Employment Relations (Allowing Higher Earners to Contract Out of Personal Grievance Provisions) Amendment Bill

I rise to support the bill. The bill proposes a new section 102A, which allows high earners the option to contract out of Part 9 of the current Employment Relations Act.

As a new immigrant from China, where we had socialism, everyone was equal, and everyone earned a similar salary, and coming to New Zealand, I often find it hard to believe that those golden handshake deals involve so much money—a huge amount of money. I thought it would be very challenging to all businesses. This bill will help to protect businesses. Basically, this bill will help to protect businesses from being taken advantage of by costly personal grievance claims that negate their employment agreement.

When you have a business you want to employ a CEO, and then you find it is hard to get rid of the CEO because they would demand a lot of money, through personal grievance claims. In the end the business will have to basically pay out to resolve the issue because they may find it even more costly to go through the courts. So this bill will, in that sense, help reduce the risk and protect businesses.

The current Employment Relations Act includes personal grievance provisions that override any contract that has been entered into by the parties. These provisions were supposed to protect vulnerable workers, and it is necessary to be there to protect those people. But when you come to CEOs, those high earners, you will find that they are more capable of negotiating good deals, and, therefore, it makes more sense to give them the option to contract out of Part 9 of this particular Act. So this is the idea of the bill.

My understanding is that when the bill was first drawn Labour was supportive of it. I understand that Andrew Little agreed with the bill in principle and thought Labour would support it to select committee. So that was the original plan. But then, of course, now obviously we can see that Labour and parties on the other side are opposing this bill. It is a bit surprising. The Employers and Manufacturers Association has made it clear that they will support the bill because the bill will save taxpayers money and help free up court time. They believe it is a useful, sensible proposal.

This bill will provide certainty to many businesses because they understand that they would be able to basically end the contract without being charged this huge amount of money, and also because we believe it is a good deal because it is optional. It is not compulsory. People can negotiate, and you should trust these people—they can earn so much money. We believe they are capable of negotiating for themselves.

So this is another reason why we believe that this bill is a good bill. It basically will help business people to employ people, with the certainty of the outcome, with the certainty of not being charged or sued for any personal grievance claims, and that it will be easier for business people to make decisions to hire CEOs or high earners. So it is important for us to understand that this bill, firstly, will protect businesses; secondly, it will provide certainty to our businesses; and, thirdly, it is optional. It is not compulsory. It can be negotiated. So this bill, we believe, will be able to increase our productivity and give more certainty to our businesses. Thank you.

Tēnā koe, Mr Assistant Speaker. Tēnā koutou Te Whare mō tēnei wā. I just want to start by saying that members’ bills are certainly a mixed bag. Some of them remind me of the Ōtara Millionaires Club—“How Bizarre”. Some of them are ridiculous. For example, the lost luggage bill was ridiculous, and the medals and decorations bill is pretty marginal, but this one is ridiculous and insidious, whereas some members’ bills are just ridiculous. So this one is actually insidious as well as ridiculous, which is a sad achievement on behalf—

💬 Clayton Mitchell: Ridiculously insidious.

Or ridiculously insidious, as the member says.

It is interesting why one would bother filling up the ballot biscuit tin with this kind of rubbish, because that is what this is. The bill is not just rather bizarre and ridiculous; it has the opportunity to undermine some important employment law and the important commitment to human rights in employment law, which is why I have called it insidious.

The bill is based on some really interesting assumptions. I think the last speaker was more honest than most in saying that it is really about saving money, from his point of view, and saving court time. If that is what is driving it—I think it is clear that it is also about helping the employer. So let us just be honest about this bill. It has got nothing to do with protecting human rights or creating options and choices for working people, and everything to do with making sure that employers can have more certainty and perhaps avoid the risk—protect themselves from being challenged about a personal grievance.

But, actually, that is not why we are here in this House. We are not here to protect people who are employing people. Even if those people are earning 150 grand, that does not mean they do not have their human rights as working people. It does not mean there is a level playing field either, so that when someone is employed they can be manipulated, under this bill, into getting a lawyer and signing a contract that takes away their right to take a personal grievance case. They may be either pressured or innocent enough to believe that sexual harassment could never happen to them. After all, they are earning, according to this bill, $150,000, so sexual harassment could never happen to them.

Racially charged discrimination—racism, as we should call it—that could never happen because I am earning all that money. But that is funny, because I am a parliamentarian earning more than that and I have still experienced discrimination and sexually discriminatory comments, even in this job. So do not tell me that people do not need their human rights just because they are earning that kind of money, and that having a contract that allows them to lose those rights is justifiable in any sense of the word, because it is not.

This is really a bad bill, really a waste of time, and it really reinforces a rather unpleasant meme because it is pretending to offer choice to people who are not on a level playing field. So it is pretty disappointing all round. Certainly the idea that power is equal, there is a level playing field, and that it is optional for that person—I am not going to use the word “bollocks” because I got told off by the Speaker and I am not allowed to use it. But really it is one of those examples of a bill that should not be in the ballot, should not have had the luck to have been selected from the ballot, does not need to be before the House, and it undermines really good relationships between employers and employees.

We have enough trouble without this kind of legislation. We have enough inequality in this country without this kind of legislation. We have enough duplicitous and manipulative statutes that no one understands, without pretending that this is in the interests of people to sign away their human rights. Why would somebody put it up? Why would anyone support it? No one has justified it. No one has marched on Parliament and called for it. There has been no petition. I bet the unions have not gone: “Yes, this is what we want.” No one wants it. It is just a waste of space, which poor Scott Simpson has inherited. We do not need it.

The Green Party is really, really proud to oppose the bill. The human rights of people in the workplace, no matter what they earn, must be protected, including their right to take a personal grievance, which, as we all know, is about a whole lot more than just their employment status. I am really proud of us for not supporting this bill. Thank you very much.

This has been a really interesting debate. It has been interesting because tonight of all nights—on a night when we heard a valedictory speech from a Prime Minister who has given us, as a nation, the pride and confidence to go bravely into the world full of our own faith and ability in ourselves—we have this delineation between those on this side of the House who want to give people choice, who have faith in people’s ability to make their own arrangements, and who have faith in their own ability to negotiate contracts, terms of engagement, and severance arrangements of their own free will, and those on the other side of the House; an Opposition that has resorted absolutely to type. Oh, no, no, no, we cannot have people making arrangements that they know best, that they want to enter into freely and of their own volition!

This bill actually represents a very clear delineation of the philosophical differences between a Government that is aspirational, that is confident, and that has people’s best interests at heart, and an Opposition that wants to be narky and snarky and say: “No, Government knows best. We do not believe that you are going to be big enough, bold enough, and brave enough to make your own employment arrangements.” This is the fundamental philosophical difference between an optimistic, positive, centre-right Government and an Opposition that wants to revert to big government, Government knows best, and “Let’s wait and let the legislators arrange all the conditions of our employment.”

This is a simple bill. It is not a radical bill. It is a simple little bill that gives people a right, should they choose, non-compulsorily, to come to an arrangement in terms of their own employment negotiation, that allows for a severance package to be negotiated favourably, in terms that are agreed between an employer and an employee. Then, when an employment situation ends, it provides certainty and confidence for both parties so that they can proceed to end their employment relation. The employee receives a severance package that has been pre-agreed and an employer has the confidence that they are not going to have the sword of Damocles of a personal grievance hanging above their head and an employee who might want to just say: “Well, there’s nothing that I’m going to lose by having a crack at clogging up the Employment Court system or a mediation process; I might as well have a go.” The employment agreement has actually been agreed prior to the termination, and this bill seeks to allow voluntarily, non-compulsorily, with the protections of legal advice, legal counsel, a situation where should the two parties agree, they can. Personally, I do not have a problem with that.

To hear the last speaker stand in this House and say that the motivation for legal reform in this Parliament should be protest is, I think, appalling. I know that that member comes from a Vietnam generation. She was born and raised with a protest banner, and she is proud of all that sort of stuff. But that is not the only method for legal reform in this Parliament, and, Lord, may it never be. There are people who want to have civilised, open, and free employment negotiations, and they want to make the most of those. Why should we as a Government and why should we as politicians get in the way of that?

In my introductory speech on this bill, I made it clear that I hope that some matters will be addressed at select committee. There is an easy and simple way to address the matters raised on the other side in terms of human rights and those employers—and there are some—who are just bad employers. Those provisions can easily and properly be included.

I want to conclude by reciting what Andrew Little said when this bill was drawn from the ballot. He said that it was the sort of thing a Labour-led Government would be keen to look at, especially for chief executives. He went on to say that subject to a discussion about the threshold, he agreed that the bill would, in principle, be a good one and he thought that Labour would support it to a select committee. I am very surprised that the Leader of the Opposition has flip-flopped again and they are not supporting it. This is a good bill. I commend it to the House.