Employment Relations (Trial Periods) Amendment Bill

Members, we now come to clause 4, “Section 67A replaced (When employment agreement may contain provision for trial period for 90 days or less)”. The question is that clause 4 stand part.

Thank you, Madam Chair. I want to speak to my amendment to clause 4, which is that after new section 67(1), it would insert “An employment agreement cannot contain a trial provision if the employee identifies as Māori or Pasifika or as a woman, or if the employee is under the age of 30 or is disabled.”

In the classical liberal view of the world—and I raise that because the ACT Party often style themselves as great advocates of classical liberalism—that particular world view sees humanity as just a collection of atomised individuals, and Margaret Thatcher very famously said, or is often quoted as saying, that there is no such thing as society. Now, she said that she was terribly misquoted, as people often do when their words are quoted back to them, but she was, in fact, expressing a view that was influenced by Friedrich Hayek, who some people in this Parliament, including some ACT members, claim as a great—

Dan Bidois: Relevance.

Hon PHIL TWYFORD: —philosophical influence. Well, I’ll get to the relevance. The relevance will become very clear.

CHAIRPERSON (Maureen Pugh): Soon, I hope—soon.

Hon PHIL TWYFORD: The view does not allow that we have collective interests and that we are part of communities, or that it is the role of Government to regulate our affairs. It also doesn’t allow for the possibility that how we get on in the world is determined, often, by things like social hierarchies, or where we sit in the process of production in the economy, and that’s where this amendment comes in, because there are people in our community and in our country—women, the young, ethnic minorities, the disabled—who actually are at the bottom of the economic hierarchy. They are the people who figure most disproportionately in low income and in poverty, and it’s not just ethnicity and gender; it’s often the history of those people and their place in the country and in the way that power is exercised—not just political power but economic power.

The view that I’m talking about pretends that we’re all individuals and we’re all able to negotiate our interests and contract with each other on a level playing field. For example, a 17-year-old Pasifika woman who turns up, applying for a job with a multinational fast-food operator that has hundreds of millions of dollars of capital behind it—it pretends that she can negotiate on an equal basis with that company, with that prospective employer. That is why we have rules for collective bargaining and protections built into our employment systems, like the restrictions—or what should be a ban, in my view—on 90-day trial periods.

This bill, which extends the 90-day trial periods to all companies and to all employees and all employers in our economy, is a perfect expression of this view, and I want to ask the Minister: does she believe that there is a power differential between the job seeker—the young 17-year-old Pasifika woman turning up to seek to apply for a job at a multinational fast-food company—and the employer? I’d really like to know whether the Minister thinks that they are, in fact, negotiating on an equal playing field. Further to that, I would like to ask, in line with my amendment, whether or not the Minister believes that the young, women workers, the disabled, and Māori and Pasifika experience disadvantage in the workplace, and whether or not they should be protected by labour laws like the law that currently restricts—significantly restricts—the use of 90-day trial periods in workplaces.

This bill is an echo of a view that is also expressed in this coalition Government’s desire to bring back no-cause terminations in rental housing. It’s based on a view that working people, the young, and the least powerful people in our society don’t deserve due process and they don’t deserve the protection of the law, and it is contrary to the idea that we are all individuals living together on some kind of level playing field. It is a brutally hierarchical view of humanity. It says that one group of people, or a whole bunch of people in our society simply don’t deserve the same protections as other people.

Thank you very much, Madam Chair. I’d like to take the opportunity to speak to the amendment put forward in my name to clause 4. In clause 4, in new section 67A(2)(c), I propose to insert a (d), which would state that an employer seeking to rely on a trial period must keep detailed records of the dismissal process for an employee under the section and that these records must record the correct reason for the dismissal and must be provided to the employee upon request.

I’d like to actually back up why I’m proposing this change, because the regulatory impact statement—and I’m really pleased that the Minister for Workplace Relations and Safety has agreed to have a regulatory impact statement on this bill—highlights some very good reasons why this amendment should be adopted. I’d be interested in the Minister’s feedback, because in the regulatory impact statement it does state that “There is limited research on the prevalence and extent of impacts of trial periods in New Zealand.” So we don’t know what the impact is, fully, on this. We have a lot of anecdotal evidence—many of those incidents have been recalled in this House tonight—but we do not have a good base of evidence in New Zealand around the impacts of this on both employee and employer. And if we have an Employment Relations Act, which this bill is amending, then we need to be understanding how the impact on that employment relationship between an employee and an employer plays out.

By inserting a subsection (d) in section 67A(2) and requiring that we keep detailed records of the dismissal, that will enable us, going forward, to have that evidence base of understanding where, in fact, a 90-day dismissal period is being utilised. Is it, in fact, going to provide greater flexibility in the labour market and be endearing employers to take more people on? It’s a great thing, in general. Or is it, in some instances, being utilised at the detriment of the working rights of New Zealanders who have no comeback when they’re told to leave and not come back the next day? I think we know that we should have that information available to us, and, furthermore, I’d like to quote the regulatory impact statement that the evaluation that was undertaken back in 2016 did not find any specific evidence of an economy-wide effect. We need to know that. This is going to have a huge impact. We know that there’s a large number of people who will now be potentially impacted upon by this legislative change. Do we not owe it to ourselves as lawmakers and good policy makers to be able to enshrine within this legislation a way of understanding the impact of what this would do?

And so my amendment is only right and fair; to say that we should be keeping good records and understanding, if someone is dismissed under this new provision, then we should know why they are dismissed. And, also, there is a fair right for workers to know why they were dismissed. Whether it be their hair colour, their weight, or whatever their employer has used as a reason, they should have that written down and have information made available to us.

The regulatory impact statement also states that there are a number of old surveys that do provide some insights in terms of prevalence, through information on the impact on employees. But the impact on employees—that information is limited. The current regulatory impact statement that accompanies this piece of legislation is clear in the fact that the impact on employees—we just simply do not know that. So if that is the case right now, I think it is really important for the Minister to enlighten us, to understand what would be the impact and why we should not have a provision in this legislation for records to be kept and for the correct reason for dismissal, and for that to be provided to the employee upon request. That is my request to the Minister, and I’ll be really keen and interested to hear her response.

Before I take the next call, I’ll just remind the member who resumed her seat: you were speaking to your amendment that is relevant to clause 5, but I did allow that contribution to continue. So we just need to keep a close watch on some of those amendments, to make sure that they are relevant to the clause we are speaking to.

Madam Chair, thank you for giving me that call. I’m actually speaking to two amendments that I have put forward in my name and they are both ones that I’m passionate about and they both pertain to clause 4.

Basically, the first one is in clause 4 after section 67A(2)(c) insert “(d) 67A(2)(c) does not apply if the employee identifies as Māori or identifies as Pasifika, or identifies as a woman, or is disabled.” The second clause is in clause 4 after section 67A(2)(c) insert “(d) 67A(2)(c) does not apply to any employee who has been employed after being on a benefit.” They are two that I am personally very, very passionate about and I’m going to actually ask the Minister a question first because I may not get through this, so I want to just put my question out there to the Minister beforehand and then put the context around it.

My question to the Minister is that for people who are in vulnerable situations, as has been identified, those that are most vulnerable under employment law, how is the power imbalance going to be addressed and what is available for those people in those situations? Now, that might sound very simple to the Minister, but the reason I ask is that it is because of the 90-day trials that I made the very difficult decision to come into Parliament. I had personal experience of this, and I was reminded of that when I was in the House earlier when I heard my colleague Rachel Boyack talking about her family member, and I was really appalled. It was a hard story to listen to, but I was really appalled when I heard from the other side an interjection that said something along the lines of “Oh, it doesn’t matter, they got over it, they got another job.”

Well, I can tell you a story where someone didn’t have the opportunity to get another job. And that is a former pupil of mine who on day 86 of their 90-day trial was let go and had no reason given to him why he was let go. Now, that might have been illegal, but he did not have the wherewithal to know whether that was illegal or not. Now, this was a pupil who I had had a lot to do with over the years. I wouldn’t say that we always got on when he was a pupil; he was one of the more colourful people, but I always had a very big soft spot for him.

When he was let go, it was very tough for him, and he actually went into a deep depression. I had only seen him about three months earlier and things were great. He had his first job, he had things going right for him in his life, and then suddenly this happened. Now, he’d come off a benefit. He had gone into this job. This was the best thing that had happened to him in his life. Then he was let go and given no understanding of why that happened. Two weeks later he took his own life. And talking with his mother—and I still have that recollection in my head every single day that I am in this place because it brought me here—seeing the pain, seeing a young life snuffed out because of a 90-day trial. It is not right. This is bad law and it’s just being made worse under this bill.

So that is the question that I have for the Minister, and it is a real question. What is it that those people who are so vulnerable, who don’t understand the law like we understand in this place; they don’t sit down and read the law, they don’t sit down and read these Acts. They don’t know about people that can advocate for them. They just want to work. They just want to be valued because all through their life very few people have valued them. For that young man, this was the first time in his life that he felt valued, and that law took that away from him. It was because of that that I felt a passion to come into this place—to leave something that I was passionate about. Because we can make law better, but what we’re doing here this evening is making that law worse for those people, and that is such a shame.

So, again, I ask: what is it that those people can access? And how do they know that they can access it? Because it is not easy for them out there, and I implore the Minister to go out and sit beside those people in those situations, because life is just hard.

Thank you, Madam Chair. I want to honour the contributions from the previous speaker, the Hon Jan Tinetti, and acknowledge the real-life impact that bills like this and policies like this can have on people. I hope that in this clause, Madam Chair, because of the kind of substantive element that it covers in terms of the clarification of those trials and how they work, we can go a bit deeper into the analysis that we didn’t get a chance to at select committee.

My question was hoping to get—I touched on it earlier but it wasn’t addressed whatsoever and I think this is another good part to try and get it addressed again—into the impacts of wage scarring. Why I wanted to get the Minister to address the issue of wage scarring is because of the fact that we haven’t got any analysis or comments, actually, from the Minister around the impact on households when somebody jumps from finally receiving an income to then potentially being out of work, into a benefit. That actually puts people in a situation where, because the benefit is so low, they may feel forced to take a job that would have paid less than the previous job they had. I believe that this bill contributes to wage scarring; it contributes to lowering wages. I want to see if the Minister had any insights on what she considers is the impact on wage scarring and household incomes because of this policy.

Hon Member: Relevance?

RICARDO MENÉNDEZ MARCH: I can hear the members on my left making snarky comments, and to be honest I heard those even through the very sensitive contributions that the Hon Jan Tinetti made earlier regarding issues of suicide, and I’d like those members to get a grip and understand that these are questions that we’re asking because we care about our communities, because we care about our constituents and the workers who are going to be impacted.

So I just reiterate, my question is: has the Minister asked, seen, or got any analysis regarding the impact of this bill in relationship to the issue of wage scarring?

Kia orana, Madam Chair, thank you. I note from the regulatory impact statement (RIS)—and thank the Minister for providing the cover sheet of that—that where it relates to clause 4, option three in the RIS, looking at paragraph 64, it talks about the fact that “fewer than 20 employees [would] represent around 89 percent of [businesses]”. So this extension, effectively, would extend by 11 percent. In light of the fact that we haven’t had a select committee process to hear from either the 89 percent or the 11 percent of businesses—not to mention the employees who might be affected by this—I have an amendment in my name which seeks an amendment in clause 4.

Clause 4 itself, as members will know, seeks to insert a new section 67A that outlines the process for a provision of a trial period of 90 days set within that. The amendment in my name seeks to insert a new section 67A(3), in that a valid trial provision must state a couple of things. I’m interested in the Minister’s views as to perhaps whether she thinks these should be included, or, if not, why they shouldn’t be included. The first is the genuine business reasons based on reasonable grounds for inserting a trial period in the employment agreement, and that relates to providing some weight around the genuine nature of the concerns that might be expressed by an employer, but more specifically, the reasonable grounds that exist for placing that condition within the terms of the employment agreement—that’s the first one.

The second one is around where a trial period is used to dismiss the employee, to provide the process for advising the employee as to why their employment is ending in that way. And I think, Minister—we’ve already heard from other members in the Chamber that there are many people who are employees who just want to work, and perhaps are not au fait with legislative provisions or what particular aspects in an employment agreement might be. And it’s all good and well for people to say, “Well, they should just know that before they sign it.” But when someone is on the bones of their backside and they need a job; they need work—many will do what it takes in order to secure that. And so that provision really does provide for an opportunity to advise the employee—the person for whom this has the significant impact—on why their employment is ending, but, in particular, what the process is: the process for advising. Not the process that might take place, but the process for informing or advising an employee why their employment might be ending in that particular way.

We’ve heard a wee bit about the power imbalance, and I think what would be helpful to hear from the Minister is considerations around process and how there is going to be an acceptance or a guarantee that those employees who might be subject to a process in this particular manner will be made aware of not just their obligations but what the process means for them. And remembering that the decision by an employer to, effectively, dismiss an employee is a pretty significant one. It is a pretty serious one, and so I think members on this side of the Chamber—and certainly myself—are interested in hearing from the Minister around what provisions either exist in the legislation or why she won’t support the amendment in my name to ensure that there is a process in place for employees who may find themselves in a situation where the end result is one of being dismissed.

Much has been said about the parent Act itself and the provisions of the principle of good faith, and so the amendment that I put forward—and I’ve got a couple more that we’ll deal with, perhaps later—really does lend itself to ensuring that the good-faith principle, which is the overarching consideration here, is actually available, not just to the employee but also to the employer, so that the employer is aware of what the process might be if they choose to engage that functional aspect of dismissal and then to be able to provide the employee with the opportunity to understand why things are taken in a particular way. So I’d appreciate the Minister addressing those.

Thank you, Madam Chair. I will take the opportunity to respond to quite a few contributions so far—a number of which already repeat themselves in substance, so I’ll take them together.

For the amendments from both the Hon Ginny Andersen and from Tangi Utikere, there are questions about providing reasons for dismissal. One was, of course, about inserting a new clause—as was the other. The reason why we are not detailing that businesses “must” provide an answer is because this is a Government that is seeking to reduce regulation and reduce burden and reduce red tape on employers. However, I’d also like to point both members to the fact that there is nothing precluding an employee from asking what the reason is for their dismissal. That is perfectly in line with current legislation and we’re not removing that ability to occur.

I wanted to take the chance to respond to Ricardo Menéndez March talking about wage-scarring impacts of the 90-day trials. This is a Government that is hoping to extend the availability to increase job opportunities, and we believe that this is what this law will do. It will expand the number of job opportunities that will provide more opportunity for people to be able to progress their career and increase their incomes by increasing marketplace flexibility.

I wanted to take the time to respond to the Hon Phil Twyford and the Hon Jan Tinetti, who both had similar amendments and both were about certain groups being excluded from the 90-day trial provision. This bill is intended to help people have more job opportunities and people that may be considered disadvantaged by the members. We believe, on this side of the Chamber, that people will be better off because they’ll have more opportunities; because they will have more business confidence and more ability for people to have a go in the labour market.

People can still bring a personal grievance claim related to discrimination; we’re certainly not removing that—that is very important to note. But we believe that this law will allow more labour market flexibility and more job growth for people who those members may consider to be disadvantaged. But I also just wanted to take the opportunity to thank the member for her contribution. It was very emotional and I certainly hope that the family members and friends of that individual do find peace.

Point of order. I just want to seek some clarification because of the previous comments you have made around a few of the amendments, including those that are in clause 5 as another clause. I just want to seek your guidance on whether you expect us to have a debate on potentially adding that additional clause and whether you’d want us to have that debate right at the end, or at what point do you think some of those amendments may be appropriate?

CHAIRPERSON (Maureen Pugh): Can you elaborate on which amendments you’re talking to?

RICARDO MENÉNDEZ MARCH: So, I mean, because I know that some of the themes we’re covering are already there in the additional clauses—for example, several amendments that I’ve put in, so, for example, my amendment 6 which adds a new clause 6. I just want to seek clarification as to whether you’re going to ask for a debate around clause 6, or at what point do you want us to have those debates?

CHAIRPERSON (Maureen Pugh): The short answer is yes, there will be an opportunity to debate a clause 6 amendment.

RICARDO MENÉNDEZ MARCH: The new clause 6?

CHAIRPERSON (Maureen Pugh): But not in clause 4, no.

RICARDO MENÉNDEZ MARCH: Thank you.

Thank you. And may I have 5 minutes? Thank you.

The reason why there are so many tabled amendments that are being proposed by my colleagues to clause 4 is that we find ourselves in a situation where the Act that is being amended—the Employment Relations Act 2000—retains those grounds of prohibited discrimination which someone may bring a personal grievance for, but this amendment Act that the Minister is proposing proposes to limit that in certain circumstances. So, Madam Chair, if you’ll allow me to just explain the situation that we find ourselves in: because those grounds within the Employment Relations Act, the original Act, are preserved, you then have a situation where if someone is fired within—dismissed within—their 90 days, they have a question of whether they can bring the personal grievance on the grounds of prohibited discrimination, say, for example, because they are a woman. But then whether they should mention that they were also dismissed within the 90 days is at issue, because on the face of it they have been dismissed for reasons that were legal, but then they have this further sort of issue for an employment court to work through.

So that’s why there are so many tabled amendments—21, in fact—in my name, and I hope to speak to them all and I will be economical with my time. The first I’ll speak to, No. 1, is to amend clause 4 after section 67A(1) to insert a new (2), “Employers can only use a trial provision to dismiss an employee if they can prove that the employment of the employee has caused a material, financial, or reputational harm to the employer or the employer’s organisation.”

This is a clause where I’m trying to find a way through for the Chamber. This is not something that fits well with Labour Party values, but this is a way that we can acknowledge that though there are a divergence of views around the Chamber about what is appropriate here, to allow, say, market flexibility to allow employers the kind of flexibility that they need to operate in, this is something which says if there is a problem here, if you’re a reasonable employer, you’re just doing your best, whether you’re a small employer or a large one, you’ve taken a chance on somebody, you’ve given a young guy a go and he’s not the fit, you need to say, “Well, the employment here is causing me financial hardship, it’s causing me a financial problem.” And, you know, you don’t need to go and tell a regulator that. That is not extra regulation, you just have to keep proper records of it. It’s an email between you and your chief financial officer, it’s an email between the line manager and their boss. It’s simply recording somewhere that it is reasonable because of the financial reasons of the business that it is appropriate to let this person go.

And just dealing with this point, this finds us a middle ground, because the Motu research that I referred to in one of my earlier contributions found in their inquiry into whether 90-day trial periods were a good thing for the economy as a whole—they concluded that “the main benefit of this policy was a decrease in dismissal cost for firms, while many employees faced increased uncertainty about their job security for three months after being hired.” That independent research found that the balance was perhaps not right.

So my question to the Minister is: is there a way that this sort of amendment, that finds that middle ground where employers, who all maintain a practice of keeping reasonable records about their employment decisions anyway—should they be held to a standard where, look, if it’s impacting on your business, we say, “All right, go for it, dismiss that employee because you’ve given them a go and good on you.”? So that is the first amendment that I hope the Minister will consider.

The second amendment that I wish to speak to is to replace section 67A with a new title. I’m not splitting hairs here, but we’ve worded it in a really weird way in the amendment bill that the Minister has proposed. She’s saying, “90 days or less”. I would like it to say, “90 or fewer days”. That’s the way I would say it and we should make that amendment now just so that our law reads correctly and is in plain language. I know the Minister is an advocate of plain language, straightforward language, less regulation, clearer language, and so I would hope that she would consider that amendment.

The second tabled amendment that I wish to speak to is to clause 4 to replace section 67A(1) with a clarification about using the trial provisions only if the employee has not previously been employed by the employer. The current way that reads I don’t think is clear enough and, you know, in the spirit of making sure that this law is plain language, that it reads well for employers like me and many of the members around the Chamber who have been employers in a situation where we’ve had to make quick decisions—we need the primary legislation to make sense.

Thank you, Madam Chair. I have not had an opportunity yet to speak to this part of the bill, clause 4, but I do have a couple of amendments that I wanted to make. The first two are, I think, really sensible, pragmatic amendments which are very much in the spirit of this bill.

The first that I wanted to mention was, essentially, adding in to section 67A, which is in clause 4—the area that we’re currently debating in the bill—to make sure that when people are able to be covered by a trial period, when people are either engaged as an employee, or if they, in fact, in the past, have been engaged as a contractor, they wouldn’t be able to be covered by a new trial period.

There’s a clear policy direction within this piece of legislation and other pieces of legislation which have dealt with trial periods, which is very fundamental to the design of them, which, essentially, means that if you are already engaged as employee, you can’t then have a valid trial period put into your contract of employment. That’s clearly in this bill as well. So it’s people who are currently employed with an employer who wouldn’t have a trial period. That’s because—I mean, why would they? The justification for trial periods, even though I may not be one of the people that accept them, is clearly to allow an employer and employee to get to know one another. So that could also occur in other types of relationship akin to employment, so worker relationships.

I know that this is an area that the Minister for Workplace Relations and Safety is interested in, having read the coalition agreements and the ACT Party policies prior to the election. I know she’s interested in looking at contractor law. I’m not interested in discussing that particular aspect today, but, I think, to have a piece of legislation be enduring and also meet the policy objectives that she is trying to meet, why should contractors who have already had the opportunity to engage with an employer, although not in an employment situation, be subject to trial periods? I don’t think the justification applies. They already know that contractor because they’ve engaged with them. They know if they’re reliable. They know if they’re trustworthy. They know if they do a good job. They know if they’re a good fit. They’ve engaged with them. Yes, it could be in a slightly different way to an employee, but that’s also true of existing employees who may be looking to move up within the organisation, which, possibly, could be more likely to be the case when you have trial periods, because you wouldn’t be able to be subject to a trial period if you got a new job with your existing employer.

So that is my amendment that I have tabled, which I think is within the spirit of the bill that’s being put forward and would improve it. I encourage the Minister to consider it, and I would like to hear her response as to whether she will be supporting that particular amendment.

The second amendment that I wanted to particularly mention was really about the situation that sometimes vulnerable employees find themselves in, which is when they, essentially, have a different employer, but, essentially, they don’t really have a different employer. You know, the legal entity may change, they might have a different name on their employment contract, they might have a new contract, but, basically, the same people are doing the same work for pretty much the same people, and usually in the same locations. So I’ve actually added that into my amendment.

Arena Williams: It’s a good amendment.

CAMILLA BELICH: Thank you. Trial periods wouldn’t be applicable to an employer using a different name, or legal entity, but conducting the same or substantially the same work in the same location.

So there is quite a substantive part of the Employment Relations Act which deals with vulnerable workers and that type of situation. I think it should be really clear, within this bill, that we’re not seeking to put trial periods in for those particular people. I think that is in line with the policy intent, because I think all of those other reasons are justifications for this policy: getting to know one another, finding a good fit. All of the things the Minister has proposed in her speeches in the different readings of this bill would not apply in that situation where there was a change.

So I think those are two very good amendments. I do have a third one which I would like to speak to, but I would like to give the Minister the opportunity to respond.

I move, That debate on this question now close.

Thank you, Madam Chair. I want to take this opportunity to address some of the amendments that I’ve made on the Table that are actually related to each other.

The first one is about the possibility that there will be a carve-out; that the trial provision will be unlawful for any employee who has left another job to take work with an employer given the injustice of the employee’s loss of work and the loss and, actually, the cost to the taxpayer if they are unemployed as a result of termination. So I want the Minister to tell me if she would consider this, because I understand, from her speeches, that what she’s saying is motivating her is giving people a chance who may not find other employment and encouraging people who would otherwise be unemployed into the workforce. Yet, these people are employed and they are taking a huge risk going into a situation where they may not actually keep that job and they may suddenly find themselves in a situation where they have to go on the unemployment benefit and we all have to pay for that.

The other amendment that I’ve put that I think relates to this is the one that I foreshadowed in my speeches tonight, which is the issue of restraints of trade. Because what I have seen in a lot of agreements is the increasing use of restraints of trade with low-wage workers. If it’s combined with a trial period, you are putting people in a situation where they may well go into an employment situation and be dismissed but actually be prevented from going out and getting another job. So I have suggested an amendment which is about making it unlawful for anybody to be held to a restraint of trade if they are dismissed in a trial period and that if, in fact, that happens, that they will be free to compete.

Now, I have made sure that in my amendment I have addressed the issue of confidential information; that if you’re given trade secrets or confidential information, this is something that, of course, you should keep and there should be right to suit if you don’t. But if it is a matter of competing with your employer, then it’s very important.

I would just like to talk a little bit to the mischief here, because this is not fantasy: this is happening all over the place. Big employers like Amazon have adopted restraints of trade for workers on as low as US$13.50 an hour. They put them in absolutely habitually and most employees don’t actually look at these contracts when they’re signing them because they’ve got no bargaining power, which goes to my friend the Hon Phil Twyford’s point about the inequality of bargaining power. They simply—yes?

CHAIRPERSON (Maureen Pugh): Sorry to interrupt the member, but you are speaking to clause 5. Your amendment relates to clause 5.

HELEN WHITE: I think I’m speaking to clause 4 because what I’m speaking to is an amendment which says that clause 4, after section 67A(1), insert, and then I’m bracketing subclause (2) and then I’m saying, “a trial provision will exclude”—. So I am speaking to clause 4; I’m adding to clause 4—an extra—and I’m carving out. So thank you, ma’am. Is it all right to continue?

CHAIRPERSON (Maureen Pugh): Absolutely, continue.

HELEN WHITE: Thank you, ma’am. So I am talking about a very real situation, and it’s a trend that has been noted by big economists—and they’re not left-wing economists. They’re people like Joseph Stiglitz, who’ve noted that this is happening. There has been a lot of research in America, which actually goes to another point, ma’am, if I can just have a little bit more time because I’ve got another amendment on the Table which suggests that what people should do is, if they’re going to put a trial period in the agreement, they should lodge it with the Ministry of Business, Innovation and Employment.

So the reason for doing that is it turns out we have very little information about 80 percent of employment agreements. So because we have these employment agreements in individual form, nobody knows what’s in them. You’re very unlikely, Minister, to know whether these impacts that you’re talking about are real or whether there is exploitation. So, for example, this kind of issue that I’m bringing up about restraints of trade and the—[Time expired]

Kia ora. Thank you, Madam Chair. Thank you very much. Tuatahi, Madam Chair, e mihi ana ki a koe mō tō kaha ki te whakaputa i tō whakaaro e pā ana ki tō hoa. Ngā mihi aroha ki a koe.

[Firstly, Madam Chair, I would like to acknowledge you for your strength to express your thoughts about your friend. Heartfelt acknowledgments.]

Just speaking to clause 4, supporting the Hon Phil Twyford’s view—his amendment—in terms of Māori, Pasifika, women, and those who are under the age of 30 or disabled, I was the employment Minister for three years. I was wanting to ask the Minister: as she looked at this, did she have a look back at some of the work we did with these groupings? We had employment action plans for all of those groups. We had a Māori action plan. We had a Pasifika action plan, a women’s one, a disabled one, and I think it would be incredibly helpful for the Minister to have a look at those reports, which told us about the different disparities, about the problems particularly that Māori workers have faced over the years.

When I became employment Minister back in 2017, the Māori unemployment rate, for instance, was close to three times what the mainstream, or Pākehā, unemployment rate was at the time. It’s really important for our Minister here to get her head around, I suppose, some of the barriers and some of the problems that so many of those Māori workers were facing and have faced. Under my chair, we got to facilitate the Māori strategy with a woman by the name of Janice Panoho, who was a very senior union organiser within the Public Service Association, and a very dear friend of mine, too, might I add, having organised with her many years ago. I think that this—

Hon Member: Is this relevant?

Hon WILLIE JACKSON: Well, I’m talking about this amendment that has been put up by Phil Twyford, which identifies Māori, Pasifika, and women as groups who need the support and who will be disproportionately affected by this bill.

As we know, lower job security particularly impacts these groups, and the question I have for our Minister is: is she going to go through those reports that were put up—the employment action plans that were put up by each group—that traversed all the different areas? When you look at the disabled report, you will see what some of these workers had to face. They couldn’t even get through the door sometimes—they couldn’t even get through the door. Never had a chance. It was terrible, and I think it’s emotive reading for a lot of us. We don’t actually understand, and then when you see the barriers in terms of these trial periods, it can be heartbreaking for so many of them. And, of course, the percentages are weighted so much against Māori, against Pasifika, against women, against the disabled community, that we had to put in targeted programmes.

I ask the Minister: will those types of programmes still be receiving support from this Government—programmes that looked after young people, looked after women, looked after Māori? Mana in Mahi was one of the big successes. That can be a success for everyone, which is something I worked on with one of the current coalition partners—He Poutama Rangatahi, getting nephs off the couch. These supported the Māori rural areas very, very much. So I ask again: will the Minister be looking at these plans, talking to some of the chairs, a number of them women who have done extensive work in our communities? I think that it could be good for all parties if she was able to do that.

Thank you, Madam Chair. I’d like to take the chance to respond to a number of members and their queries, starting with the Hon Willie Jackson. I won’t go over my previous response to the Hon Phil Twyford’s amendment. I’ve already done that, so we are repeating ourselves, but I also note that contributions about his past works as a former Minister are not actually relevant to the bill.

I also note, speaking to the questions from Helen White about restraints of trade, I really commend the member for wanting to talk about her own member’s bill which is at select committee—love the opportunity—but that’s also not part of the bill and it won’t be after this goes through.

I’d like to take the chance to respond to Camilla Belich, who had a number of amendments. The first was to extend the 90-day trials to contractors, and I’d just like to alert the member to the fact that contractors are not employees and don’t have employment agreements, and so that’s not really relevant to this bill.

We had Arena Williams talking about wanting employees to only be able to use a trial provision to dismiss an employee if they can prove that the employment of that employee has caused immaterial, financial, or reputational harm. The whole purpose of this bill is to reduce red tape, reduce regulation, reduce bureaucracy, and make our labour market more flexible for employers so more employees are given an opportunity. This is a significant procedural requirement and so we do not support it.

I also wanted to take the opportunity to briefly touch on the fact that she’s talking about the word “fewer” or “lesser” when it comes to 90 days fewer or 90 days or less. Look, you might want to bring up a talking point with the legal drafters of the laws around this place but I’m not in the position of wanting to do that. I think the purpose of the draft is pretty clear.

Talking to Camilla Belich also about her amendment to suggest that after an employer in the clause 67A(1) would also have an employer using a different name or legal entity but conducting the same or substantially the same work in the same location, I understand this is purporting to try and limit a trial period if an employer has multiple businesses but this is not actually changing the definition of an employer. The bill extends the availability of trial periods to all employers and doesn’t change any of the other settings. So it’s pretty clear.

Thank you, Madam Chair. I’m really chuffed that you chose me to take a call on this bill, the Employment Relations (Trial Periods) Amendment Bill. I have a couple of amendments to clause 4, and I just want to clarify that they are to clause 4, and they are on the Table. I’m quite a pragmatic person, so for me it’s about providing an alternative solution for the Minister, and I want to understand the Minister’s views in relation to my amendments.

My first amendment would replace all references to a “maximum trial period of 90 days” with references to a “maximum trial period of 45 days.” So that is a shortening of the 90-day trial—it would be a 45-day trial. So if you go to the regulatory impact statement and you work through the problem definition: employers not able to use the 90-day trial period—so maybe a 45-day trial period—because they weren’t hiring new employees due to the risk that new employees may not be a good match and could result in an unproductive employment relationship. OK—tick.

So let’s have a look at the options. So if you go to the regulatory impact statement, and I’m going to use the same criteria that officials used in their regulatory impact statement, the options that were provided by officials, and I’m not talking to their options; I’m talking to my 45-day trial and the options have been assessed against the following criteria. Does the policy encourage employers to take on more employees, particularly disadvantaged job seekers? I believe a 45-day period does provide that, because it still allows employers to take on more employees but also the ability for it to be reduced to 45 days means that there’s still a bit of balance on both sides, not just for the employer but also the employee.

A shorter period means it’s a shorter cloud, a shorter grey area, for employees around the unjustified dismissal element. The second criteria that officials used to address the policy problem is: does the policy reduce the process costs and risks of a personal grievance for employers? Well, yes, because I’m not saying it’s 90 days. I’m saying it’s still 45 days; it just half the time. It is ultimately a little bit more balanced on the employee’s side, but it is still 45 days.

The next question is: does the policy increase security for employees when beginning a new employment relationship? In some ways it could seem contradictory that I’d be saying that, actually, for employees it’s 45 days so therefore there is almost less security. But, actually, it’s just greater certainty for them. It’s 45 days. I know people who have got married after knowing each other for 45 days.

Hon Members: What!

Hon BARBARA EDMONDS: Not me. I’m saying that 45 days is still a period of time whereby the employee and the employer get to know each other, the employer gets to understand if the person is the type of person that matches the job expectations in the description. So I believe that in some respects that third criteria that officials have used to basically analyse their different options does weigh towards the employee a little bit more than the employer.

The next criteria that officials use is: does the policy provide certainty for employers and employees regarding their employment rights and obligations? Yes, it does. It just makes it really clear it’s 45 days. So it’s similar to everything else that’s been covered in the regulatory impact statement for the 90-day period but it’s shorter at 45.

And is the option simple to implement? I believe it is. We currently have a framework, and the Minister is obviously looking to implement parts of that framework. I think that having a shorter period of 45 days is a way to balance it up a bit more. Currently, as the Minister just responded to a number of questions, she said it’s about reducing compliance costs and—a number of things, actually; I only heard the first one about compliance costs.

I believe that this is a bit more balanced in that it’s 45 days. For the employee it means there is a shorter period of harm for them because they understand really clearly. The employer knows whether it’s working or not for them in that first month and a half. I’d really like to know the Minister’s views on whether a 45-day period could actually work.

I also want to speak to my second amendment, which is on the Table. It’s not 45 days; it’s even shorter. My second amendment to clause 4 replaces the reference to the word “days” in section 67A with “hours”. So it’s a similar argument except that instead of 90 days, how about 90 hours?

Thank you, Madam Chair. I thought I’d take the opportunity to respond to all three of the member’s amendments and say that we will not be supporting any of them. The time period is at 90 days; it makes it pretty straightforward. It will be 90 days for small and medium, 90 days for larger, so therefore 90 days for all employees. But also, reducing that amount of time by the extent that she is desiring—within a few days—doesn’t actually give the opportunity for an employer and an employee to form a relationship, and to see whether or not they are a good fit for each other.

I move, That debate on this question now close.

Thank you, Madam Chair. Thank you for giving me the opportunity to speak again on this clause. What I wanted to clarify is, respectfully, I think the Minister for Workplace Relations and Safety has misunderstood the amendments that I’ve tabled in clause 4. The Minister stated that contractors are not covered by 90-day trials, which of course I know. There is no need for a contractor to be covered by a 90-day trial, because they have no employment rights because all of their rights are bound up in the interpretation of their contract.

The point of my amendment was to state that if someone is to follow the policy of the clause—which was, essentially, if someone had been previously employed by someone else, by a company, then they’re not able to be covered by a trial period. So my proposition, with the amendment, was to state that if they had been engaged in another capacity as a contractor, then, by that same employer, even though that was a contractual relationship—as a contractor and not an employment relationship—surely the same logic applies: that they shouldn’t be covered by a 90-day trial. And that is what I explained in my first contribution. The purpose, as the Minister had stated it, of the 90-day trial period, was, essentially, to get to know, find a good fit—I think she’s used that term—get to know one another, make sure that they work with the team, that they can undertake the jobs well. And a lot of that, if not all of that, would be just as easily obtained as knowledge by the employer in a contractual relationship. I did state in my first contribution that of course that wouldn’t necessarily be exactly the same, but it would be sufficiently similar, I believe, that it could be considered to strengthen this particular piece of legislation.

The second matter—which I don’t think, perhaps it was in the way that I explained it, was not fully grasped by the Minister—was the amendment that I had raised in relation to people who may work for a company and then that company either dissolves or is insolvent, and a new company jumps up in its place that is, essentially, run by the same people, starts trading, and then is, essentially, considered to be a new employer under the legislation. I don’t think it’s the intent of this legislation to cover people in those situations. Part 6A of the Employment Relations Act covers a number of these employees in these types of situations, where there’s often, you find—in cleaning companies, for example, you might have people continuing to do the same work but their employer might change. There’s provisions within the Principal Act that this bill amends to deal with them. I was talking about that type of situation, where, genuinely, the person isn’t really, if you look at it, actually in new employment. They’re, basically, continuing their same job, although the name of their employer on their employment agreement might be different.

So those were the amendments, and I just felt that the Minister hadn’t grasped the intention of those. They are made in good faith and I do think they would strengthen this piece of legislation, and they’re in line with the principles of the legislation. So those were the clarifications that I wanted to make in relation to that.

I did have another amendment in relation to clause 4, to change section 67A(2)(c) to replace “not entitled” with “not required”. Now, you may say that that’s not within the spirit of this Act, which seeks to not allow personal grievances, but I would say a legal interpretation of that change would be to allow personal grievances, yes, but on a slightly lesser basis than they are currently permitted to people who are not covered by trial periods. So that amendment to clause 4, I think, would perhaps achieve the policy objective that the Minister intends to achieve with this piece of legislation, by kind of not really encouraging a personal grievance in that particular situation, but not going so far as to say that they were totally prohibited by it. And so that’s why I think that additional amendment that I proposed to clause 4 is also helpful to perhaps meet the policy objectives, but with not such a harsh piece of legislation to actually remove the rights of personal grievances within trial periods.

I think it’s really important—and I wonder if the Minister could reflect on this a wee bit. I don’t feel that she fully addressed the point that I made around the ability to bring personal grievances and have that consistent with good faith, and to bring a personal grievance where there’s discrimination, but to be dismissed. I don’t feel that that has been answered by the Minister yet.

Thank you, Madam Chair. I move, That debate on this question now close.

Point of order, Madam Chair. I just want to note that there are still a number of amendments tabled on the Table with content—including mine and I’ve been seeking the call—that haven’t been addressed yet on amendments, and I think that we are calling this debate to a close too early. There are amendments still to be discussed.

I thank the member; that’s not a point of order. I have made sure that everyone with amendments on the Table has had a chance to speak in this debate. The question is that the debate on this question now close.

Arena Williams’ tabled amendments to clause 4, the heading to section 67A and 67A(1), are out of order as not being serious amendments.

The question is that Arena Williams’ tabled amendment to clause 4, amending section 67A(2)(c) to delete the words “or other legal proceedings”, be agreed to.

Arena Williams’ remaining tabled amendments to clause 4, section 67A(2) are out of order as being contrary to the objects and principles of the bill.

The Hon Phil Twyford’s tabled amendment to clause 4, setting out that an employment agreement cannot contain a trial period if it is to apply to certain types of employee, is out of order as being contrary to the objects and principles of the bill.

The Hon Barbara Edmonds’ tabled amendment to clause 4, replacing the word “days” in section 67A with “hours”, is out of order as being contrary to the objects and principles of the bill.

The Hon Barbara Edmonds’ tabled amendment to clause 4, replacing all references to a maximum trial period from 90 days to seven days, is out of order as being contrary to the objects and principles of the bill.

The question is that the Hon Barbara Edmonds’ tabled amendment to clause 4, replacing all references to a maximum trial period from 90 days to 45 days, be agreed to.

The question is that Camilla Belich’s tabled amendment to clause 4, inserting words into section 67A(1) after the words “by that employer”, be agreed to.

The question is that Camilla Belich’s tabled amendment to clause 4, inserting into new section 67A(1) the words “or engaged as a contractor”, be agreed to.

The question is that Camilla Belich’s tabled amendment to clause 4, replacing in section 67A(2)(c) the words “not entitled” with “not required”, be agreed to.

The question is that Helen White’s tabled amendment to clause 4, requiring trial provisions in employment agreements to be lodged with the Ministry of Business, Innovation and Employment in a prescribed format, be agreed to.

The question is that Helen White’s tabled amendment to clause 4, requiring employers seeking to implement trial provisions to provide employees with a form approved by the Ministry of Business, Innovation and Employment, be agreed to.

The question is that Tangi Utikere’s tabled amendment to clause 4, setting out criteria for valid trial provisions, be agreed to.

The question is that Rachel Boyack’s tabled amendment to clause 4, limiting trial periods to employment agreements with a salary in the top income quintile, be agreed to.

The question is that Rachel Boyack’s tabled amendment to clause 4, limiting trial provisions to employees who earn more than the New Zealand median wage, be agreed to.

The question is that the Hon Jan Tinetti’s tabled amendment to clause 4, enabling a dismissed beneficiary turned employee to bring a personal grievance, be agreed to.

The question is that the Hon Jan Tinetti’s tabled amendment to clause 4, enabling dismissed Māori, Pasifika, women, and disabled people to bring a personal grievance, be agreed to.