Fair Pay Agreements Act Repeal Bill

Members, the House is in committee on the Fair Pay Agreements Act Repeal Bill. I would start by reminding members that the wording of the closure motion has changed in this Parliament. The new wording is “That debate on this question now close.”, and I refer members to Standing Order 137(1). We start this debate with Part 1. The question is that Part 1 stand part.

Thank you, Mr Chair. It’s a pleasure to take a call in this committee stage of the Fair Pay Agreements Act Repeal Bill. I say “a pleasure”—it’s always a pleasure and honour to speak in this House—but, obviously, there are a lot of issues in this bill that we disagree with on this side of the House. I have looked at the bill and, even though it is a short bill, I consider that there is quite a bit that we would want to raise. So, in this debate on Part 1, I’d like to ask the Minister why there are no transitional savings and related provisions in this bill. That’s the first question I’d like to ask her.

The second question I’d like to ask her is whether she has considered the departmental disclosure statement which was released recently in relation to the publication of the bill and which discusses on page 7 that “The Bill repeals the Fair Pay Agreements system, which provided the Employment Relations Authority and Employment Court with jurisdiction in relation to obligations and rights under the Fair Pay Agreements Act”, but then makes what I consider to be quite an interesting point in relation to the Legislation Act 2021, “where if an existing right or legal position exists before the FPA Act is repealed, a party can still exercise their legal rights as though the FPA Act had not been repealed.” Does that in fact, in the Minister’s view, mean that any right that exists in an initiated fair pay agreement could continue under the Act even though this repeal bill is passed?

Thank you, Mr Chair. Following on that line of questioning, and in the Minister’s previous comments in relationship to the aim of the repeal—

Camila Belich: Point of order, Mr Chairperson. I understand that it’s important in the committee stage to always have a Minister in the chair.

Hon Brooke van Velden: I am.

CHAIRPERSON (Teanau Tuiono): She’s in the chair.

Camila Belich: Sorry, you weren’t when I raised the point of order.

Hon Brooke van Velden: I was talking to my advisers.

Camila Belich: Point of order, Mr Chairperson. I understand that that’s not permitted. That’s my understanding.

CHAIRPERSON (Teanau Tuiono): OK, that’s understood now. Ricardo Menéndez March.

RICARDO MENÉNDEZ MARCH: Thank you, Mr Chair, and congratulations on your ascension to your new role. This is the first time I get to speak, actually, while you’re in the Chair.

So following on the previous line of questioning from the Labour Party member Camilla Belich around the lack of transitional savings for related provisions in this Act as enacted, it’s worth contextualising that a few sectors have initiated the process to get to a fair pay agreement, and one of the things that we wanted to speak of is the Amendment Paper under my name to carve out those sectors that have already started that process of initiating a fair pay agreement.

If the Minister is so confident around fair pay agreements having a negative effect on our economy, would it not actually make the case to test out those fair paying sectors which actually have initiated the process to see the impacts of those, considering the likes of proper consultation and evidence-gathering when it comes to the repeal, and also putting into context that international evidence we do have that does show that there have been benefits overseas? Would it not be worth letting those sectors continue with that process and to treat it as some form of trial—to then actually have evidence available domestically on those impacts? Because otherwise what we have is a vibe-based policy where there hasn’t been domestic evidence on the impact of those sector-based agreements. So, yeah, I was just wanting to get some clarity of why we’re not just allowing those sectors to continue with that process.

Thank you, Mr Chair. I want to take up my friend Ricardo Menéndez March’s point there because I think it’s a very good idea to carve out the areas that have actually already started bargaining. I’m particularly concerned about some of those areas being ones that are very vulnerable. I have put an amendment in, in my own name, about the hospitality industry in particular. I remember being a hospitality worker when I was young. It’s quite often experienced by a young workforce. My daughter said to me just tonight that she found hospitality some of the hardest work she’s done. We pay lower wages than Australia, and I wanted also to comment on that and ask the Minister for her comments on this, because she has commented that she believes this law will be good for productivity.

Australia has higher productivity—I looked at some statistics tonight, and I think there was 1.4 percentage growth in productivity here when there was over 2 percent in Australia, up to 2019. It seems to me an incredibly important thing that we at least try a different approach which is more akin to Australia, where people are paid higher wages, and by carving out the group of industries that have actually initiated bargaining, we have a number of industries we can look at. We can take out factors, we can look at commonalities, and we can trial this and see whether in fact it assists those workforces. I am very keen to see it happen in the industries that have already initiated, because they are obviously hungry for that kind of trial. And it seems a very sensible place to start.

I know that I have some different views on productivity, but I also am concerned that we’re about to dismantle the Productivity Commission and these are the kinds of institutions that have, in the past, been relied upon to give us advice. They have been saying, as late as July last year, that we need to move to a high-wage economy. Now, the fair pay agreement process is really targeted at the scattered workforce who are not well paid, not well represented, and vulnerable. It really is targeted at the people who most need assistance, because it is just a minimum floor.

I would also like the comments of both the Minister and her colleagues, in the purpose of this bill, about flexibility of work, because this seems to be a misnomer. Flexibility, it seems, always only applies to workers reducing terms and conditions to the bare minimum. Yet, it never applies to employers actually allowing employees to move across the workforce and have the freedom to do so. You’ll note that I’ve got a member’s bill at the moment on what’s called “portability” of work, which is a positive approach to flexibility. It says that workers should be able to move freely across a workforce in the lower-paid work so that they can actually get ahead of it and they can get higher wage rates.

I also want to comment on the hospitality industry as one that I’ve interacted with strongly. I’m now the spokesperson on small business, and I’m taking a particular interest in hospitality because, in hospitality, we have had extremely low-profit rates as well as low wages. Low wages don’t seem to help with profit margins. We want to actually get that sector healthy. We are going to have to move to a different kind of economy, which means, yes, we will have to pay our workers more, but we also need to support our businesses to make sure that we do. There is more than one way to make a business grow in this country, and that’s why I’m asking about things like portability and other ways of actually getting the kind of productivity, because the low-wage economy—because, remember, what you’re talking about is going back to a system that we have now, where those workers fall right down in wages—doesn’t work; it hasn’t worked. It hasn’t worked for a sector like hospitality, and it hasn’t worked for your average worker.

I want also to talk about the health and safety implications of this, because if you think about the implications of this in the safety area—I take my daughter, who I’ve just been spending the break with. She’s a young woman, and one of the hardest jobs she’s ever done—quite a few of the hardest jobs she’s ever done—was in the hospitality sector. In my own experience of that sector, when I was young and I worked for a number of different hospitality groups, you’re very vulnerable to bad treatment. One of the things that this does is give people a floor. It gives them those basic rights, and, actually, it means that employers who are paying a decent wage, who are paying perhaps the living wage to their workers, aren’t competing with people paying a lot less.

I would say to small business—and I would like you to consider this—that actually small businesses often benefit. It might be something they fear, but they often benefit because the big multinationals can’t squash them with this kind of process where they are constantly in a situation where they are tying up those workers, often with restraints of trade, and they are lowering the wages. They are using the small businesses as a kind of stalking horse and saying that it’s for their flexibility, when in fact it’s about driving conditions down across vulnerable industries.

So I would love your comment on these things and whether you’ve thought about them. Even if you disagree with me, Minister, I’d like to understand how on earth you are justifying this and how you see the way forward in New Zealand—how you see high-wage work happening if we don’t do something differently. Because we have been doing this, Minister, for quite a long time now and it has caused a whole lot of people a whole lot of pain, and we have industries like hospitality where there is no money being made. It is heartbreaking for those small businesses. They are not able to compete with the big multinationals that are coming in. They are having those wages dragged down.

I’d also just like to tell one story from when I practised as an employment lawyer. I was practising for 25 years. I had a call from an Australian company. They rang me because they wanted to set up shop in New Zealand, and they said to me, “What do I have to do? What do we do? How do we pay our employees?” They fully expected that there was going to be some sort of agreement which they had to buy into, and I said, “Well, actually, we have the minimum wage, but that’s about it. There’s the Holidays Act. There’s the minimum wage. There’s sick pay. That’s it.” And they said, “But surely if we’ve got people on call, if we’ve got people that are casualised, we’d have to pay them an extra 20 percent, wouldn’t we?” I said, “Actually, you don’t. You don’t have to do that. You don’t have to do any of those things under New Zealand law.”

Now, hopefully this kind of arrangement of fair pay agreements would mean that some of those things that we would negotiate in would be minimum floors, and it would be fair on the employer who’s already doing those things and paying good wages, because they would be on an equal footing with one that wasn’t. But my understanding is that you’re saying that’s not the way forward here. Those Australian employers were well able to pay a lot more, and there are situations I know at the present time where the same employer works across Australia and New Zealand and pays its retail workers or its hospitality workers so much more than its New Zealand workforce. And it makes such sense when we talk about the drain to Australia—how we are going to stop it. So that’s my other question here for you tonight, Minister. How are we going to stop the drain of young talent going to Melbourne to work as a barista if in fact in New Zealand we cannot offer the same kind of wages, because everybody is going to the bare minimum all the time and hoping that that will sometimes make a profit?

Minister, I know that you’re aware that the Productivity Commission has said we have been working harder than almost any other country for less money. We have been doing that. We do a lot of hours, and the only productivity gain we seem to get—that’s what they are saying—is actually out of working more hours. That’s how our productivity goes up in this country. That’s not a good model. That’s not smart. It’s not what I want for my children. It’s not actually what I want for myself. So I’d ask you to answer those questions. Thank you for your time.

Thank you, Mr Chair. I’d like to take the chance to answer a few questions that have come already. Firstly, from Helen White—and, apologies, because I’ll paraphrase in the interest of time—talking about why would we not allow initiated fair pay agreements to conclude. And the reason behind that is because we are committed as a Government to repealing the Fair Pay Agreement Act, which means that we’re committed to repealing the bargaining process that allows for the fair pay agreements. So that is why we are repealing the Act in totality: because we’re repealing the bargaining process that sits behind the Act.

When we look at the question from the member Camilla Belich about why there are no transitional clauses in the bill: this is because for the bargaining of all the initiated fair pay agreements, they are in very early stages, which means that there will be no fair pay agreements that have been finalised before the legislation is repealed.

Talking also to Camilla’s other question about the legislation—

CHAIRPERSON (Teanau Tuiono): Camilla Belich.

Hon BROOKE VAN VELDEN: —Camilla Belich; my apologies—there are rights that could be exercised under the legislation, following a repeal. That is because the effect of the legislation of 2019 is that a party can pursue a right or action in relation to something that occurred while the Act was in force. That is under the legislation.

Talking to the member Ricardo Menéndez March’s question about why we would not allow those that have already been initiated as fair pay agreements to continue through the process: well, the answer is quite simple. It’s because we want a flexible labour market where employers and employees can agree to terms that suit their own unique situations. We don’t believe in having a blunt tool like a fair pay agreement, which affects all employers and employees within an occupation or an industry, which is why that goes right to the heart of why we’re repealing this Act and the bargaining process underneath it.

Speaking to the member Helen White’s latest question on productivity: that question is, surely, directed to the Minister for Regulation. I’m sure you can have many, many in-depth conversations with Minister Seymour about how we will improve productivity in New Zealand by removing unnecessary red tape and regulation which is holding back our economy and holding us back against other countries around the world. But that’s not within this bill; this is quite a specific bill about how we will be repealing the bargaining process sitting behind the fair pay agreements.

Look, I want to be able to advance some of the discussions because we’re quite an advanced-thinking party. In Part 2, and I’m talking to my Amendment Paper, we see that the Ministry of Businesses, Innovation and Employment has identified the implications of the repeal of the fair pay agreement legislation on Māori. And, obviously, to be supportive to the Minister in making sure how else, for example, the Government would be consistent with Treaty of Waitangi obligations, my amendment is ensuring that we identify those who are disproportionately affected—and remember that there has been no consultation with iwi Māori, no representation groups.

We’ve had advocacy after advocacy from those who have said that this is not supported by us. We have not had enough time. The New Zealand Council of Trade Unions Rūnanga also have supported and stated that they are really concerned for Māori and particularly how they’re going to be affected by a lack of standards, and that they would benefit from a system that we have seen here in fair pay agreements.

So my amendment is, again, a solution to a problem that is before us. It is looking to ensure that you are considering an opportunity to continue the Act in areas where Māori workers will be disproportionately affected. And this amendment would provide an exemption for Māori workers who will be harmed by the repeal of the fair pay agreements.

For the Government, whose Prime Minister has assured us that he’s got the best interests of Māori at heart, this would be one way of considering again how we could be making amendments to pull off, I guess, what has been really forced on us in a concerning urgent way.

The question I would have is: why wouldn’t you support my Amendment Paper? Kia ora.

As my first call with Mr Chair in the Chair and in the seat, I do want to congratulate the wisdom of this choice in having Mr—

Hon Kieran McAnulty: What a greaser!

Hon MARAMA DAVIDSON: I am happy to spend some of my precious time to acknowledge some history. Thank you, Mr Chair.

I would like to ask of the Minister, and what I want the Minister to come back with is mitigating the disproportionate impact of stagnant, lower wages for youth—so rangatahi is a focus that I’m wanting to pick up on—without fair pay agreements. I have noticed throughout the discussion in the House from the Minister, she constantly uses the word “believe”—“We believe that this will be the case”, “We are doing this legislation because we believe it will be better”. Believing and having actual, grounded evidence are two different things.

So in light of the fact that it has long been recognised—and, Mr Chair, I am trying my hardest to respect the bounds of the Part 1 legislation that we are on right now. I will take guidelines from you to keep me on that. But in Part 1, “Consequential amendments to Acts”, I think this is called—OK. “Replace section 132(2) with:”, what this legislation is proposing, and again, in “Replace section 224(1)(a) with:”—there is a different proposal. What those two particular repeals and replacements highlight is a returning of the onus to the worker.

Now, fair pay agreements, and especially on rangatahi—how confident or how strong is your belief that rangatahi, young people, in an employment situation are going to feel supported in an imbalanced power situation to raise any issues? This one particularly relates to the claims regarding “wages actually paid to the employee” and “hours, days, and time” and, also, leaving it up to rangatahi to make a complaint to a labour inspector.

So I would love the Minister please to give something beyond her belief and actually provide evidence, provide statements, and provide a fulsome analysis that shows that rangatahi, who are going to be severely disproportionately impacted by the lack of fair pay agreements are going to be able to have the onus that is going to be placed back on their individual shoulders. See, the purpose of fair pay agreements was collective bargaining. It was to be able to try and correct some of the power imbalance that is especially felt by young people, and I’m not even going to go into the level of exploitation that young people, including young women—young women who I have had come to me about the way that they have been treated and the way that they have been exploited, including in sexual harassment situations. We know this is true; we know this happens.

So please, would the Minister go beyond her belief and instead put up some analysis, some evidence, and some hard-line research that talks about the ability of keeping the onus on young people’s shoulders to raise these inequities and these injustices to their employer with power.

Thank you, Mr Chair, and congratulations on your elevation to the role. It is good to see you there, and congratulations also to the Minister on taking up this role in this Cabinet. It is a pleasure to be able to ask these questions of you today.

I want to build on some of the questions that the Hon Marama Davidson has asked in the committee, because I am considering an amendment to clause 4 which would be relevant to you. But before I take the committee through what those amendments would be, I need some further clarity from the Minister on how youth will be considered in these regime changes.

Because the Minister has presented to this committee—she has said that fair pay agreements (FPAs) were never about being fair, which is something that I disagree with. But, perhaps putting myself in her shoes and appreciating the world through her ideology, I can see that she is trying to advance something which is beneficial to New Zealanders. So for young New Zealanders—I know this is something that she’s passionate about and would not be enacting legislation which impacted poorly on young New Zealanders. That begs the question of what amendments this committee needs to make to make sure that young workers are protected, because young workers are amongst the most vulnerable and the least able to represent themselves in these situations.

Further, the purpose of the fair pay agreements legislation when it was enacted in 2022 was about creating an industry floor for many of these industries which are dominated by young workers who move between different employers doing very similar kinds of work. We’ve heard from my colleagues on this side of the Chamber about the example of baristas, fast-food workers, other sorts of hospitality—these are all industries where often young New Zealanders get their first start in life. That kind of work experience that they have is really important to the way that they experience not only their education, their lives, but they also get the first start in their employment journey, which we hope is a really positive one here.

I want to turn the committee’s attention to some of the submissions made by young people in the passage of the Fair Pay Agreements Act 2022, because we don’t have the opportunity for young people to present to the select committee about the kinds of changes that they would want to see in the legislation here. So it is important that the committee give some consideration to what those submissions were.

So first I’ll start with the submission of Stand Up. It was made by Dr Zoe Port and Moniqua Reid. The comments of Dr Port are really useful for us, but it was Moniqua’s story of her own experience as a young person in the workforce who would have benefited from an industry-wide agreement that I want to focus on. She said, “We know fair pay agreements will halt the race to the bottom in wages, improve job security, and put our members on a path to better jobs with fair pay. I’m 28, and I was born to young parents. Only my dad worked in our family for the minimum wage of $7 in 1997. With this one minimum wage income, my young family was able to get their first mortgage on their $70,000 home that still stands in good condition today. It was still a struggle to live on one income, but it was manageable and there was always food on the table. With the inflation rate of 74 percent between then and now, that $70,000 house should be worth $122,000 today. Even if we consider that the $7 minimum wage from 1997 today would be worth just over $12, and the 2022 minimum wage is a lot higher at $21.20. In proportion, we would double the cost of what that house should be worth to $244,000 to keep in line with the current minimum wage. That house today is almost worth double what it should be, at 440,000”.

The point she’s making here is that for someone like her, who’s 28 and earning a minimum wage, she’s in a really different position, because minimum wage and wages for people working the kinds of jobs that her family worked, and the kind of job that she could work, are not keeping up with the generation of her family. That’s the position that many young people find themselves in today, where a race to the bottom in New Zealand and the kind of economic settings that we have had have meant that young people are not able to earn what their parents earned—and their parents before them—in relation to the price of other things. It’s really important that young people get a good start on decent wages and can experience the kind of conditions that not only protect their pay across industries like the ones that Moniqua’s family were working in but also their conditions, so that they experience the economy in a way which is insulated somewhat from the vagaries and fluctuations of it, and they have the ability to hold down their work as well. So that once they have a job, they can keep it, because the conditions of their employment are such that they are given the skills and the kinds of opportunities that they need to thrive in those roles, and to continue in their education.

The comments of Dr Port are really useful for the Chamber to also consider. She said that the FPAs in that context seeks for a generational reset, and a chance to make work and wages fair, and stop the race to the bottom which defines our current industrial relations framework. Young people in this country—[Time expired]

Thank you, Mr Chair, for the opportunity, and can I begin, Mr Chair, by acknowledging you on your role and congratulate you on your appointment to be one of our Assistant Speakers. I look forward to being part of a House which has you in the Chair, Mr Tuiono.

I have two questions for the Minister—and I just note I don’t seem to have a clock, so that’s helpful, Mr Chair. The Minister in her earlier reply made some comment around the need to maintain a system that allows individual employers and employees to be able to bargain with each other. I just wanted to make some observations around that, because one of the purposes of the original Act was to actually strengthen our collective bargaining system. I’m just interested in the Minister’s comments that she’s already made about why it is that that would be seen to be a superior framework for negotiating wages and conditions. There is evidence—and I’m interested in what advice the Minister has received on this—that when people do bargain collectively, particularly people in low-wage industries, it leads to higher wages. So I think it’s important that we hear a little bit more detail from the Minister about what evidence has led to those statements that she made in her earlier contribution.

In my reading of the Employment Relations Act, it actually stipulates that one of the objects of the Act is to promote collective bargaining. So this original legislation would have strengthened the ability for workers to come together and negotiate better terms and conditions.

In terms of the second question I’ve got, I was just reading through the departmental disclosure statement, and I just want to add some more comments to my colleague Camilla Belich’s contribution earlier around the lack of transitional provisions within the bill. In the departmental disclosure statement, it specifically talks about whether the Privacy Commissioner was consulted and raises some concerns around the fact that there have been a number of fair pay agreements that have been initiated and are under way, already in process. We’ve heard that there are, for example, supermarket workers, bus drivers—there’s close to 300,000 workers that will be covered by these fair pay agreements. And so I think it’s right to have some concern, if the repeal is successful, around what actually happens to all of that data that has been collected about those workers and who holds that data.

I note in the departmental disclosure statement that the Ministry of Business, Innovation and Employment (MBIE) intends to work with the Office of the Privacy Commissioner to put some guidance in place. But my question to the Minister is whether the Minister actually considered whether it would have been helpful to include some transitional provisions in here. Because I think that for those workers—and remembering that many of them are very vulnerable workers—knowing that their information would have been disclosed to their employer, their information would have been disclosed to a union, their information would have been disclosed to MBIE, do have the right to have an understanding that their private information is going to be held securely and also, under the Privacy Act, used for the purpose that was intended to be gathered for.

I’m concerned that there could be some time frames around how long it takes to develop those guidelines, how long there might be information sitting there, being held by the various parties that have been involved in the bargaining of fair pay agreements, and whether it would have been more appropriate to include some transitional provisions within the bill so that we could give some certainty to those workers that actually there is a plan around how their data will be protected, given that the legislation will actually be repealed. So I’d be very interested in hearing from the Minister about what analysis was followed through that.

And also I just note again from my first question—obviously I’ve got two questions here for the Minister that I’d like to hear from her on. The first was that I would very much be interested in what research and analysis was provided around the benefit of collective bargaining against the benefits of individual negotiations—recognising that in some professional industries individual negotiations are absolutely fine and deliver for people. But when we’re talking about—as we’ve heard from others—young people, people who don’t have that high level of bargaining power, they might be new to employment. They might be someone that’s traditionally discriminated against, maybe because of a disability, and there’s actually a lot of benefit for them in being able to bargain as a collective. So I’m just interested in a little bit more analysis about how the Minister came to that position in her earlier comments. Thank you, Mr Chair.

I thank the member for bringing the debate back to the relevant part.

Thank you, Mr Chair. I’ll take the opportunity to respond to a few questions, starting with the Hon Marama Davidson. Her questions touched on how we can protect youth and younger people in our workforce, and I’m delighted to tell the Hon Marama Davidson that we already have quite strong minimum entitlements with the minimum wage, which affects not just youth but also all employees within our employment relations framework. She also asked and touched on what evidence do we have for repealing the fair pay agreement system. There is no evidence for the fair pay agreement system itself. I note the regulatory impact statement for the instatement of this law—for the Fair Pay Agreements Act—actually recommended against the fair pay agreement system.

She also touched on how Māori workers will be protected, with the onus on them being able to negotiate their own terms. It’s also quite possible that there are employment groups that members in this House will touch on that could have been negatively affected. We’re talking about youth, we’re talking about Māori, Pasifika, disabled—there are many people who could have been negatively impacted by disemployment effects. I once again look to the regulatory impact statement that was produced for the previous Government, which says, “It is possible that [fair pay agreements] could lead to employers choosing to hire fewer people or reducing hours of work. Any disemployment effects could also disproportionately impact these population groups.” So it is not the case that these population groups would be better off under a fair pay agreement; it is also quite possible that they could be worse off, as is stated within the regulatory impact statement.

I want to touch on questions from Debbie Ngarewa-Packer, talking about two of her Amendment Papers. The first is asking for there to be a review of the repeal of this Act after three years, considering the impact of this review and the repeal, especially in areas where Māori are overrepresented. My response to that is it’s not possible to have a review of a law that would be repealed, because there would be nothing to review after three years, so the whole point of that paper is null and void.

The second Amendment Paper that she put forward was asking for there to be fair pay agreements allowed to be initiated for sectors where Māori workers are disproportionately impacted; however, the six areas that she has listed, wishing to allow those particular areas to increase, are the areas which we as a Government are repealing under the law. They don’t affect just Māori workers; they affect all people within all of the collective bargaining under that fair pay agreement, so we would be keeping, in effect, all areas of the law. That is against what this Government wishes to achieve, which is to repeal the fair pay agreements law. So, once again, I thank the member for her paper, but this Government will not be supporting that.

The member Rachel Boyack talked about why it is that we want an individual framework and why do we believe that would be better than having collective bargaining. I’m also delighted to tell the member that we do have ability for collective bargaining outside of the fair pay agreement system. This Government has not repealed that law. We are repealing a fair pay agreement law. The Employment Relations Act sets out a framework for both individual and collective bargaining processes, which has worked quite well for the past 30 years and, in fact, my entire life. So we’re going back to what that was.

Tēnā koe, Mr Chair. E mihi ana ki a koe mō tēnei tūranga hou, te Heamana tuatahi nō roto i Te Uri o Roroi, Ngāi Takoto, e mihi nei ki a koe.

[I congratulate you for this new role, the first Chair from Te Uri o Roroi, Ngāi Takoto, I congratulate you.]

Just in reflecting on the discussion that we’ve heard tonight, I want to hoki whakamuri—take a step back—and think about the voices of those that met with us on the steps of Parliament today. When I saw the babies roll out with their early childhood education (ECE) teachers, those that worked at Countdown—Connor who addressed us, a young man trying to get by and pay his bills. Then thinking about our bus drivers that provide transport now from the airport to Parliament. The new system that’s available, you know, through fair pay agreements would have enabled them to all have a really good Christmas.

The backs of Parliament are built off those who serve us right now—our cleaners and our security guards—they are all impacted by this legislation, and the repeal is an injustice for our people. I have a mother who has worked in early childhood education since the 1990s—I think I was still at high school—and they have battled for fair pay for far too long. And the collective bargaining that was provided through these avenues—oh, and I recognise our unions, the power, the strength that they have given to sectors who have had no voice is an important space for all New Zealand.

As Māori, we are gravely impacted in this space, and I’d like to remind the House that we are often the buffer of all of the lowest statistics in Aotearoa. Lest we forget about tobacco impact and the health and wellbeing of our people, I’m bringing us back to the kaupapa as I refer to the fact that te iwi Māori are overrepresented in the workforce that we’re talking about. So the question for the Minister tonight is about mitigation. What is the path to mitigate the disproportionate impact that this legislation—or, what’s going to happen to te iwi Māori? What is your plan? And then in fact, when I heard you speak earlier, Minister, about “Actually, maybe te iwi Māori may not be so impacted.”, what is the evidence base behind that? Because from my perspective as a mokopuna of an ECE teacher and with whānau who clean hotels right now, and the cousins who serve me at Countdown—I’m here as their voice from Tai Tokerau to share my grave concerns for those who have no voice. Kia ora.

I just wanted to acknowledge the newness of some of the members and remind members to come back to the relevant part that we are discussing.

I move, That debate on this question now close.

Thank you, Mr Chair. I just wanted to open also by congratulating you on your appointment, and also Minister Brooke van Velden, who may not have been the Minister in the chair available to hear that comment when we originally started. So congratulations, Minister. This is an important portfolio and I know you’ll take it really seriously.

I also know that you’ve made comments in the past about how you’ve changed your mind on important issues. So I take that to mean that the discussions that we have today and the points that we raise will be taken in good faith, and I hope that some of them will be considered in terms of supporting some of the many amendments that we’ve put forward, some of which I think—well, actually, all of which, but there are particular ones which I think will be particularly useful for the passage of this piece of legislation.

In terms of how I have read this first part of the bill which we are debating at the moment, obviously it’s a smaller part of the bill compared with the second part, but this first part does have an active provision of repealing this bill, which is, as I understand, a mechanism which is employed in order to clear the statute book, essentially, of a repeal bill.

Arena Williams: I have a suggestion about that.

CAMILLA BELICH: We have some suggestions about that, and my colleague has an amendment that no doubt she will speak to later. But with that in mind, that is informing some of the discussions that we are having. So although it may seem unusual to speak to this bill and the context around this bill in the first part rather than the second, it is because this Act is repealed in the first part, which is why we are discussing things in relation to the repeal bill at this stage, and just to note that there are a number of amendments that haven’t been addressed yet.

Hon David Seymour: She’s using confusion as a weapon, but it’s backfired.

CAMILLA BELICH: Apologies, I couldn’t hear that interjection.

Hon David Seymour: I said the member is using confusion as a weapon, but it’s backfired.

CAMILLA BELICH: I can explain it again to the member. So the first part of the bill has a provision in it which repeals the bill in order to clear the statute book. Therefore, it is relevant to discuss the repeal bill in its entirety, in my view.

Hon David Seymour: No, no.

Hon Kieran McAnulty: The Chair will judge that—crack on.

CAMILLA BELICH: Yeah, the Chair will judge it for relevance, but anyway. One of the points that I wanted to make and ask the Minister about was she’s received a number of comments, and I know there are a number of amendments as well in relation to this first part, looking at te ao Māori and Māori. I know that in the advice that she received in the cover sheet of the regulatory impact statement in relation to this, it was specifically noted that Māori women, young people, Pasifika would be disproportionately impacted by this bill.

This is also reflected in the advice, which is contained within the departmental disclosure statement, which I referred to in my first contribution—on page six of the departmental disclosure statement, the advice states that “Māori are more likely than other groups to earn low wages. Given that they are disproportionately represented in workforces where there are lower employment terms, they could have disproportionately benefited from any improved terms obtained by an FPA.” It goes on to note that “No consultation with Iwi or Māori representative groups was possible due to time frame restrictions.”

Now, I know through reading the whole departmental disclosure statement that there is a view put forward in the alternative as well, but I just wanted to make sure that we highlighted the other information about how Māori would be disproportionately affected, and I wondered if the Minister wanted to comment at all. Given that there is this concern raised now in two documents that she’s been privy to, what is she going to do in order to address the low pay that Māori receive in New Zealand, as Minister of workplace relations? Because, of course, she is repealing this bill.

I just have some other comments that I wanted to make. Obviously, we are in a situation where we don’t have a select committee process. We did have a select committee process for the primary bill which is being looked at and we will discuss in detail in Part 2.

Hon David Seymour: What did the RIS say?

CAMILLA BELICH: There is said—

Hon David Seymour: “Don’t do it.”

CAMILLA BELICH: There is said that Māori—well, actually, the most—

CHAIRPERSON (Teanau Tuiono): If members could bring back their attention and have a conversation not with each other but with myself, it would be appreciated.

CAMILLA BELICH: Apologies, Mr Chair, I was distracted by the interjections from a member opposite.

There were a number of submissions made during the select committee process. And I note that in other committee stages where there hasn’t been a select committee process there’s been some leeway given to discuss the views of the community that haven’t been able to be expressed due to the fact—[Time expired]

Thank you, Mr Chair. I wanted to talk to three members and their questions. The first is Rachel Boyack—the member Rachel Boyack. She talked about the Privacy Act and the need for employees’ information to be kept private. I absolutely agree with that member. Where people’s information has been collected, it has been for a specific purpose, and now that that purpose no longer exists, or will not at the close of this bill, that information should not be used for any other purpose, not by an employer and not by a union. And I note that the Privacy Act 2020 will apply in this case. Principle 9 of the Privacy Act specifies that an agency that holds personal information must not keep that information for longer than is required for the purposes for which the information may lawfully be used. So once the fair pay agreement legislation is repealed, unions will no longer have a lawful purpose for retaining this information and it will need to be deleted. The Ministry of Business, Innovation and Employment is developing guideline and guidance materials to make this obligation very clear to the unions that were part of the bargaining parties.

To the member Camila Belich, she’s talked about the self-repeal provision that’s within this bill. This is a fairly standard provision for a repeal bill to keep our statute book nice and tidy. If we have a law and then we have a repeal of that law, there’s no need for that repeal of law that no longer exists to be on the statute of books. So it just tidies it up within a few days after the repeal—and that’s pretty plain and simple.

To the member Hūhana Lyndon, I’m talking a little bit about the path to mitigate any impact on Maōri. I thank the member for her question. I believe it’s in good faith. However, I do want to stress that this bill will not make Maōri worse off, because there have not been any fair pay agreements that have been finalised. So every employee, whether they’re young, whether they’re Maōri, Pasifika—throughout our economy if they had been part of this bargaining process, they are not worse off. The current wage that they currently have will be the current wage they go into Christmas and into New Year. Nobody is going into Christmas with a lower wage because of the repeal of this fair pay agreement.

Thank you, Madam Chair. I want to speak to clause 4, “Repeal of this Act”. It is a very simple provision that states, “This Act is repealed on the close of the 28th day after the date on which it comes into force”. I just want to focus on the fact that this is, pure and simple, a repeal. It wipes clear the Fair Pay Agreements Act 2022, which was a genuine attempt based on a lot of discussion, a lot of policy work, a lot of analysis, consideration of a lot of evidence to address the problem of entrenched low pay in this country, to stop the race to the bottom by means of a national framework of sector bargaining and minimum standards.

Now, because this is just a repeal and nothing else, there’s nothing being put in place to replace the Fair Pay Agreements Act. It’s the status quo ante. My question for the Minister is: is that enough for you? Was the status quo ante an acceptable situation? I’m keen to know whether or not the Minister is happy and content with the state of affairs before the passing of the Act, and whether or not the Minister accepts that low pay, which is entrenched in a number of industries and occupations in this country, is a problem or not. I’m genuinely interested to know the Minister’s view on that.

Given that there’s no regulatory impact statement (RIS) for us to discuss tonight, I’m also interested in the departmental disclosure statement. It states that the objective of this bill is to revert to the previous framework where employers and employees or unions representing their members have more flexibility to agree their employment terms.

So if that’s what this all turns on, it’s the flexibility to agree the terms of employment. And given that we don’t have a RIS, I’m interested to know what the Minister’s evidence base is for the assertion that underlies this whole exercise—that it will deliver greater flexibility. If that’s the view that the Minister has, if that’s the prime motivation for this new law, then what is the flexibility we’re talking about? Is it the flexibility for employers to lay down conditions and rates of pay to new workers that they take or leave? Because that is the reality when people are not bargaining collectively, and in many of the industries that have lodged applications for fair pay agreements, there is very little substantive collective bargaining. That’s why low pay and poor conditions are features of those industries.

There are workplaces and there are firms that are unionised, where bargaining goes on. But there are swathes of the economy where there is no significant collective bargaining, and when a worker shows up to seek a job, they get a “take it or leave it” offer. Now, that’s a very flexible situation for the employer, but it is not flexible for the employee, particularly when times are tough in the economy and competition for jobs is intense. So I’m really interested to hear from the Minister whether or not that is her conception of flexibility.

I want to share some comments from someone I spoke to—

CHAIRPERSON (Teanau Tuiono): If the member could come back to Part 1—he’s starting to stray.

Hon PHIL TWYFORD: Well, I want to share some comments about the repeal of this law from someone who won’t get a chance to come along to a select committee and tell this Parliament how she feels about the repeal of the fair pay agreements. Jackie, who is a cleaner at a very large corporate facility in South Auckland, told me that she really hoped that fair pay agreements would make things better. She said, “We get sick at work and we’ve run out of sick days. We can’t afford to go to the doctor because we simply can’t afford to lose a day’s pay.” She hoped that fair pay agreements and more bargaining across the industry actually would improve those kinds of conditions.

I think I heard my name. Acknowledging, because there was no select committee report—I’m just wanting also to unpack the rationale and arguments that were given by the Minister, which we would have otherwise had an opportunity to do more broadly at the select committee stage. So I wanted to pick up on the flexibility arguments the Minister has presented, because to me it sounds like it’s flexibility to pay poor wages and to have a race to the bottom. I guess, in unpacking that argument, which, as I said, we would have had the chance to do in select committee otherwise, if there hadn’t been urgency—when she talked also earlier about the lack of evidence, did she draw at any point on the evidence overseas on wage increases as a result of fair pay agreements and the rationale—

Hon David Seymour: Which countries?

RICARDO MENÉNDEZ MARCH: —particularly in the OECD support for sector-wide bargaining? I can hear the member at my left challenging, but there is OECD support for the sector-wide bargaining, and so I’m just checking on those rationales.

The reason why this relates to Part 1 is because we are not allowing for a transition period, right? So we are not allowing for us to test the impact domestically, which means we have to then draw on overseas evidence for their sector-wide bargaining, and if we had given ourselves the chance of having at least a transition period or having a carve out for specific industries, as my amendment would have proposed, then we would have had, I guess, the ability to have evidence domestically as well.

But I just wanted to once again reiterate: did she use international evidence and impact overseas of sector-wide bargaining to inform the arguments, or was it just because she campaigned on it based on vibes and without any evidence prior to coming to forming this legislation?

Thank you, Mr Chair. I just wanted to continue the train of thought that I was on when my last call ended, which was, similar to my colleague Ricardo Menéndez March, talking about some of the voices that we would’ve heard from, had we had a select committee process on this issue. There are a number of different submissions that were made—I mentioned earlier in the House today I think there were about 1,700 submissions made—in relation to the primary bill. We as a select committee during that primary bill travelled. We went to Auckland, we heard a number of submissions in person there as well, so took the opportunity for scrutiny of that primary piece of legislation really seriously. I just wanted to raise some of the comments that some of those submitters made during the initial consultation on the bill, because I think it is relevant to consider what they would have said had they been able to participate in a select committee process during this particular bill.

One of the ones that I wanted to highlight was a submission that was made by Kaimahi Whaikaha. They are an organisation who represents workers with disabilities, who, I note, have been particularly in support of fair pay agreements. They said in their submission to the original select committee, “We support the Fair Pay Agreements Bill and its intent to create a framework that will lift terms, [and] conditions, and pay for numerous workers in our country. This Bill will benefit disabled workers as people in low paid work, and … users of services where we know workers would benefit from Fair Pay Agreements.” They went on to say that the statistics in relation to disabled workers show they have “lower participation … in the workforce, … higher rates of unemployment, [and] a greater … underutilisation” in their work, and their “median weekly income is less than that of [their] able bodied peers.” They also state that a number of their members work in industries which have subsequently lodged fair pay agreements. They cited early childhood education, hospitality, cleaning, home care and support, as well as many other low-paid industries. So I think it’s important to have the voice of disabled workers raised again in this House, and it’s a pity, in my view, that they didn’t get the opportunity to submit again on this repeal bill.

Another submission that we received during the select committee was a submission from St Peter’s on Willis Social Justice Group. They cited the potential for health and safety to be addressed within fair pay agreements, because often when we’re talking about fair pay agreements it is about terms and conditions and, obviously, pay, but I think another aspect of this regulatory regime which is being repealed, and then the bill itself being repealed through this Part 1, focuses on health and safety issues and how they can collectively be discussed between workers and employers to make sure that the conditions are fair. Often, the things that may be in fair pay agreements will not be financial; they’ll actually be reasonable accommodations that make a big difference to workers’ lives. So one of the things that this particular submitter said was that the bill had the “potential to address health and safety issues and structural [inequality] based on sex and ethnicity.” and it should have “intervention measures addressing in-work poverty, chronic understaffing, undercompensated [values] … in terms of skill, responsibility, conditions … qualifications and unequal remuneration of workers performing the same work in the same [type of] firm … across the [different] sector.” So, I think, really interesting thoughts.

Another thing that has come up quite a lot in relation to this debate has been the impact on women. There is going to be a disproportionately large impact from the repeal of this primary piece of legislation on women, and we did receive a number of submissions from women’s groups during the select committee process. One of them was from the Public Service Association Women’s Network. We had quite a personal story that was shared from Nancy McShane, who was one of the people involved in that group, and she stated that “Fair Pay Agreements are a sensible way to lift hardworking New Zealanders out of poverty and ensure everyone in [New Zealand] is paid a fair and livable wage.” She also went on to talk about her 14 years within the health service, when she’d watch female colleagues forgo much-needed dental treatment because they could not afford it, stay in abusive relationships due to financial hardship, or suffer mental health problems due to chronic—

CHAIRPERSON (Teanau Tuiono): Yeah, could you let us know which provision you’re speaking on?

CAMILLA BELICH: I’m speaking to Part 1, not the provision, but I’m also, Mr Chair, reflecting on the common practice in this House of, when there is a committee stage in urgency when there hasn’t been a select committee process, the voices of people being able to be brought to the House.

CHAIRPERSON (Teanau Tuiono): If we could focus on Part 1, that would be helpful.

CAMILLA BELICH: Yeah, thank you. So I’ll finish up in relation to the submissions. I did actually have—[Time expired]

Thank you, Mr Chair. I was very much enjoying the contribution of the member Camilla Belich, and if anyone was interested in the other submissions that came through, they can refer to my second reading speech; I don’t need to repeat those. But I also wanted to just touch on her earlier question about how we will improve conditions for people in our economy. I note that it wasn’t actually specific to this bill, but I do thank the member for her interest, because this is a Government that is going to have a lot of work on our hands to create a good, thriving economy for every person in New Zealand. And I can’t wait for the member to see what this Government will deliver for all New Zealanders. I note that this is external to the bill, but so was her question.

I wanted to touch on the Hon Phil Twyford’s questions, firstly starting with what evidence base we have for this bill given that we don’t have a regulatory impact statement. I just wanted to alert the honourable member to the second page of the cover sheet to the Fair Pay Agreements regulatory impact statement, point No. 2, where it says that Treasury actually determined that we didn’t need a completely new regulatory impact statement, because it said, “This exemption is granted on the grounds that the regulatory impact statement produced when the Fair Pay Agreements system was introduced in 2021 mostly duplicates the analysis needed to repeal the system. This exemption is conditional on MBIE producing a coversheet”—which is what I am reading from. So it’s not correct to say that there isn’t a regulatory impact statement. The regulatory impact statement from 2021 still well and truly applies, and within that regulatory impact statement they did not actually recommend that we had a fair pay agreements system.

To the second question, which was about why I am asserting that the repeal will actually deliver greater flexibility for the employment market, that’s important because we do have flexibility under the status quo, which is that employees and employers can individually or collectively have employment agreements. That is by definition far more flexible than what this agreement allows for, which is a blunt tool that forces employees and employers to be part of a fair-pay agreement even if they chose not to be part of one. In the case with the submissions that we heard through the Fair Pay Agreements Bill when it was going through under the previous Government, there are businesses where workers don’t actually wish to associate with a union but would be forced to under this law. But also, there are businesses who would be forced to close because they could not afford the terms and conditions that would be forced on them by a third party. So, therefore, there will always be more flexibility under what we are assuming versus what the member is hoping for.

He also considers whether or not we’d be satisfied with low pay in New Zealand. I’m not satisfied with low pay, but I don’t believe that this would actually improve pay and wage conditions in New Zealand. It is really important that we have a flexible labour market where we have high productivity, where we focus on the regulations and red tape that is actually stifling our economy, so that businesses have more money to pay their staff more. Adding more bureaucracy to our labour market will not have the desired effect.

Members are starting, in the content of their speeches, to move into Part 2, so I will take another call and see where we go.

Thank you very much, Mr Chair. I refer, in my contribution, specifically to Part 1 and the part that proposes that we replace section 224(1)(a) in the Employment Relations Act 200 with “(a) an employee makes a complaint to the Labour Inspector,” and it goes on. When I read that, I went to the bill and looked at that part—224(1)(a) of the Fair Pay Agreements Act—which says “(a) decide how to provide the bargaining support services required under section 222;”. So I moved on to that, and it lists a couple: “(a) a union: (b) an employer association: (c) a bargaining party: (d) a bargaining side.”

So what we are seeing here proposed is that instead of an organisation that employees and employers can associate to, they are proposing to replace it with the Labour Inspector. My concern being, of course, is that is one moving from organisations that are self-funded—through members; through associations—to one that is funded by the State. When we propose that something is replaced by the funding of the State, it’s important—

CHAIRPERSON (Teanau Tuiono): Could the Hon Kieran McAnulty let us know which provision he’s talking about?

Hon KIERAN McANULTY: I’m talking about, under Part 1, the proposal to replace section 224(1)(a) as it’s outlined.

CHAIRPERSON (Teanau Tuiono): That’s in Part 2.

Mr Chair, I note your comments in relation to the part, but I have actually got an amendment that I haven’t spoken to in Part 1, which is the amendment in my name to insert a new clause 3, which would still be in Part 1.

When I was at law school, I learnt that in good legislative drafting it is preferable to put a purpose clause in legislation. And the reason for that is sometimes it’s important to understand the purpose of the Parliament in creating a particular law, because, otherwise, when there’s a provision that is unclear or perhaps maybe with the passage of time, a new interpretation is possible, it helps to have a purpose. Unfortunately, this bill doesn’t have a purpose, and, if it did, it would be in Part 1. So my proposal in my amendment is to insert a new clause, and the purpose, to be in line with the Act, obviously needs to be consistent with the repeal legislation.

So the purpose that I have provided in this amendment document is to outline what I believe is the purpose of this bill, which is to ensure businesses can continue to undervalue workers, to protect New Zealand’s low-wage economy from encroachment by workers’ rights, and (c) to entrench inherent imbalance of power enjoyed by employers. I think that, really, that is the purpose of the bill. I know it’s probably not the aspirational purpose that you see in some pieces of legislation, and I hope that we’ll get the opportunity to discuss the purpose clause in the primary piece of legislation when we move on to Part 2, but sometimes the purpose clause does serve a very important role within statutory interpretation. So, if the Minister doesn’t accept my proposal, I would like to know a few things from her.

The first is: why isn’t there a purpose clause in this document and why isn’t there more detail about what it seeks to achieve? And, secondly, if she were to insert a purpose clause or to add more detail of that nature into the legislation, what does she believe is the purpose of that?

I think that does have some value for the Hansard in terms of assisting with future statutory interpretation, and I think that it would be beneficial for those scholars who undoubtedly trawl through the hours of this debate looking for the true meaning behind this repeal Act legislation to understand her thinking, which she’s undoubtedly gone through in deciding to repeal what would have been a fundamental change to industrial relations in New Zealand, probably the most significant one since the Employment Contracts Act. So I’d be interested to hear the Minister’s response to that in relation to that.

I think there’s at least one other amendment that we have that the member seeking to put that amendment hasn’t spoken to yet. So I just remind you that additionally there are some additional amendments on this part that have been raised by other members, which I wouldn’t mind having comment on as well, in Part 1.

The first one is Ricardo Menéndez March’s provision in relation to Part 1. I think what he has suggested in his amendment has a lot of value and I wouldn’t mind if the Minister would elucidate the House with whether she intends to support Mr Menéndez March’s amendment.

Additionally, Debbie Ngarewa-Packer has put forward what I think is a very valid proposal and amendment on this part. I would also additionally be interested in the Minister’s view on whether she considers this particular amendment as worthy. It also talks about a number of issues that have been touched on in the debate to date, including the continuation of this particular fair pay agreement regime, which is to be repealed, in areas where Māori are particularly impacted.

I think in relation to some of the previous questions that we did ask, I know the Minister has responded to some of them, but I don’t really feel she’s given a true answer as to how she will address low pay for Māori. I know that we’re not allowed to repeat questions, but I understand when they haven’t been addressed that it’s important to bring those to the Minister’s attention. So I wondered if she had considered Ms Ngarewa-Packer’s amendment and whether she intends to vote for it, and, again, if not, then what actions related to this amendment under Part 1 she intends to take in order to further the position of Māori and address the low pay which has been mentioned in two documents so far in this committee stage in relation to the first part of this bill.

I thank the member Camilla Belich for asking why we are all here. What is the purpose for us being here tonight? It’s within the bill and it’s our reason for being here, which is that we are here to repeal the Fair Pay Agreements Act. She asks why that purpose is not explicitly written. The Parliamentary Counsel Office have advised that it’s not standard practice in drafting a repeal bill to include a purpose clause, because the purpose of a repeal bill is to repeal a bill.

Grant McCallum: Pretty obvious, really.

Hon BROOKE VAN VELDEN: So that’s pretty obvious.

There was also a question from Ricardo Menéndez March. Did we consider overseas evidence of what other countries do with collective bargaining? There are no fair pay agreement systems that we’ve established here based on any international system—it is very much a unique design—and so in this regard we consider that many of its features are unnecessary and negative for the employment market, especially the requirement that all employers and all employees would be drawn into a fair pay agreement if they chose not to be part of it, especially because it could be initiated by a tiny minority, 10 percent or 1,000 workers, for all. It is quite a blunt tool. But there is no international consensus on the best mix of bargaining systems. There is no one-size-fits-all—even different parts of the OECD have different models.

I move, That debate on this question now close.

The question is that the motion be agreed to.

Point of order, Mr Chair. Unfortunately, there is one amendment in this part, in the name of my colleague Arena Williams, that she hasn’t had the opportunity to speak to yet.

There’s been plenty of opportunities. We’ve been taking calls. What’s been happening is that people have been drifting into Part 2. I’ve been trying to bring people back to Part 1 and there’s been ample opportunities for people to take a call and to focus on that part.

The question is that Debbie Ngarewa-Packer’s amendments to Part 1 set out on Amendment Paper 2 be agreed to.

The question is that Camilla Belich’s tabled amendment to insert new clause 3 be agreed to.

The question is that Arena Williams’ tabled amendment to delete clause 4 be agreed to.

The question is that Part 1 be agreed to.

Point of order, Mr Chairperson. Just checking that the amendment in my name—was that in Part 1? I’m pretty sure it was; it just didn’t get a vote.

Was it a tabled amendment?

Yeah—I mean, if it’s not, I’ll live with it.

It’s in Part 1 of Schedule 1, so you’ve got time.