the Minister will take a call on this particular part and explain to businesses why they should have to put up with these rules. I know that businesses have gone to Labour members and asked them. Labour members said: “Well, make a submission. This is what the select committee has done.”, and they try to hide behind the majority of the select committee. [Interruption] We will not see Jill Pettis going into the rest homes in Whanganui and saying: “You’re not going to be reimbursed for the extra 1.5 percent costs.” What she will say is: “Well, look, I will argue the case in Wellington but, you know, things are tough.” We will not see her owning up to the extra costs she is putting on restaurants and rest homes. We will not see her owning up to the Whanganui District Health Board for the extra cost that will drive up its deficit. We will not see her fronting up to the manufacturing sector in Whanganui—a sector that works shifts—and saying: “Well, these are the extra costs that I’m putting on your business, and I think it’s fair.”

I want to also talk about Tranz Rail, a company that the Government for a while wished to own. Tranz Rail also appeared before the select committee on this part and talked about the cost of locomotive drivers on a salary. Now because they drive the train or unit on a public holiday, Tranz Rail ends up having to cop the extra costs. To escape from this, Tranz Rail has to be able to prove that at the time of the salary negotiations any double time was taken into account. That is impossible for Tranz Rail to prove.

I want to respond to the suggestion made by an earlier speaker that the commencement date for entitlement to 4 weeks’ leave—about 1 April 2007—is inappropriate. We have heard members saying that this is just a blatant election bribe, but it is quite the reverse. The Labour-led Government made a promise not to introduce 4 weeks’ leave effective from this term of Parliament. A member’s bill brought the matter before a select committee. As a consequence, it was incorporated into the legislation, but with effect from 1 April 2007, so that it does not take effect during this term of Parliament.

If perchance the Opposition were lucky enough to win the next election—

💬 Jill Pettis: But it won’t.

—which it will not, it would have the opportunity to reverse it. If we win the next election, it can be taken that we have a mandate for this new law. So it will then, quite properly, take effect from 1 April 2007. Rather than this bill being an election bribe, it is the most proper way to deal with the issue.

The Green Party welcomes the Hon Matt Robson’s amendments to Part 1. Those amendments bring back the date of implementation of 4 weeks’ statutory annual leave for all workers by 2 years, from 1 April 2007 to 1 April 2005—a very reasonable amendment, if I may say so. Like many unions, community-based organisations, and individuals who made submissions to the Transport and Industrial Relations Committee on Mr Robson’s original member’s bill, the Green Party believes that it is actually way past the time that, as a society, we should accept and endorse the right of all workers to have 4 weeks’ annual leave. Waiting until 2007 to introduce that provision effectively means that for many it will be late 2007 or early 2008 before they become eligible for the extra week’s leave.

The delay until 2007 is unnecessary and uncalled for. What is more, it is the workers in the worst situations who will be hardest hit by the delay. Already, some 40 percent of State workers have at least 4 weeks’ leave a year, while technical and professional staff in the private sector often have the ability to negotiate 4 week’s leave, or even a lot more. It is the people in the lower-paid, casual, and less skilled parts of the workforce, and new entrants to the workforce, who are most likely to have to wait the extra 2 years to see any extension to their statutory holiday entitlement. People on low wages need an extra week’s holiday just as much as people on higher wages and salaries. It is one of the less comprehensible aspects of modern thinking that somehow the people in those echelons of the workforce where they have more interesting and fulfilling work are somehow more worthy of extra pay and extra time off than those who struggle hour by hour, day by day, and week by week to survive on $8.50 or $9.50 an hour, doing work that often offers very little personal interest or satisfaction.

The nature of work has changed a lot in the last 30 years, too, since statutory leave was last extended, to 3 weeks a year. Firstly, women are now much more a part of the working world, which means that for family life it is even more critical that working parents are able to maximise their time with their children, especially during school holidays. Secondly, when we look at some particular sectors of the economy, we see that a number of industrial sites now operate 24 hours a day, 7 days a week, 365 days a year, while in the retail area many shops are open 7 days a week, from early morning and into the night, and particularly so at times of the year such as the one we are in at the present. At many such sites employees are often expected to work overtime, as well. Those workers are working longer hours, often at antisocial times, and their need for a longer period of rest and recreation and time with family and friends is even higher than it was in the past, when hours of work were far more restricted and confined. A third change to the nature of work since the 1970s, when 3 weeks’ leave was introduced, has been the growth and acceptance of structural unemployment. Despite the current and very welcome drop in unemployment, we still have hundreds of thousands of people out of work in this country, by a number of measures—and that includes hidden unemployment. Giving all workers an extra week’s leave is one small part of the solution to unemployment. As well, it will simultaneously help to deal with the corollary problem of overwork, which has also become systemic and which exists alongside unemployment and underemployment.

An extra week’s leave in 2005, rather than in 2007, would bring New Zealand more quickly into line with the many other countries overseas that already offer their workers 4—or even more—weeks’ leave each year, as of right. An extra week’s leave will also help workers to become more productive, with positive impacts for employers, including, I am sure, reductions in absenteeism and sick leave. This Labour Government has, commendably, talked a lot about improving the work-life balance in the last couple of years. If Labour was really serious about sustaining high labour market participation, at the same time as supporting improved productivity and a greater quality of life for workers and their families, it would join the Green Party and the Progressives today in voting for 4 weeks’ leave for all workers from April 2005, not from April 2007.

I would like to start by talking about the purpose of this bill, which is to promote a balance between work and other aspects of an employee’s life. I would like to ask the Minister in the chair, Chris Carter, how he thinks that compelling people to have 4 weeks’ holiday a year, instead of giving them the choice of having higher wages and taking fewer holidays and so on, will promote a better balance between their work and way of life. Before I got into Parliament I worked in a company with about 1,000 workers, and when it came to Christmas time a whole lot of them wanted to take every single hour of work that they possibly could, because at that particular time in their lives the money was far more important to them than the holidays. What we should be doing in this Parliament is passing laws that give workers freedom of choice and the freedom to negotiate with their employers, so that they can either have more money or more holidays.

We do not need this sort of legislation; this is like blinking, Stalinist-type legislation that takes every bit of choice away from the workers. Yet the Labour Party tries to pretend that it is pro-worker! Well, there is a huge anomaly there. I would like the Minister to explain to the Committee how taking away the ability of workers to choose between having more leave or higher wages and more hours of work is in their best interests, when the latter is what they want to have. There is a huge anomaly with regard to this legislation. It is the latest in a long line of anti-business legislation that has been passed by this Government. What is worse, it is an open political bribe, because the bill passes into law 4 weeks’ holiday a year, but that does not come into force until 1 April 2007. What sort of Government passes laws that do not come into force until 2007?

💬 John Key: Trying to buy an election!

It is a nonsense. It is simply, as the member says, a way of trying to buy votes at the next election.

One of the elements of this bill that I find quite confusing is that I understand that the provision regarding 4 weeks’ holiday, which is the major part of this bill, did not have proper scrutiny at a select committee. Maybe some of the members who were on the Transport and Industrial Relations Committee, which dealt with this bill, can clarify that, but I understand that the select committee did not properly look at the 4 weeks’ leave provision. That provision is being rammed through by the Labour Government, and it has not been subjected to an open public debate through the select committee process. It has not been subjected to proper scrutiny by the select committee. So we have another example of the Government trying to pretend that that provision in the bill has been through the proper process when, in fact, that is misleading and deceptive. It is another example of the Labour Government not coming clean with the people of New Zealand.

Maybe the Minister could take a call, to explain to the Parliament why a provision as important as this provision, giving the workers of New Zealand an extra week’s holiday a year, has not been through the proper scrutiny of a select committee. I wonder whether the Minister can look up, so I can catch his eye and get him to indicate whether he will take a call to tell us why the select committee did not properly address that issue. Maybe I have that wrong. Maybe the Minister can take a call to tell us whether the select committee that dealt with this bill dealt with the issue of 4 weeks’ holiday a year. Could the Minister take a call and tell us whether that was—

💬 Jill Pettis: He is not allowed to.

Maybe Ms Pettis could say that more clearly. I did not quite hear her.

I told him he was not allowed to.

The Minister is not allowed to take a call! Is that what the member from Whanganui is telling this Committee? If that is the case, it is outrageous. Does that mean the Minister who is sitting in the chair has been told by the member in charge of this bill that he is not allowed to take a call? He is the Minister in the chair, and I want him to take a call.

I know that we have already taken a call and spoken on the title of the bill, but I wonder whether it should just be the “Workers’ Holiday Bill”. Where does the poor small-business owner get his holidays in all of this?

The purpose clause states: “The purpose of this Act is to promote balance between work and other aspects of employees’ lives …”. Well, I have learnt in life that sometimes it pays to know whom one is talking to. Around us here in Parliament we have 120 seats. How many members in this 120-seat Parliament have ever employed somebody? Let me see the hands. One, two, three, four, five, six, seven, eight, nine—11 members out of 120 have actually employed somebody in business. So we have a bit of a challenge when we are dealing with this issue. If I spoke at a car club about increasing the speed limit, I would get an entirely different sort of response from what I would get if I were speaking at a local trampers’ club.

💬 Peter Brown: I raise a point of order, Madam Chairperson. I am very interested in what United Future has to say about this bill, but the survey the member has just conducted is absolutely ridiculous. I did not put my hand up, and I have been an employer and an employers’ advocate. Can you ask him to get back to the bill?

The CHAIRPERSON (Ann Hartley): That is a debating point. The member is entitled to do that in his speech if he so chooses.

I am very happy to acknowledge Peter Brown’s hand, and will increase the number to 12.

💬 Dr Muriel Newman: I raise a point of order, Madam Chairperson. The member should be aware of the fact that when he was doing what he just did, which was to take a survey of the members in this Chamber, he was indirectly reflecting on the number of members who are in this Chamber. He knows very well that not every member is in this Chamber right at this moment in time. So that survey was a complete and utter nonsense, and the member was going against the Standing Orders.

The CHAIRPERSON (Ann Hartley): No, the member did not refer to particular members as being absent.

In coming back to the bill, I want to point out that small-business owners in this nation are also people. I think this legislation is very unfair and very unwise, given we are trying to get a work-life balance—which we would support—into the lives of all New Zealanders. When we have 85 or 90 percent of small-business owners carrying the burden of the types of increases proposed in this bill, I become concerned.

Let me take, for example, the provision regarding 4 weeks’ holiday. One must look at who already has that entitlement, and then look at the cost of that sort of thing. Obviously, I have always found that staff members want to retain their relativity. So we cannot ignore the costs of an additional weeks’ holiday, which is what this legislation intends, and say that that is not a cost. Well, my friends, I can assure members that when staff members who already have an additional week of leave by way of relativity see that all workers are to get an extra weeks’ leave, they will argue it is fair for them to retain that relativity. For an employer, that is a very difficult argument to fight against. I think that the costs of this legislation to the small-business sector will be substantial. I hear the concerns and the cry of the small-business sector. I really wonder whether the Labour Government does listen to that. We hear that Labour is trying to become more business friendly. Well, I say this legislation is terribly unbusiness-friendly legislation.

There are many other factors that come into a work-life balance. Unfortunately we have developed a 24-hour, 7-day-a-week world, and we probably all enjoy that world—being able to go out to a restaurant at any time of the day or night, and having a 24-hour corner store to get the milk from. I do not see anything particularly wrong with that. But some people need the ability to get staff to maintain the business over those hours. Then we start to get into the issue of paying time and a half for this and time and a half for that, and in the end the situation becomes very difficult and very challenging for many small-business owners. So, much as United Future would love to see people have 4 weeks’ holiday, we ask why the Government does not consider—if it is looking at parity with Australia—also dropping our taxation rate to 30c in the dollar, so that we can be on a par with the Australian rate. Those employers over there do not have to pay our taxation rate. They pay a lesser taxation rate, so therefore they should have more disposable funds that they are able to use to pay for an extra week’s holiday.

We are not au fait with an extra week of holiday, but we are saying that there must be a balance to the equation. One cannot always expect the small-business owner to be giving out, and expect him or her to take that. To be honest, the Government will put a straw on that camel’s back that will break its back, and then what would we do with all the unemployment that we would have in the nation?

It interests me that the bill as a whole covers a wide range of reforms for holidays. They have come about through a very intense scrutiny of what is wrong with the present legislation. In particular, attention is paid to making sure that there is clarification, and that helps employers and employees. There are reforms, such as those involving public holidays, so that those who work on public holidays get full holiday entitlements. People will be paid at time and a half on public holidays. I welcome that in particular, because there have been decades of driving back the conditions that working people won over a long period of time to compensate for their working hours that are outside the normal social hours. There is a social side to employment as well as a working side—that is, when people are working, if they do not have proper conditions, we are actually taking a large part of people’s lives that they are contributing to their area of employment, and that, in philosophical terms, is the alienation of labour.

This bill gives many people who work a lot of their life back by giving them, firstly, better conditions, and secondly, 4 weeks’ leave. I am interested that always when there is a social reform the parties of the right—the conservative parties, from United Future to National—talk about the economy as though the people are absent. One of the aspects of the economy is to ensure that those who contribute to its profitability are given their due reward, as well. It is 30 years since the bulk of low-paid and unskilled workers have been brought into a system that everybody else has granted himself or herself—4 weeks’ leave. I defy any members in this Parliament to say that in total they do not give themselves 4 weeks’ rest a year. I would be very interested to see any people in this Parliament who do not, particularly if they add in the flexibility they have as members of Parliament to organise their working lives. This reform is bringing workers in many of our enterprises into line with others who granted themselves this benefit a long time ago.

On the question of the economic viability, could members name one country that is comparative to New Zealand, has 4 weeks’ leave, and has gone backwards economically because of this reform? There is no such country that has done that. I have, in the name of the Progressives, an amendment, which I ask people to vote for, that puts this measure of 4 weeks’ leave—this just reform that gives to other parts of our society what many members of this Parliament, and professional people, have given themselves for a long time—in place as from 1 April 2005. I am pleased, as a coalition partner, that the Labour Party has come to support this bill—it is a Government measure. The Greens and the Progressives were lonely on this when we first brought it in, but we now have a majority, with Labour and New Zealand First joining in. It is a good and constructive step, but if the date this measure comes about is 1 April 2007, then we are condemning a section of our workforce never to get this for two reasons. Firstly, some will pass away, because it is a health measure, as well. There is an aspect of getting more recreation that helps people’s general well-being Secondly, by asking people to wait that long, we are actually taking from them that part of the recreation side of this measure that is for the benefit of their health. So placing it 2 years further along means that we are denying a section of our workforce the right that so many of us have right now. I ask members to think very, very closely about that particular clause, clause 2(1), and to bring it in on 1 April 2005 so that the benefit flows to that section of the workforce that is excluded.

In terms of being family-friendly, I once again particularly want to issue the challenge to United Future to tell us about how knocking back 1 week extra for families under pressure is a family-friendly vote—it is absolutely the opposite—and, secondly, the concern for small businesses.

I think it is fair to say that when New Zealand First discussed this bill, it had as tense and as a difficult a time coming to its conclusion as it has had on anything. Basically, we see parts of this bill as being business unfriendly. We recognise some of the points made by the Hon Roger Sowry. I think that Paul Adams made a few points, although I have to correct him on a few others.

At the end of the day, the holidays legislation in this country needs clarification, and it needs to be made fairer, both from the employees’ point of view and probably from the employers’ point of view. Paul Adams referred to Australia. I think he inferred that the conditions there are inferior to those in New Zealand. Let me say to the honourable member that the gross wages are higher, the tax rates are fractionally higher, and the net wages are higher. I have done the research. In Australia people get 4 weeks’ leave a year as against 3 weeks here. The people who do not get currently get 4 weeks’ leave are generally the low-paid, lesser skilled people, and young people. All of those folk would like to leave this country permanently in significant numbers—not every one of them, but people from every one of those categories. I know some personally. They say that the wages in this country are low compared to Australia, the UK, Asia, and many other places in the world, and that is an attraction to go elsewhere for higher wages. They also say that the holiday entitlement and what one might call the general conditions of employment are inferior in this country to those in many of those places. A few years ago young people in particular would go to Britain, Australia, or wherever for an OE, but now many of them do not want to come back, and they know that from the time they leave. We cannot hold on to our young folk on lifestyle alone. We cannot depend on lifestyle as being the sole factor for young people to make their career here.

💬 Simon Power: Is the member voting for or against the bill?

We have made an assessment that we need this bill in this country right now.

💬 Simon Power: What about the minority report?

Our minority report? I will come to that.

💬 Brian Connell: The member said it was business unfriendly.

Will the member get back to his own seat? We said the bill is business unfriendly, and we still believe it is business unfriendly. We still believe that this will give an incentive to some employers—[Interruption] Madam Chair, if these guys do not get back to their own seats—

The CHAIRPERSON (Ann Hartley): Please give the speaker a fair go.

💬 Opposition Member: What’s the member going to do?

The member wants to know what we are going to do. I will tell the member what we are not going to do. We will not repeal the 4 weeks’ leave provision when it comes in, like those members will, and we will not have the unemployed queuing outside post offices—like those members. That is what we are not going to do. Those members are like clowns in a circus. We will not sell all our assets, like National’s new leader wants to. We will support this bill, not because we believe it is perfect but because we believe that New Zealanders, particularly young New Zealanders and low-paid New Zealanders, have a right to better holiday conditions than they currently enjoy. We believe that in the fullness of time the flaws in this bill will emerge. We worked on a Supplementary Order Paper to produce tax concessions, and we would like to couple that with this bill. However, we realised that that would put us in the invidious position of having those concessions vetoed by the Minister, and we would then have to face the truth—whether we wanted the bill or the bill depending on tax concessions. We came to the conclusion that there is a need for better holiday entitlements in this country. I say to Mr Adams that the sun will come up in the morning even when this bill comes through. It will come up, and it will be a bright day not only for that member over there but for the low-paid, as well.

I move, That the question be now put.

I am delighted to take a second call on this bill. I am very clear about what National’s position is on this bill. I say to Mr Brown that we do not support it. Read my lips: we do not support this bill. [Interruption] That means immigrants, as well. We do not support it, so let us be very clear about that. When I think about this legislation, and Part 1 in particular, I have a vision about the Labour Party. It is a vision of a witches’ cauldron. I see a whole heap of witches hanging around the outside of the cauldron, thinking up nasty legislation that they can throw into it. Admittedly, there are good-looking witches like Jill Pettis there, as well, but underneath it all she is still a witch, and she is asking how they can hurt the employers of New Zealand just a little bit more.

The CHAIRPERSON (Ann Hartley): Please be seated. That is not acceptable.

I apologise.

The CHAIRPERSON (Ann Hartley): It is not acceptable to refer to a member like that. Would the member please withdraw.

I withdraw. I did not mean any offence. I am sorry if I gave any. Nevertheless, I am concerned that we have the Status of Redundancy Payments Bill, the Smoke-free Environments Amendment Bill, the Employment Relations Law Reform Bill, and now we have the Holidays Bill, and I have to pose the question of just how much more we can expect the business people of this country to take, because they are not a bottomless pit. How much more can we ask those people to contribute before they say “Enough!”

This bill is a step backwards. In fact, it is a step so far back that if we keep doing it we will rediscover dinosaurs. I do not mean the nimble, fleet-footed ones like the allosaurus; I mean the slow sloth-type ones that we are encountering at the moment. Indeed, we are in great jeopardy of going back so far with this legislation that we will be in an era where we are completely uncompetitive.

This legislation is appalling. It is ill advised, poorly thought out, and poorly conceived. The purpose sounds OK, and I shall go through that. Clause 3, “Purpose”, states: “The purpose of this Act is to promote balance between work and other aspects of employees’ lives and, to that end, to provide employees with minimum entitlements to—(a) annual holidays to provide the opportunity for rest and recreation:”. That sounds fine, and I agree with the genesis of that. But if it is so good, why can we not just let employers and employees get together to make those decisions themselves? Why do we have to legislate? If it is such a good idea that everyone inherently says: “Yes, that’s fine.”, why do we have to legislate? It is entirely not practical, and it assumes that every business in this country is exactly the same. It assumes that the conditions that people need in order to make their livelihood in Auckland are exactly the same as those in Southland, but the reality is just not like that. Clause 3(b) states: “public holidays for the observance of days of national, religious, or cultural significance:”. That sounds fine, but when we get to—

💬 Pansy Wong: Chinese holiday!

I bet it does not happen—not under the New Zealand First Party anyway. I bet it does not happen there; absolutely not! Public holidays sound fine, do they not, but let us look at the affordability and willingness of some employees to take leave. The police department is a classic example. Does the Committee know that some members of our police force have 6 months’ outstanding leave right now?

💬 Simon Power: Why can’t they take it?

It is not that they cannot take it; it is that they do not want to take it. The last thing they want is an extra week’s holiday. Do members know why? Because they enjoy their jobs; they want to be there. What they would like is the ability to cash out some of those entitlements, but this legislation does not give them that flexibility. Why not?

💬 Pansy Wong: It would be too logical.

Yes, it would be too logical. Just imagine the financial impact on the police force when this legislation comes into force. The contingent liability of our police force will go through the roof. That is why I say this legislation is ill conceived and poorly thought through. Comparing the economies of other countries and saying that we should have the same as them is just absolutely naïve. Other countries are not New Zealand. The conditions we need to put in place should be relevant to New Zealand. In case members do not know, this is a small economy.

I move, That the question be now put.

I would like to make a further contribution in light of some comments made by members of United Future and New Zealand First. I will then raise an issue that I am concerned about in respect of new clause 5A, “Relationship between Act and employment agreements”, contained in Part 1 that essentially cuts to the quick as to the sanctity of contract and the employer’s ability to negotiate directly with the employee.

But first I pass on a couple of comments about some of the comments made on Part 1 by members of United Future—a strange group of members of Parliament. Presumably, if United Future is voting against this legislation, because it is not business friendly, and the worker who is self-employed, or employing one or two people will be hit hard by this legislation, then United Future will be keen to continue that thread of debate and will withdraw its supply and confidence in the Government for all legislation that is unfriendly towards businesses.

Members of United Future are chipping in now. They have decided they will get a bit interested in this debate. At least United Future—and I hesitate to say this, because I am not keen to give its members too much credit—has a view on this. What I cannot understand is New Zealand First’s view on this bill, which, as best as I can sum it up, goes like this: “We think it is business unfriendly. We’re not happy about it. We know it’s going to damage business, but we’ll give it a crack—even though we know it’s going to damage business and we know that it will damage workers’ rights.” It’s the “Let’s give it a whirl!” party.

Members of New Zealand First should remember that view when we are on the platform at the next election: “We know it’s bad for business, but we’ll just give it a whirl.” I shall remind members of that when it comes to the election in 2005.

Specifically, I now turn to clause 5A and ask the Minister in the chair whether she would be good enough—because historically she has been good enough to take calls in the Committee stage—to answer a couple of questions for me. Subclause (1) of new clause 5A, “Relationship between Act and employment agreements” states that each entitlement is a minimum entitlement. Subclause (2) states: “This Act does not prevent an employer from providing an employee with enhanced or additional entitlements … on a basis agreed with the employee.” Why can that principle not just apply to the entire employment relationship? What is it about Labour members that they think the employer is automatically, in negotiating an employment agreement with the employee, going to undermine the employee’s rights and ability to negotiate freely with the employer? What is it about the employer that Labour believes that it is fine for the employee to negotiate directly on enhanced entitlements, but what makes employers so much in the gun that if those minimum entitlements are not there, they will not be able to negotiate for those? I find that a very odd strain of logic.

💬 Jill Pettis: Because miserable gits like David Bennett make them wait for 10 years.

But it goes on. Perhaps the officials could help the Minister—

The CHAIRPERSON (Ann Hartley): Please be seated. The member cannot say that.

What did she say?

The CHAIRPERSON (Ann Hartley): The member cannot refer to a member like that.

I did not take any offence.

💬 Jill Pettis: I said “Miserable gits like David Bennett make them wait 10 years.”

The CHAIRPERSON (Ann Hartley): I am sorry. I thought the member was referring to the member.

The member cannot say that. I have taken offence now. The member should apologise for that.

The CHAIRPERSON (Ann Hartley): The member should stand, withdraw, and apologise.

💬 Jill Pettis: I withdraw and apologise, but I got it on the record.

She was quick off the mark there; she was quick out of the blocks! New clause 5A(3) states: “However, an employment agreement that excludes, restricts, or reduces …”—those minimum entitlements, which people cannot negotiate—“(a) has no effect to the extent that it does so;”—OK that makes sense to me—“but (b) is not an illegal contract under the Illegal Contracts Act”. So only those portions that disrupt the minimum entitlements have no effect—in other words, this bill wipes them out—but the rest of the contract stands. I ask the Minister in the chair, the Hon Judith Tizard, whether that is right. Is the contract still enforceable—although the Illegal Contracts Act does not apply—and certain mandatory parts of the contract cannot be contracted out of? I think it is a question worthy enough that the Minister should put down her Christmas card signing, get to her feet, and answer as to whether the Illegal Contracts Act does make it an illegal contract. It is a very worthwhile question to be asking. I see Matt Robson nodding his head. He thinks it is a fair point. So let us hear from the Minister.

I move, That the question be now put.

There is a point in the Holidays Bill that I do hope can be clarified by the Minister in the chair, the Hon Judith Tizard, during the Committee stage debate. It is a technical point; the sort that the Committee stage is intended to deal with. Clause 7(1)(b) states that ordinary weekly pay, for the purposes of calculating annual holiday pay, includes—“(iii) the cash value of any board or lodgings provided by the employer to the employee;”. It then states in clause 8 what the cash value is. It goes on in a redundant way to state that clause 7 “includes the cash value of any board or lodgings provided by an employer to the employee—(a) as agreed by the employer and employee; or (b) as determined by a Labour Inspector …”.

We find words similar to those in clause 7 in clause 12, “Meaning of gross earnings”, but paragraph (a)(vi) states: “the cash value of any board or lodgings provided by the employer as agreed or determined under section 8:”. Now, there is a difference in wording. Usually in reading statutes, if one finds a difference in wording where one thought they would be the same, the courts try to put a meaning to it. I do not know what the meaning may be, but I would really like to know. Is it something more substantive than drafting clumsiness or maybe an accident of the tortured history of this bill? What happens when the employee is continuing to use the cash value—or is continuing to use the board and lodgings provided—but is on holiday? Because it appears to me that this says the employee must be paid holiday pay, including the cash value, and then receive, on top, the board and lodgings.

I am sure the members who sat on the Transport and Industrial Relations Committee, and the officials, would have thought of it, but it looks to me as if it is a doubling-up. If so, there is time for the Minister to put an amendment forward to make clear if that is not intended. If it is intended, then that is consistent with the cavalier approach in this bill to just doubling-up, irrespective of cost.

In looking at Part 1, this really is evidence of the projection. The previous speaker got to it when he said: “Why would you do this?”. Why would they pass something that the advice tells them costs hundreds of millions, that reduces the employment of those who most need jobs, that patronises people and treats them as if they cannot work out their own arrangements, that will change the nature of holidays in New Zealand again? Because things that people wanted to go and do—like shopping or go down to the restaurant for a treat—will suddenly be out of reach of some of those who cannot afford it.

It will not matter, of course, to the people who can pass their costs on. It will not matter to the people who get the cost of living adjustments—like Labour members opposite who were sneering and talking about this as “trifling”—but it will matter to the people for whom a few dollars—the 1 or 2 percent difference—really matters.

When I look at the way this has emerged, it is the Hon Margaret Wilson’s bill, and I think she loves being Lady Bountiful with other people’s money. There is no more refined pleasure than wandering around being Lady Bountiful with other people’s money, especially when one can hide that fact and bribe people with their own money and their own time. When she can put in these definitions that are as vague as her “good faith” definition in the Employment Relations Act—

💬 Simon Power: Look where that got her!

Exactly! She had to rewrite it—and it will be worse next time. One finds that a bill that was supposed to make it easy and simple to understand, to allow the woman sitting at home trying to make up the wage book for her husband’s business, the guy who is sitting down late at night, after having worked all day, trying to do the wages and the holiday pay calculation, then having to dig into this kind of legal drivel that defines “ordinary weekly pay”, “relevant daily pay”, then goes on and defines “gross earnings”. I am a lawyer. I have spent 20 years reading the law. If this is simplification, God save us from any more! Having sat here for the last hour and a half trying to understand what it is going to mean if one is working through the wage book, trying to make up the entitlements, I cannot tell what it means.

I move, That the question be now put.

Thank you for the opportunity to speak to Part 1. Now that the Minister in the chair, the Hon Judith Tizard, has finished her Christmas card list, I want to ask—[Interruption] Sorry, she has found three more friends. When she has finished those cards, I want her to answer a very specific question about clause 3, “Purpose”. I will read it out so she can think about an answer: “The purpose of this Act is to promote balance between work and other aspects of employees’ lives and, to that end, to provide employees with minimum entitlements to—(a) annual holidays to provide the opportunity for rest and recreation:”.

My concern is that those words suggest to me, following the rash of anti-business legislation, as we head towards the summer of discontent, that Margaret Wilson has not yet finished, and that more nanny State legislation will be coming in earlier next year telling New Zealanders how they are to spend their annual holidays. That is an easy question for the Minister to take a call on, and if she fails to do so, then I think my suspicions will be confirmed. Clause 3 states that the purpose is to provide “minimum entitlements to annual holidays to provide the opportunity for rest and recreation:”.

💬 Pansy Wong: No smoking.

We know that people are not allowed to smoke. We know that shortly they will not be allowed to eat hamburgers, and all sorts of things. But my point is that a lot of people, when they take their holidays, do odd jobs around the house—paint the house, tidy up the garden, etc, or whatever mum tells them to do. But will they be allowed to do that, when a bill as specific as this is telling people they must take their holidays for rest and recreation?

💬 Simon Power: To get balance!

To get balance. I want the Minister to take some time to explain what that means. Because I am very concerned that there will be further anti-business legislation, further opportunities for this current Government, to tell people how they are to spend their holidays. This is a simple question for the Minister to answer for us.

Take the hospitality industry, for example. I spent time yesterday with Don Brash in Christchurch and we spoke to a number of people in the hospitality industry who are really struggling—firstly, with the anti-smoking legislation, and, secondly, because what they thought was going to be a Holidays Bill that would simplify matters for the industry, has now ended up on their plate looking significantly different from what the Prime Minister, Helen Clark, went around the country talking about, prior to the last election. It is significantly different from what Steve Maharey had taken the opportunity of assuring the House about, only a year or so ago; all of a sudden, at the last minute we have the imposition of 4 weeks’ annual pay, without the public of New Zealand knowing when it voted at the last election that that would happen.

The very people who will pay for this are the workers on the lowest income levels in New Zealand. This sort of legislation must be paid for by somebody. The Government, with its anti-business legislation, thinks all employers are fat cats. It thinks that all people in business have plenty of money to accept the costs associated with the 4 weeks’ annual leave. That just goes to show to New Zealand, particularly to the business sector, that the Government does not understand industry. The likely effect is that further pay rises will be significantly minimised because the employer must somehow cover off the additional week’s leave that has been granted by this legislation.

It is a relatively easy question for the Minister to answer as to why in clause 3, “Purpose”, it has specifically detailed what the Prime Minister, or the Hon Margaret Wilson, or some other member of the sisterhood, thinks is what people should be doing on their annual holidays. I do not see any need to be as specific as that. I did not have an opportunity to sit on the select committee; there may be a reason—let us hear it.

I rise and ask one question of the Minister: do the socialists know any bounds at all? Do they have any boundaries at all, or do they just think that business is a bottomless pit for more and more costs, and more and more politically correct legislation loaded on it? It is a simple question, and I am sure the Minister does not have to have too much knowledge of the detail of the bill to be able to answer that. Do they know any boundaries, or do they think that business is just a bottomless pit, or do they absolutely dispute the figures put out by Treasury that there would be an extra cost to New Zealand business of $800 million by passing this legislation? That is a simple question.

Will the Minister also answer the question: how will work-life be enhanced by this legislation? It is totally beyond me how a Government that purports to represent poor, lower socio-economic, hard workers, can think that by introducing an extra week’s leave into the legislation, and all the other requirements that are set out in this bill, that will somehow or other enhance the lives of those who are in the most vulnerable position when it comes to negotiating their pay rates.

The next question would be: does the Government believe that further pay rounds in the next 12 months to 2 years, up to 2007, will be enhanced by this legislation? Will those people get higher increases or lower pay increases? That is quite a simple question. Will the lower-income workers in the country get a higher or lower pay increase as a result of this legislation? The answer is obvious—they will get a lower pay increase.

This, in effect, is a wage freeze. There is no doubt in my mind about that. All small businesses in this country, which have this $800 million worth of extra costs now dumped on them, will be looking at ways to try to maintain their bottom line. I pause and ask the Government to consider business in New Zealand. Business in New Zealand is a unique structure compared with anywhere else. The average business in this country employs no more than nine people. It is small business by any international comparison.

💬 Opposition Member: It’s five.

My colleague says it is five. I guess it depends on where one draws the line on what is small business and what is not. But let us say it is between nine and five—it does not make any difference. By comparison with the rest of the world, that is significantly lower. The question then is: will this enhance employment opportunities amongst those small businesses? When it comes to work-life balance, we already have a situation in small businesses around New Zealand where the bosses, or the self-employed people, who have taken the risk, who have put their capital on the line, already are working far too many hours, on average. There is no work-life balance. They do that in the sort of hopeful belief that some day they will have a bit of capital behind them and they will succeed, despite the fact that statistics show us that overwhelmingly those businesses do not ever end up in that situation. Those people do it because they are self-motivated and want to do something they can feel good about. Often they do it because they enjoy employing people and providing an opportunity for people who would not otherwise have an opportunity.

Can the Minister answer this question: will their ability to do that be enhanced by this bill, or not? Overwhelmingly, the answer is “No”. Overwhelmingly, those on the other side know it, and overwhelmingly, that is the reason they are using this as an election bribe—no more than that. That is why it will not be introduced until 2007. Government members know that it will have a detrimental effect on growth in this country.

I want to talk for a moment about the industry that I belong to myself—the dairy industry. That accounts for 20 percent of this country’s export earnings. We have the largest single manufacturing site of dairy products in the world, in Hawera—in the electorate of the honourable member for Whanganui. The former Kiwi site built a new powder plant in the mid-1990s. It cost $120 million.

I move, That the question be now put.

I want to look at the compliance costs that will be associated with the introduction of this bill. It is interesting to note that many different figures have been floated around. Even this afternoon we have heard a number of different figures. But the true cost of the extra week’s leave to come in in April 2007 that this bill allows for has been projected to be in excess of $700 million. That is twice the amount that the Government disclosed. The Government said the figure would be $350 million. Treasury and the Department of Labour issued a statement in which they estimated it would cost employers about $350 million, but the Cabinet papers show a different figure. In fact, the Cabinet papers released under the Official Information Act show that the figure will be much higher than that, and they also show that employees will be hit in the pocket, as well. They will be hit in the pocket by about $350 million. So the total cost of these measures will be about $700 million, and projections are that it could go out to about $800 million.

It was interesting to note that the Minister of Labour, Margaret Wilson, defended the announcement, saying that it had always been made clear that there would be unspecified flow-on costs. A minimum cost of $700 million is a huge cost, in my opinion. Then she went on to say: “You don’t get something for nothing … The bottom line is that the monetary costs are very small compared to the total wage bill.” In my mind, $700 million is a huge amount. It is not a small cost, at all.

That cost will be added on to the way we do business. It is just another part of the huge compliance costs and the regulatory regime that small businesses in New Zealand are having to face that are putting immense costs on those businesses. It has been reported that 267,000 small businesses employ 595,000 people. We are a nation of small businesses, and the cost they will have to bear is such that a lot of small-business owners will ask: “Why would I bother? Why would I want to invest and why would I want to put my money at risk, when I am having to carry these costs?”.

If we look at what happens overseas, we see that in the United States there is no mandatory figure for how much holiday entitlement workers have. Employers negotiate that with employees. Most businesses over there pay for about 2 weeks’ leave. If we look at performing countries, where there is growth in the economy, we see that they do not have many weeks of annual leave. They work productively and have bonus-based incentives. France, which has the highest amount of leave at 5 weeks, has a productivity rate so low that it is looking to restructure. France has a 35-hour week and 5 weeks’ annual leave, and it is in dire straits. So are some of the other countries in the European Union.

💬 Hon Matt Robson: You should take your holidays.

The member over there wants to have holidays all the time. That is the way socialists operate. They do not realise where growth and wealth come from. They come from people who are prepared to invest, and there are risks associated with that.

Here is another interesting point that Mr Robson might like to consider: this extra cost will hit health boards, and we know how cash-strapped they are. Here are some figures: the Auckland District Health Board said it expected to pay at least $1.25 million a year more, and the Capital and Coast District Health Board has estimated that the bill will cost it an extra $400,000 in pay for doctors and casual staff, which will have to come from existing funding. The health industry is under extreme pressure, but this bill says that the Government knows best and will introduce 4 weeks’ annual leave across the board.

It will also bring in bereavement leave of 3 days—not 3 days per year, but 3 days for a close relative, as identified in clause 62; I will talk about that later on, when we get to Part 2—and there will also be another day’s bereavement leave for a close associate. Workers do not have to produce a doctor’s certificate if they are sick, until after 3 days. We are seeing a huge compliance cost regime that New Zealanders cannot afford. We will not achieve the 4 percent growth that this country needs to provide all the services we expect in health, education, police, and security by giving out more annual leave provisions.

I draw the Committee’s attention to another quite disturbing point, which is in clauses 8A and 8C, which give power to the labour inspector to determine ordinary weekly pay or relevant daily pay provisions. Clause 8A(2) states: “A Labour Inspector may determine the amount of the employee’s ordinary weekly pay or relevant daily pay, as the case may be.” Huge power goes to the labour inspector.

I move, That the question be now put.