Regulatory Systems (Workplace Relations) Amendment Bill

It is a pleasure to speak to Part 1 of the Regulatory Systems (Workplace Relations) Amendment Bill, which deals with amendments to the Employment Relations Act. There are two broad aspects to the changes that are made by this part to the Employment Relations Act. The first is the change that was included in the original draft of the bill, the original version of the bill that we considered at the first reading, and the second are the changes that were made at the Transport and Industrial Relations Committee, which were further changes that were identified by officials and recommended to the select committee.

I want to deal, firstly, with the original change and that is the change contained in clause 4 of this bill, which amends section 142W of the Employment Relations Act—and this relates to the involvement in breaches. I will come to the substance, the real purpose, of this amendment in a moment, but, first, I want to commend the drafting of this clause, which refers to companies, partnerships, limited partnerships, or sole traders as entities rather than as persons. This is because we are dealing with people occupying a position within an entity and we get ourselves very tied up in knots when we start talking about people occupying a position within a person.

I could state it no better than the actual version of this section in the original Act, which says in subsection (2): “However, if the person in breach is a company, partnership, limited partnership, or sole trader, a person holding a position in relation to the person in breach may be treated as a person involved in a breach only if the person is an officer of the person in breach.”, which is bloody confusing—I think is the technical term for that. So it is fantastic to see that in this new section 142W, in clause 4, we now talk about entities. So we can talk about a company, partnership, or limited partnership, or sole trader being an entity, and a person being an actual human being—a person who holds a role within that entity. I really do commend that drafting and I hope we see that nomenclature used in further legislation in the future.

The actual change—the reason for the change offered in clause 4—is to do with an inadvertent restriction in the current drafting, as is often the case with these regulatory systems amendment bills, making changes to tidy up inadvertent consequences of the current drafting. This has to do with the scope in terms of whom the policy relating to breaches actually applies to. The original policy was intended to include a director of the employer or any of its employees, as well as any other third party unrelated to the employer, such as an accountancy or legal firm under contract with the employer. Subsections (2) and (3) then impose certain restrictions on the applicability of subsection (1). The policy intent was to ensure that such actions targeted the decision makers, the offices of the employer, and exclude the administrative staff, who have little or no influence over the decisions that are made. So the whole point of the original legislation was to ensure that the people who were genuinely responsible for decisions made in the company would be those who could be held responsible for breaches of the Act. The current drafting is potentially a little bit too broad, and potentially includes people who have no real decision-making power—who have no significant decision-making authority—in an organisation or entity and could potentially be drawn in and could be found to be in breach of the Act, although that was not the original policy intent.

So this is a good piece of tidying up that ensures that the legislation operates effectively and appropriately. The other change included in Part 1 is the change that is now recommended in new clauses 3A and 3B, which were not included in the original draft of the legislation but were brought to the attention of the select committee by officials. This refers to cross-referencing within the Employment Relations Act. It is actually a case where cross-referencing potentially has a real impact on people who are seeking redress under the Employment Relations Act.

So as a result of changes made by the Employment Standards Legislation Bill—which was the bill that dealt with, amongst other things, zero hour contracts—there are now three additional grounds on which an employee may pursue a personal grievance despite being under a 90-day trial period. Those three grounds are that the employee has been treated adversely for refusing to perform work in the absence of a valid availability provision, which is relating to the changes we made to eliminate zero-hour contracts; the employee’s employer “has failed to pay [the employee] the compensation to which they are entitled when a shift has been cancelled”; and the employee’s employer “has treated [the employee] adversely for a prohibited health and safety reason or has contravened section 92 of the Health and Safety at Work Act 2015.

Those additional grounds for taking a personal grievance despite being under a 90-day trial period are contained in section 103(1)(i) through to 103(1)(j) of the Employment Relations Act. However, current section 67B(3), which allows employees to take a personal grievance despite being on a trial period relates only to section 103(1)(b) through (h), so it does not include paragraphs (i) through to (j). There is potential there—it is small but there is potential—for employees to have their ability to take a personal grievance under those grounds diminished as a result of that incorrect cross-referencing between those two different sections of the Act.

Because there was the potential for those to be diminished we had a conversation at the select committee about whether this provision, clauses 3A and 3B in Part 1, should in fact be applied retrospectively. However, officials assured us that because employees have always had the ability to take a personal grievance on the grounds of unjustified dismissal—which I think is contained in section 103(1)(a) of the Act—should an employee wish to take a personal grievance under the three additional grounds, essentially everything is covered by the ability to take a personal grievance for unjustified dismissal.

Just to put it on record once again, in the unlikely event that the judiciary, the Employment Relations Authority, finds itself dealing with a case where an employee has taken a personal grievance for one of those three grounds whilst on a trial period, let it be absolutely clear that it is Parliament’s intention that from the moment those three grounds were added to section 103(1)—from that moment forward—an employee would be able to take a personal grievance if they were dismissed during a 90-day trial period for any one of those three reasons, despite the fact that we are not applying clauses 3A and 3B retrospectively.

With those two changes—the original changes to section 142W associated with the involvement in breaches, and these changes ensuring that workers get slightly better rights under 90-day trial periods than they do ordinarily—we are supportive of these changes and supportive of Part 1 of this bill.

Thank you for the opportunity to rise and speak on Part 1 of the Regulatory Systems (Workplace Relations) Amendment Bill. Of course, people who have been following the debate will know that this is the third of a series of bills where we are looking at quite specific technical changes to the regulatory systems. We have already looked at the two areas of housing and commercial law, and now we turn to workplace relations.

I want to just concur with my colleague Iain Lees-Galloway and add a little bit more detail to the new clause 3A that has been recommended in Part 1 of this bill, which, of course, is with reference to what was known as the “90-Day Fire-at-Will Bill”. It is called “trial period” in regard to the bill that we are debating, and those are the words that are used now. People listening to this debate will understand the importance of getting the technicalities of this right, because we are talking about a group of workers who have fewer rights than other workers because they are in the first 90 days of their employment. So it is incredibly important that we get the technicalities right, because this group of workers is the most vulnerable of all, and so getting that right is important.

I want to congratulate the officials on the excellent work that they have done on this, and, in particular, I want to draw attention to one of the issues that inadvertently did not get picked up in the original employment standards legislation bill when it was passed through, and it is incredibly important because it is about health and safety at work. It is one of the provisions in section 103: subsection (1)(j)(i) that had been inadvertently dropped. My colleague Iain Lees-Galloway is correct in that I do not think it was purposeful; it was simply, in doing cross-referencing from one section to another, paragraph (j) (i) was not necessarily covered, and this amendment will fix that. It will address it so that we know that where an employee has been treated adversely for refusing to perform certain work—and in almost every situation that is a reference to people’s right to withdraw their labour in instances where the work is so dangerous that it would actually cause them serious harm to undertake that work. That is why an employee must have the right to refuse to perform certain work.

The area that Iain Lees-Galloway did talk quite substantially about is the area where the employer has failed to pay them the compensation to which they are entitled when a shift has been cancelled. That was as a result of some great work that was done—actually, I have got to say—by the Opposition parties, to make sure that we got rid of zero-hour contracts. But the third part that it actually makes sure that employees can take a personal grievance over is where their employer has treated them adversely for a prohibited health and safety reason, or has contravened section 92 of the Health and Safety at Work Act 2015.

These are all incredibly important things to get right, to ensure that these most vulnerable workers do have the right to take a personal grievance. The law as it stands today, I think we could argue, does already include those three areas. However, it is unclear in the drafting of the legislation as it stands about whether they would have the right to take a personal grievance on those grounds specified alone, or whether they would have to prove that whatever had happened to them in those three areas was an unjustified disadvantage. That is an additional hurdle that these vulnerable workers would have to pass, if we did not pass these clauses through in the Committee stage here this evening.

So I am pleased to stand in support of doing exactly that, because, as I said, these are some of the most vulnerable workers. As a parent of teenagers, I can say how frightening it is for people in their first 90 days of work, when they are just learning and trying to get on that ladder and get their things on their CV, to be exposed to that 90-day trial period. It is a very difficult thing already. Let us make it safer and ensure that people do not have their health and safety rights diminished as well.

In reading through this bill, although I was not on the Transport and Industrial Relations Committee, I have to say I took some comfort from the question that sprang into my mind. Is this another improvement in legislation because of the Pike River tragedy? I read through this and it is referring in Part 1 to health and safety breaches—“Involvement in breaches”—and there could be many, if you read the royal commission report. It has identified a number of people, none of whom, of course, have been prosecuted—none of them, at all—because the Government has chosen not to. But I guess that if this piece of legislation passes, does that clarify the position for any Government—particularly a National Government, which seems to struggle around ethical issues in this area—and would it help it push ahead with the prosecution in a way that most New Zealanders would think was fair and reasonable?

It says here, in new section 142W(2), to be inserted in the Employment Relations Act by clause 4 here: “However, if the breach is a breach by an entity such as a company, partnership, … or sole trader, a person who occupies a position in the entity …”—the point being that it is anyone involved in the breach—“only if that person is an officer of the entity.”, and it goes on in new section 142W(3) to explain who an officer of an entity is. Actually, most people probably do not need to read through this, but post - Pike River, the Government struggled and the department of labour struggled to work out who was an officer of the company. In fact, it was not the mine manager, they said—“We shouldn’t prosecute that person.” Well, who else, then?

Well, by definition in this piece of legislation, an officer of an entity is “(a) a person occupying the position of a director of a company if the entity is a company:”. So a director of a company that is in breach of any health and safety provision in any workplace is liable or could be prosecuted—which is the way I would read it—and, actually, it is pretty good law. But I would have thought that that was in place now. I would have thought that the mine manager at the Pike River mine, and, indeed, the directors of the company, should be liable for knowingly allowing an unsafe situation at that mine to continue.

There is another question, which is perhaps answered here, as to why the Government did not proceed with prosecution. It says here, in new section 142W(3)(e), “any other person”—this is an officer of the entity—“occupying a position in relation to the entity if the person is in a position to exercise significant influence over the management or administration of the entity.” Actually, a mines inspector—that is, an employee of the Government, who should have been doing their job—was in a position to close down the mine. They were in a position to say: “This is unsafe.”, and could have done so. So I guess that would say that that person is in a position of significant influence over the management or administration of the entity.

So, in fact, this change here—insignificant as many might see it—does a couple of things. Firstly, it tidies up law that might be untidy, or it is a whole new revelation of completely inadequate law, which the Government was happy to sit on, or to not act on, because it did not proceed with any of the prosecutions. The Chairman, in his wisdom, kind of nods his head when he says: “Well, it is a tidy-up of the law.” I accept that, but how could we have in law such un-clarity, or such a lack of clarity—I will sort that one out, Mr Chairman.

The CHAIRPERSON (Hon Trevor Mallard): It’s clear.

The point being that I still think the Government had the ability to proceed with prosecutions in the Pike River mine disaster without this change in legislation, because any sensible New Zealander understands that anyone responsible in that company, be it the mine manager or be it the directors, should have been held responsible in some way. Not a thing—all paid off by insurance money.

I have to say, in conclusion, that this minor change in the law here makes huge progress for the families of the 29 people who still lie in the bowels of the Pike River mine. I do not think they realised what was going on tonight. In fact, I am not sure I realised myself, until I read the legislation. I think that those of us who were not on the Transport and Industrial Relations Committee did not realise that this significant change in legislation, probably prompted—although the Government would never admit it—by that terrible tragedy, is progressing through Parliament, and I think it will offer some comfort for those families to know that their loss was not for no reason at all—that, in fact, they have made some progress.

So I am not going to go on, other than to say I acknowledge that the Government is making the change. It seems as though it was necessary—although I do not buy into it being absolutely necessary—to make officers of the company, people in the company, and people responsible for actions at a workplace ultimately responsible for the health and safety of their workers. That is what this is about. And so I hope that it proceeds without amendment and as quickly as possible, so that we do not have another Pike River mine disaster.

I move, That the question be now put.

Thank you, Mr Chairman. I do appreciate the opportunity to make a—[Interruption]

The CHAIRPERSON (Hon Trevor Mallard): Sorry, I am just going to interrupt and say that it is most unhelpful—just as we do not like comments that deride Chairs’ rulings, comments that are supportive are also out of order. So I want to thank Megan Woods for her support, but I ask her to restrain herself in future. The Hon David Cunliffe—we will start again.

Peace, love, and goodwill is breaking out all over the Chamber tonight, but I will refrain from extending my own, just in case I get in trouble and am sat down.

The CHAIRPERSON (Hon Trevor Mallard): Yes.

It is a pleasure to take a very brief call on the Regulatory Systems (Workplace Relations) Amendment Bill, Part 2. I want to touch on two things: the grounds on which an employee may take a personal grievance, and the term of eligibility for paid parental leave.

Firstly, on personal grievances, this bill, helpfully, extends the grounds upon which an employee may take what we know colloquially as a PG. It covers grounds such as when an employer has failed to pay them the compensation to which they have been entitled—in this case, when a shift has been cancelled. That recognises the relatively powerless position that an employee has in a large organisation when it makes scheduling decisions, often for very good scheduling reasons—product flow, product mix—but those decisions should not come out of the pocket of the employee who has turned up for work and should not lose income and employment because the business has made what for it might be a prudent business decision. The business wears the cost. The business wears the risk. Of course, repeated infringements of that nature should be a cause for a personal grievance.

The question of compensation calls to mind the matter that my colleague Damien O’Connor has raised in relation to Pike River coalfield. It sticks in the craw of the Labour Opposition that a substantial insurance cheque was held by the owners of the mine and the parent company and not paid to the families of the deceased. New Zealand Oil and Gas, I understand, is a parent, and Pike River mine company when it was pre-liquidation. That is not appropriate. That compensation should have gone to the families, and that is part of the unresolved business. This is not exactly the same circumstance, and I know you are going to, rightly, bring me back to the bill, but I think it does attest to the same principle: employees who are owed compensation should be able to get it, just as you, Mr Chairman, should be compensated when you are unduly praised by my noisy colleagues sitting just to my right.

The CHAIRPERSON (Hon Trevor Mallard): Unduly praised? Well, that’s purely—[Interruption]

Well, outside the Standing Orders it must be undue, and I am reflecting your own ruling on that.

The second thing about this bill that leaps out is the paid parental leave provisions. Labour, led by Sue Moroney on this issue, has pushed since—

The CHAIRPERSON (Hon Trevor Mallard): No, no, no. It is the next part. We are doing Part 1 at the moment. So if the member wants to keep going on Part 1—or does he want to wait? We will be on Part 2 quite soon.

I will foreshadow my next call on Part 2, Mr Chair. But thank you, you are quite right to draw me up. Such was my enthusiasm for the paid parental leave provisions. I know Sue Moroney is just waiting to expound on the demerits of the financial veto that was issued but that story will have to wait. We will come to that soon.

I will just close by saying that the personal grievance process is a really important one for employees. Employees are often in a powerless relationship relative to particularly large employers but employers of all size. We support the extension of the grounds for a personal grievance. We know that due process is required. The select committee did look at whether those provisions should be retrospective. They were advised that that was unnecessary and that the rights of employees to take personal grievances would not be curtailed by the lack of a retrospective provision. We are prepared to live with that, and we support that part of the bill. Thank you.

I appreciate the opportunity. I want to take a different tack and address a part of this bill that I do not believe any other member of the Committee has pursued, and that is the fact that this is legislation written, in my view, to benefit and to enable workers to understand.

One of the points I want to bring to the attention of this Committee in Part 1 is clause 3B, “Section 110A (Adverse conduct for prohibited health and safety reason)”, which says: “In section 110A(5), replace ‘section 103(1)(h)(i)’ with ‘section 103(1)(j)(i)’.” When I look at the report by the Transport and Industrial Relations Committee, it essentially says that the original “Section 110A(5) of the Act sets out an employer’s possible defence to a personal grievance claim for prohibited health and safety reasons.”, and the committee then recommends changing that. What concerns me is the reference “This would ensure that employers have the correct defence available if an employee makes a personal grievance claim on the grounds that they have been treated adversely for a prohibited health and safety reason.”

Is this legislation about protecting workers, or is this legislation about enabling an employer to have the right argument to rebuff any grievance by a worker? Because that is what I am reading—that this is what it is saying, essentially.

I am not a member of that committee, so I do not know what the answer to that is, and I do not know whether the Minister is aware of whether that is the correct intention, as I understand it. My understanding is we are arming employers with arguments to rebuff any personal grievances by a worker who may have a personal grievance on the grounds that they do not want to carry out a function or work for health and safety reasons. Why that is important is we know in this House about the hundreds of workers, or maybe thousands or tens of thousands of workers, who die each year as a result of a lack of health and safety protection being provided in the workplace. It just seems to me that that particular clause is enabling employers to get away—it is enabling employers not to provide the protection that workers may need because the workers refuse to carry out a function because of health and safety reasons. So I, clearly, do want to understand, and that is why I am posing the question to the Minister as to whether she would be able to help me to better understand that.

I do not see any other avenues here to help me better understand that particular clause—clause 3B in Part 1. I will give time to the Minister to think about how to respond to that.

The other factor is—and I do not know whether this is deliberate or not, or whether it is just legal jargon, but when I read the entirety of this particular bill it is not very helpful in the way it is written. It is not very helpful. How on earth can one expect workers in the workplace to be able to use the legislation and understand what their rights are if it is written in this form? Surely, in the new millennium, we can find appropriate words to convey messages to the working-class people of New Zealand so that they can better understand their rights and responsibilities and ways of helping them protect themselves. If I refer you to clause 7, “Section 71L amended (End of parental leave payment)”, this is how I read it: “In section 71L(2), replace ‘Subsections (1)(b) and (c) do not apply, and parental leave payments continue to be”—[Bell rung] Mr Chair, let me just finish that.

The CHAIRPERSON (Hon Trevor Mallard): I will let the member finish, but I think I know what the member is going to say.

So let me start again: “In section 71L(2), replace ‘Subsections (1)(b) and (c) do not apply, and parental leave payments continue to be payable until the date specified in subsection (1)(a)’ with ‘Subsection (1)(c) does not apply, and parental leave payments …”. How on earth does a worker understand this jargon?

So, surely, now we are in the year 2017, we have lawyers and we have Ministers who can better understand the working people of New Zealand, who just want simple messages. Simple messages—be safe, stay away from this machine, and put the cover on that machine. Surely we can come up with words that can better convey how to enable the workforce—our workforce, which this country relies on—to make sure that they are safe, because if we do not do that, then we will continue to add to the numbers of injuries and the numbers of deaths that have occurred, year in, year out, in the 8 or 9 years that this Government has been in power.

I think, and I hear this from the trade unions themselves, that this is a Government that should be—my colleague Damien O’Connor raised the fact of the Pike River mine. This is a health and safety issue.

Coming back to that, I just think the Minister should be able to take the opportunity to now just respond and help me understand whether this is what that particular clause is about. Is it arming employers to rebuff workers from taking up a personal grievance on a matter of health and safety? Thank you.

Part 1 agreed to.

Part 2 Parental Leave and Employment Protection Act 1987