Holidays Amendment Bill

I think it is fair to say that Part 2 is not quite as big as the previous part that we have been dealing with in the Holidays Amendment Bill, but it involves schedule 2 and clause 19, “Transitional Provision”. Schedule 2, “Amendments to other Acts”, cross-references the Employment Relations Act 2000 No 24. Schedule 2 involves repealing section 79(1) and substituting new section 79(1), which states: “An employer must pay to an eligible employee the employee’s relevant daily pay as defined in section 9 of the Holidays Act 2003 or average daily pay calculated in accordance with section 9A of that Act (as the case may be) for every day or part of a day taken by the employee as employment relations education leave.”

There is a further amendment, in this case to the Parental Leave and Employment Protection Act 1987 No 129, whereby there is an addition to the end of section 42(2) of the words “is taken or paid out”. So the essence of schedule 2 is that the Acts listed—the Employment Relations Act and the Parental Leave and Employment Protection Act—are amended. At first glance, they appear to be relatively minor changes, but when one looks at them more carefully, one can see that these provisions hook right into the vicious attacks on workers. In the case of the first Act that is amended by the schedule, this nasty new approach to relevant daily pay is important to the Employment Relations Act for people who are taking employment relations education leave, as well as for other reasons.

Clause 19 is the other operative clause of the bill and, effectively, is a transitional provision. It states: “To avoid doubt, a request under section 28A of the principal Act (as inserted by section 10 of this Act) may be made only in relation to an entitlement year that begins on or after the commencement of this Act.” I think members agreed to insert this amendment as part of section 10. One of the questions is whether it should be “section 10 of this Act” or “clause 10”, because I think that when this bill is passed, the provision will be part of the substantive Act, and then there will be a numbering question. It may well be that because this bill will not be a stand-alone Act, because it amends the Holidays Act, there is the question of whether the reference in clause 19 should be to“section 10 of this Act”, or to “clause 10 of this bill”. A section, of course, is what finally goes into legislation; a clause is what we are dealing with here.

There will not be a Holidays Amendment Act standing alone in the statute book. All the changes that are made as a result of this legislation will be imported into the substantive Act, which is the Holidays Act—I have lost the original year, my colleagues might be able to help me—2003. It has been about 7 years. I cannot quite recall whether this Holidays Act was one that was totally rewritten in 2003, or whether it is one from an earlier date. As it turns out, the principal Act is from 2003. When the legislation is reprinted and all put together, there will be a 2003 Act.

The Holidays Amendment Bill that we are dealing with now will not exist as an Act, because it will sit right through the other bits of legislation. We will not be able to find it. When the legal people of Brookers have worked their way through consolidating the Acts in the way that they do, wandering through our offices every now and again, this bill, which will become an Act, will be part of the substantive Act, and we will be able to find it in the statute books with the points I have mentioned all made. It is a question for the Minister in the chair, the Hon Kate Wilkinson—and I know she is right on top of these drafting and constitutional issues—to tell us whether the reference in clause 19 to section 10 should read “section 10 of this Act” or “clause 10 of this bill”.

In fact, the person who was an assistant lecturer at a polytech and could not make it into the legal faculty but instead made it into the commerce faculty as an assistant lecturer, Dr Wayne Mapp, is the font of legal wisdom currently on the other side of the Chamber. It may be that he is able to take a call and let us know from his experience, which got him as far as being an assistant reader. Does that mean that he helped people read, or does it mean that someone had to read to him, if he was an assistant reader at the polytech in the commerce faculty rather than the legal faculty? Perhaps he could not quite make it into the law faculty because his qualifications were not flash. It may be that he has the drafting knowledge to indicate to us what the right approach should be.

Going back to the question of employment relations education leave, I am pleased that the Minister of Labour has decided to put it in the bill. She raises what is an important issue for us. Making sure that the conditions are appropriate for people as they take their employment relations education leave is very important. This bill is designed to drive down the conditions and drive down the payments that people receive when they have employment relations education leave, which used to be pretty widely available and is now very, very rationed. The leave initiative has been widely supported by the union movement and by a lot of employers, because they know that a well-educated workforce, which understands the industrial relations area as a result of employment relations education leave, is much more likely to take a problem-solving approach, rather than a combative problem-causing approach.

Of course, National has different views on this. Those members prefer people to be at the barricades and lobbing grenades at each other, and we can look at schedule 2, which contains amendments to other Acts, including substituting section 79(1) of the Employment Relations Act 2000. Labour is very strongly supportive of making sure that when employees take their employment relations education leave, they are not disadvantaged in the way that has been done in that amendment. Frankly, it has been done in a pretty sneaky way. I ask why the Minister of Labour did not stand up in this Chamber and say that the Government will cut employees’ pay when they take employment relations education leave. I ask why she did not get on her hind legs and admit to the House that the objective of this Government is to cut back the payments that people receive when they take their employment relations education leave. What did she do? She sneaked it into a schedule, sitting it at the back of the bill.

I have to admit to being absolutely dismayed on examining schedule 2 and the amendment to the Employment Relations Act in relation to employment relations education leave. I was on the Transport and Industrial Relations Committee and I have to admit that the provision went past me.

💬 Jo Goodhew: Oh!

Jo Goodhew should listen, because it is a very, very important provision for workers when it comes to having an active and engaged workforce, whose members understand their rights—

💬 Hon Dr Wayne Mapp: Unlike the current member, who is neither active nor engaged.

What is that noise over there? There is a bit of a noise going on over there. It would be good if it just stopped.

This provision comes on top of the sneaky cuts that this Government made to employment relations education in last year’s Budget. It cut the contestable fund by 56 percent.

💬 Hon Trevor Mallard: Well, this is consistent with that.

I know that Wayne Mapp gets all excited when we start talking about workers’ rights, but that fund also applies to employers. They were just as upset about that as unions, workers’ representatives, and the Council of Trade Unions were. Employers also use that fund to educate their managers and businesses about productive employment relationships.

Let us face it, one of the problems we have in this country, and it has been well researched and well documented, is that we have a low quality of management. That is one of the issues that are standing in the way of increasing our productivity.

💬 Hon Trevor Mallard: If they went to some of those union education leave courses, the quality of their management could well improve.

Well, that is true. They might learn something. But now it will be even more difficult, of course.

💬 Hon Trevor Mallard: The managers wouldn’t want to go on the pay that the workers get for it.

No, that is true, and what will happen is that unions will have to top up that pay. It will become yet another compliance cost on unions, which are trying to do the right thing. They are trying to make sure that they are able to have engaged, informed, and well-educated workers, so that they do not have to knock on the door of employers all the time to talk to them about what is going on in their workplaces. The whole idea about employment relations education leave is that many issues can be solved in the workplace by workplace representatives or delegates.

I am disappointed about that, but I also refer to the transitional provision in clause 19 in Part 2, which refers to section 28A of the Holidays Act. I think it is an illustration of the mess that this whole legislation has got us into. We heard from members opposite in the earlier debate about how workers will just love the ability to cash up their annual leave and that they cannot wait to do so. We heard that they are so grateful to the Government. Of course, this bill will not come into force until next year. I come to the commencement date, because there is some confusion over that, as well. The bill will not come into force until next year. All sorts of people have been listening to the National Government’s rhetoric. They are thinking that at least they can get a pay increase by cashing up their annual leave this year. They have not had any other sort of pay increase, because this Government has no plan to build the economy—

💬 Hon Tau Henare: Stop your moaning and stand up straight.

Yes, sergeant-major, I say to Tau Henare.

There is no plan to build the economy, to increase wages, or to bridge the gap with Australia—we all know that.

In schedule 1, “Consequential amendments to principal Act”, what we have again is an illustration of the confusion of this bill. Although we have not talked a lot about average daily pay versus relevant daily pay, because overall we do not have major difficulties with the change, what we do have in this bill is a choice for employers between one system and the other. How confusing is that? We have heard again and again how difficult the Holidays Act is to interpret, and how complicated relevant daily pay is to calculate and so on, but now we have a choice. Oh my goodness, all of those sections under schedule 1 will be amended, and I think we are getting into a right old mess.

The Holidays Act is criticised again and again, and this bill is supposed to be the opportunity for the Government to show everybody in the country that it can do a better job than the previous Labour Government, but I think it has mucked it up.

I will also talk about clause 19, “Transitional provision”, in Part 2. It contains the phrase “section 28A of the principal Act (as inserted by section 10 of this Act)”, which relates to the question of when people will be able to cash up 1 week of their annual leave, as my colleague Darien Fenton has said. New section 28A(5) defines the term “entitlement year”. It is “a period of 12 months continuous employment beginning on the anniversary of the employee’s employment; and (b) includes a period of 12 months continuous employment described in section 16(2).” of the Holidays Act.

When we look at the provisions in new section 28A, “Employee may request portion of annual holidays be paid out”, we see that they go through the process as to how that will happen. Originally that process was to be informed and voluntary. It will no longer be informed and voluntary. The suggestion that was made to people that the process would happen only when employees wanted it to happen and that everyone would understand the full implications and be very, very clear that it was voluntary is no longer there, but there are some other provisions on how employees will request that a portion of their annual holidays are paid out. The request must be made in writing, and it may be made on one occasion, or on more than one separate occasion, for example. Employers must consider the request and advise employees in writing as to whether they agree. Employers can decline the request.

We heard a lot of rhetoric about this matter. We heard that Labour is not supporting workers’ choice, and we have had all the high dudgeon about property rights and about whose holidays they are. They are employees’ holidays and, apparently, we are trying to stop employees using their property, their holidays. Well, actually, if people were honest—and members opposite did not mention this bit—the absolute right is with the employer. We have heard all the great rhetoric on this matter tonight from ACT and National, but the property right in relation to buying out holidays effectively sits with employers, because they can deny the request. But, more than that, employers can have an absolutely blanket policy that workers in their workplace will not be able to buy their fourth week’s annual leave. That will be the policy of those employers—full stop, tough luck. I would quite like to see whether Ms Roy will get up and explain that situation with regard to the property right and choice. Given that the Opposition got such a bollocking from her about that, perhaps she can explain why it is OK for employers to do that.

After section 28A, there is a whole range of requirements in clause 10 regarding how this provision will work. New section 28B, “Payment for annual holidays paid out”, sets out how the payment will be made and what will happen if it is incorrectly paid out. New section 28D, “Requirement to make payout prohibited”, provides that an employee’s request under section 28A for a portion to be paid out must not be a term or condition of that employee’s employment. We agree with that—we certainly agree with that.

In new section 28E, as I said, employers may have a policy preventing paying out a portion of annual holidays. New section 28F, “Labour inspector may determine payout”, states: “(1) This section applies if an employer has agreed to an employee’s request to pay out a portion of the employee’s annual holidays under section 28A,”—which is the bit that the transitional provision in the bill applies to—“but the employer and employee cannot agree on—(a) the portion of annual holidays that are to be, or have been, paid out; or (b) the amount that the employer is required to pay the employee for the annual holidays that are to be, or have been, paid out.”

These provisions are quite a lengthy bit in the bill. My point in relation to the transitional provision, and section 28A, is that before employees may be able to access this provision, depending on whether their employer has a policy that they can access the right to cash up their holidays, a year might be necessary to deal with all the arrangements.

I move, That the question be now put.

I am standing again, along with my colleagues, to take a call.

💬 Hon Tau Henare: Oh, you’re not standing again!

Well, it is a pity that that member is—[Interruption] I will start again. I am not getting into any of that nonsense. Members should settle down. I want to talk about schedule 2, which relates to employment relations education leave and average daily pay, which will be calculated, let us be honest, on the lesser amount. What does that mean for workers in New Zealand? I know that the Government would argue about the value of paid education leave, and I acknowledge that it has not applied its usual slash-and-burn approach this time. It has been more a case of burning a bit off the corners, but, essentially, it takes some money out of it. As my colleague said, paying at the rate of employment relations education leave for the day means, effectively, less pay—just as there are fewer holidays and fewer rights, etc. It is a case of same old, same old from National.

Members on the Government side of the Chamber—certainly not those on this side of the Chamber—may say: “Well, so what? What’s a few bucks less on paid education leave? What’s a few dollars less?”. Again, it is one of those dreadful choices that workers have to make. They want to take education leave because they know the value of it, but they know that if they will be a few bucks down, it will make a real difference to their household incomes. Why? Because this Government does not care about ordinary people and their ability to earn a good living. And I could go right through all the cuts and all the things that have happened under this Government. But I want to talk about the importance of a few dollars when workers take paid education leave. Workers will weigh up the increased cost of GST and the increased cost of early childhood education, which may be up to $50 a week for some parents. So when it comes to paid education leave, which is a necessity for good workplace relations, it will be another one of those dreadful choices. National says it is the party of choice. Yes—and the choice people are given is absolutely reprehensible.

💬 Hon Tau Henare: And the choice New Zealand made was not you.

I am not even listening; I cannot hear what the member is saying. I am really pleased about that because he has been talking nonsense all night. I will not even acknowledge him, although it is irritating. [Interruption] I ask whether David Bennett has taken a call. No, it has been Tau Henare every step of the way. We are over that man! Let the Minister in the chair, the Minister of Defence, take a call. Come on, bring it on!

I want to finish by acknowledging the value of paid education leave. I have been to paid education leave days that enlightened employers have attended in order to learn about health and safety. They see the value of it.

Once again, this Government is trying to disincentivise workers using, and having the right to use, paid education leave. It is being done, as are other things in this House—and I can see Chairman Roy looking sympathetic—by stealth. That is what is most offensive. At least we know where the ACT Party—shocking as it is—and Roger Douglas are coming from.

I want to focus again on the schedules and the consequential amendments in the Holidays Amendment Bill to the principal Act. I take my lead from my colleague Darien Fenton, who has made a great contribution in this area. I am sure at some stage, as these matters get to the Employment Court, if it still exists, or the Court of Appeal, or the Supreme Court, they will be cognisant of it. In particular, I want to look at section 16(4) of the principal Act, which, as we established after a little bit of work last time, is the Holidays Act 2003. I know it is spelt principal with an a-l and not an l-e, because, due to the way it has been changed, it could never be described as a principled Act; it is a principal Act in this particular case.

As a consequential amendment to the principal Act, section 16(4) is repealed and substituted, not surprisingly, with new section 16(4). It states: “An employee’s entitlement to annual holidays remains in force until the employee has—(a) taken all of the entitlement as paid holidays; or, (b) been paid out under section 28B for the entitlement in the entitlement year.” One of the questions that I want to ask is a drafting question. We have as the Minister in the chair the former “Assistant Professor” Mapp of a commercial law faculty of a polytech, the name of which I cannot remember. It is a question of drafting. What is the technical name of quotation marks, the thing that sits in front? I note the quotation marks are sitting at the beginning of each of the clauses, but are only at the end of the last one. I wonder why the statements are not either all surrounded by quotation marks or each of the headers in the subclauses are surrounded by quotation marks. Again, I think it is pretty important at some stage that we get this right.

The CHAIRPERSON (Eric Roy): I think the member is talking about schedule 1, and we are debating schedule 2.

Sorry; I am happy to switch to schedule 2. I thought we were on schedule 2 as well, because as I indicated I heard my colleague Darien Fenton make an entire speech for 5 minutes on schedule 1. I thought it was such a learned contribution that the Chair had decided we would open it up and have another debate in that area so that we could go to some of the possible drafting errors there. I know the Chairman comes from Southland and is generally pretty reasonable and not too stuffed shirt about his approach to these things—

The CHAIRPERSON (Eric Roy): Schedule 2.

—and I just thought that he was being generous in a way. Frankly, I want to know which drafting approach is the proper one. Is it the approach in schedule 1 or in schedule 2? In schedule 2, the quotation marks are just at the beginning and the end. I think it is fair to say that in schedule 2 there is only one subclause. There are no subparts of the clause; therefore, what has happened is that there are quotation marks around the beginning and the end of it. That could be the reason. But when one looks at the parental leave change, one can see that the quotation mark is partway through the line and the addition, repeal, or substitution is outside of it. It does not appear to have the type of quotation notations that are in the earlier stage. I know that after a number of years in this place I should be used to some of the drafting foibles and some of the questions—and I ask the member not to yawn, because I am likely to go sleep during my own speech if she continues—

💬 Carmel Sepuloni: I’m not yawning.

Or is she hiding her face in amazement at the contribution?

I move, That the question be now put.

The CHAIRPERSON (Eric Roy): The question is, That the question be now put. Those who are of that opinion will say Aye, of the contrary opinion will say No. Party vote called for?

💬 Hon Trevor Mallard: Absolutely.

The CHAIRPERSON (Eric Roy): The Clerk will conduct a party vote.

I raise a point of order, Mr Chairperson. I do not think you declared a result. I think you have to declare a result before we challenge it. You did not say that the Ayes have it or the Noes have it.

The CHAIRPERSON (Eric Roy): I am not sure that is the case. I can make a determination that it is a split call. I said “Party vote”, and the member consented that that is what Labour wanted. That is what we are doing. The Clerk will now conduct a party vote.

I raise a point of order, Mr Chairperson. It is a minor matter, and it is a matter that I have referred to. I refer you to Standing Order 136. The Speaker is required to state the result of the voice vote. I am not challenging your ruling, asking the Speaker to come back, or anything like that; I am just indicating that point. I know you are getting a bit tired, but in future—

The CHAIRPERSON (Eric Roy): I think the member would note through my conduct in the second vote that I had already absorbed the point he made. I thank him for his contribution.