Holidays Bill

Part 2 of this holidays legislation was the part that attracted the most submissions. I shall put aside the 4 weeks’ leave provision that has been put in it, because that was a separate bill, and I want to talk about it separately. Suffice to say, that bill was not really taken seriously by the vast majority of the submitters. They basically said they were opposed to it, they took the Prime Minister at her word that it would not be introduced in this term, and they moved on to talk about the substantive legislation. I guess one could say “More fool them!”, because the Prime Minister broke her promise, broke her word to business, and turned round and introduced that legislation. The 4 weeks’ leave provision would not be in this bill if the Prime Minister had kept her promise, but she did not. She said one thing before the election, and did another thing straight after the election.

💬 Hon David Carter: The “Maharey principle”.

It might be the “Maharey principle”; in fact, Mr Maharey was involved with it, because he said the same as the Prime Minister did, and he broke his promise, as well. I know that business is feeling particularly aggrieved with the Prime Minister, who can so blatantly say one thing before an election then do something completely opposite after the election. I think that is probably a behavioural trait that we will see a lot more of from this Prime Minister.

This part of the bill contains a couple of clauses, though, that were particularly opposed by submitters. They are the clauses around sick leave. The bill as introduced required that somebody taking sick leave would not have to produce a medical certificate until he or she had been away from work for 5 days. Apart from a couple of trade unions and the Labour members on the Transport and Industrial Relations Committee, who seemed to think that provision was all right, all of the submitters opposed it. They said that allowing 5 days’ sick leave before an employer could ask for a medical certificate was an absolute nonsense.

I am glad that, in the end, the Minister of Labour saw fit to change that. The Labour members on the select committee were in no mood to change it, at all, but they had word from on high—the Minister negotiated that it would be changed from 5 days down to 3 days—and, as Labour members meekly do, they voted for what Cabinet had decided. It makes one wonder, actually, what the purpose of the whole select committee process is, if the Minister sits in the splendid isolation of her office, decides these things, and imposes them on the Labour members, who were, supposedly, listening to submitters.

That aside, the legislation is better than it was in that the period is now 3 days, but that is not good enough. In National’s view, the period of time in clause 61, “Proof of sickness or injury”, should be 1 day. An employer should be able to ask members of staff to provide proof of sickness when they are away on sick leave, if he or she needs to do so.

We heard from employer after employer who told us that they generally do not do that. Generally, someone takes a day off, and that is fine; the employee rings in sick, the employer accepts that the employee is sick, and that is it. But—and we heard it from employer after employer—for some staff there can be a “Mondayisation” of sick leave. They just happen to get sick on a Monday. There is a pattern, and the employers want to check out that pattern by requiring a notice of sick leave. I think that is a legitimate thing for employers to do. They should not have Mondays—or, for that matter, Fridays—wrecked by a small minority of staff who always want to take their sick leave in a way that creates a long weekend. We had people saying that all the time. Representatives of Tranz Rail made that point very strongly to us, and Tegel Foods was another business that made that point very strongly to us. Representatives of both those businesses talked about the problems that are created in a manufacturing line or in a service industry like the rail network, if a group of employees just decide they can always take Monday off and no one will ever be able to ask them for proof of illness or injury. It is not that they just will not be asked for proof; by law, they will not be able to be asked for that proof.

One has to ask oneself why anyone would want to create a law like that. What is its purpose? How will it grow the economy? How will it make the economy go faster? Perhaps the Minister would like to take a call and tell us how she thinks it will help the economy grow faster. Certainly, no Labour members on the select committee could talk about it; they never told us that, and the Minister never appeared before the committee to show us how it would work, at all. We think that area is just a nonsense, and we would like to see that period of time for proof of sickness or injury changed back to the 1-day requirement in the legislation at the moment, which does not seem to be causing any problem at all. We asked people who came before us what the problem was, and the only response we got was from the Greens, who said: “Well, if you’re required to do that, it costs you money, and sometimes you have to go out in the rain when you’ve got a cold, to get a certificate, and you get worse.” I say to the Greens that all the employers sort of rolled their eyes, because if someone who rings in obviously has a cold or the flu, then the employer will go: “Oh, that’s OK.” It is consistent “Mondayisation”, or using sick leave to have long weekends, that we believe needs to be addressed.

That was the major issue, I have to say, in this part of the legislation, outside the 4 weeks’ leave provision that the Government sneakily—and it was sneaky—added into the bill It was sneaky because the Prime Minister 3 weeks before the election—she was in a bit of trouble—went along to businesses and gave them her word and her promise that the Government would not introduce it. Then she raced around to Mr Robson and said: “That’s OK. You’re a different party. You introduce it, and we’ll all vote for it.” It is a bit like the sneaky little tricks Labour is trying to pull on the cannabis legislation at the moment. The Prime Minister really wants to see cannabis decriminalised, so she will let someone else bring that in, then she will deal with it as a conscience vote, and it will be a case of: “Oh gosh, United Future, it is so sad that you got tricked by that.”

The Prime Minister has used the same sort of trickery on the business community regarding this legislation: she told businesses one thing, broke her word, and proved to them that this is a Prime Minister who simply cannot be trusted. This is a Prime Minister who cares not a fig for business. This is a Prime Minister who says one thing before the election to the productive sector, and does another after it. This is a Prime Minister who will engage in mirrors and trickery as much as she possibly can and get away with it, because that is the way she operates. They are good old Labour Party tactics; they work in terms of the internal mechanisms of the Labour Party, and she has now decided to take those tactics and deal with the business community in the same way.

Well, I have a message for the Prime Minister: the productive sector does not trust her any more. Its members do not believe her any more. They know that this is a Prime Minister whose word cannot be taken at face value. They know that this is a Prime Minister who, despite all of the political spin around her “straightforwardness”, is very, very tricky. We are certainly seeing that with this legislation in the way that the Prime Minister introduced the 4 weeks’ leave provision into this part. Not only that; the Prime Minister thinks it is such a good idea that she has put out to 2007 the date for it to come in, and Labour members have just voted in the Committee to make sure that the date is 2007. That has more to do with election bribes than with holding to any principle about work-life balance or other things that the Minister likes to prattle on about. This bill does nothing to achieve any of those things, at all.

Part 2 contains a whole lot of old-fashioned, class-warfare ideas. It is the area where the Labour Government addresses employees generally—[Interruption]—and the Hon Margaret Wilson, whose bill this is, giggles. It would be good if she as Minister in the chair would take a call to explain some of these things. I come to the debate as someone in this Committee who is probably nearest to being a potential user of this bill—a bill that was supposed to clarify things.

Let us take the example of the new sick leave provisions. The worst employees, of course, make things bad for the other employees. It is the worst employees who take advantage of any privilege. It is the worst employees who make an employer wish he or she had never been decent and granted concessions. It is the worst employees who allow a burden to fall on others, because they do not care when they turn up or what they do when they do. This bill recreates the public service culture of skiving off—of Spanish customs that mean sick leave is not for sickness but is just another holiday entitlement—and it extends that culture throughout New Zealand’s employment scene. This bill says that the employer effectively has to recognise that every employee has not 4 weeks’ but 5 weeks’ holiday. This bill says that 5 days’ extra sick leave per year, without any proof whatsoever of sickness or injury, is an entitlement that accumulates like holidays and can then be taken in the same way. The employer is not allowed to ask for proof of sickness or injury until 3 days have gone, so employees can take all their sick leave as holiday leave as long as they do not take it in lots of more than 3 days at a time.

This bill now says to every employee: “You’re a mug if you don’t cheat.” This bill recreates in every workplace tension upon people who are diligent, whose object is the job at hand, and who want to feel proud of the integrity in their work unit. It says to them: “Lie”. This bill says that good employers do not ask questions of employees who take the occasional sick day. If good employers offer a benefit like that, the Labour Government will force every employer to do it. Of course, it also takes away the safeguard. It will take away the procedure that enabled employers to make sure that a concession like that was not abused. That safeguard was that employers could ask for a certificate if they were suspicious that employees were exploiting any concession. Now they will not be able to do that.

The corrosive effect relates not just to sick leave but also to bereavement leave entitlement. A whole lot of the new entitlements to bereavement leave do not depend even on the immediacy of a family relationship. Decent employers with valued employees would very rarely have insisted on bereavement leave being taken to the letter when someone was plainly broken up by a bereavement.

A new set of prudent customs will develop in the workplace. One of them is one that this Government is very good at introducing. Essentially, a simple rule of thumb for this prudent employer will be: “Do not hire Māori. If you can avoid it, do not hire people who may have got their qualifications on some kind of preferential quota. Do not hire them, because you will not be able to ask about previous convictions—and now, do not hire them, because they can ask for bereavement leave if they have ‘any cultural responsibilities in relation to the death’.” Who will be able to challenge that? What employer will want to buy into the fight of challenging someone’s claim to have cultural responsibilities? If the Hon Margaret Wilson had really wanted to simplify, clarify, and make it easier to be flexible, as she so falsely claimed, this bill would have had in it a definition of “cultural responsibilities”. It would have assisted employers to know when someone was not just dragging the chain but also taking ruthless advantage.

The Green Party has two amendments to Part 2 on the Table that we would like the Committee to consider. The first is to clause 46, which recommends that we omit the words “the time actually worked on the day” and substitute the words “the hours ordinarily worked on the day”. The aim of this amendment is to change the bill so that if an employee works on any part of a public holiday, he or she should be paid the ordinary pay for that day, plus half the rate again for the actual time worked on that day, or the amount in the existing employment agreement. The bill currently compensates employees at the rate of one and a half times the ordinary pay for the hours worked on the day, but does not pay them if employers send them home early.

The Green Party, like a number of union submitters, believes that workers should be fairly compensated for having to come into work on a day that is a public holiday and on which they would normally work. The situation as it stands could see some workers receiving less money for a day’s work than they would normally receive. This is simply unfair when someone has planned and prepared, with all that that means, during periods like this Christmas season, to come in and work on time and in a healthy state, and then be told to go home early, with an unexpected loss of pay. As the bill stands it encourages employers to use even regular employees on public holidays as a form of casual labour, or on an ad hoc basis, in a way that disturbs time with family and friends but does not provide sufficient pay to make it worthwhile for employees. The Green Party wants to see a reduction in the barriers to employees taking time off to be with their families, not the opposite. This bill does provide sufficient provisions so that employers can take on casual staff during public holiday periods, without having to penalise regular workers. We therefore seek support for our amendment to clause 46.

The second amendment we are proposing to this part is to clause 61, which deals with proof of sickness or injury. We recommend that the words “for a period of 3 or more consecutive calendar days” be omitted and substituted by the words “for a period of 5 or more consecutive working days”.

This part of the bill started off OK as originally drafted, with the 5 days in, but, unfortunately, over the period of the select committee consideration, for some reason the Labour Government decided to move backwards to a requirement that workers be asked to present proof after 3 days off for sickness or injury. I do not know if this retrogressive step was because of a concern about staff taking so-called long weekends, or because of a general Labour susceptibility to buckling to business demands in the middle of employment relations legislation, but the consequences are unfortunate. The move to a 3-day rather than a 5-day requirement will place a severe and unnecessary financial burden on some low-income workers. It can cost up to $50 a pop to go to the doctor for a medical certificate. It is a pity that people will be forced to do this, especially when they are suffering from an illness like a cold or flu, which normally does not need medical treatment.

The problem of recurring absences on Fridays or Mondays can be a real one, and I would be the first to acknowledge that, but I suggest that it is best dealt with by careful and good management practices, through things like sensitive and well-done performance reviews rather than through the blunt instrument of this clause in this legislation, which can be used or abused by some employers. I call on the Labour Government to change its mind on this and revert to its original position.

A third area of particular concern for the Green Party in relation to this part concerns the general clauses around sick leave. Currently, parents—particularly mothers and those caring for sick or elderly relatives—are often disadvantaged by not being able to have enough leave, or paid leave, when their dependants themselves are sick. We are pleased that minimum sick leave entitlements are clarified and entrenched in this legislation, and it is made abundantly clear in clause 58 that taking time off to care for dependants who are sick or injured is totally permissible across the board. Ideally, however, we would have preferred to see domestic leave separated from sick leave, so that those caring for dependants would be entitled to a separate quota. This is because now that so many women are in the regular workforce and so many families have both parents working, it is critical that at least one parent or caregiver can legitimately take time off when a child or other dependant is ill. All too often women use their own sick leave entitlement to meet family obligations. We would have preferred to see a separation of sick leave from domestic leave, and an extension to the overall entitlement.

Basically, New Zealand is a low-wage country when compared with Australia, Britain, and various other places in the world. Now we in this Chamber cannot change that. It is almost impossible to change that through any short-term solution. To a large degree, the market dictates what is paid for our goods and services, and what people are paid comes back to that. [Interruption] The member here keeps muttering behind me. I do not know one area of expertise where New Zealanders are second-rate—not one. They lead the world in the industries I come from, and they lead world expertise in a number of other areas also.

I have to say that New Zealanders have difficulty getting paid what they are worth in their own country. If we cannot change the wage rates, we can do something about the holiday entitlements, and Part 2—the holiday and leave entitlements segment—attempts to do exactly that.

That said, I have to say that in general terms the bill is business-unfriendly. I have said that before, and I would like to clarify just what I mean. Because of the effects of this bill, there will be some employers who, of necessity, will have to pass the extra costs on; there will be some who will have to restrict their activity because of the extra costs; there will be some who will revert to employing people casually when normally they would have employed them permanently; and there will be other employers who will be easily able to absorb the costs.

The employers that concern me are rest homes, organisations like the IHC, and the health boards. Will the Government help them come to terms with this bill?

💬 Lindsay Tisch: Good question for the Minister. Ask the Minister that.

I do not know. The Minister might take a call and tell us that.

The benefit of hindsight will point out the flaws in this bill, and it will have to be tidied up, but we believe it moves society in the right direction. There are a number of areas that concern us, and I outlined them in our minority report. Basically, these are the payment methodology; some automatic entitlements with sickness and bereavement leave that have been touched on here today, and an underpinning lack of flexibility. In time, all those things will have to be addressed more thoroughly than perhaps they have been in this bill. However, we believe that the holiday legislation as it is needs to be tidied up, and we think this bill moves in that direction.

We believe that the Government will eventually have to look at a favourable tax regime for employers, particularly for some small employers who will suffer some hardship as a result of this bill. New Zealand First will be advocating strongly for a favourable tax regime for employers—particularly employers who are prepared to employ people permanently, rather than casually, as a result of this bill.

In summary, we believe that this bill takes a few steps forward in the right direction, but it also takes a few steps backwards. In essence, we believe it is a positive move towards addressing some of the concerns that affect New Zealanders in terms of holidays and their entitlements to them. I listened intently to the costs tabled by some of the members who have spoken on this bill. I recognise that what they have said is basically true, but we cannot move society ahead on the backs of low-paid workers and young people who have fewer holiday entitlements than we believe is generally fair. This country has to move ahead. Contrary to what the National Party says, we have to treat our young people and low-paid people more fairly.

I would like to address Part 2 on behalf of United Future, but I would first like to address a question put forward in a previous session by Simon Power, when he asked how United Future could vote against this legislation yet support the Government on supply and confidence. Well, Simon Power should be waking up by now to the fact that United Future is a party that is committed to its word and sticks to its agreement. When we make a promise, we fulfil it.

Part 2 deals with holidays and leave entitlement. I really believe that in business there has to be an employer-employee working relationship, yet it seems to me that this legislation is very one-sided. We have heard a lot about the rights to a work-life balance, and I do not believe that many people in this Chamber would disagree with that. Yet over the years I have seen situations where a worker works very hard and diligently for his employer, but because of his time of life, because of the stage his family may be at and the financial pressure that may be upon him, he is not in a position where he can actually take holidays.

So from an employer’s perspective, how does this legislation deal with a situation whereby employees have worked hard, but on the day they walk out for their holidays they take up a part-time job, or go to work for somebody else for 3 or 4 weeks and therefore get no work-life balance? They get no refreshment, yet that employer has to take them back on at the end of their holiday entitlement and they continue to work.

I believe that when we take away the ability to negotiate, take away people’s ability to choose, and take away the ability of an employer or an employee to negotiate for things that might be more beneficial at that time, we run into trouble. I believe that it comes down to legalism, and in all of my days I have never seen legalism work. At the end of the day, it is a relationship—whether it is a working relationship between an employer and an employee, or a relationship between a man and a woman, it has to be a good working relationship.

The bill refers to providing for employees, but employers are required to do the providing. I believe there should be requirements on employees so that, if they are given an entitlement to holidays, there has to be an element of responsibility and they should be required to take a holiday. How can employers deal with a situation where they find that their staff are working elsewhere, or are staying at home doing “homers”?

As Mr Franks pointed out, this is spending other people’s money. There are only three ways of spending money: we can spend our own money on ourselves, which we are very careful about; we can spend our own money on somebody else, which we are also very careful about; but what we are dealing with here is spending somebody else’s money on somebody else, and that is when people are normally very carefree. The employers’ groups have calculated that on the basis of the current workforce, an additional week’s leave would cost employers an extra $908.5 million a year, or 0.7 percent of gross domestic product. The unions have argued that that is false because it includes those who already have 4 weeks’ leave, but as I said in Part 1, they will want that again by entitlement.

The Government likes to ride on the coat-tails of Peter Jackson’s success with The Lord of the Rings, and rightfully so—I think it is fantastic—but will it listen to the five companies involved in the films, which all oppose this bill? They tend to work in fairly intense bursts and argue that entitlements such as time and a half will add 2.5 to 3 percent to their wage bills. They say that those increased labour costs will reduce their competitiveness and attractiveness to overseas film producers when they already pay their workers well above the accepted rate. Normally they are reliant on contractors, but if employees were eligible for time and a half and 4 weeks’ leave, they predict that the contractors would be encouraged to become employees.

National and ACT have complained that this bill did not have enough scrutiny. That is a strange comment to make when one puts it in contradistinction to the employment legislation that National introduced in the last decade, which was detrimental to employees, and then to the later legislation, also detrimental to employees, that ACT helped to rush through. The process on this bill has been very thorough, and I think a tribute should be paid to Minister Wilson, who has consulted widely with a range of groups. Much time has been spent to enable the coalition Government to bring the bill to this stage. It is a significant step forward in terms of holidays, both in the clarification of entitlements and in making sure that the entitlements of workers and all employees are now far more just and fair than they were before. As a barrister who worked in employment law and saw the misery that was caused by the entanglement of the holiday legislation and the denial of employees’ rights, particularly in areas such as sick leave, bereavement leave, and tangi leave, I am very pleased that we have made this step forward in what are basic human rights for employees.

I want to return the issue of 4 weeks’ leave and to state that there is an amendment here to put in 2005 as the starting date for 4 weeks’ leave. I am aware that that did not pass in the debate on the previous part, Part 1. So if members have now had time to reflect on the basic fairness of that for employees, and to come to a situation now where they will vote for it—I think that the Labour whips are thinking very hard about whether they will support this amendment now—we will be able to go back to it. Perhaps we can call the Leader of the House down to the Chamber, as he would be very good at finding a way to make sure that Part 1 could be brought back up in relation to Part 2. So I ask members to think about that.

Let me give members a quick story, in the 3 minutes that I have left. I went to a school camp with my son. As a member of Parliament I am a little inflexible with regard to my time, so I spent only the Thursday night there. I was very impressed with a man called William, who came to the camp to spend the whole week with his 12-year-old son. To do that, he took 1 week out of the 3 weeks’ leave that he has. Mr William has worked 11 years for the same company, helping with its profitability—and that is another thing that National members should think of. They talk about money and investment, but they should remember that money and investment are made by people who give their lives to a company and to an employer. Mr William has now used up 1 week of his 3 weeks’ leave. He cannot now spend that week with the rest of his family, because it is gone. If he had 4 weeks’ leave, of course, he would still have 3 weeks to spend with his family. He has made a social investment in his son by going on that holiday with him, by strengthening the bonds with his son, and by encouraging him in his education. So I would like members to think of the Williams of this world, who do that for their children and make that investment. Mr William has to wait until 2007—that is another 3 years away, once this year has ended—before he will be at the stage where he is able to look forward to having that extra week, and to being able to spend a week with his son while still having 3 weeks to spend with his family. So I ask members to think of people like him. That is a reason for voting for the 2005 date for the commencement of 4 weeks’ holiday.

I support the Greens in their amendments. Some members may see that as a tactical alliance. I think there is a lot of sense in moving forward like that, and I am pleased to add the Progressive votes to make it clear that the total bill is one that is supported by the two coalition partners in the Government.

I want to go straight to clause 36, and to deal with the 4 weeks’ holiday component. But before I do so, I would like to ask Mr Robson why, if his idea is so good, he does not have the courage of his convictions and make his amendment apply from 2004.

💬 Hon Matt Robson: I raise a point of order, Madam Chairperson. A member cannot be challenged for his or her courage. I am sure that is in the Standing Orders.

The CHAIRPERSON (Ann Hartley): No, the member cannot be.

Well, I suppose he can be, but in this case I will not. The question I want to pose is this: was 4 weeks’ leave wanted by employees, or was that just presumed? Was that just presumed, and was the provision for 4 weeks’ leave the brainchild of the Government and its union buddies? I bet no one asked the employees. I bet no one asked them whether they wanted the money or the bag—the money or the holiday. I bet a good number of people would have said they wanted the money, to pay their mortgage and the bills. But under what is being outlined here, there will be absolutely no choice for the hardworking employees, the workers, of this country.

How much will 4 weeks’ leave cost? I get a variety of answers to that question, but it is somewhere between $700 million and $800 million. Who will pay for it? Business, clearly, will pay for some of it. In fact, $708 million will be paid for by the private sector, and in most cases that means small businesses—the mums and dads of this country. Can they afford it? The answer to that is clearly no. How will they get around the fact that they cannot afford it? They certainly will not employ other people. They will simply just have to work longer.

💬 Lindsay Tisch: They will retrench.

They will retrench, but of more importance, I think, is the fact that the social implications of this bill have not been thought through. This situation has come about because of members like Mr Robson. He purports to be very employee friendly, and I would have thought he would think it through. What this bill will result in is mums and dads working harder and longer, and that means they will not be at home with the kids and with their partners. We will see more marriage break-ups, more solo parents, and more kids become involved in crime. That part of the cost has not been factored into anybody’s cost models—and it should have been.

Workers will pay, also. They will pay because as this cost is expensed by employees it will be done under the guise of wage freezes and reduced wage increases. Essentially, we will see wage cuts, and I bet no one asked employees whether they wanted that. That is the worst outcome for the people in this country who, if we believe Mr Robson, work the hardest and contribute the most. In fact, what he had done is to consign them to experiencing a wage cap, and I think Mr Robson should rethink that before his amendment is passed.

I want to deal also with the issue of sick leave. Most employers whom I know do not deny sick leave to people who are genuine, and I think that the people who are genuine are clearly and quickly worked out by employers. It is no mistake that employers have a jaundiced view of the people who always get sick on a Monday or a Friday, or when there is a test match in town. If employees have a pattern of that type of sick leave, I think it is only fair and reasonable that they are asked to present a doctor’s certificate to their employer, who is entitled to have some assurance that they are genuinely sick. So I think that is only fair and reasonable.

I am afraid I have to go back to the minority report of New Zealand First in the Transport and Industrial Relations Committee’s report on the bill, as Mr Brown, I am afraid, is sending out quite conflicting signals. I want some clarity. I want the Committee to know that the minority report states that New Zealand First: “has major concerns with this Holidays Bill. In a nutshell, New Zealand First believes it is flawed and so ‘business unfriendly’ that it will, in circumstances, be a disincentive to employ.” I do not know how the member can reconcile what has been said in the Chamber today with those types of statements. The member’s explanation, I am afraid, has been that his party will give this legislation a whirl, as the New Zealand First members think it may be all right. I cannot wait—

💬 Peter Brown: I raise a point of order, Madam Chairperson. I have no objection to this member quoting from our minority report, or indeed from what I said. But I have never said we would give it a whirl, and I—

The CHAIRPERSON (Ann Hartley): That is a debating point.

💬 Peter Brown: It’s not a debating point.

The CHAIRPERSON (Ann Hartley): It is a debating point.

💬 Peter Brown: It is not a debating point. The member cannot make things up.

I believe it is a matter of expression. The member was certainly giving rise to the view in this Chamber that New Zealand First will support this legislation.

I move, That the question be now put.

This bill is the bill that Treasury and the Department of Labour have estimated will cost this country $700 million a year. Clauses 15 to 65 are all about holidays, sick leave, and bereavement leave provisions. The bill, in clarifying all those things, is needed, but the problem is that the workers, the employers, and the people of New Zealand do not actually need the bill in its present form. This bill is a fraud on the business community. The way that the whole of the 4 weeks’ holiday a year provision was introduced was sneaky. It was done by a back-door method, using a member’s bill. That meant that when the whole idea of 4 weeks’ holiday was put before a select committee, the submitters did not treat it as seriously as they could have, because the Labour Government had given a pre-election promise that 4 weeks’ holiday a year would not be—

The CHAIRPERSON (Ann Hartley): I am sorry to interrupt the member but the time has come for the dinner break.

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

This measure was brought to the Transport and Industrial Relations Committee in a fraudulent manner, in that it came in as a member’s bill, and the Government later picked it up. That meant the submitters on this bill did not have a chance to talk about the 4 weeks’ leave provision.

Interestingly, the Prime Minister did promise before the election that she would not bring in a provision for 4 weeks’ holiday a year, but I guess the fact that we are now debating provision of 4 weeks’ holiday in this bill is just an indication that one cannot trust the Prime Minister—particularly a Prime Minister, I suppose, who forges paintings. It is a deceptive way to introduce changes to employment legislation.

The reality is that right now, with the different types of workplaces we have, we need diversity in employment law. Today we have workers who want to start early and finish early, and we have others in the same workplace who want to start late and finish late. There are others who want time off for school holidays, and many people now are looking at the option of working from home. All of that tells us that the workplace is becoming more and more diverse, and what we need is flexibility in labour laws—labour laws that allow negotiation and agreement between employers and employees. What we are doing right now is pass a bill that provides more prescriptive law, and that really puts a straitjacket on any discussion and arrangement that can happen between employers and employee. This bill denies workers and employers the opportunity to sort out deals that are in the best interests of the workers and of the organisation. In other words, instead of creating a win-win situation, this type of legislation creates a lose-lose situation.

I had a look at what some of the submitters were saying. They were horrified by the provisions in this bill, particularly the 4 weeks’ holiday provision, which was done in such a sneaky and dishonest manner, and particularly given that the provision does not come into force for 3 years and 4 months, for goodness’ sake—April 2007. But that is just long enough for Labour to use it to buy the next election. The submitters said that as a result of this legislation some of them would have to sell their businesses, downsize their businesses, or close their doors. They would increase their employment of part-time workers and casual workers, and decrease their number of full-time workers. The employers would have to work longer hours—up to 16 hours a day. Of course, the Labour Party members, who are opposing what I am saying now, do not know that, because they have never owned or operated a business. The employers said that they would need to call in their families, to open for fewer hours, to have fewer customers, to provide fewer services, and to increase prices to provide for the extra costs.

Overwhelmingly, many employers said that what they would have to do, as a result of this legislation, was change the Government and get rid of the Labour Party. Well, I totally agree with those sentiments. The Labour Government is passing laws simply to suit its union backers—the people who give it the money to be able to win elections. The union movement right now is simply after more power and more members. Or course, we all know that there is a rake-off to the Labour Party for every member who joins the union. This bill is disgraceful.

I want to draw the Committee’s attention to clause 36A in new Subpart 1A, “Entitlement to 4 weeks’ annual holidays from 1 April 2007”. The point that Muriel Newman has just made is that this provision has been put into this bill without any discussion, or any referral to the Transport and Industrial Relations Committee. It is a straight-out bribe. It is an election bribe of a desperate Government. There was no opportunity for the select committee to hear this part of the legislation. This measure was not in the original bill. This has been taken over from a member’s bill. Incorporated into this bill is new Subpart 1A, which provides for the entitlement of 4 weeks’ leave to take effect from 1 April 2007.

The point I made in an earlier speech on the title identified the down time—the non-productive time—that an employer has to account for. An employee wants to be paid for 40 hours a week for 52 weeks of the year, which is 2080 hours. I gave the example that on the current provision of 3 weeks’ annual leave, and other entitlements, the actual down time is about 280 hours. If one divides that by 40 hours per week, it represents 7 weeks of non-productive time to an employer that an employee has advantage of. Under this new clause, which takes the annual leave provision from 3 weeks, or 15 days, out to 4 weeks, or 20 days, that is another 40 hours of non-productive time in a business. That is 320 hours, which equates to 8 weeks in a year that an employer has to carry that person on a full-time basis. The compliance costs of that are quite horrendous if we take into account what the business has to deal with—paying 4 weeks’ leave, as opposed to making it a choice.

Some employees do not want 4 weeks’ leave. In fact, some surveys that have already been done in Auckland suggest that employees would rather be paid. The cost of living in Auckland is much greater than in the South Island. So in that case, an employee would rather have 3 weeks’ holiday and be paid for the extra fourth week. In the South Island, however, there is an acceptance that 4 weeks’ leave may be appropriate. But what does this mean at the end of the day for the employee? It means two things. It will actually put a cap on future wage rises, because someone has to pay. It is as simple as that. Who pays? It will be business that pays. Business will pay—not the Government. The Government is telling employees: “We are going to do this for you.” It wants to interfere in our lives. It thinks it knows best. But at the end of the day it is business that will have to pay, so we will see a cap on wages. We will see a retrenchment. I have been talking to people in business, and in some cases they are saying: “We are not going to expand our operations. We are going to just do what we can do.”

I was dealing with a person who operates a fast food outlet in the Piako electorate. He has 53 staff, and he has great difficulty getting people to work at the weekends. Under this provision—and the bereavement leave provisions, which I want to talk about shortly—he is saying it will be absolutely impossible to be able to staff his sort of operation on a 7-day basis. So this measure actually affects employees. They are the ones who will be affected by this legislation. They will not be able to get increased cost of living rates. They will not be able to get the increased wages or salaries they are looking for because employers will put a cap on wages and reduce overtime provisions. What will probably happen is that employers will look to contract work out. Those are the sorts of things that this bill is starting to identify, and which this Government has no concept of—absolutely no concept, at all. It believes that it knows best. It is not prepared to let employers and employees work together to come up with a win-win situation. No, it will not allow that to happen. What this Government wants to do, because it knows best, is legislate to impose these extra compliance costs on business.

I move, That the question be now put.

I want to continue with clause 58, “Sick leave”. At the present time, with the 5-day sick leave provision, I would expect, as an employer, that if an employee were genuinely sick, he or she would come up with a medical certificate to say that he or she could not be at work because of various reasons. That is fine, I accept that. However, this bill states that people have to produce a medical certificate only after 3 days. What will happen in the meantime? This will be the extended holiday, because people will take advantage. We will never know whether they are genuinely sick. No one will ever know because it is only after 3 days that they will have to produce a doctor’s certificate.

Clause 58(2) proposes a blanket 5-days’ sick leave per annum for every employee regardless of the number of days worked each week. This becomes inequitable. When representatives from Foodstuffs came before the select committee—a major employer with thousands of people working for them—they pointed out the inequities that will occur in this sort of provision. I would like the Minister to take a call on this and clarify what will happen with people who work part-time. They will receive a disproportionately high amount of sick leave for the days they work, because this provision is a blanket 5-day sick leave provision. So full-time employees will get their 5 days, but part-timers disproportionately will get a much higher figure. Some of the figures that were worked out show that part-timers who may have a number of jobs could effectively be entitled to up to about 25 days of sick leave a year if they happen to work for about five different employers. That is the sort of compliance cost that will be carried by business, yet this Government does not acknowledge or recognise that fact.

The second point I want to bring forward is the bereavement leave provision, and that is found in clause 62. Clause 62 states quite clearly that bereavement leave can be taken under seven different categories, and for up to 3 days. That does not mean 3 days per year; it actually means 3 days for anyone who suffers a bereavement under any one of those seven categories. Once again, who will pay for this? I will tell members who will pay for it. The employers will have to pay, and at the end of the day they will do three things. They will retrench, they will not take on staff, and they will put a cap on wages for those people who are there. Businesses cannot afford to carry this sort of compliance cost, which will be open to abuse.

I made a point earlier about a fast food outlet, and this is another reason why that fast-food outlet operator cannot take the risk. He said: “I cannot afford to take the risk of people not turning up to work on a Saturday or Sunday because of this bereavement leave provision.” If it were 3 days per year, that would be fine and acceptable. However, this provision is not. It is open-ended—it is 3 days for anybody who falls into these seven categories. That is the sort of compliance-cost provision that is completely unacceptable.

I want to go back to the point that I made earlier in relation to clause 46. Clause 46 states that an employer must pay an employee time and a half for working on a public holiday. Those who are involved in the entertainment business and the food industry have said that that will be a huge compliance cost. They do not mind paying penal rates, but when they have to give employees a day off in lieu, as well, then members can imagine the sorts of costs that will be incurred. A lot of small businesses often open on statutory holidays just to provide a service. It is a service to the community, and they are prepared to do that. However, under this provision they will say: “Why should I bother?”.

I move, That the question be now put.

I want to make a contribution in this debate, and I want to do so for this reason. I have listened to the contributions made by a number of my colleagues and, indeed, a number of the other members who have spoken in this Committee, and I want to take a little bit of a different angle on this debate, from this perspective.

We can talk about the individual impact this measure has on businesses, as my good friend and colleague Lindsay Tisch has just explained. We can talk about the impact that it is likely to have on small businesses. For the many tourism operators and small businesses in Northland it will be devastating and will put a huge strain on them, and some of them will struggle to survive. There is no question that a number of them will downsize and reduce staff as a consequence. Another outcome will be that a number of employees find they do not get wage increases over the next 3 or 4 years—we should not forget that this measure does not take place for 4 or 5 years. But what worries me about this whole aspect is that this measure is another cost in our society and on our economy. It is a cost right across our nation. We have to ask ourselves whether this country can afford this sort of cost at this time.

The problem we have with this economy is that it still survives off two things. One is the primary sector primarily—our farmers, foresters, tourism operators, and so on. They are the backbone of our country, and that is an absolute fact of life whether or not we like it. The other thing that is driving our economy—when we look at what is happening with our economy we see that it is buoyant compared with those of a number of countries—is the building boom. That has been brought about because of a number of factors, one of them being the immigration that we have had.

💬 Pansy Wong: A good thing.

Absolutely! Somewhere along the line, when the Minister of Labour, Helen Clark, or the Government are considering these sorts of things, they need to have a look at the total impact they have on our country’s whole economy. I wonder whether the Minister can tell us whether she has contemplated what sort of impact this measure will have on the whole of the economy, and whether it will drive some more productivity into it. Will it actually result in a benefit to our country, or will it be seen as a negative? Will businesses and the whole sector that actually produces income for this country benefit, or will it become a barrier? While I accept that there may be an argument that perhaps the workers themselves will feel better off if they have an extra week’s leave, there is a cost to them because they have to be able to afford that week for a start.

That is the first thing. The second thing is what happens to those businesses that are expected to be productive and produce the goods that we sell and trade overseas to earn income for our country so that we can pay for these things. I wonder whether the Minister is able to give us any facts and figures on the negative impact that it is likely to have on our productivity level. I doubt whether that has been done at all. This whole bill has been driven by Matt Robson and a minor party that is now so minor that it often does not even have a presence in Parliament. Worse, and for some reason that we do not know, a promise that was made prior to the election that there would not be 4 weeks’ holiday has now been broken, and that is now to be implemented. My having said that, it is a bit smoke and mirrors because we are 4 or 5 years away from anyone being a recipient of it. In the meantime, why can people not negotiate 4 weeks’ holidays if that is what they want? If they are good enough and have the skills and the background, of course they will be able to negotiate it with the employers.

But I come back to the simple theme of my 5-minute contribution and make this point: can we be sure that the country will benefit as a consequence of 4 weeks’ leave being put in? We know there will be some individuals who benefit from it because people will get an extra week’s holiday, and that is fair enough. But, overall, it is more than likely that this provision will be a negative, not a positive. There is the argument that people will be more productive because they are more relaxed and so on, but I doubt it.

I move, That the question be now put.