Holidays Amendment Bill

As we indicated in the second reading, this is an extraordinary missed opportunity. The Government boasts that it is fixing up the unintended consequences of the Holidays Act. If it had listened to the numerous submissions, it would know that business has effectively rejected this bill. Business rejects it because of what it does not do; not what it does do.

The Government had the opportunity to fix the huge problems around relevant daily pay and it has wilfully refused to take that opportunity. These kinds of opportunities do not arise frequently, and that is why businesses are so concerned with the failure of the Government in this matter. Did it listen to the Meat Industry Association? The association’s evidence showed that the cost of sickness in the first 6 months that the Holidays Act has been in force went up 50 percent. Fifty percent more people are now taking sickness leave than before. Why do they do that? Because the reality is that people can get more by being sick than by working. That is ridiculous and the challenge to the Government was to fix this up.

We have provided the opportunity for the Government to fix that very issue. We have gone through a very careful process of preparing a Supplementary Order Paper. If the Minister cares to read it, he can vote for it because it is precisely what he—or rather his predecessor—introduced in 2003 in the Holidays Bill. The proposal that National has put on the table is what the Government introduced just 12 months ago. What happened was that after the select committee process, because there were no proposed amendments to the bill, a sneaky deal was done that introduced the concept of relevant daily pay—the source of all the problems.

I turn to Business New Zealand’s submission to the select committee in September of this year on the Holidays Amendment Bill. Business New Zealand made it very clear that it wanted this issue fixed. Government members had the temerity to suggest that Business New Zealand was part of the process of introducing relevant daily pay. That caused Business New Zealand to present a letter to the select committee which confirmed that at no stage did Anne Knowles of Business New Zealand indicate acceptance of the concept of relevant daily pay. Indeed, when the original bill was released it did not include such a concept, which is consistent with there being no agreement.

So we are offering the Government the opportunity to go back to its own proposal—the proposal that was fair and reasonable. It is an advance from the Holidays Act of 1981, and there was widespread concern that that Act needed to be updated. So why will the Government not take the very reasonable step of voting today to fix the most serious problem in the Holidays Act by voting for its own proposal? Because that is the opportunity it has. One would think that when the Government carefully goes through the Supplementary Order Paper that I have introduced, it will see that it can fix the serious issues, not the issues that it is claiming have to be fixed, which are minor and trivial compared with this major issue. We tell the Government to take this opportunity and vote for the measure that it introduced itself in the bill in 2003 and fix up the real problems of the Holidays Act.

National is obviously totally opposed to the changes that are being introduced by the Government in the Holidays Amendment Bill. I say to the Minister in the chair, Paul Swain, that we are not opposed to it because we think the current legislation is working. Clearly, it is not. He has acknowledged himself that he made a mess of it last time around, and that he is trying to fix it. I would ask the Minister how he reconciles his view that he is fixing the problem with the view of submissioners to the Transport and Industrial Relations Committee—the Retailers Association, the Hospitality Association, Air New Zealand, Business New Zealand, Carter Holt Harvey, one of the largest companies in New Zealand, the meat industry, and Heinz-Wattie. They were all invited to the select committee, with the agreement of the Labour members of Parliament, to make submissions. None of them was listened to on the issue in this part, which is the issue of relevant daily pay. None of them was listened to, at all.

I direct the Minister to Air New Zealand’s submission. I hope he has read it, because Air New Zealand is a Government-owned entity and Government-owned entities do not usually criticise the hand that feeds them. Air New Zealand came before the committee and said a couple of things. One of the things it said was that the Holidays Act, which was passed by the Labour Government last year, was such a shambles that this week it is in court to try to get a ruling from the Employment Court on how to deal with the Act. That is the first thing. The next issue is whether this amendment bill fixes the problem for Air New Zealand. The answer is no. Air New Zealand told the select committee that it believed the “penal on penal” concept still exists, and that this bill does not fix the problem.

The debate on this bill will be interesting, because the Greens have said that they do not support the bill. They are not voting for it, at all. All the business groups oppose it. ACT, National, New Zealand First, and United Future have, individually, told business that they support the position of business. So one party has told porkies. One party is telling business that it is with business on this bill, but that party will vote with the Government to get it through. One party will do that. Which party has told the business lobby that it is with business and that it thinks the bill will not fix the problem, but will, in fact, vote for the bill? Which party will do that? We will watch with interest to see who it is.

We members of the select committee know that no business group supports this part—the penal rates of overtime—which, effectively, is the unintended consequence that the Minister kept talking about. That is not fixed. People who sell on commission and who work on a public holiday still get the extra commission on their sales that were not made on the public holiday. What sort of nonsense is that? It will stop many businesses from operating on the day. The Hospitality Association told the select committee that it is easier to stay shut, which gave joy to many Labour members I have to say, or to employ somebody—a mate—and pay him or her by way of a voucher for a bar tab or a free meal in the restaurant. It is easier to do it in that way than to actually employ someone. In fact, we have examples of the Hospitality Association now hiring people with a clause in their contract that states that they will not be employed on public holidays. That is not because the business will be shut, but because the business cannot afford to pay them on a public holiday, and it will come to other arrangements.

The member has asked a couple of questions, and I will respond to at least one of them. He asked why we are doing this, and why we are not doing that. About 6 weeks ago I indicated that the intent of the bill that is now before the Committee was to fix the unintended consequences of the Holidays Act. A lot of the issues that the member has raised were not unintended consequences. That is the fact of it. This bill attempts to fix the unintended consequences of the Act, and that is the matter that is before the Committee. Those matters, which I announced 6 weeks ago, are providing for no penal rates to be paid for public holidays on top of existing penal rates—there was some confusion about that—and for no public holiday rates to be paid if an employee does not work on that day. There were indications that some people were taking sick leave on a public holiday and then getting time and a half, so we indicated that that was not the intention of the Act but was an unintended consequence. Some people said that there was an issue about trying to resolve composite pay rates, and the fact that there was not enough time to do that. We had indicated in the legislation that that could be resolved by the middle of next year, but a lot of people were saying that a lot of their contracts rolled over until 2007. We said that those negotiations should be allowed to go until 2007, or until the composite agreement was renegotiated. That was the point of that—to give more time to resolve the matter—and that was quite an important issue.

Then there was the issue about medical certificates. Under the current legislation employers are not allowed to ask for a medical certificate until after an absence of 3 days. I thought that it was important that where there was good reason employers could ask, on reasonable grounds, for a medical certificate. There were a couple of conditions attached to that—one being that the employer pay for it. The Transport and Industrial Relations Committee clarified that by stating that employees should be able to go to a doctor of their choice. I agree with that. The select committee has come back and made some further clarifications. It has stated that penal rates do not include overtime, that employees can choose their own doctor, as I have said before, that employers are only required to pay an employee’s reasonable expenses when requesting a medical certificate, and that employees who are asked for a medical certificate and do not provide it without good reason may not be paid sick leave. So the committee has made some clarifications around the provisions for employees to prove that they are sick, and that is where we are at on that matter.

I have added another little minor, technical amendment, which adds the word “into” after the word “entered” in new clause 2A in the definition of an “existing individual employment agreement”. That is to be consistent with the rest of the bill.

Finally, I should say that as far as support for the bill is concerned, my understanding is that the Green Party is not supporting the bill. I presume that I will hear from the Greens in a minute. Their view is probably that the bill goes too far, particularly around the medical certificate requirements. That is why, I presume, they are not supporting the bill, though I will wait to hear from them on that. New Zealand First has indicated support for the bill thus far, but is currently considering its position, I understand. But the United Future members, who have some concerns and will have at least one Supplementary Order Paper, have said that it is really, really important that at least these things happen now and we make progress on them, rather than wasting more time. I have always said that it was important that this stuff be resolved before Labour weekend, which is not this weekend but the following weekend. In fact, Peter Brown made a very, very good speech—and I listened to his speech, because I think he sometimes gives very, very good speeches—saying that a bird in the hand was worth two in the bush. That was basically the general message that he gave us. It is a position that United Future is taking, and I think that it is a principled position to take, as well.

So in the end this bill attempts to resolve the unintended consequences of the legislation that was introduced last year. By and large that legislation was designed to try to make sure that ordinary working people get time and a half when they work on a public holiday. That is a good and fair thing. It will also introduce 4 weeks’ annual leave in 2007, which is another good thing. But there are some minor amendments that need to be made to take away some unintended consequences of the Act, and therefore I urge members to consider this bill in that light.

I raise a point of order, Madam Chairperson. As I understand it, we are on Part 1. The Minister talked about medical certificates, which I understand come under Part 2. I have not taken a call yet, but just want clarification that we are only on Part 1.

The CHAIRPERSON (Ann Hartley): The member is quite correct, and there was also another reference to a matter that is not covered in this part, as well. So I would caution members to stick to the content of Part 1.

We are dealing with an amendment to the Holidays Act, and I rise on behalf of the ACT party to say that not only will we be opposing this bill but we have had a look at Dr Wayne Mapp’s amendment, and we would recommend very strongly to the Committee that it support that amendment. I tell the Minister that he would have been very wise to read the submissions on the bill. What the Committee should understand is that the business community was not given a chance to make submissions. The Transport and Industrial Relations Committee invited submissions from just a number of industries, and it could have gone wider than it did. I think that the submissions received by the select committee were devastating in their effect, and one of them was this. Human beings take a while to adjust to new incentives. We all know that. The legislation came into effect only in April. The meat industry, which is still our largest single exporter, produced this extraordinary chart, which members may not be able to see, but they can get a copy of it from me. It shows the cost of sick pay and how that cost has increased since April. When one studies the chart, one finds the cost of sick pay—which has been normalised—was $16 million, which is a very high figure, and it has already jumped to $27 million just since April.

What would cause the rate of sick leave to go up? We could look at Ministry of Health statistics to see whether we have had an outbreak of any disease. No, we have not. So, clearly, there is something in the nature of the Holidays Act that has caused the increase, and what it is is the late change about relative daily pay. Instead of sick leave being based on a person’s ordinary pay, it is now based on a person’s total payment. What is unfair about that is that someone may have had included in his or her pay an incentive for turning up to work. Now, according to the Government, that incentive must be paid to people who are sick. Of course, it costs money to go to work, and as the meat industry pointed out, people are actually being paid more not to work than to work. Human beings do respond to incentives. I know that the Greens do not necessarily believe that, but people do respond, and they are responding. If they are to be paid more for not working than for working, people stay away, and in shift-work situations some bizarre situations arise if people have just received a large bonus, because the relative pay is not worked out on the basis of the whole year but on what happened in the last 4 weeks.

We were given an example by Heinz-Wattie, a very large exporter, of a particular person who is normally paid, I think, $16 an hour, and the company had to pay him $38 an hour to stay away from work. The incentive to stay away is great. Then we go to Carter Holt Harvey—I think it is our largest company; if not, it is very close to being that—which told us that the average number of sick days each employee has is 100. Now, that was calculated first at the ordinary rate of pay, but many of the staff work on shifts, so Carter Holt Harvey’s contingent liability has gone through the roof. But it made another statement, to the effect that it is a multinational company, so it can choose where to invest. It asked why, when it is thinking about investing, it would choose to invest in a country where we have a loony system whereby its staff are paid more for being sick than for working. The Kawerau plant produces over 1 percent of the total gross domestic product of New Zealand.

I thought it was very interesting that the Minister told the Committee that the reason that the provision was not changed was that it was not an “unintended consequence” of the Act. We listened to Ministers earlier today say that at the IMF this country had been described as the best place to do business, but that was because of changes made before the Act. The Government cannot have it both ways: it cannot say it is wonderfully flexible, and then introduce all these inflexibilities. Where does it stand? I ask Government members why this is not a matter that employers and employees can settle for themselves. They have been doing that for most of the history of this nation. We did not need the Government to come in and define relative daily pay. That is an example of the Government interfering in the marketplace, and my recommendation to the Committee is that we should support the amendments put forward by Mr Mapp.

In speaking to Part 1 of the Holidays Amendment Bill, I want to know why the Minister in the chair, the Hon Paul Swain, does not admit to the Committee something that we all know: that he does not believe in this stuff, at all. We know that the Minister does not support the amendments to the Employment Relations Act, and we know that he does not support this junk, either. We know that the Minister has been rolled by the left-wing faction of the Labour caucus—we know that.

I have some particular questions for the Minister relating to Part 1, because as I read Part 1, in conjunction with the principal Act, I see no exclusions for salaried people from the provisions of the Holidays Act. I see no exclusion based on the level that salaried people are paid. I want the Minister to explain whether members of Parliament who work on public holidays—[Interruption] I say to the Minister that this point is quite serious. I ask him whether members of Parliament who work on public holidays—often we have to, and sometimes we choose to—will be paid time and a half.

My second question is whether the Parliamentary Service is exempt from employment law in this country, because I wonder when members of Parliament will see an employment agreement. As an employer I have to, by law, provide an employment agreement for my staff. When will the Parliamentary Service provide me with an employment agreement? Will that employment agreement indicate by 1 April 2005, according to Part 1 of the bill, the time and a half that I will get when I work on public holidays? Or is this law something that poor damned employers out there have to comply with, but that the Parliamentary Service and all the wonderful outfit around here do not have to comply with? Does the Minister think that dirty, nasty employers out there have to comply with it but the Parliamentary Service is above it because the ordinary staff do not work on public holidays in this place, although members do? I want the Minister to explain whether members of Parliament, every time they have to work on Anzac Day, Labour Day, or whatever holiday it is, will be receiving time and a half, and on what basis that will be calculated. I see no exemption here in this bill for members of Parliament or for the Parliamentary Service Commission.

What is more, what happens for employers whose staff are on high salaries in order to deal with all this junk? Such employers actually offer a high salary and leave it up to the employee or the manager to choose when to work. Employers may offer people thousands of dollars a year more than the usual rate so that they can avoid this garbage, but under this bill, as I read Part 1, they cannot avoid it. Even if an employer offered $10,000 more a year in an employment agreement than the going rate for a normal job in order to get out of this junk, the employer cannot do so. Part 1 basically states that no, the employment agreement has to spell out how time and a half is to be covered, and that it has to go through the whole nonsense of the relevant daily rate of pay. I put it to the Minister that many employers have tried to get out of that compliance cost problem by offering far higher salaries than usual in situations where employees have control over when they work. What happens when an employee does have control over when he or she works, but chooses to work on a public holiday, and then comes along to the employer and says he or she wants to be paid time and a half based on the relevant daily pay rate? That walks all over existing agreements.

Does the Minister expect employers, next time they negotiate an agreement, to knock several thousand dollars off a salary package, so they can actually then cover the ridiculous bureaucratic junk in this bill? Is that what the Minister expects? That is what will happen if employers are faced with having to pay this sort of thing on top of generous salary packages. I cannot see where this bill exempts people on high salary packages from having to go through this sort of nonsense. I would appreciate the Minister explaining to Parliament whether members of Parliament—who must be employed by someone, although I have never seen an employment agreement—are exempt from this legislation.

United Future will be supporting this legislation because we have discovered that one eats an elephant one bite at a time, and this is one bite we are taking that is heading things back in the right direction.

💬 Opposition Members: Ha, ha!

It would be nice of my colleagues around the Chamber, who are so supportive of employers, as I would be, to give the Hon Paul Swain a little bit of credit where credit is due for bringing in legislation that is heading us back in the right direction. But as has been pointed out, I do have some areas of concern, and I look forward to the support of my colleagues on this side of the Chamber for my Supplementary Order Paper, which deals with people’s income where a large proportion is earned by commission.

Take, for example, the higher-paid salesperson who may be on a higher retainer than normal, a person who is on a $269 per day retainer, yet probably earns another $30,000 or $40,000 above that in commission. Unfortunately, if my Supplementary Order Paper is not passed, it would mean that people working on, say, Good Friday, would have to be paid $512 for that one day and on Easter Monday another $513 for the day. However, in the case of commission salespeople, they will work to earn their commission. Employers will have to pay not only what is based on their relevant daily pay for the year, but, of course, they also have to pay their salespeople the commission that they earn on that day.

If this does not have the support of the Parliament, I am concerned that if that salesperson decided that maybe one of those statutory days was a very poor day for customers coming into the yards because they are spending time with their friends and family, one does not have to be a rocket scientist to work out that one will get much more money by staying at home. Therefore, I look to my colleagues over here to support my Supplementary Order Paper because I think that that example shows exactly some of the challenges we face with this legislation.

Let me say also that United Future absolutely supports holiday pay being based on ordinary pay and not relevant daily pay. However, because we are the common-sense party and we believe in taking one step at a time, we recognise that although this legislation is not perfect it is better than nothing. United Future wants to progress. We are happy to go one step at a time. We are happy to go a little bit slower than some other party would go.

I have never found any common sense at all in saying: “This is not everything we want so I’m not going to do it.” I think the little kids do that. One looks at something and says: “Hey, is this going in the right direction or is it going in the wrong direction?”; when United Future members look at it they say: “This is going in the right direction”, and we put up our hands and say: “Well done, yes, get on with the job.” As a small employer myself I am very pleased that this legislation has a great chance of passing before the next holiday period. I believe that many small employers out there agree with this, and they will be thankful that United Future is in this Parliament to support this legislation to help them out.

The previous speaker, Paul Adams, said that one eats an elephant one bite at a time, but I say that one swallows a dead rat whole. I have to say that this is swallowing the biggest of dead rats I have ever seen. This is an appalling fix-up of a muck-up. I have to be careful in the way that I say it because if I get it wrong I will be thrown out of the Chamber. It is a fix-up of a muck-up. I will tell members why it is a fix-up of a muck-up. When the original bill in relation to holidays was put through, the Government mucked it up. But today the Minister would have us believe that there are some unintended consequences that are now being fixed. I have heard him say that. Unintended consequences are also written about in the commentary to the bill. Has the Minister not read the commentary to the original bill that has the minority report from Deborah Coddington of ACT? That report makes it clear that these would be the consequences. The Minister cannot hide behind the fact that he did not know, that the consequences were unintended, or that after it all happened the rest of the world sort of went mad and said: “Oh, my God, I didn’t realise that.” It was brought up at the time. It was absolutely the clear intention of the Government at the time, and suddenly it has all become too hot in the kitchen. There are already too many dead rats in the boiling pot all at once and the Government has decided that it had better bale out of it. So we now have a bill that is even more of a hotchpotch.

I want to concentrate on relevant daily pay. I say to the Minister and to the people who are listening to this debate just how bizarre this gets. Relevant daily pay will not be just one’s ordinary wage, but all of the other bonuses for attendance, penal payments, tool allowances, and things that people get as part of their job. I want to go back to my days when I drove for Refrigerated Freight Lines driving a large truck and trailer units, and so on. We received wet money—the Labour Party gets wet money every day because it is full of wets—when it was raining. If we were not putting containers on, but had palletised milk powder, we used to get a cover allowance because we had to put big covers over it, get up on the top of them, and strap them down. We used to get a rope allowance. We used to get all these little bits and pieces. If it was not wet, we did not have pallets, and we were not using ropes and covers, then we did not get those allowances.

However, when people take days off as holiday, how many people on their holiday get out into the back yard, throw the tarpaulin over the house, and start to pull ropes just for practice? If it is raining and they are on holiday they will go to the movies or whatever. Why should people get any of those special payments—the bonuses and additions—when they are on holiday? I do not think people should be getting any of them anyway. I argued at the time that people should be paid a straight base rate that was the proper rate, and that getting wet as a truck driver was one of the hazards. It is like getting wet around Parliament can be a hazard. Many people have got quite wet around Parliament!

This bill states that when people are off on their holidays they will be paid according to their relevant daily pay calculation. It will take account of all those special things they are paid because of the conditions that they were under while working, even though they are not at work. For example, when people decide that they will have their holiday next week and get their penal rate and their relevant daily pay, the other poor sod who is back at work driving a truck, and it is not raining and he does not have to put up tarpaulins, is actually getting a lower rate of pay while he or she is at work than his or her mate from the same shift who is off on holiday swanning around the Gold Coast telling people: “I’m getting wet money today.”, and when people say that it is a lovely sunny day: “It doesn’t matter, the Government of New Zealand is so stupid that it passed a bill that gives me wet money even when I’m on holiday.”

That is what this bill does. That is why we are opposed to it. We think people should get a proper rate of pay when they are on holiday and maybe when they have worked on a public holiday and are now taking the time off when it is a public holiday, but not this absolute stupefying nonsense. This is mega dead-rat swallowing.

What do members of the business community think about it? If the Minister was listening at all, if he would wax out his ears and listen to what members of the business community are saying, he would hear that they think this is an absolute outrage. If there is one thing members of the business community—and if any members of this Parliament say they have never heard it I want to talk to them—say day and night, it is that they are sick to death of compliance costs in this country, and this adds to it.

This Committee knows that the Act was introduced on April Fool’s Day by the then Minister of Labour, Margaret Wilson. It does not take many examples to work out why it was introduced on April Fool’s Day. This bill gives people time and a half—

💬 Government Member: One plus one equals three.

Yes, one plus two equals three. If Michael Cullen cannot work that out he is not as bright as I think he is, but I digress. This bill gives people—salaried employees—time and a half and a day in lieu. Let us just imagine the situation for a moment—Theresa Gattung is sitting in front of the TV watching something on Easter Monday, and she gets a phone call to go to the office to do a couple of hours of urgent work. She will get $15,000 for that—that is, time and a half and a day in lieu for popping in on Easter Monday. That is not bad.

I can see why Margaret Wilson got the boot when this bill was introduced. In less than 6 months we are now in a tremendously embarrassing situation where the new Minister of Labour has had to come to the Chamber and pretend he is fixing it up. This is the same Minister about whom it was said, in regard to the next bill coming up: “Don’t worry, business community, Swainey and the boys will sort it out.” That came from the Minister who said: “If George Hawkins is out of here, I’m out of here as well, and so is Clayton Cosgrove.”, to which the Prime Minister said “Clayton who?”, but that is another issue completely.

I sat on the select committee—[Interruption] I tell Mr Hughes that that is the absolute truth. If I am in better touch with the political situation than the Labour Party, then so be it. I sat on the select committee with the Hon Judith Tizard and listened to employers who came in.

💬 Dr Wayne Mapp: Was she swearing?

No, she was not swearing; she was very polite.

💬 Dr Wayne Mapp: Was she awake?

She was awake, but she was polite. Anyway, I will not say any more. I have got myself into a lot of trouble recently, and I need to understand that. Employer after employer came to the select committee and said that they had spent years defining ordinary pay. They had reached the situation where they now understood what ordinary pay is, and by defining relevant daily pay, we would be forcing them to go back to all of their contracts, and now they would have to go back to a much more convoluted process where they would now have to de-engineer, and that has not happened. What has happened is that Paul Swain, who has been put up as the Trojan Horse for some sort of sensibility, reality, or—[Interruption] In theory, he has done that, but in fact he has not fixed the problem at all. What he has done has fixed the—[Interruption] No, he has not. He has fixed the incredibly embarrassing situation where people were taking a day off on a public holiday, and getting time and a half, and watching television or going to the races. He has not fixed the problem of Theresa Gattung being paid $15,000 and having a day off. He has not fixed the problem that thousands of New Zealand employers—[Interruption] I think it is great that Theresa Gattung gets $2.5 million, but it is mad that a salaried employee would get paid time and a half and a day in lieu. If that is the Minister’s intention I would welcome him taking a call. Was that the intention? Did he intend that Theresa Gattung be paid $15,000 and get a day in lieu for popping into the office? Was that what “Swainey and the boys” will fix? Was that what it was all about? Is that what John Tamihere was thinking? Is that the fix-up of the muck-up? It is not.

When I sat on the select committee, employer after employer came in. They came from the restaurant industry and what they said to us was very clear, indeed. They said they could not afford to operate under those conditions. Under the margins they had they could not afford to provide services, and when visitors came to New Zealand on our airline—the pride of the Pacific—and wanted something to eat, the only thing that would be open would be Paul Swain’s house, cooking up some food. That would be the only place they would get a meal, because no restaurant will be able to afford to pay waitresses as much as that. Restaurants will not be able to afford the margins. They begged us—

💬 Hon Maurice Williamson: Let them eat cake.

That is right.

I think everybody agrees that the Holidays Act needs tidying up. It was a mistake. It was like a camel, which is a horse, designed by a committee. We stuffed up and it needed some urgent attention and I know that the Minister acknowledges that. The bill he has produced does address—one has to be absolutely truthful—a couple of the issues. It addresses some concerns around sick leave, and we now know that he addresses them so comprehensively that the Greens will not support the bill. However, it does address those concerns around sick leave.

It also addresses the concern about an individual putting his or her name down to work on a public holiday and then pulling out sick and demanding to get paid at time and a half on top of everything. It addresses those two issues. However, it does not address the issue of relevant daily pay. The amendment in the name of Wayne Mapp, which he assures me is a direct copy of the original bill, does bring it back to what it should be. The United Future party should support this, because basically, this legislation started out as a Government bill. I cannot figure out where the relevant daily pay occurred. Did it occur in this House after the select committee? I cannot readily recall whether it did go through the select committee.

💬 Hon Paul Swain: Yes, it did.

So it was dreamt up there and advanced the Government’s original intention into embracing relevant daily pay. That is a significant mistake. I have to say that it is a far bigger mistake than I thought at the time, and I believe Wayne Mapp’s Supplementary Order Paper will address that issue fairly and properly. I cannot see how the Government, or indeed, United Future, can vote against this, because it was in the original 2003 bill.

The concern we have in addition to that is the concern about people on a salary—not only Theresa Gattung but people even on a lesser salary. We cannot understand or accept why an individual cannot negotiate a salary with his or her employer that embraces everything. In other words, they know what they are going to get from the start of the year to the finish of the year, and they have a good idea of their responsibility, or what will be required of them in terms of their work. We have quite some discomfort in having to pull those salaries apart and then put them together again when it comes to working on a public holiday, or whatever.

A Supplementary Order Paper in my name simply addresses that issue. It states “Notwithstanding anything in section 51 or any other section of the principal Act, nothing shall preclude an employer and an employee (or their respective representatives) from negotiating an employment contract, based on an annual salary, which includes a provision for working none, some or all public holidays without any further remuneration.” That is pretty clear cut and I believe that this legislation should be amended to embrace that Supplementary Order Paper.

In summary, there are three issues. The bill addresses some of them. It addresses the sick leave and getting paid on a public holiday when a person is not working, although he or she might have put his or her hand up for working. The Holidays Amendment Bill addresses that issue. The Wayne Mapp Supplementary Order Paper addresses the concerns around relevant daily pay, and they are very, very important concerns. They should not be taken lightly. It addresses them fully. What amazes me, and Wayne Mapp assures me that this is a direct—

💬 Dr Wayne Mapp: It is an amalgam of several clauses.

But every clause in the Supplementary Order Paper was in the original bill. We think that is a good place to go back to and to put a degree of common sense and fairness into the thing. Finally, my Supplementary Order Paper will bring in the salary.

The Minister of Labour took a call and answered one question that he had been asked; he said that his intention in introducing the legislation was to try to fix up the unintended consequences of the Act. What he has not answered in the Committee is how it fixes the Act for business people who are worried about relevant daily pay, because that is the biggest issue.

Even the United Future people, who have told people who have asked them, business people and so on, that they are on the side of business, have come to the Chamber today and told us—it was news to me; I have just been talking to some people out there, and it was news to them as well—that their Christian view of the world is that they tell people one thing in their offices and do a different thing in the House. That gives a whole new meaning to turning the other cheek. United Future acknowledges that the bill is a mess, but it is sort of having it both ways; it is saying: “Well, if you’re going to eat an elephant, you do it in small bites. We know that this bill doesn’t fix it, but it does something, so we think it’s OK.” Well, actually, it does not do anything. Air New Zealand is still going to the Employment Court to fix it. Does United Future think that is OK?

Perhaps I could ask a couple of questions. Will United Future take a call and tell us whether it believes that relevant daily pay is fixed?

💬 Paul Adams: I’ve already done that.

No, the member has not. Will he take a call to talk about relevant daily pay? He talked about people on commission, but he did not talk about relevant daily pay. Will United Future tell us what it told the business lobbyists? Will it tell us that? Perhaps if the United Future member who is in the Chamber telephones his leader, they could sort out what the leader has said versus what the member is saying. It is a bit like when United Future members took the petition from Federated Farmers on the steps of Parliament; they said one thing, then brought their Christianity in here and did the opposite. It is the same story from that party all the time. I ask United Future members how they can do that.

💬 Paul Adams: It’s quite simple—it’s sensible.

He says it is quite simple. Does he not believe in telling the business community, upfront and honestly, what he will do, before he does it? Why did he not do that in this case?

💬 Paul Adams: They didn’t ask.

The member says they came and told him what they wanted, but, because they did not ask, he did not tell them what he would do. I think that is dishonest. Does the member have a different view of honesty?

💬 Paul Adams: No, I don’t.

Well, next time he stands up and gives one of his moralistic lectures in the House—

The CHAIRPERSON (H V Ross Robertson): I just advise the member, who is a longstanding member, that it is inappropriate to indicate that another member is dishonest.

The party is dishonest in the way that it has handled this legislation—

The CHAIRPERSON (H V Ross Robertson): Reference to a party is consistent with reference to a member, as well.

Right now those business groups are feeling downright deceived. Was that the member’s intention? Was that United Future’s intention?

💬 Darren Hughes: This member always does this.

No, no; he’s trying to say something. What was his intention?

💬 Paul Adams: They’re pleased with some progress.

He says they should be pleased with some progress. So the fact that they feel deceived is their problem, not his problem; the member thinks he did not deceive them in not telling them what his party was going to do, even though he had led them to believe something different.

It is a pleasure to be able to speak for the ACT party on this bill and to listen to the debate. It was interesting to come into the Chamber when the United Future representative was on his feet trying to explain why, when something is wrong that one thinks should be fixed, it is better to take one step at a time instead of fixing the problem. The member simply ignored and failed to answer any of the challenges that he explain why he would say it was better for him to vote in support of the Government, which caused the problem in the first place; to vote in support of its grudging and tiny steps to overcome the political damage it has caused—none of it driven, of course, by concern about the economic loss or frustration of, or the wound caused to, all those people who make up the pay books. Just think of those women—often, they are women—who stay up late at night making up the pay books of their husband’s or partner’s business, in frustration poring their way through the complexity that this Government has created.

United Future thinks it would be far too bold and far too direct to remedy the problem for those people right now; it thinks that just one wee step at a time should be taken. Well, the challenge that was given was to take two or three steps, particularly as Dr Mapp has proposed amendments that United Future, if it believed that there was a problem and if it would rather see it fixed, could support. Why does it not support the amendments put forward by the National Party? We did not hear the United Future member say that he thought they were wrong. We did not hear him argue that the Government was right in refusing to go further. We did not hear any explanation of why United Future will take only the one tiny step from time to time that Labour says it can take.

💬 Dr Wayne Mapp: It’s called “yap, yap”.

Yes. “Please release my leash so it is a little longer; you’re stepping on my toes—or my claws.” We know that in about 3 or 4 months’ time United Future members will be looking desperately for bills such as this, so that they can pretend to disagree with the Government. We can see it coming now. When there is anything that looks like an amendment to the holidays legislation, and people are paying attention to it, we will see United Future members looking like lions. They will be out there saying: “Some giant steps are needed here—some real reforms. Those who talk about little steps, those who think we are too close to Labour, those who think we have no mind of our own, those who think we have no confidence and courage, are all wrong. When it comes close to an election, we take big steps. We’ll have a real row with the Government.” But why not do it now? If United Future is prepared to have a row—

💬 Darren Hughes: Tell us ACT’s election strategy.

The ACT party’s policy is absolutely clear on this. The bill was a mistake at the beginning. It is still a mistake. This step is an insult to those people who make up the wage books. This step, from a party that I once belonged to, a party that actually believed in looking after the working people, a party that worried about those who worked hard instead of those who had privileges, is a disgrace. It is a disgrace that United Future is supporting it, but it is much more of a disgrace for Labour members to come here and say that they have made a mistake but they will not fix it; that they will fix just a wee bit, because that does not offend the unions; that they will inch the matter out and make it more complex; that they will put in more definitions; and that they will allow employers to ask for proof of ill health, as long as they pay for the doctor. They will not let them stipulate what doctor is involved, so, in every town, people will come to know which gatekeepers are corrupt. There are doctors who do not act as gatekeepers. It is actually not their duty. Their oath says that their first and supreme duty is to their patient. If they have patients who say they badly need a holiday because they are stressed, and ask for a medical certificate, it may be that some law might one day bite the most egregious of them—the ones who are least honest.

The CHAIRPERSON (H V Ross Robertson): I call Martin Gallagher.

I raise a point of order, Mr Chairperson. I have been seeking the call for some time. I have been standing to seek the call, even though you may not have noticed. I would certainly like to participate in this very important debate for National. With your indulgence, I seek a call.

The CHAIRPERSON (H V Ross Robertson): The member should wait and see what I am going to do. He well knows I indicated to him that I intended to call him next, anyway. But, first, I have called Martin Gallagher.

I move, That the question be now put.

Thank you, Mr Chairman. I knew that if I stood for long enough I would get the call at some stage—that someone would notice.

United Future members have not taken any notice of all the submissions that came in. The member over there said that it took a long time to eat an elephant. Well, I can tell members that it will take years and years to eat the elephant that he talked about, and he calls that progress. We on this side of the Chamber say that the comments made by the United Future party just do not stack up. When my colleague the Hon Roger Sowry asked how the relevant daily pay provision, which is the essence of Part 1, could be justified, the reply was that the Government was making some progress on it.

I say to United Future members that they are doing business an absolute disservice by supporting the Government on this legislation. Businesses will be in for a very expensive Christmas. The Christmas and New Year holidays will be an expensive time for businesses. The Holidays Act states that some public holidays that fall on the weekend must be “Mondayised”—that is, observed on the following Monday or Tuesday. In the summer of 2004-05, all four public holidays—that is, Christmas Day, Boxing Day, New Year’s Day, and the other New Year holiday—fall on the weekend. That means 7-day businesses will face increased wage and time-off provisions for a total of 8 days, not 4 days.

💬 Hon Maurice Williamson: You’re kidding!

No, I am not kidding. That is what the relevant daily pay provision will do. There will be a build-up of all the overtime hours that people work, and the allowances they are able to get for working in the build-up to the Christmas period—the festive season. For businesses the festive season means that they will be out of pocket. Business owners will get to the stage where they will say: “Why should I bother?”. We are already seeing it in the restaurant industry. Cafe owners are saying: “Why should I bother to open on a statutory holiday? It’s not worth it.” In fact, some of them put a surcharge on a cup of cappuccino that is purchased on a statutory holiday. We go along to buy a cappuccino, latte, flat white, or whatever, and we find there is a surcharge. The owners say: “Well, if we have to pay relevant daily pay to our workers if we open on a statutory holiday, then we have to put a surcharge on, to make it work.”

What happened to the concept of “ordinary pay”? I am an ordinary person and I have a clear idea of “ordinary pay”. It is not a concept that should be devoid of meaning. “Ordinary pay” has been around for the last 50 years. What happened, in terms of calculating staff holiday pay, to paying staff 6 percent of the gross take? Remember those days? Workers were paid 6 percent of the gross take as holiday pay. It was very clear. There was nothing complicated about it. I did not have to work out, in the months before, what would happen with overtime, or the allowances to be paid—meal allowances, tool allowances, travel allowances, and all those allowances that are incorporated into what will be known as relevant daily pay.

National members are really concerned about this measure, because this is a step backwards. Members will recall that my colleague John Key noted that the new Holidays Act came in on April Fool’s Day. It came in on 1 April this year. National members said during the debate last year and at the beginning of this year that the legislation was a step backwards. We are a nation of small businesses—295,000 small businesses employ fewer than five people—and the legislation will kick them. What will those businesses do? If they have to look at the bottom line, it will be the workers, the employees, who ultimately will suffer.

I hope we will hear from Dr Mapp again, because he presented the excellent Supplementary Order Paper 278, and I do recommend it to the Committee. I say to members that I think it is a very good move to take the original bill that the United Future party voted for, and that the Greens also voted for—

💬 Paul Adams: No, we didn’t.

The member thinks this is better now than the original bill? Well, that is very interesting. The member said that he did not vote for the original bill, but now that the bill is a muck-up, he will vote for it in order to help the Government. I think that is extraordinary.

I just want to draw a simple fact to the attention of Government members. I do not think there are very many members of the Government who have ever employed a fellow New Zealander with their own money, so they are probably not aware of the impact of holiday pay. [Interruption] The member should just listen to this example. No doubt she is pleased with the fact that the Department of Labour’s latest statistics show that people’s wages went up by 1.8 percent, which means that people were getting paid more money. Yet in that quarter the actual cost of labour fell. Is it not extraordinary that wages went up by 1.8 percent, yet for employers the cost fell? The reason for that is that Anzac Day fell on a weekend. One day’s change was enough to make that much difference. For the particular business that I am in, where Easter falls makes an amazing difference to the return from the business.

This Government has put in an incentive for people to take extra sick days. Most New Zealanders do not take every sick day that is available to them. But when the Government states by law that an employee will be paid more money for not working than for working, the number of people who take extra sick days will go up. Even if one is being conservative, the number will go up by at least 1 day per worker per year. That may not seem to be very much to Government members. I have to say that the officials who worked on this bill were disgraceful. I normally get up to say that the officials were excellent. The Department of Labour has benefited enormously from this Government. The size of the department has gone up, it has been able to run all sorts of rorts, and it has paid people to study hip hop around the world. I thought the actual evidence we got from the department was disgraceful. The sort of evidence one would expect civil servants to give MPs is to say to us that we should realise we are making New Zealand a less competitive place, and that we are putting huge costs on small business. We had an example from Wattie’s, which said that in one particular factory that it runs it has had to employ an extra six people just in order to work out the sick pay and the holiday pay. That is six people who are not being productive. We have a trade union official, Helen Duncan—who is now heckling—who voted for all that in the Transport and Industrial Relations Committee, but she is not prepared to get up and say how New Zealand is a more prosperous nation by having all that extra red tape and bureaucracy.

We have seen the United Future party and its extraordinary explanations as to why it is a doormat for the Government. I think Helen Duncan, if she is proud of this bill, should take a call and explain to small business why all this extra complexity has been put in place. She should explain to people who work in freezing works the justice of the situation whereby if they turn up to work they are paid less than a person who takes the day off. That was the example—was it not, Helen Duncan—that we were given in the select committee. In fact, we were told that there are chains in our freezing works that have not been able to work because absenteeism is so bad. Export orders, which are vital to this country, have been lost because of this legislation. Is that not correct, Helen Duncan?

💬 Helen Duncan: Rubbish!

Is she saying that the meatworks were lying, or was she not listening?

I move, That the question be now put.

I want to explain in more detail the issues around relevant daily pay, because they are absolutely crucial. The member across on the Government side of the Chamber is interjecting, but she has not understood that the concept of relevant daily pay includes things that are beyond ordinary pay. That is the real issue—they are beyond ordinary pay. They include productivity and incentive claims. Even if the person does not actually earn them, the person gets them. They include commissions, payments for overtime, and cash values for board and lodging. We do not have a problem with the latter point, but productivity and payments for overtime are where the problem lies. It is worth noting, and, in fact, it must be stressed—and the member who is interjecting obviously has no understanding or appreciation of this—that the bill introduced by the Labour Government in 2003 by the well-known socialist Margaret Wilson had that concept contained in three clauses about ordinary pay. Clause 7 was about the meaning of ordinary pay, clause 8 stated that ordinary pay included the cash value of board and lodgings, and clause 9 stated that ordinary pay did not include certain payments—specifically, overtime and bonuses. Those things were excluded by the bill introduced by the Labour Government, and it is worth remembering that.

But the unionists got control of the legislation, and I guess the truth of the matter is that people like Helen Duncan got the new concept of relevant daily pay, which includes incentives, bonuses, and overtime. [Interruption] The member interjects and says that it does not, but she should read the legislation, which shows it clearly does. There is no question about that, whatsoever. So that is why I have chosen not the 1981 Act but the Government’s very own proposition as the basis for my Supplementary Order Paper 278. The Government knows full well that that is where the problems lie; we only have to look at the submissions on the bill to see that.

In the submission from Heinz-Wattie, for instance, it could not be clearer that relevant daily pay, as legislated for in section 9(1) and (2) of the Holidays Act “is not workable” in a large enterprise. That company could not have put it more directly or simply than that. It gave the Transport and Industrial Relations Committee working examples, such as one that if the ordinary rate is $23 an hour, because of the way the calculations are done under the new regime people can be paid $82 per hour—not $23 but $82. That is absurd, and that was the point that Heinz-Wattie brought to the attention of the select committee.

But the Government just ignored Heinz-Wattie. Labour people asked what was wrong with that, and said there was nothing wrong with it. They wanted to justify the absurdity that people who are sick are paid more than people who are working. I mean, when we distil it down, that is what it actually means. That is why business, when given the opportunity to make submissions, pleaded for a return to what was introduced by the Government in 2003. The member across the Chamber, Ms Duncan, said that that was boring. That shows the contemptuous attitude of Labour to business. When business and employers were given the opportunity to make their submissions, I guess that the Government was hoping they would say that they supported this bill. They did not say that; they asked for the real problem to be fixed up. And that is the problem United Future has, has it not? Its members say that an elephant has to be eaten one bite at a time, and that therefore they will support this bill. How many bites would it take to eat an elephant? I guess we would be on the “Holidays Amendment Bill 3049” before the legislation was fixed.

I move, That the question be now put.

I raise a point of order, Mr Chairperson. I do not know whether I am correct, but I understand that you must take calls in proportion to the parties’ size in Parliament. New Zealand First has had only one call in this debate, and I think my National Party colleagues have had far more than two calls.

The CHAIRPERSON (H V Ross Robertson): I thank the honourable member for his contribution, and suggest to him that he look at Speaker’s ruling 59/2, which states that proportionality applies principally to fixed-time debates. I had been watching the member carefully, to see whether he sought the call. He had not called for some time. He rose last time, yes, but he did not call to speak. I refer him to Speaker’s ruling 24/4 from Speaker Wall.

I raise a point of order, Mr Chairperson. Frequently the Chairperson shuts members down or stops debate because it is repetitive. I have heard that many times from many chairpersons. I have refrained from taking a call until something new has come up that I believed I could comment on. I wanted to comment on aspects of this bill that are new—that have not been commented on.

The CHAIRPERSON (H V Ross Robertson): I thank the honourable member. I have already taken the closure motion, but I can assure the member that he will be given every consideration in terms of the next part.

Now we have an amendment in the name of the honourable member Dr Wayne Mapp to insert a new clause 3A. I have to rule it out of order, as it is inconsistent with the previous decision. The next amendments are to clause 4, and also are in the name of the honourable member Dr Wayne Mapp. The two amendments are set out on Supplementary Order Paper 278. Those amendments are also out of order because they are inconsistent with the previous decision.

The question was put that the amendments set out on Supplementary Order Paper 277 in the name of Paul Adams to clause 4 be agreed to.

Can I amend the United Future vote on Wayne Mapp’s amendments? I should have called “abstention” on the first two instead of “for”. I seek leave to amend the vote.

💬 Lindsay Tisch: I raise a point of order, Mr Chairperson. I just want clarification. Dr Mapp had a number of amendments, and I am wondering which ones the United Future member is referring to.

The CHAIRPERSON (H V Ross Robertson): My understanding is that he is referring to both the amendments to clause 2A. Maybe the member would explain.

Our abstention vote would be for all of Wayne Mapp’s amendments.

The CHAIRPERSON (H V Ross Robertson): You have abstained on one of them, to clause 3. The member is seeking leave. Is there any objection to that course of action being taken?

💬 Hon Richard Prebble: I raise a point of order, Mr Chairperson. I just want an assurance from the member that he genuinely did intend to abstain all the way through, and that he did not have a flash of inspiration as the voting was going on, because in that case it would be improper for him to ask for the record to be changed. One cannot change one’s mind. If he could tell members that he had an instruction to abstain all the way through, that is a different matter. But I think members need to have that explanation made to the Committee.

That is correct. I did have instructions to abstain all the way through.

The CHAIRPERSON (H V Ross Robertson): We will take the member at his word. The leave has been agreed, so the voting list will be changed. For the first vote on Dr Mapp’s amendments to clause 2A, the Ayes are now 49, the Noes are 62, and the Abstentions are 8. For the second vote, the Ayes are 49, the Noes are 62, and the Abstentions are 8.

Part 2 Amendments to principal Act relating to sick leave and bereavement leave