Holidays Amendment Bill

I move, That the Holidays Amendment Bill be now read a first time. At the appropriate time, I intend to move that the Holidays Amendment Bill be considered by the Transport and Industrial Relations Committee, that the committee report finally to the House on or before 5 November 2010, and that the committee have authority to meet at any time while the House is sitting, except during questions for oral answer, during any evening on a day in which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, and to meet outside the Wellington region during a sitting of the House, despite Standing Orders 187, 189(a), and 190(1)(b) and (c).

The Holidays Amendment Bill will improve the overall operation and efficiency of the Holidays Act, improve the balance of fairness, and provide greater choice to employees and employers. The changes introduced to the House today will make it easier for employers and employees to understand and to comply with the holidays legislation. This bill follows a review of the Holidays Act by a ministerial advisory group of employer and union representatives that we set up last year. The Holidays Act affects all employers and employees. It is significant legislation. However, parts of the Holidays Act have been criticised as being unclear, overly complex, and lacking choice for both employers and employees. A lack of clarity in holiday provisions has a negative impact on employment relationships and productivity because employers and employees have to spend time and resources trying to establish their rights and obligations. A high number of public submissions on the review shows that there are a number of issues that are important to people. The group’s recommendations provided me with a sound basis for arriving at the proposed changes we are debating today and I thank it for its work.

We will be making a number of changes to the Holidays Act. The major changes propose to address the application and calculation of payment for public holidays, alternative holidays, sickness leave, and bereavement leave, and give employees the ability to exchange up to 1 week’s annual holiday a year for cash. Giving employees the ability to exchange 1 week’s annual holiday for cash was a National Party pre-election manifesto commitment and I am delighted to be implementing this policy.

There is widespread public support for this exchange. New Zealanders want to be given greater choice and flexibility with their holidays and this Government is delivering it. This is an incredibly popular policy. All the feedback we have received from the public is in support of this choice. In fact, the only concern raised to date is that this policy has not been available sooner. This exchange is all about choice. We are saying to New Zealanders that they are best placed to make their own decisions based on their own circumstances. After 9 years of a meddling Labour Government this comes as a welcome relief. New Zealanders can be trusted to make these decisions. If they want to take their full 4 weeks’ holiday a year then they can. If they feel they need only 3 weeks then they can ask their employer to trade it in and be paid that extra week as cash. If it works for both parties then it is a win-win. The necessary protections will be built into the law. The exchange cannot be raised in salary negotiations or as part of an employment contract. This is a sound policy and I expect that it will prove beneficial for many New Zealanders.

The issue of relevant daily pay has proved to be the most difficult and frustrating part of the Holidays Act. The bill will address this issue. We acknowledge that for some employers and employees the existing arrangement of relevant daily pay is straightforward. For these people—for instance, those on salaries—relevant daily pay remains the basis for calculating the pay for leave taken. Where relevant daily pay creates difficulties, such as where pay or hours vary, we will be introducing a new concept of average daily pay. Average daily pay is a daily average of an employee’s pay over a year, or whatever lesser period the employee has worked for that employer.

This change will make the Holidays Act easier to understand because the payment for leave is based on past identifiable earnings. The change addresses the issue of potential fluctuations in pay. Average daily pay avoids the higher and lower payments that can be caused by averaging over 4 weeks, as is the case currently. It will be beneficial for employees and employers by providing more certainty around the value of leave for any particular day. It will provide more certainty where an employee is paid by piece rates; it will provide more certainty where an employee’s hours of work are dependent on the volume of work available; and it will provide more certainty where an employee receives different pay rates for different tasks.

This bill also provides more choice for employers and employees by restoring the right to transfer the observance of public holidays to another working day. The 11 public holidays provided by the legislation are important to New Zealanders. However, our society is changing. This law change recognises that it may better suit some workplaces and employees to agree to observe public holidays on other days. For example, an employee may agree with his or her employer to observe Boxing Day on another working day that holds religious or cultural significance for that employee. The bill sets out a number of criteria that apply to any agreement to transfer public holidays.

A minor change is being proposed to allow employers to request proof of sickness or injury within 3 consecutive days of an employee taking sick leave without first having reasonable grounds to suspect that the sick leave is not genuine. Despite the usual scaremongering from the Opposition claiming that the health system will be clogged up, I do not expect that this law will be used very often at all. Employers have to pay for the proof and it is clear that they will request a medical certificate only when they genuinely suspect somebody of routinely pulling sickies. The current law is open to interpretation and employers have noted that they simply do not know at what point they have reasonable grounds. This change will make the law clear and simple.

A late amendment to the bill will clarify employees’ entitlements during customary close-down periods such as at Christmas. This change makes it clear that employees are entitled to be paid for public holidays, alternative holidays, sick leave, and bereavement leave falling during a customary close-down period if they would otherwise be working days for the employee. This does not change current practice but it ensures that the legislation reflects the original policy intent. This change is in response to a recent Employment Court decision.

Lastly, we will be seeking to increase the maximum penalties under the Holidays Act. The maximum penalties for non-compliance with the Act will double to $10,000 for individuals and to $20,000 for companies and other bodies corporate. There is no reason why employers cannot meet their obligations under this Act, and the current penalties are too weak. Breaches of minimum entitlements are not conducive to good commercial practices and it is important that the law is taken seriously.

This bill responds to concerns raised by the public about the Holidays Act. The bill retains the integrity of the Holidays Act and maintains employees’ holiday and leave entitlements. The bill clarifies areas of uncertainty and addresses concerns about how certain aspects of the Holidays Act are causing unnecessary costs and confusion. It gives greater choice to employees who may want more flexibility around how they take their annual holidays and public holidays. I commend this bill to the House.

I think one should probably start by looking at the regulatory impact statement for the Holidays Amendment Bill. That is probably the reverse of the way that it is done on occasion, but if we look carefully we can see what a nonsense this bill is. We see the statement from Treasury and the Ministry of Economic Development that the proposed changes may not improve the functioning of the legislation. They note the balance of cost to benefit of the package of the proposed changes is not clear. At a minimum, amendments are likely to impose transitional costs on both employers and employees and the extent of other potential costs is unclear. They say that the cost of implementing it is likely to be so high that most employers will not use it, and that the proposal will create new tensions between employers and employees.

I think the fairly described, ideologically right-wing agencies of the State are basically saying that this will not work and this is nonsense. These are the very agencies that one would think would come in behind the Government to provide the Government with an argument to back up its nonsense. I think it is fair to say that for big parts of the legislation the Department of Labour said either there was not enough research or it did not have enough time to spend on it. In some cases, the Minister did not even ask the Department of Labour. She wrote the legislation and did not ask the department for a view, or ask what material or what facts were in its possession in relation to the legislation.

💬 Hon Steve Chadwick: They don’t care.

And maybe National does not care. Maybe National does not care about the effect this legislation has on Kiwi families, and that is something that I am beginning to see.

An interesting comment was made a couple of years ago by someone about the New Zealand situation. He said that spending long hours at work, having both parents in employment, childcare shortages, growing interest rates, and rising bills can be a far from ideal environment for good parenting and healthy family relationships.

💬 Hon Steve Chadwick: Suicide rates.

Well, no, suicide rates were not mentioned by John Key when he talked about the pressures on families.

💬 Grant Robertson: When did he say that?

It was just before he became the Prime Minister. It was at the point when he was pretending that he was supportive of a high-wage economy, rather than the introduction of measures that are deliberately designed to drive down wages and to reduce the conditions of New Zealand wage and salary earners.

He dresses up these measures as an attack on unionists and union members. But all of us know that his secret agenda is to very quietly undermine the wages and salaries of middle-income New Zealanders on behalf of the people who give very big donations to the National Party. That is what he is doing. He will never admit it, but that is what he is doing. He is not only attacking those people at the bottom of the heap, but with this legislation he is putting the pressure on middle New Zealand, in a number of ways that I would like to get into.

National members in the past used to be more honest. They used to say that they were opposed to 4 weeks’ leave. They voted in this House against 4 weeks’ leave. They said that they did not want it. Now they are pretending to say that they really do support it, but if one is poor one should not have a fourth week of holiday. If one is a vulnerable worker and does not earn enough to keep one’s family, one can cash up one’s holiday and not have the holiday. We know that low-wage earners are the ones most likely to do that. They are the very people who are under the most pressure in their households. They are the very ones who struggle the most, which causes all sorts of problems within their families, and they are the ones whom this National Government is attacking. They are the most vulnerable people, and they are being attacked by the National Government.

Kate Wilkinson said that employees will not come under pressure. Employers will not be able to pressure people. She said that cashing in annual leave cannot be a term or condition of the employee’s employment. It cannot be part of what is advertised for the job at the beginning. But is that not what she said about the 90-day trial legislation? That is exactly what she said. She said that it was the employee’s choice. It was not going to be one of the conditions when people were employed. I notice that Kate Wilkinson is not replying. She is not focusing; she is not listening. I think it is pathetic that a Minister in this House this early in a debate is not focusing on the inconsistency and the hypocrisy of someone who claimed that the 90-day legislation could not be part of the conditions of employment. She is making the same claim about this. We know that is not true and that she has no way—

💬 Hon Steve Chadwick: Hold their heads down in shame.

Those members over there are holding their heads down in shame. It is interesting that as soon as the noisy Māori, Paul Quinn and Tau Henare, leave the House those members put their heads down. They look ashamed—so might that particular pair look ashamed.

Already in the first 12 months of this Government being in office, wages in Australia increased by 2.5 percent more than in New Zealand—2.5 percent more in average weekly wages in Australia than in New Zealand. National is the Government that promised to close that gap. What it has done, as National Governments have done consistently right through the 1990s, is open that gap. Under the employment contracts legislation the gap opened up massively during the 1990s, and this Government is true to form. This is what it believes in. National believes in lower wages; it is part of its raison d’être. National does not believe in high wages and good skills. It does not believe in decent capital investment. It believes in this spiral to the bottom and in competing for low-wage jobs with China and India. That is the sort of approach that this Government has, to drive wages down in New Zealand, and this is the sort of legislation that is designed to do it.

As far as holidays are concerned, New Zealand workers have fewer holidays than the vast majority of like countries, certainly around the OECD. We are holiday starved in New Zealand. The Minister of Labour might well hang her head in shame, as she is doing now. She should be ashamed of the fact that New Zealand is a country that has one of the fewest number of holidays in the OECD, and she is taking them away.

There is only one other point, and it relates to the provisions to stop sickies. The only thing I want to say about that is that Peter Dunne has got it right. I agree with Peter Dunne and I welcome his support for the Opposition on this legislation. It is good to see a Minister who is prepared to stand up for his principles and to abandon the Government on this. He says that the sickie provisions are unworkable. Any of us who live in low-income areas, who see long queues at doctors’ surgeries, would ask Kate Wilkinson whether she really wants someone who has the flu for a couple of days to go and infect everyone else at doctors’ surgeries. Does she really want someone with gastric problems to go to the doctor? Does she really want someone who has been given leave to look after a kid to drag that kid out of bed in order to go to the doctor? In my view, we do not want that. I think it is fair to say that when Labour was in Government we got a little bit of criticism from some of our friends and colleagues in the union movement for not going far enough, but the objective in that legislation, which was introduced by the Hon Margaret Wilson, was to get a balance that could be sustained because it was fair. Kate Wilkinson is undoing that balance, and that is unfair.

I rise to take a call on the Holidays Amendment Bill and to note the fairness and equity that the Minister of Labour is employing in her portfolio. The way in which the legislation has been proposed, the manner in which the public is aware of the detail of it, and the simplicity of the nature of the changes mean that many New Zealanders, and especially working New Zealanders, find a lot of comfort from this Minister and the way in which she is dealing with these issues. We congratulate her.

Contrary to the rhetoric from members opposite, we have had two labour relations bills before the House this afternoon and Labour members have not talked about the actual bill in either case. They have talked about lower wages and things like that, which have nothing to do with the bills. The New Zealand public needs to know that the reality of this bill is not about reducing wages or any of the other rhetoric that Labour members have talked about. This bill is about giving choice and personal direction in regard to holidays. It is a bill that will assist workers and be to their benefit.

We see this bill going through the House, being successful, and being in the best interests of New Zealand workers so that they have choice in the future. Thank you.

It is difficult to have to deal with two attacks on workers’ rights in one day. I put on the record an invitation to Kate Wilkinson to turn up to the New Zealand Council of Trade Unions rallies on Saturday in Auckland, Wellington, Dunedin, and Christchurch—

💬 Hon Trevor Mallard: No, Dunedin’s is on Sunday.

OK, Dunedin’s is on Sunday. I invite her to turn up and justify these changes to New Zealand workers. She will find it very difficult to do so. One of the things that make me very angry in this House is that members like the previous speaker, David Bennett, and others talk about what is good for New Zealand wage and salary earners, although clearly they do not talk to them. They talk only to their friends in business. The announcements at the National Party conference were all about its big-business backers and making sure that they will continue to fund the party at the next election.

I thought I would start my contribution today by reflecting on where we are at, what we are looking to change, what the current legislation says, and where that came from. Currently, workers in New Zealand are entitled to 4 weeks of annual holidays for rest and recreation. Who brought that in? The previous Labour Government brought that in. It took 30 years for New Zealand wage and salary earners to go from having 3 weeks’ holiday to 4 weeks’ holiday. The Labour Government did that. We also brought in time and a half on a public holiday. I am really pleased that we are not now looking at a push-back on paying time and a half on public holidays and a day in lieu, even though there are some issues—and I will talk about those. But a Labour Government brought that provision in. Prior to that, workers who had to work on a statutory holiday, a public holiday, had a day in lieu but received no extra money for it, unless that was specified in their agreement. So that was really, really hard. Even the 5 days of sick leave is under attack, as well, but that also came in under a Labour Government. It came in under a Labour Government, which added bereavement leave to that.

Those are the things that Labour brought in. In some ways it is reassuring that this Government has not really been able to go into an all-out attack on the things that Labour has entrenched in the minds of New Zealand workers, New Zealand wage and salary earners, as being their entitlements. But the Government is coming at it in another way.

I thought it was interesting that the Minister talked about cashing up annual leave. As I said, it took us 30 years to get to 4 weeks’ leave. In the previous debate about the changes made in the Employment Relations Amendment Bill (No 2), she and all her colleagues could not wait to talk about what happens in Australia with regard to trial periods. But that is interesting, because in Australia there has been 4 weeks’ annual leave for a long time. Workers there cannot cash that up. They can go beyond that and cash it up, if that is part of their agreement. But Australian workers have had 4 weeks’ annual leave for years and years, just as they have had many, many other things.

💬 Hon Steve Chadwick: Off they go to Australia.

Well, more Kiwis are going to Australia.

I can understand, and I think that we on this side of the House can understand, why any workers who look at the fact that they have had no pay increase under this Government in the last 2 years—unless they are on the minimum wage, and then it was a measly 25c an hour—and who look at their household bills and think about how they will feed their children, may think that cashing up the fourth week’s leave is quite a good idea. I can understand that. Our leader Phil Goff was trying to explain that; that is what he was saying about our position on the fourth week’s leave. But underpinning the fourth week’s leave from our position is the fact that it is about rest and recreation. New Zealand workers, New Zealand employees, work some of the longest hours in the OECD and have some of the fewest holidays in the OECD. There is an interesting thing about that; I read an article the other day that said that the only other country that works longer hours than New Zealand is Japan. There is a thing happening there called karōshi, where people are working such long hours that they are actually dying from overwork.

We have very few regulations about rest and recreation, breaks, and holidays, and we have almost no regulations on working hours in this country. The situation is so deregulated that it is not funny. The only other things that we have are meal and rest breaks, but, hey, can members guess what is happening to them? They are under consideration in the Transport and Industrial Relations Committee right at the moment, because the Government is trying to take them away. Labour is doing its best to try to make sure that those protections stay—

💬 Dr Jackie Blue: Rubbish!

—but what is happening with regard to meal breaks, I tell Jackie Blue, is the proposal to have a situation whereby workers can be required to work during an unpaid meal break. I think that it used to be called slavery when people worked for nothing. That is what I think it was called.

There are other things in this bill, but before I move on from annual leave I tell members that I remember that National voted against the fourth week’s annual leave. John Key called it a bribe. That is what he called it. National members can try to write in all the protections that they like, but the fact is that many, many workers will come under pressure to cash up that fourth week’s leave. We should be encouraging people to take leave and have time off with their families—to have 4 weeks with their families. Failure to do that is why we have the social problems that we see around the country. That is why families are under pressure.

Then we move on to public holidays and the proposals in the bill to transfer public holidays. I do not know where that came from. It certainly was not a National Party policy; it was not a National Party election promise. It was not in National’s manifesto. [Interruption] It was not. I tell the Minister that it was not in National’s manifesto. There was the whole thing about relevant daily pay, but transferring public holidays was not in the manifesto. I can kind of accept the thing about the fourth week’s leave, even though I do not agree with it, because National did go out to the voting public and say that was what it was going to do. People had a chance to understand that. But the transferring of public holidays seems to have arisen in the last couple of years. I am on the Transport and Industrial Relations Committee, and I remember some employers coming along and proposing that it would be a good idea to be able to transfer the 11 public holidays that we recognise in New Zealand, the festivals, to other days, which could be other cultural festivals, or whatever else.

Well, OK, that all sounds very, very good, and I see that the Minister of Labour has tried to write in protections to make sure that the transfer of a public holiday is not being done just to avoid paying time and a half on the day. But in reality what will happen is that, at the end of the day, if the employer and employee cannot reach agreement on a transfer, the employer gets to decide. So we could have workers working on Christmas Day, away from their families. They could have to work on Christmas Day and not be paid time and a half, and at some other time during the year the employer will decide that another day will be the holiday for Christmas Day. It could be in April. It could be 1 April—what a joke! What an absolute joke that is.

There are some very real concerns about the public holiday transfer. No one has asked for it, I understand, except Business New Zealand and the Employers and Manufacturers Association, which came up with the bright idea. The way that I saw it at the time was that it was a way to try to get out of paying for 11 public holidays. In fact, we have a problem next year. We should be paid for an extra holiday, because we have Easter Monday and Anzac Day falling on the same day, as my colleague Grant Robertson said. We need to look at that.

💬 Hon Trevor Mallard: I’d rather have 4 weeks’ holiday.

The member would rather have 4 weeks’ holiday.

💬 Hon Trevor Mallard: That’s my priority.

Well, that is true. Yes, I am sure that many, many workers would rather have that, too.

Then we get on to the whole issue of sickies, and the tone of this bill is that workers cannot be trusted. They cannot be trusted. Apparently, they are so untrustworthy that their employer can require them to go to the doctor so that they can provide the employer with a medical certificate on their first day of illness. That is very unfair. If a worker has a sick child, I ask whether the worker is really expected to drag that child out of bed, go off to the doctor, and get a medical certificate. We have heard from doctors that they will not appreciate it. I go to my doctor sometimes, and there is a big queue—particularly in winter, when there are many cases of flu. People will not get in to see their doctor, and what happens then?

💬 Hon Member: If you did, you’d just infect other people.

That is right, so then they drag themselves off to work. It is just ridiculous. The whole argument around the Minister’s removal of the word “reasonable” is an interesting one, too, because that flows over into the Employment Relations Act, and we had a discussion on that earlier.

In closing, I say this legislation will help us to drift further away from Australia. We will see more people getting on planes and going off to Australia, because people do not have to argue about their holidays in Australia. They do not have to argue.

💬 Hon Steve Chadwick: Forty families from Whangarei last week.

Forty families from Whangarei went off to Australia last week, and who can blame them? In Australia people are treated properly. They get time off to be with their families, and they do not have to put up with this nonsense.

I seek leave for the House to rise at this point. I think that people are dashing off—

The ASSISTANT SPEAKER (Eric Roy): Leave is sought for the House to now rise. Is there any objection to that course of action? Yes, there is.

I raise a point of order, Mr Speaker. I will just get out my gear and see whether I can find the appropriate Standing Order. I think that we are getting to the point in the debate where it is making a nonsense of trying to—

The ASSISTANT SPEAKER (Eric Roy): Order!

I am sorry, but I am trying to find the particular page as we go.

The ASSISTANT SPEAKER (Eric Roy): The member must raise his point of order; we do not need a dissertation on the debate. That is not a point of order.

No, I think you are right, Mr Assistant Speaker, but I am sure that one of my colleagues—

The ASSISTANT SPEAKER (Eric Roy): I ask whether some member is seeking the call. The member does not have a point of order.

I raise a point of order, Mr Speaker. I think that Mr Mallard should have been able to get to the particular clause—

The ASSISTANT SPEAKER (Eric Roy): What is the member’s point of order? I ask whether some member is seeking the call.

I am grateful for the opportunity to speak to the first reading of the Holidays Amendment Bill. It is an excellent bill, and I congratulate the Minister of Labour on it. It is part of a suite of employment laws that the Minister is bringing to the House. We had the Employment Relations Amendment Bill (No 2) this afternoon, and the Holidays Amendment Bill is the second bill that we will debate today in this area. The bill is all about finding practical solutions to the issues facing both employees and employers, which is all being done in the backdrop of the Government’s objective to grow the economy, create more jobs, and increase growth for the country.

The bill amends the Holidays Act 2003, so that the Act is easier to understand and to apply; the comment has been made that the Act has been complex and confusing. The bill will decrease compliance costs for employers, making it easier for businesses to grow and get on with their core business, which is all about carrying out their business and opening up jobs. This bill is all about choice and flexibility. I commend it to the House.

💬 Hon Trevor Mallard: Point of order—

The ASSISTANT SPEAKER (Eric Roy): The time has come for the House to rise, so we will not deal with a point of order.

Debate interrupted.

The House adjourned at 6 p.m.