Employment Standards Legislation Bill

I now want to seek the leave of the Committee to consider the following three parts and the preliminary clauses as one question. I will allow members to go across the range of what is left and the preliminary clauses, but, as part of that leave, if we start voting by 9.55 p.m., we will continue and finish all of the votes. Is there any objection to that process? There appears to be none, so the question now is that clauses 1 and 2, clauses 114 to 136, and schedules 1 to 6 be agreed to. I will put the votes separately.

I note that we have only about 20 minutes to talk to this and so I had better get cracking because there is a lot to be said and, to be fair, I would like to hear some of the contributions, including from Minister Woodhouse, with regard to casual employment. I believe that Jonathan Young is also going to be speaking on it.

Our amendment, which introduces casual loading into this agreement, is, I think, vitally important and it is one that actually covers off one of the loopholes or unintended consequences that we are seeing happen time and time again. We have gone through the zero-hour contract provisions. We are specifically talking about those people who are on casual employment agreements.

As I said earlier on, we had a number of submitters submitting with regard to how they were adversely affected when it comes to having uncertainty with their work conditions. The one situation I raised was to do with a lawyer who was on a casual employment agreement, who was finding it difficult to make ends meet because, by the nature of the employment, it was very casual.

What we are proposing here, under our amendment, is to put a casual loading on to any casual employment agreement. What we have come up with is an amount of 19 percent. The breakdown of that 19 percent casual loading comes down to a 4.4 percent loading, to look at the Holidays Act with regard to statutory holidays. We have a 1.6 percent loading, which is in actual fact a loading because that is relating to bereavement leave and sick leave. Of course, if you are employed part-time or full time you would not necessarily be available for those provisions after 6 months of employment, so we are looking to pay that in advance.

Then we are looking at 8 percent holiday pay, which of course is not actually a loading; it is what you are entitled to, regardless. But paying this upfront actually works towards also looking after the interests of the employer, who does not need to keep the records and have these accumulated fees paid out to staff who are genuinely employed in a casual agreement. So that worker would have that 8 percent paid up front also.

To round that off, which gets us to 19 percent, is a 5 percent loading. So if you looked at it collectively, you are talking about a 6.6 percent loading, which is a 5 percent loading for the casual employment aspect of Supplementary Order Paper 150; 1.6 percent, which is to do with bereavement leave and sick leave; and then, of course, everything else you are entitled to.

What we are trying to say here, and what it will clearly remedy, is the fact that if people who are employed casually are going to be paid a premium, the employers are incentivised to get that casual employee on to a permanent contract, either part-time or full time. If they decide to do that, and if they can manage their rostering system to allow that to happen, there is no penalty for them. They will simply go straight on to a part-time or a full-time contract, which will give them an idea of having certainty around the hours that they are going to get. They will still be entitled to their KiwiSaver provisions.

We hope that this amendment gets support throughout the Committee because it does tighten up the final aspect in relation to the casual employment agreements creating a loophole to somehow potentially allow those zero-hour contracts or uncertainty of hours in an employment agreement. I would like to hear from other members in the Committee, and so I will wrap it up there. Certainly, with regard to support, we would love to see that happen. Thank you.

Mr Chair, I understand that everything in politics is a matter of timing! I would just like to address Mr Clayton Mitchell’s comments and thank him for his contribution, and also thank him for his contribution in the Transport and Industrial Relations Committee, and I believe, as I said before, that as a member of the select committee he warrants a response. We have had many people speak on this bill in the Committee, and particularly those members of the select committee have brought some thoughtfulness to it.

In terms of Supplementary Order Paper 150, which the member has been talking about and has presented right now, the proposal was intended to create a loading on any casual employment, giving benefit to the workers and an incentive to the employer to move the employee on to a part-time or full-time contract. As he listed it off, that loading equates to a 19 percent increase on the average hourly rate: 1.6 percent for sick and bereavement leave, 4.4 percent for statutory holidays, 8 percent for standard holiday pay, and a 5 percent casual loading.

It is not intended in this bill to dispense with casual agreements. Some people may not like them, but casual agreements have their place in the job market. As we heard from many submitters, casual agreements work for many people. It is also important to understand that casual employees already have an 8 percent loading for holiday pay. If the employee’s work is so intermittent or irregular that it is impractical to provide 4 weeks’ holiday, then holiday pay is paid at no less than 8 percent of gross earnings.

Sick leave and bereavement leave are also an entitlement. An employee has an entitlement if they have completed 6 months’ continuous employment with the employer, or if they have worked at least 10 hours a week on average and no less than 1 hour each week, and 40 hours each month, over a 6-month period.

If a casual worker is an employee who is required to work on a public holiday, that must be stated in the agreement. If they work on a public holiday, they receive time and a half. If they do not work on a public holiday but the day would otherwise be a working day, then they are paid for that day.

What I am saying is that many of these loadings that the member has presented in his Supplementary Order Paper already exist in employment law, so, essentially, what he is adding is the 5 percent casual loading. The reason why, with due respect, we are not supporting his Supplementary Order Paper is that his 5 percent casual loading might actually be an incentive for employers to have more casual workers, rather than to bring them on into permanent part-time or full-time work. We just wanted to make it known that that was our view, and we thank the member for his contribution.

I think the comments from the previous two contributors to the debate raised the issue of casual work and the casualisation of the workforce.

I agree with a comment the Minister in the chair made some time ago, which was that casual agreements do have a place in the overall framework. In fact, when employers came to submit on this legislation, many of the employers—perhaps after a little bit of questioning from the Labour Party—agreed that if they have got permanent agreements, casual agreements, and fixed-term agreements, then there was no need for zero-hour contracts. And it is great, because we are not going to have zero-hour contracts, but we are going to have permanent agreements, casual agreements, and fixed-term agreements. Only one of those is defined in our legislation.

This is actually a debate—this is a live debate about whether it would be a good thing or a bad thing to define casual and permanent agreements in the legislation, and to perhaps tag to those casual agreements some casual loading of the type that Clayton Mitchell is proposing with his Supplementary Order Paper 150. I do not want to necessarily express a firm view one way or the other on that except to say that it is a live debate, but I do see some merit in defining casual agreements. I think that by defining casual agreements, we would deal with a lot of the issues that Clayton Mitchell is trying to deal with by including the loading.

One thing that the loading does—or at least it is one thing that is the intention of including the loading—is for it to be a disincentive. It is not intended to be an incentive to put employees on a casual agreement, but, actually, it is intended to be a disincentive to employers to put people on casual agreements, or to at least make them stop and think about whether it is in their best interests to have people on casual agreements or whether they would be better off having them on a permanent part-time agreement, with guaranteed hours. Obviously, there are other aspects to the loading as well that Clayton Mitchell has raised in terms of equity, such as just what casual employees are entitled to, and we already have that 8 percent loading recognising annual leave.

I think there is a lot more to it, and that may very well be one of the next things this House needs to think about, such as permanent agreements being for permanent work—so where work is permanently available, that should not be provided through a casual agreement. I also think that there is a lack of understanding amongst many employers about what the appropriate use of casual agreements is. Although we have case law and although we have a degree of advice from the Ministry of Business, Innovation and Employment, we do not have them in law and that makes it very difficult for many employers to actually use them properly.

We are going to support the New Zealand First proposal. I suspect it is not going to get up tonight, but this is an issue we have to come back to. I am very keen for members from around the House to address some of these broader issues around casualisation and how we make sure that the range of employment agreements that we have available to us are being used properly.

I just want to make one last comment, since we are ranging over all the remaining parts, which includes the title. The title of this legislation is the Employment Standards Legislation Bill. That seems a very bland title for a bill that extends paid parental leave, eliminates zero-hour contracts—after we have finished here tonight—and improves employment standards. Of course, that is actually because this started off dealing only with employment standards. After the Labour Party and Sue Moroney and the 26 for Babies campaign ran that wonderful campaign, the Government realised it had to act on paid parental leave. And after the Unite union and the New Zealand Council of Trade Unions and the Labour Party and other Opposition parties ran our campaigns around zero-hour contracts, the Government realised it had to act on that too. It threw those two issues into this legislation, hence the Employment Standards Legislation Bill deals with those.

Do you know what? We are happy. We are going to be celebrating after tonight. We have made huge advances tonight. We have also identified the next tranche of work that this House needs to consider in employment relations, and I hope that the cordial approach that we have built around employment relations might continue and we might actually start to reverse some of the damage that has been done in recent years, and make some real progress.

I feel privileged and honoured to take a call on these final, concluding stages of this piece of legislation. The Employment Standards Legislation Bill is vital in a world and in a labour market when, actually, standards, minimum standards, and the idea of certainty are becoming rare commodities for far too many workers. The idea now that we have a provision that makes it very clear for workers that they cannot be compelled into an agreement that tells them they must be available or must be at work with no guarantee of any work at all—the fact that that has now gone, when that was endorsed in the earlier draft of this legislation, is a welcome development in this legislation. So I think the Committee tonight—although I would never suggest it congratulate itself—can reflect well with the rest of New Zealand that it has done its job of reflecting the sorts of standards that New Zealand would expect in our employment legislation.

The same can be also said for the parental leave and employment protection parts of the legislation—now having provision for parents whose child is born prematurely, so that they can have some certainty for themselves that those entitlements will be available for them.

This draws on work that members on this side of the House have done. These are basic things that working New Zealanders, once upon a time, expected—took for granted, perhaps. Now we live in an age when, for a lot of working people, the idea that they not only have standards but have the means to enforce them is becoming something that is out of their reach. So I think it is a great moment for this House that we take this legislation, which started its life in an inferior form, and through the good work of MPs—certainly on this side of the House, and indeed in the whole House—and have now arrived at a bill that is in a shape, and we can proudly go out to all New Zealanders and say: “This seriously starts to set good minimum standards.”

The provisions relating to the requirement for employers to keep a record of minimum entitlements for their employees—I, in the early part of my professional life, learnt how to conduct a wages and time book inspection, which is something that you do not hear much of these days. In fact, I am not sure even labour inspectors know how to do them. But the idea now that employers know that they have to keep a record of employees’ minimum entitlements and the extent to which their employees are getting them, I think, starts to turn the clock back, which we had seen ticking in the last 30 years, and the idea that it is OK to talk about minimum standards—this bill now reflects that.

Let us acknowledge and let us celebrate the work that has been done. The Minister has worked very hard, obviously, with members on this side, and with no less a personage than Iain Lees-Galloway, to produce a piece of legislation about which everybody in this Committee can leave tonight and say “The New Zealand Parliament has done its job and the interests of working New Zealanders are once again proudly at the forefront of doing something progressive and constructive and beneficial”, which stands in stark contrast to much other employment legislation that has passed through this House in recent years.

I conclude by saying to all members in this Committee who have been part of this very important debate—some would say struggle—that we now have a piece of legislation that is palatable, and we can look in the eyes of all New Zealand working people and say: “This is good.”

I want to talk to Part 3 of the bill, and, in particular, to Supplementary Order Paper 150 from Clayton Mitchell, which I thoroughly agree with and the Greens will be supporting. The reason we will be supporting it is that earlier, in a different part of the debate, the Minister for Workplace Relations and Safety talked about mutual obligations and mutuality between employer and employee. One of the concerns that we see arising around the casual workforce is the overuse of casuals, and the undercutting of permanent paid staff in the workplace because casuals are being used. That was the concern with zero-hour contracts as well, before we eliminated them tonight.

The effect of this Supplementary Order Paper would be that anybody who is employed as a casual would actually have a loading on top of around 19 percent. In my original member’s bill, where I talked about this, I actually talked about a loading of time and a half, which is a substantial increase. It is probably more than what is actually prevalent in the Australian workforce of casual workers, where they do frequently have a loading of 25 percent or more.

Clayton Mitchell’s Supplementary Order Paper actually says that if you are a casual, you do not get bereavement leave, you do not get holiday pay, you do not get sick pay, you do not get KiwiSaver—there is a whole range of rights that other workers get that are, basically, stripped away from these workers, which, essentially, puts them into a cheaper category of work. That is another incentive, if you like, for employers who may be unscrupulous to want to overuse those casual workers. If you put a loading on their hourly rate, and have that defined in legislation, then what you have is a disincentive to use casuals.

I think that if we are looking at wanting to create a society where everybody gets a fair go, where people can earn enough to live on, then we need to be looking at the hours of work and how those hours of work for ordinary working New Zealanders play out. Casual work, although it is, obviously, useful, particularly in those peaks—and I think previous speakers on this side of the Chamber, particularly Sue Moroney, have talked about the ability for most industries and most workplaces to be able to predict the amount of work that is happening, and so you can top that up with casual workers. That has been the standard practice for decades and decades. What we have now, though, is a situation where the overuse of casuals can actually undermine, and does undermine, permanent employment.

The casual workers themselves are worse off than any other worker. It is also harder for them to actually fight for their entitlements, because of the very nature of being casual. These are the vulnerable workers whom I think we should talk about. Thank you.

The question was put that the amendments set out on Supplementary Order Paper 154 in the name of the Hon Michael Woodhouse to Part 3 be agreed to.

Amendments agreed to.

I am ruling out Sue Moroney’s amendment to clause 2, because it was contingent on an amendment that was lost being passed.

Clause 2 agreed to.

The Committee divided the bill into the Parental Leave and Employment Protection Amendment Bill, the Employment Relations Amendment Bill (No 3), the Holidays Amendment Bill, the Minimum Wage Amendment Bill, and the Wages Protection Amendment Bill, pursuant to Supplementary Order Paper 153.

Progress to be reported presently.

House resumed.

The Chairperson reported the Employment Stands Legislation Bill with amendment and divided it into the Parental Leave and Employment Protection Amendment Bill, the Employment Relations Amendment Bill (No 3), the Holidays Amendment Bill, the Minimum Wage Amendment Bill, and the Wages Protection Amendment Bill, and reported no progress on the Building (Earthquake-prone Buildings) Amendment Bill and the Health (Protection) Amendment Bill.

Report adopted.

The House adjourned at 9.59 p.m.