Employment Relations Amendment Bill

I move, That the Employment Relations Amendment Bill be now read a second time.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think the second reading has to be called, does it not?

The ASSISTANT SPEAKER (Hon Rick Barker): What is your point of order, Mr Mallard?

💬 Hon Trevor Mallard: I do not think the Clerk called the bill.

The ASSISTANT SPEAKER (Hon Rick Barker): The Clerk advises me that she called it. Secondly, I said that the Employment Relations Amendment Bill is set down for second reading forthwith.

This bill addresses the Government’s response to the need to assist employees and employers in small and medium-sized businesses in creating employment opportunities. This bill has been carefully and moderately drafted. It is not about taking away rights; it is about giving opportunities. Importantly, the bill maintains employees’ rights. We have said in first reading speeches that employees can still raise a personal grievance under the discrimination provisions of the Employment Relations Act. Sexual or racial discrimination is not acceptable.

💬 Hon Clayton Cosgrove: How will you police that?

The bill maintains the right for personal grievances to be resolved using either the authority or the court in those situations, I say to Mr Cosgrove.

The bill specifically provides that the employer and employee may agree to a trial period only once. This bill is about helping employers to provide genuine opportunities for new employees. We have heard in first reading speeches talk of productivity, and I will read a quote from the Tauranga Chamber of Commerce from yesterday: “This is very positive news”—it is talking about the bill—“for both employers and employees, particularly smaller businesses. The key issue for our economy is productivity, and this bill goes a long way to ensuring the right people are in the right jobs. This bill is good for both parties and will result in much firmer employment relationships. The Tauranga Chamber of Commerce supported the bill because the 90-day period gives both parties time to gauge the fit of both employer and employee. Particularly important are the benefits to employees with no formal qualifications, who will have a better chance at obtaining skilled positions because they have a trial period to prove their capabilities. Employers who are considering taking on an extra staff member will be in a better position to trial the role and the impact on the business before confirming the position.”

This bill is a moderate bill. It has been prepared to protect the rights of employees. It has been prepared and drafted to give new employees the opportunity to say “Give me a go; I will prove myself.” and to get their foot in the employment door. We have added the protection that the trial period is to be established by agreement between the employer and employee. I would like to—

💬 Hon Simon Power: I raise a point of order, Mr Speaker. I have sat here for an hour and listened to various contributions from members opposite. I think that you should take the opportunity to allow members opposite to listen to a speech from this side of the House, without their constant interruption and barracking.

💬 Hon Clayton Cosgrove: Speaking to the point of order—

The ASSISTANT SPEAKER (Eric Roy): No, I do not need any assistance. The member is responding to some of the points that were made in the first reading debate, and I think members could contain themselves a little more.

💬 Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. In fairness, I think you were not at the last debate, where Nick Smith sat opposite—

The ASSISTANT SPEAKER (Eric Roy): That point of order is out of order. I have already ruled on this matter. If the member has a new point of order he should raise it—

💬 Hon Clayton Cosgrove: I do.

The ASSISTANT SPEAKER (Eric Roy): I am on my feet. The member will sit down, please. I have ruled on the matter.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. I ask whether your ruling means that Ministers with weak voices get special treatment, because that appears to be the case.

The ASSISTANT SPEAKER (Eric Roy): That is not what I intended, nor said. All I have done is ask members to contain themselves a little more. That is not an unreasonable expectation from the Chair.

I would like to address some of the myths that have been enunciated both before and during this debate. One of those myths has been spread by one of the Labour affiliates, and it basically says that if the bill becomes law, workers employed at enterprises with fewer than 20 staff will lose the right to challenge an unfair dismissal during the first 90 days. This bill applies only to new employees. It will not affect existing employees, and the trial period is established only by agreement. So it is up to the new employee to say “Give me a trial period.” The bill will not affect the rights of existing employees.

Throughout the debate the member from the Green Party, Sue Bradford, has mentioned what happens to those on benefits. I mentioned in my first reading speech that beneficiaries who leave the benefit to go on a trial period will not face a stand-down if they go back on the benefit. I want to enunciate and reiterate that point, which is actually contained in the question and answer sheet we have put out. That document specifically states: “Employees on a trial period, if they were previously on a benefit or if they receive assistance post-redundancy in a new package to be announced before Christmas by the Minister of Social Development, will not face a stand-down if they go back on a benefit or onto the post-redundancy assistance, unless they have been dismissed for misconduct, or have chosen to end the trial themselves without good reason”.

We see this bill as giving opportunities. It is not only giving businesses the confidence to take on new employees; it is also giving prospective employees the opportunity to say “I want to get off the benefit. I haven’t got experience. Please give me a try.” We think that that is a good thing.

I will also address the issue of why it is important that this legislation is passed as a matter of priority. I refer to the Christchurch Press editorial of today, which states: “the Government is also well aware that the global economic crisis means the country will no longer be able to coast along on a wave of externally generated prosperity while economic fundamentals at home, particularly growth in productivity, slump precipitously. … It is, in any event, a good bill to get passed into law as soon as possible. The vast bulk of business in New Zealand is conducted by small and medium-sized enterprises. As they are at the moment, the laws governing employment are a powerful disincentive to anyone thinking of hiring a new worker but uncertain as to his or her capacity for the job. At present, if an employee turns out to be unsuitable an employer who wishes to dismiss him or her risks having to deal with the whole time-consuming, complex and expensive apparatus of the law governing dismissals. The risk of distraction from the core job of running a business and incurring large costs may make an employer hesitate. This can be particularly the case with employees who may be worth taking a chance on but whose backgrounds indicate potential difficulties.”

The editorial further goes on to reiterate the safeguards we have put in place: “But National proposes safeguards to prevent abuses, and the time and effort employers must spend to advertise for and hire employees make it highly unlikely that they will misuse the system. It should also be remembered that trial periods were once commonplace without causing any great difficulties. The benefits to be gained will far outweigh any possible disadvantages.”

I will also refer to the previous consultation. The legislation has been consulted on; it has gone to a select committee. There were 619 submissions. At the end of the day the vote at the select committee was tied and therefore lost. This bill has been extensively consulted on, and if one looks at the submissions opposing the bill, one will see that they talk about benefit entitlements. National has addressed that issue. Those submissions talk of employees being reluctant to change jobs if they were subject to a probation period, which particularly applied to jobs that require relocation. That is why we have the provision that establishes trial periods by agreement. We recognise that this will not be suitable for all new employees, and we recognise that it will not be suitable for all employees wishing to relocate. That is why the trial period is to be established by agreement between the employer and the employee.

Another concern raised at the time was in relation to discrimination grounds. We have specifically retained the grounds and the protections under discrimination provisions. At that time the Opposition said that the bill would also allow employers to engage employees on a series of probationary periods. Even if one could fathom why an employer would do that, and have an 89-day rollover period, one would know that that would be expensive and not a practical or sensible solution. We have specifically provided, in our bill, that an employee is one who has not been previously employed by that employer. So an employer cannot use it as an 89-day rollover.

In light of the Minister’s denial of her relationship with the Exclusive Brethren, I seek to table an article from the Christchurch Press of 29 November 2006—

Leave is sought to table that. Is there any objection? There is.

I seek leave to make a personal explanation.

The ASSISTANT SPEAKER (Eric Roy): Leave is sought for the Minister to make a personal explanation—

💬 Hon Trevor Mallard: Mr Assistant Speaker, before we deny leave it is traditional for members to state the subject of the personal explanation.

It is in reference to the previous Minister of Labour’s deliberate misrepresentation.

The ASSISTANT SPEAKER (Eric Roy): Leave is sought. Is there any objection?

💬 Hon Trevor Mallard: Yes, there is—put it nicely and you will get it.

The ASSISTANT SPEAKER (Eric Roy): I am on my feet! Members will be silent. When leave is sought to make a personal statement, we are not going to get into these across-the-benches kinds of interjections. So leave was sought; it was denied.

I raise a point of order, Mr Speaker. I make it clear to the member that I will not object to her making a personal explanation if she does not, as part of that, accuse me of breaching privilege, which she has just done.

I seek leave to make a personal explanation—

The ASSISTANT SPEAKER (Eric Roy): In relation to?

—in relation to the Press article, quoted by the previous Minister of Labour.

The ASSISTANT SPEAKER (Eric Roy): Before I put the leave, I will say that the Chair will be the judge of whether there is any breach of the leave once it is granted. I will put the leave. Is there anyone who has objection to that course of action? There is not. Leave is granted for a personal explanation.

As many will know, prior to my career as a member of Parliament I was a solicitor for some 25 years. During that time I acted for many clients. Some of those clients may have been members of religious groups; some of them were not. I have acted in the past for members of Parliament who are not even members of the National Party; that does not mean that I am a part of those other political parties. I have also acted for bullies, but I have never in my life acted for Trevor Mallard or Clayton Cosgrove. I can say categorically that I have not acted for the Exclusive Brethren church.

I raise a point of order, Mr Speaker. I take offence to those remarks; they should not have been part of a personal explanation. I think, Mr Assistant Speaker, you are aware of that. It should be ruled out, and she should be asked to withdraw and apologise.

💬 Hon Kate Wilkinson: I withdraw and apologise.

The ASSISTANT SPEAKER (Eric Roy): I did say that I would be the judge, and the member did breach that. The apology has been given and the matter now rests.

This is an outrageous bill, and it has been processed in an outrageous way by a Minister who clearly spent too much time with her Exclusive Brethren clients, and who has been overly influenced by them in her approach to this area.

The Labour Party will oppose this bill; it will attempt to amend the bill to make it more reasonable. I already have a draft that will stop Anne Tolley from becoming a liar, and I will make that available to the House during the Committee stage. Anne Tolley made a commitment on video that this measure would not apply to teachers. We are trying to save her back and stop her from becoming a liar in that way.

The other point I make, in order for officials to have a good look at the bill, is to ask them to look at the clause that purports to make it clear that people dismissed in these circumstances have a right to mediation. Unfortunately, the bill as drafted makes it clear that employees have a right to mediation. People who have been dismissed are not employees, and, therefore, will not have rights to mediation. I ask the Minister to get some advice on that particular question. We will be drafting amendments to attempt to correct that as well, so that we will try to stop the Minister from becoming a liar in that particular circumstance. We will work on that issue in order to see whether we can get to the point where we—

💬 Hon Steve Chadwick: Dave would have told them.

Well, a select committee would have sorted it out fairly well. I think it is fair to say that generally the Department of Labour has done a very good job on the drafting of bills, and in terms of parliamentary counsel there has been a long tradition of Walter Iles being involved. But I am sure that his advice, and the officials’ advice to a previous Government would never have been to put a bill like this through under urgency, because that is how mistakes are made.

I go back to the fundamental question, and ask whether this legislation is necessary. The answer is that it is not, because we already have probationary periods; lots of people have probationary periods, and that works very well now. I make another point, more so as the spokesperson on economic development than as the spokesperson on labour—that this measure will dampen down the ability of people to shift from job to job and to come to New Zealand. If someone knows that the deal is to sign up for a temporary job, then why would that person leave a $100,000-a-year job to go to a $105,000-a-year job, when he or she might get a “do not come on Monday” notice within 90 days. Why would someone shift jobs for a marginal increase in money? Why would someone go to a job where he or she can be more productive? Why would someone come to New Zealand, having been offered a job but knowing that the employer could sack that person for no reason, without even giving the person a note to say why—the employer does not even have to put a reason in writing.

I ask why the Government is pushing so hard in this area. I think it is fair to say that is traditional. National would not feel like a proper Tory Government if it did not attack workers in its first week in office. I do not understand why members opposite hate workers so much. I really do not understand why they feel an obligation, within a week of getting into Parliament, to do something that undermines workers in that way. It is fair to say that out on the hustings a lot of those members were more reasonable than they are being now. It may be something to do with group dynamics. They get together here, they infect each other, they turn into more rabid Tories than they are out on the hustings, and, in the end, they feel that they must kick the workers—those who generally vote for Labour—in the teeth, in order to make them see who is in Government now.

I reiterate the very clear advice of the Bank of New Zealand in its overview of its weekly report that was issued yesterday. It said: “If businesses think light is appearing for the economy they can hire on the off chance they are right. … But if they are wrong, and things deteriorate anew they can shed the staff and sit waiting again for the upturn.” Well, what kind of an approach to people is that? I can see it is the approach of the National Party. I think it is very sad that a major bank—one that used to be a New Zealand bank, and is now an Australian bank—is making it clear that it thinks one can take people on in the upturn and flick them off on the downturn, and that will have no consequences whatsoever. That is very, very sad and I regret it a lot.

Trial periods are something that many of us have used when we have employed staff. It is often the way when young people come into jobs. They often have trial periods, better known as probationary periods, and in the entire time that I have been a member of Parliament I have not had anyone come to me and say a probationary arrangement has not worked.

💬 Shane Ardern: Who would come up to you?

As a member of Parliament, dozens of people come to me every day. I visit businesses in the electorate every week, and their problem is actually the opposite of that. Even with the current anxiety around the economy, the problem is at the other end: hiring staff, especially with adequate skills to do the job. The problem is one of finding the staff with the necessary skills, sometimes finding the capital—[Interruption] The member over there says we should abandon training, and employ people who do not have the skills.

💬 Chris Tremain: No.

That is a Tremain approach, that is a Hawke’s Bay approach, and that, I think, is the approach of a number of Tories who have not really thought carefully.

The member had a very large real estate company. Probably the people were contractors, but he almost certainly had a few people that were employed—quite a lot of people who were employed. Did the member have problems sacking them when they did not work out? Did he ever try a probationary period? No, there is not a murmur, not a word, not a whisper from the member opposite. He knows that it is not a problem. He has been a relatively big employer in his time, and he is telling the House he has not had problems. I heard that the member was quite a good employer, and most good employers do not have problems at all. But what we are doing here is passing legislation for ratbag employers: those who are not prepared to put a bit of time into the employment practices, who are not prepared to put a bit of time, effort, and energy into hiring staff, who are not prepared to do the training that is necessary, and who do not care about the human relations aspect of employment.

I think it is sad that the member who has been overly influenced by her Exclusive Brethren clients has got to the point where they are dictating the legislation that is coming to the House. My only question is why she does not wear a scarf.

I have to say that the last speaker, the Hon Trevor Mallard, is living in some kind of alternative reality, based on the hogwash he was saying and on the extraordinary cloth-cap socialist dogma he was trotting out—something from at least 80 years ago. Frankly, that kind of speech should be treated with the ridicule it deserves.

I ask whether the member on the other side of the House is completely unaware that only two countries in the entire OECD do not have trial periods of the sort being put forward in the Employment Relations Amendment Bill. Members on the other side of the House always talk about Scandinavia—that it is the miracle place, and that it has the most advanced social legislation, the most progressive workers’ rights, and so forth. Well, I have news for members on the other side: those countries all have probation periods. In fact, this bill is, in large measure, modelled on some of those probation periods. They have chosen a period of 90 days. Other countries actually have a probation period of 6 months. Some have 1 year. Britain used to have 2 years, then it reduced it to 1 year. Australia has 6 months.

I drafted a bill not dissimilar to this one some 2½ years ago. I deliberately chose 90 days because it was at the most moderate end of appropriate trial periods. My intent was to reach out to New Zealanders, whether they were employers or employees, and say that this was a fair approach to the issue. It was not 1 year or 6 months, but 90 days, and it was voluntary at that.

We just heard the previous speaker say that under this legislation no one would want to go from a job—and he actually used this example—paying $100,000 to one paying $105,000. I guess all his friends have jobs like that. I ask whether he really thinks that none of those people have the ability to negotiate and say that they have 20 years’ experience in a particular field and have a lot of references. Those people can tell the employer that they do not need the 90-day trial period in this particular case, and that if he or she puts it in, then they will not take the job. That is the nature of the negotiations that we expect. I would be surprised indeed if there was any 90-day period in the educational sector involving the New Zealand Educational Institute and the Post Primary Teachers Association. The truth is that negotiations will happen in appropriate circumstances but not in other circumstances.

One of the extraordinary things that members opposite are arguing is that because of this legislation people will not come to New Zealand. They say that the people of, let us say, South-east Asia, India, or the People’s Republic of China will think that if there is a 90-day probationary period in New Zealand, they will be going to some sort of hellhole where workers have absolutely no rights at all and can be treated in a completely cavalier way.

💬 Hon Steve Chadwick: That’s right.

Ha, ha! Do people know what those members said? They said “That’s right.” Alternative reality, here we come! It is visited on the Labour Party—that kind of statement certainly demonstrates that.

The people who want this most are, in fact, new immigrants. The most important thing for them is to get their foot in the door. They want to say to employers to take a chance on them, and if it does not work out in 90 days, then there is not too much risk. There is the possibility of mediation, but employers will not be paying thousands of dollars in legal costs to go to the Employment Court, the Employment Relations Authority, and so forth. New immigrants want employers to take a chance. That is what they want. Because I represent North Shore I talk to huge numbers of immigrants; that is the nature of North Shore. Consistently they ask employers—particularly if their English language skills are not quite all there yet, or if they have qualifications that New Zealand employers do not fully recognise, or, more accurately, do not understand—to just give them that chance, and they will satisfy all of their concerns because of their work ethic and the skills that they will demonstrate in practice. Then the employer will say that it was worth hiring them.

The 90-day period will help that group more than any other group in society. So why on earth would Labour seriously suggest—as the junior whip, Steve Chadwick, apparently believes—that this provision will turn immigrants off? Actually, they are probably the group that is most forthright in arguing for this provision. The other groups that will particularly benefit, I think, are people starting their first job. They are the ones who, again, say that they have a lot of skills and are really keen and enthusiastic, and want employers to just give them a go. They want to prove themselves to employers through the way they work. Some employers, particularly smaller employers, find it difficult to make the decision to hire someone.

We have deliberately shifted this bill away from the one I introduced 2½ years ago. In fact, the consideration by the Transport and Industrial Relations Committee of the hundreds of submissions led to quite significant changes. One of those changes was to ensure that there would be written warnings. Another way was to ensure that there would be mediation. Another way was to ensure that human rights discrimination, which I had originally said would be dealt with through the Human Rights Review Tribunal, would stay with the Employment Court and the Employment Relations Authority. There was never any suggestion that fundamental human rights would not be covered by a process of litigation, but the view was taken to keep the process within the Employment Relations Authority and the Employment Court rather than put it with the Human Rights Review Tribunal. I thought that was a fairly logical approach. Those adjustments were made, and they are entirely reflected in this bill.

A further adjustment is very important, as well: the probation period is available to employers who employ 20 people or fewer. That is very deliberate. We know—and a lot of evidence on this issue was presented at the select committee, as well—that larger employers get a lot of advice on the way that they employ people. They have human resources consultants and all that sort of thing. In addition, when they take on a new person, it might be one person in 25—4 percent of the workforce. If things do not work out, it does not have a huge impact, really, in terms of the business as a whole. But if a small employer with five employees takes on one person, then that person is 20 percent of the business, and that is very significant. It is very significant if that person does not work out—if the person is overly disruptive, does not fit into the team, or does not have the appropriate skills. It does not affect just that one person; it affects everyone else in that organisation. That is why we have proposed the limitation of this measure to smaller employers. Not only is there the issue of having human resources consultants and all those sorts of things but also there is the issue of scale—the impact on a very small business of a person whose placement does not quite work out.

I have to ask myself why on earth Labour is spending so much energy on opposing this bill. Does it not just make those members look a bit ridiculous? Does it not just confirm to the New Zealand public why they are in Opposition and why, on the basis of their performance to date, they are likely to stay in Opposition for some considerable time? This is a reasonable measure. It has been pitched at the lowest end of the OECD scale—at 90 days. We have ensured that there are mediation and human rights processes in the bill. People will not lose a job—and should not lose a job—because they are pregnant, or something of that nature. That would be fundamentally wrong and—

💬 Hon Clayton Cosgrove: “Should not.”

People will not, in fact, because people will immediately have rights through the Employment Relations Authority to deal with that. They will have rights through the authority, just as they do now. That will not change.

I tell members opposite to look at the practice of the other modern democracies that we always compare ourselves with. If it is good enough for them, with all of them doing far better than New Zealand in terms of growth and prosperity, then surely we need to match it. This is a sensible, reasonable, and appropriate proposition to help New Zealand get going. That is why this Government was voted into office: to help New Zealand get going. That means all New Zealanders.

If the Employment Relations Amendment Bill is such a reasonable, sensible, and incredibly good bill, then why does the National Government not put it before a select committee and show the rest of New Zealand how good it is? The National members should be proud to put it into the select committee process and let every New Zealander know exactly what is in it and have a say on it. Then they could show people how good the bill is and trumpet it all around New Zealand. But no, here we are under urgency, with a party now in Government whose members previously said, when members on this side of the House were in Government, we were usurping democracy right, left, and centre, yet the first act those members do with a bill is to remove it from the select committee process.

Earlier in the debate I heard the exchange between the Minister of Labour and Mr Mallard about the Exclusive Brethren and illegal representation. As a Christchurch member of Parliament, all I can say is that I hope one of the constituents or clients the new Minister of Labour then had was not the one who took up a fictitious address in my electorate and a fictitious name, and who took out full-page advertisements in local newspapers, including the Christchurch Star, on the day before the election, accusing me of murder and mayhem at the Christchurch Hospital. I hope that person was not one of the new Minister’s clients then.

The proposal for a 90-day trial period is, by its very nature, a complex idea. That is because it changes the basic relationship between employers and employees. I heard someone shout across the Table: “Where are the employers?”. Well, I have been one of them for 15 years in my own manufacturing and engineering company. Around 700,000 people change their jobs every year, and two-thirds of them work for small businesses, so literally hundreds of thousands of people will be affected by this bill. That is one of the reasons that it should be referred to a select committee. Because so many people will be affected, the law will almost certainly have perverse effects and unintended consequences. If the Government does not allow full scrutiny of the bill by a select committee, it will almost certainly fall into the trap of causing such consequences to come into effect. Let me give members a couple of examples of that.

I just heard the previous speaker say that this measure would especially be of benefit to immigrants. Let me give members the example of an immigrant who gets a 2-year work permit to come to New Zealand, and part of the reason the person gets the immigration approval is that he or she has a 2-year work permit. The immigrant goes into a job, and after 30 days he or she is fired. Where does the person go then? He or she will end up at the social welfare department, claiming an unemployment benefit. The members of the party that is now in Government used to rail against that happening, yet they are now telling us this bill is great for immigrants. I ask, who in their right mind would move their whole family to New Zealand with a 2-year work permit, under a law that says they could be fired within 30 days? And what would a migrant do then? That makes a mockery of the immigration laws, for a start. We can see the scamsters lining up with schemes right now. They will be handing out job offers by the hundreds, and letting people take up those jobs. With full legal authority, they will then fire the immigrants, who will pop down to social welfare offices and register for the dole. That is just one thing.

Let me give members another example. What happens to someone who has been in a job for 10 years, and who switches jobs and is fired after 40 days? That will be a disincentive for people to change jobs. One of the things we want is productivity in New Zealand. Sometimes people are in the wrong job and would be much better in another one, but if they were to leave that job they would leave the sanctuary of having any kind of protection under the law for the first 90 days of a new job. I ask how that helps productivity. It will not happen all the time—of course it will not. There are many, many good employers; they are the overwhelming majority. But I lay odds that it will happen all right, and we will see examples of that as we go along. That contributes to a stagnating economy, not a productive one.

I can think of better ways to achieve the Government’s ends without getting such perverse outcomes as that, and so would many other people if they had the chance to make submissions to a select committee. Those are the sorts of details that come up when there is an adequate opportunity to scrutinise bills in a select committee. I thought we had moved past this situation. This is probably one of the benefits, or disadvantages, of having been here in the House for a long time, but I can remember when Governments used to ignore select committees. They used to tell members not to worry about submissions, to just get a bill back here to the House without change, and we would press on. This Government is actually short-circuiting that process by not even referring bills to the select committee in the first place, and that is going back to the really bad days. There are details that, as I say, come up when bills are examined carefully through a select committee consideration process. When we make laws unnecessarily under urgency in this way, we very often make mistakes—bad ones—and everyone knows that. I am sure members opposite do too; such mistakes are well proven in our parliamentary system.

We have one of the best select committee systems in the world. I have been in a Commonwealth parliamentary group that wrote a book about select committees and public consultation in Parliament, and New Zealand came out at almost No. 1 in the Commonwealth in terms of its select committee process. This is not one of the great days for supporting that process. We have that select committee process, firstly, because we have one of the flattest legislative systems in the world. It is a unicameral Parliament. There is no second Chamber, and we do not have separately elected executives and legislatures, so our checklist is the select committee process. That is our constitutional protection, and this Government is avoiding it. It is avoiding it for no good reason, because this bill presumably does not come in until 1 April, so even a peremptory period of consideration by a select committee is possible. In its first act in this Chamber, the Government is denying that.

We have a select committee process, secondly, because we have strengthened it over time not because Governments have discovered some pixie dust of select committee scrutiny, but because Governments have recognised that we make better law and get a better political process by doing so. Select committee hearings allow bills like this one to be changed in order to fix unforeseen problems—and I will bet members there will be some in this bill. I have named only a couple of them, but I bet there will be other problems that have not been mentioned and would have been if the bill had gone to a select committee. If Governments do not refer their legislation to select committees, they are back here in a month or two or three, either amending bills after they have been passed, or defending the indefensible. Those Governments are put in a position where bad things start to happen and, because they do not want to admit they have made a mistake, they start to defend the indefensible. If that happens within months of being elected, that is a slippery slope that you will go down—I mean to say the Government, not you, Mr Assistant Speaker.

One way or another, the Government will regret not sending this bill to a select committee. In my view, it is a mark of a mediocre and weak Government that it is so lacking in confidence in its ideas that it is too frightened to put them before the scrutiny of a select committee. The more that Government members say how great this bill is, the more we wonder why they are not prepared to open it for scrutiny. There is no reason why this bill needs to be passed under urgency—none whatsoever. There is no reason why it needs to be passed without select committee hearings, and that raises the question of why on earth the Government is doing that. Has some kind of secret commitment been given to somebody? There is no reason to do this. If the bill returned from a select committee without amendment because it is such a brilliant and flawless piece of law, the Government would be able to take great credit for that. So why does the Government not refer the bill to a select committee? I think it is because this process admits to an arrogance and a weakness on the part of this Government that augurs pretty poorly for the outcome for it.

I raise one more issue. The bill requires that those people who are in KiwiSaver get their employer contributions on top of their existing pay. People who opt into joining KiwiSaver could face being fired under the 90-day rule when they tell the boss they want a superannuation contribution. Do members think that will happen often? No, I do not think it will. But I certainly think it will happen, and we will be staring down the barrel of that. That is what we have employment laws for, not because most employers are bad employers. In fact, bad employers are relatively rare. But bad employers do exist, and we need to protect people from their exploitative behaviour. The beauty of the select committee process is to raise those issues.

This bill is further evidence, if we needed it, that the Government is focused not on the business measures we need in order to increase our economic performance—because this bill will not help that; actually, it will make it worse—but on mean-spirited ideas that are all about shifting around the way the cake is cut up, instead of growing it. If the Government was really serious about productivity, it would be encouraging employers to do everything they can in the first 90 days of employment to make sure that people are trained, educated, and helped to do a good job. Then they would not have to worry about the silly nonsense we have here. This bill is all about the balance between employers and employees, not about growing a pool of prosperity from which both can draw.

As members may have noted when I spoke earlier during the first reading debate on the Employment Relations Amendment Bill, one of the main concerns the Green Party has about this legislation is the way in which there is no obvious or visible protection for workers who are laid off under the 90-day provision, and who then will, at least in some cases, be subject to the 13-week stand-down at Work and Income. Both the Minister of Labour, Kate Wilkinson, and Dr Nick Smith have indicated that in fact this is not the intention of the Government, but I have seen nothing in the explanatory note of the bill or in the content of the bill itself to provide any reassurance on this matter. The Green Party would like to see the bill amended to ensure that someone who is dismissed during the 90-day period cannot be subjected to the 13-week stand-down mandated by section 60H of the Social Security Act. I will be lodging a Supplementary Order Paper to this effect during the Committee stage.

The Minister has since, in her second reading speech and in a media release, indicated that it is clearly not her intention to force people into the stand-down period, and I am very relieved by that. However, there is still nothing in the documentation so far to give me any assurance that this will not happen. For example, the press release frequently asks questions, and talks about people not facing a stand-down unless they have been dismissed for misconduct. The problem with this is that under the new legislation there is no legal grievance process, so there is no way of establishing who is right or wrong when it comes to a disputed situation.

I will give an example of how this might work. Let us say that David is employed as a barista in the café down the road, and after 2 months the boss sacks him because he reckons he might have given free coffees to a mate. That is misconduct. He tells David this and sends him on his way. David goes to Work and Income to apply for the unemployment benefit. Work and Income asks him and the employer why he has been dismissed. The employer tells Work and Income that it is because of misconduct, and that is that—David has no income for 13 weeks. However, David disputes the situation and says he never gave away free coffees and that he was not fired for misconduct but for no reason at all.

At this point, how will Work and Income judge the facts of the case? David cannot go to the Employment Relations Authority or to the Employment Court to get a ruling from them, and I doubt that the Work and Income case manager would want to spend hours, if not days, determining the rights and wrongs of the situation. In fact, it is far more likely, from my experience in dealing with the department, that in most cases the case manager will simply take the employer’s word for what happened in the situation—that it was misconduct—and David will end up destitute and ultimately probably a drain on our criminal justice and/or health budgets.

A second issue in this area is that, as far as I can see, there is no requirement under the new law for an employer to actually give the employee any reason at all for his or her dismissal. Thus, when individuals turns up at Work and Income and are asked why they were sacked, again it will be up to the good will or otherwise of the case officer on duty to determine whether they should be subject to the 13-week stand-down period.

In her speech just a short while ago while discussing this very issue, the Minister attempted to clarify the Government’s approach when she said that they did not intend that beneficiaries going into work, or those who would be later eligible for the new redundancy assistance, which the Government is evidently going to bring in before Christmas, will be subject to the 13-week stand-down, unless they are dismissed for misconduct. Well, OK, sort of; and I welcome that further clarification from Ms Wilkinson.

But what about all those employees who are in their first 90 days on the job but who are not on a benefit when they go into a job? Most new employees are in fact not on the benefit when they start in a new job. They will have come from another job, or they will have come from a school, a training institution, or a university. Many of them are not on the benefit at all. And what about all those other workers who will not have been on the benefit but who also will not be eligible for the Government’s planned redundancy assistance?

Although of course I have no idea about the details of what the Government is planning, we were told by National during the election that there were going to be quite a few restrictions around who would be eligible for the new redundancy package, including one that said that only those who are laid off after 5 years in the workforce would be eligible. If that is still to be the case, of course a whole group of employees who have been in the workforce for less than 5 years would again miss out on this protection.

I think this whole imbroglio of uncertainty, loopholes, and glaring gaps in application, or potential application, just on this one comparatively little issue of the stand-down period, is a very clear demonstration of why a bill of this complexity and significance should go through the whole select committee process. If we had had a chance to receive advice from officials, to hear submissions from organisations and groups that have expertise in this very complex area—if we MPs had had a chance to debate and consider these problems—then this bill would be a whole lot better, and we would have a chance to work together across the House to try to deal with something that is going to be really serious for those affected once this bill goes through.

The administration of our welfare system is a bureaucratic nightmare. It is a morass of accretions of regulation and law that overall is not geared ultimately to err in the best interests of beneficiaries when there is any doubt or confusion about a particular situation. For this reason, and given the Government’s concern, which I welcome, that people should not be unfairly subjected to the 13-week stand-down, I call on the National Party and other parties in the House to support my proposed amendments. If the amendments are not properly drafted or quite right—and very likely that will be the case because of the very short time we have had to draft them—I welcome the Government’s support in redrafting and putting up better amendments.

The National members also keep talking about how this 90-day trial period is going to be by agreement. They seem to neither care nor understand the total imbalance of power that characterises the relationship between an employer and someone applying for a job. As I discussed earlier in the House today, this is one of the most vulnerable moments in a worker’s relationship with his or her employer. Most people who are keen, if not absolutely desperate, for a job, will agree to anything in order to get it, even if they are deeply unhappy about the required conditions of employment that they are being asked to sign up to. This imbalance is only made worse when other factors enter the picture, such as migrants desperate for a New Zealand job and without good English language skills, perhaps young workers who are often very intimidated in these kinds of situations, or people who have disability or illness issues, or criminal issues, who are very much on the back-foot when they enter that situation and are trying to get work.

This bill is not about providing some kind of lovely social service to poor unfortunate migrants, ex-prisoners, and youth, as some Government speakers have sought to portray it in the House today. Giving people a chance at a job and then taking it away again through dismissal at will without legal protections actually deepens the exploitation of the many in our society who struggle at the low and most powerless end of the job market. I am sure that once this bill goes through we will start hearing some really sad stories from people who thought they were being given a great opportunity to enter the workforce. For example, what about ex-prisoners or migrants finally getting a job—very happy, self-esteem suddenly boosted, all their dreams coming true—then 1, 2, or 3 months into the job they are dismissed without reason, or without apparent reason, and find themselves back on the scrapheap? At this point they are unemployed again. There are a whole bunch of new issues to deal with.

It is bad enough being out of work, but being sacked without reason is even worse. Dismissal often leads to feelings of despair and a massive loss of self-esteem. When this happens to people who are already struggling with other issues in their lives, the outcomes can be devastating. I spent 16 years of my life working with people in these kinds of situations. I predict that once this law takes effect and some of our less scrupulous employers start using it mercilessly, there will be a number of casualties. People will revert to crime or become seriously drug and alcohol addicted and suffer other health problems. They will face family breakdown, and, in some cases, people actually do take their own lives in these kinds of situations. It is a real pity that this Government does not seem to understand the human impacts of what they are doing here. However, it is even worse if they do comprehend those impacts and are going ahead with it anyway. Ultimately, it is people’s very lives that are being played with here.

I rise to make a short contribution on the second reading of the Employment Relations Amendment Bill. The picture being painted, particularly by Ms Bradford and others on the Labour side, is of most, if not all, employers. I notice that the only one who did not paint that picture was Mr Anderton, who has been an employer himself. But the story from the Opposition side has been almost universally about the horrid, horrid employer and the poor, victimised employee. Yes, that does happen, but we have heard no horror stories from the other side. Ms Bradford noted, I think correctly, that at the hiring stage there is an imbalance of power between employer and employee, and it is on the employer’s side.

💬 Darien Fenton: Oh!

No, no—I said that the balance of power is in favour of the employer. The employer, until he or she makes that magic decision and says “You’re hired.”, he or she, for whatever reason in his or her own head, can refuse to make the offer. The employer at that point—up to when that hiring decision is made—does indeed hold the balance of power. But once that decision is made, the balance of power shifts hugely.

As I said earlier in my first contribution, I have practised employment law for 15 years—since it became a speciality—mostly, in fact, representing employees successfully, very successfully. It was often a case of shooting fish in a barrel, because of hapless employers who got one little detail of the process wrong. That is all that was needed. For an aggressive employment lawyer, as I was, who knew my stuff, that is all that was needed. If the guy did not give 3 hours or a day to get legal advice—bang, he was gone. If he made a decision too quickly, went and had a cup of tea out the back and did not leave it overnight—bang, he was gone. We heard a story from Ms Dalziel, and who but a most hard-hearted person could not feel sympathy for the young fellow who went and took his life—I am trusting that those facts are as stated—of course, that is terrible. Who would wish that to happen?

But there are horror stories on the other side. I dealt with several of them and I know of many, many more. One that sticks in my mind is from a few years ago, and if I have got the facts not completely right I hope the House will forgive me, but this is largely correct. The owner and employer of a small rest home arrived late one night to check on the residents, and found one of the nurses badly affected by cannabis and residents lying in their own faeces and urine in their beds. The employer, to use the vernacular, went off her head and sacked the nurse on the spot. She, the employee, was gone right there. In the Employment Tribunal, as I think it was in those days, the referee had no difficulty at all saying that this was a substantively justified dismissal. In other words, there was every good reason to sack this person without notice. But process was not followed. The referee went further: the referee bent over backwards to try to be fair, and said that although this was an unjustified dismissal because of lack of process, the employee had contributed 75 percent, I think from memory, to her own misfortune. So whatever remedy was to be granted to her was reduced by 75 percent. But the employer still lost, because the employer, I think a company, had to pay 25 percent of $10,000 or $15,000—I cannot remember—plus 25 percent of the employee’s legal costs, plus 100 percent of the company’s own legal costs.

I am not saying for one second that every employee is like this. Of course they are not. I have brought many personal grievance cases for employees that were entirely justified, and they got paid well out of them. But often it would be a case where, frankly, the employer had simply made one little mistake, and that weighs very heavily on employers when making a decision to employ, as I said in my first contribution.

This bill is in fact a very moderate bill. It protects employees for 90 days. As I said at the start of this contribution, Mr Anderton was the only speaker who acknowledged that there were bad employers and good employers. There are also bad employees and good employees. It is not difficult for a slacker to put on a good show for 90 days, and then suddenly on the 91st day—bang. I acted for some—I should be ashamed, I suppose—“serial PGers”, as we used to call them. They knew more about employment law than I did, and were intelligent people and well read. They would even tell me the latest case. I am not making this up. OK, they are a minority but they happen, and any employer who is properly advised is aware of that when he is thinking of hiring a new person. So the situation is not one-sided. It is not the poor, hapless, powerless employee and the horrid lord of the manor situation entirely. Like everything in life, it is not quite that simple.

Trial periods, as another speaker in the Government noted, are now common throughout the Western World. The media reported yesterday—and I am not certain whether it is correct—that only two countries in the OECD do not have trial periods where personal grievance procedures are precluded: Denmark and New Zealand. So we join the majority if this bill is passed in its present form. I understand that until 1998 all new public servants were required to serve trial periods with no redress for a minimum of 6 months and up to 2 years. Well, that would have saved a lot of money, would it not, on some of the bad decisions?

The other side said, quite rightly in my view, that a select committee process is desirable in most situations. But this bill, effectively, has already been there. It is a version of an earlier bill—Dr Mapp’s bill—and incorporates, I understand, some of the several hundred submissions that were made to the select committee at that time. Effectively, the bill has already been scrutinised by a select committee; submissions were received. I understand that employers at that time were unanimous that this was a good idea in terms of promoting employment. In comparing the two bills I can see they are quite clearly different. But they do not need to have much difference to make quite a significant difference. It is like those words “shall” and “may” in law. They are only single words but they make a world of difference. This bill, effectively, has already been scrutinised by a select committee.

Employing someone is a major decision for any business. It seems to me, a bit, as if the work expands to fit the time available in large firms, and the employing process can last 3 weeks, but for small businesses it is a major commitment. They do not have human resources departments normally, in my experience. Firms with nothing fewer than about 100 employees have human resources departments, but the human resources managers in small businesses are the owners. They have to set aside time to interview people, try to make an assessment, try to check references, make a judgment, and hope to hell they get it right, because if they do not they pay the penalty.

As I said at the start of this contribution, I am quite firm in the view that after the hiring decision has been made, the power and balance shifts very much to the employee’s side. The speakers on the other side said something like “All the employer needs to do is be fair.” That is not so—it takes only one small mistake of process. I think in 60, perhaps 70, percent of employment disputes where money is paid out through the Employment Relations Authority, the reason is process. The answer is generally that the decision is substantively justified but procedurally unfair, and that unfairness can be tiny.

This is not an unreasonable bill. It is a bill that will promote employment, and I would have thought that every member of the House would be inclined to support it.

Debate interrupted.