Employment Relations (Triangular Employment) Amendment Bill

I move, That the Employment Relations (Triangular Employment) Amendment Bill be now read a first time. I nominate the Education and Workforce Committee to consider the bill.

A substantial and growing number of New Zealanders are employed in a triangular employment arrangement. While this is a legitimate form of employment, a small but significant number of employers are exploiting the absence of law in this area for the purposes of undercutting wages and depriving those workers of particular conditions and rights that the rest of us who are in direct employment take for granted. This is unacceptable in this country and this practice needs to end.

This bill will restore legitimacy to this essential part of the workforce: that of labour hire companies and temporary employment agencies. It is based on the principle of ensuring fairness in New Zealand’s employment practices and it responds to what has become an increasingly alarming call to protect workers from exploitation which currently exists in some places where you find triangular employment in this country. There is a clear need for action in this area. This has only become more clear in the 10 years since this bill was originally drafted by former Labour MP Darien Fenton. I acknowledge the immense work she put into this bill at that time and her lifetime commitment to workers’ rights.

Triangular employment is where a person has a direct employment relationship with one entity, the primary employer, but works for another, the secondary employer. Labour hire companies and temporary employment agencies have a legitimate place in the economy, where they can provide labour to businesses that need it for a designated period and often at short notice or as part of a seasonal cycle.

This bill is about restoring fairness to the workplace that services that part of the economy—rebalancing what have become increasingly unfair and exploitative practices in this area. Exploitative practice happens where triangular employment arrangements are used to avoid providing fair work terms to staff engaged in short-term contracts via another entity. I’m conscious many individuals, businesses, and groups are taking a strong interest in this bill. I want to acknowledge those that I’ve consulted with in preparing for introducing this bill today. They include workers, employers, and groups that represent them.

I was struck by the willingness of all those I’ve spoken with to see action in this space. What is clear is that there is an agreement across both employers and workers that exploitative behaviour as a result of the absence of protections in the law related to triangular employment arrangements must be addressed. Our task is to reach agreement on the appropriate mechanism to achieve this, without preventing those companies that operate legitimately.

The proposed mechanism within this bill is twofold. It allows an employee to have the benefit of a collective agreement whilst working for a secondary employer if they have those terms in place. It also provides a mechanism under the Employment Relations Act to join, at the discretion of the court, a secondary employer to a personal grievance. The objective of this bill is to ensure labour hire companies and temporary employment agency workers have access to the same rights and conditions as the permanent employees they are working alongside. This is an important conversation which can be had with the seriousness and in the detail and with the intelligence it deserves at the select committee stage, and I urge the members of this House to let that conversation happen.

The labour hire and temporary work industry is important. There are businesses, particularly in rural and regional areas around this country, which rely on the business model of temporary workers. These may be businesses which are prone to seasonal fluctuations or small to medium sized businesses who may receive a contract for service which increases their need for labour at short notice. It is not the intention of this bill to undermine that business model. However, there are stories of exploitation in triangular relationships which should be heard at select committee. There are also important stories of legitimate and good practice. A good practice protects workers. It ensures a fair day’s pay for a fair day’s work and it allows a person to prove themselves to a potential employer and gain valuable skills by taking up a role in a triangular work relationship.

The goal is simple: job security, dignity, and an opportunity to progress in a working life, predictable hours of work and income, and the capacity to plan financially for themselves and their families. When a person works in a role for a long period of time, that worker would receive appropriate entitlements or job prospects, and the right to contest unjustified employment practices or dismissal. These are basic conditions to which everyone should be entitled. It is the intention of this bill to ensure that businesses operating in this way—a legitimate and good way—can continue to do so.

I’ve been presented with many examples of such practice, and voting this bill to select committee will allow these businesses to share their examples of good practice so that they can contribute towards the development of a mechanism that is fair—fair to workers and good employers. What this bill looks to address is exploitative practices which come about when the responsibility for a worker is split between a primary employer and a secondary employer. I’ve heard many stories of such exploitation. It is clear that the topic requires attention. Many in these situations are vulnerable and earn a low wage for their hours.

An example of the way these types of contractual arrangements can be exploitative was seen in the Employment Court case Prasad v LSG Sky Chefs New Zealand Ltd. LSG Sky Chefs chose not to hire staff directly, doing so through labour hire companies, often way beyond the short-term assignments that these companies intended. This practice undercut the wages and protections negotiated in their collective agreement. In this instance, the absence of law around triangular employment arrangements allowed them to pay significantly less than the market rate and avoid conditions that would have otherwise been available.

Another example presented to me was of a woman who was on an extended assignment with a secondary employer. After informing this employer of her pregnancy, she was almost immediately let go. This would normally be a breach of New Zealand employment law. However, in this instance, the woman had no rights. Selective employment practices on the grounds of discrimination have also been outlined to me. I have heard examples of secondary employers selecting their staff on the grounds of discrimination—a very clear message: no Pacific Islanders, no women of childbearing age, and no homosexuals. This is the sort of behaviour that would otherwise not be tolerated in this country. We mustn’t continue to have the absence of protections in this area, but we now have an opportunity to address this.

The effect of this bill is that it would be targeted and reasonable. Temporary and labour hire workers would have the benefit of the same terms and conditions as those of staff in the existing workplace while working for the same company. That is reasonable. This will only apply where the secondary employer has a collective agreement in place, yet it provides for consistency of treatment while continuing to enable businesses to fill their need for short-term workers.

I urge members of this House to support this bill to the next stage to allow these issues to be dealt with at select committee. I do not anticipate that the conversation will be an easy one. I do expect that employers, unions, employment law experts, and individual employees will bring valuable perspectives to the table which will highlight the important place of labour hire and temporary work agencies and employees in the economy and make clear that some change is required to restore the principles of fairness and integrity to that industry.

Exploitative practices have no place in a country that prides itself on fairness in employment. Let’s take this opportunity to do something about it. I commend this bill to the House.

Thank you, Mr Assistant Speaker. Can I begin, firstly, by acknowledging the initial author of this bill, Darien Fenton, as Mr McAnulty has done. Ms Fenton and I were on the Transport and Industrial Relations Committee of the 49th Parliament—one of the most unusual committees where, in matters of road safety and the transport legislation more generally, there was a strong degree of unanimity and collegiality, whereas on matters of industrial relations, employment law, ACC, and immigration probably not so much. But despite that and our different philosophical predilections, Ms Fenton and I got on extremely well, and I know that she was then and is now a very passionate supporter of workers’ rights and I support that sentiment. I want to also acknowledge a relatively new MP for the good fortune that he’s had to get a bill drawn out of the members’ ballot. Nearly 10 years after arriving at this place, I’m still waiting. I have had a member’s bill passed but it wasn’t drawn out in my name, and I’ve authored a few but they were drawn out in other people’s names, so that’s the luck of the draw.

Look, I want to start, firstly, by providing strong support for the sentiment that underpins this piece of legislation in so far as I certainly agree with the rights of fairness, flexibility, and safety in our workplaces. It was those three legs, if you like, of any policy or legislation that was being considered by me, as the previous Minister for Workplace Relations and Safety, that was basically the lens that we looked through, and I think we can stand extremely proud of the increases in employee protections that were provided in the last three years or so particularly—

💬 Marja Lubeck: Oh! Sorry—did I say that out loud?

If she needs some medical assistance, I’m sure we can help, but, actually, that’s the sort of reaction you get from the select committee, and I know Ms Lubeck, as a member of the committee that may consider this bill, will be up like a meerkat on the things that she doesn’t agree with.

But look, that employment standards legislation bill—the sorts of protections that we put, the extra punishments for breaches of minimum employment standards, the stand-down periods for employers that breach those standards who also rely on the international labour market, and even the sorts of flexibility that underpin the 90-day trial, and the sorts of rest and meal breaks provisions that, I continue to maintain, are actually good for workers—was certainly something that I think was very helpful.

So it’s necessary, I think, to deconstruct what this bill does and to try and understand whether or not there is an issue that is requiring a remedy and whether this is the correct remedy. Now, I was very interested to note that Mr McAnulty referenced Prasad v LSG, a recent decision of the Employment Court, which deals with the issue of triangular relationships and, indeed, the Employment Court referred to them as such. The difference between the remedy that this bill seeks to achieve and that case is that the facts of that Employment Court were that those plaintiffs were considered to be independent contractors by—using the nomenclature in the bill—the primary employer and the secondary employer, and the question was whether or not they should have been treated as such.

Now we will probably be dealing with a situation such as the LSG case, where the Minister brings probably phase two of the employment law reforms that he seeks to implement as part of the Labour Party manifesto, and I think we’re going to have some interesting conversations in respect of, for example, the collectivising of independent contractors. But the LSG case was significant. Indeed, I think when we deconstruct this bill, it reinforces the point that I don’t believe that this legislation is necessary, and the reason is this: very clearly, the court determined that those plaintiffs were indeed employees, and as a consequence, in a triangular relationship, they were afforded the protections that the Employment Relations Act and the Holidays Act and the paid parental leave Act and all the other employment law legislation provides for an employee.

Now, it is true—and the sponsor of the bill mentioned this—that agency relationships, triangular relationships, have been a feature of the New Zealand employment landscape for many, many years. I’m not quite sure Ms Fenton would agree with his argument of the legitimacy of them. There is no doubt that she and many others in the union movement and the Labour Party believe that these types of arrangements add to the increasing casualisation of labour in the New Zealand workforce. Now, I think it’s quite an emotive term. What we do have is a much larger number of people who want to work flexible hours, whether they’re starting out, whether they’re returning to the workforce, or whether they are part-time workers who are studying at the same time. There are many, many reasons why these sorts of arrangements are perfectly necessary and appropriate, and the overwhelming number of employers treat their workers fairly.

Indeed, when we see the sorts of temp agency, overload sort of arrangements, it’s not unusual for the employee to be paid more than the permanent employee, not less. I spent nearly 15 years in the health sector. It was necessary from time to time to use nursing overload services. Two things were apparent, in my experience. Firstly, the nurses were almost invariably members of the New Zealand Nurses Organisation, the union that supports nurses—

💬 Hon Iain Lees-Galloway: Good employer—a fine employer.

—which Mr Lees-Galloway knows very well—and, secondly, they were paid more than my staff, not less. Now, for temporary assignments, that’s often the case. There are a few employers who are using this—and LSG’s a very good example, in my view, regardless of the fact that they were considered to be contractors, wrongly—who work on a very long-term basis, and that is not, frankly, the purpose of agency or overload services, but, nevertheless, those employees are entitled to the protections of the Employment Relations Act. Even if they were on casual agreements, they would, if they have a regular pattern of shift work—as LSG did—be entitled to paid parental leave, to holidays, to bereavement leave, and to sick leave, according to the Holidays Act. Clearly, the freedom of association provisions enabled them to join a trade union and bargain collectively with their primary employer, not their secondary employer, and I think this is the confusing feature of this legislation.

It definitely is the case that there is—so, getting back to the fundamental question: is there a problem to be addressed that isn’t covered by existing law? My answer to that is no, there isn’t. All of the protections that are available to the employee are available now. Secondly, is this the solution? Well, again, my answer is no, and for that reason, the National Party will not be supporting this bill at first reading.

Now, there is a case, as the sponsor of the bill has said, of actually supporting it to select committee and then having that conversation there. We’ve thought very carefully about that and, try as I might, I cannot see how the bill could be improved to the point where it would answer those two questions: a problem that isn’t being addressed by existing legislation, and is this the solution?

I want to just finish by addressing, in the second part of the bill, the joinder provisions to a personal grievance. Now, it is not my understanding of employment law—although if the bill goes to select committee, we’ll have this conversation—that a personal grievance is not possible against the primary employer for the actions that took place in the secondary workplace. But I think the more concerning feature of this is the asymmetrical nature of it, where a personal grievance is one thing, but what about a performance issue? Is it possible that a secondary employer could have a significant employment issue, but there is currently no provision in this bill for them to act on that in employment law because they are not the employer? Those responsibilities and the employee’s rights are with the relationship between the employee and the primary employer. And, looking at current law, I don’t believe there is a weakness or a loophole that would justify this bill being necessary.

So we will oppose it. We’re not going to the wall over it, and it may well yet get to select committee. So, as a member of that select committee, I’ll be looking forward to the submissions and the exchange. I have no doubt it will be robust, as it was in the 49th Parliament, but I look forward to that conversation, if we have it.

Yes, I’ll look forward to that, too, from the former Minister Michael Woodhouse. First off, though, I’d like to congratulate my colleague Kieran McAnulty on this and also my old mate, former union boss Darien Fenton.

I worked in the union movement for over 15 years and saw the inequality that the previous member, Kieran McAnulty, talked about. The problem with what we have in the workplace is that it’s an unfair workplace, which was pointed out very aptly, I think. It’s an unfair workplace when individuals who have no background or experience in negotiations are asked to negotiate. I know that the previous Minister thinks that that’s somehow fair, but that is unfair. The market flexibility that the National Party so rejoices in and so celebrates does not work for a lot of ordinary, average Kiwis. It just doesn’t work. It is something that we cannot celebrate. So this bill goes some way to putting some protection and stability around workers.

Employment now manifests in many forms. Some of our workers work multiple jobs to make up their 40 hours, while others are employed on a temporary basis through hire companies, who facilitate them through to a host employer who controls how the work is done. So it’s really important that we revisit our employment relations legislation regularly to ensure that we get the balance right, and that’s the problem here. The balance—well, there is an imbalance. That’s just a fact.

The Opposition will say, no doubt, as we go down the track, that this employment relations amendment bill is some sort of union shopping list that will hurt New Zealand’s economy. But this isn’t about unions; this is about people. This is about ensuring that we have a robust and resilient economy that everyone can participate in and, more importantly, an economy that also works for all the people.

In most cases, a worker will only be able to take action against a labour hire agency if they’re treated badly. This bill will allow the authority or court to determine when the responsibility should be split fairly between the two. As a Government, we’re committed to fairness to all Kiwis, to all New Zealanders, and I’m not sure who would argue that these workers shouldn’t have the same protection as everyone else. Even the former Minister, I’m sure, would agree with that. The reality is some employers are using agency workers in order to avoid paying the negotiated rate under the collective agreement. This bill will allow workers who are union members doing work covered by the collective agreement and not covered by another collective agreement to get the same terms and conditions as direct employees.

It’s an honour to support this bill as Minister of Employment, and, as Minister of Employment, I’m focused on identifying and developing solutions for barriers to employment, working with groups of people who are not positively represented in employment statistics, and supporting communities to identify and respond to local issues with local solutions. Part of my focus will always be about ensuring that we have legislation in place, which I’m proud to say that this Government is going through, that supports a fair and equitable labour market for all participants.

It’s important to remember that being a contractor instead of an employee means the same rights enjoyed by other workers are denied, and they can’t bargain collectively under the Employment Relations Act.

💬 Hon Michael Woodhouse: That’s not the issue in this bill.

Oh, no; that is the issue. And the issue is also the coldness and heartlessness shown by yourself and your mates on the other side. Shame on the lot of ya, because you have no understanding about what workers have gone through because you’ve never been a worker.

ASSISTANT SPEAKER (Adrian Rurawhe): Order!

Oh, sorry, Mr Assistant Speaker. So, in summary, we must strengthen our economy by making it work for everyone, and I commend my colleague Kieran McAnulty for this. We must help our regions grow by creating and sustaining jobs; we must help our families to become homeowners once more; and we must make a real dent, as our Prime Minister keeps saying, in child poverty. And I commend her for her commitment to that and our party—our coalition—for that commitment that we are making on behalf of all New Zealanders. Kia ora, Mr Assistant Speaker.

Thank you, Mr Speaker. I too would like to commend the member Kieran McAnulty for bringing this bill to the House, for its intention is good. It is there to protect exploitation, and he repeatedly talked about the exploitation of workers being his primary purpose for bringing this bill to the House.

But this bill does not contribute to the protection of any exploitation of workers in New Zealand. In fact, there are very good rules and regulations and laws already in place that protect the worker. Even in the last Parliament, Mr Lees-Galloway was part of that committee which strengthened and protected further the rights of workers, particularly immigrant workers. There was legislation that punished and—what’s the term?—exported the offending employer if they happened to come from an offshore country if they were caught, seen to be abusing or exploiting other colleagues or immigrant labourers. They would themselves be—what’s the term?

💬 Hon Michael Woodhouse: Liable for deportation.

Deported—deported. Thank you, Mr Woodhouse. They would themselves be deported forthwith. So we strengthened the law around immigrant exploitation. We increased the number of labour inspectors in the market, and I would like to also commend Mr Lees-Galloway’s initiative in increasing that even further.

💬 Hon Michael Woodhouse: We’ll see.

Apparently—if Mr Robertson allows the funding to take place.

So that is the programme that has been put in place by the National Government. That is the programme, which I’m sure will be continued and supported by the Labour Government, to make sure and to minimise exploitation of workers.

Triangulation is not the reason for the exploitation. The triangulation agreement doesn’t necessarily bring about exploitation at all. Exploitation happens in bilateral—in two party—arrangements. The exploitation is going to happen whether or not you’ve got triangulation, so let’s address the issue of exploitation directly, and not try and fudge it by blaming some triangulation arrangement on the exploitation of immigrant workers.

That brings me to the point that this legislation is redundant. It is not necessary. In fact, you’ll remember, in a triangulation arrangement, you’re talking about a different group of people who want to work as contractors, who want to work part time, who want to be temporary workers. And they can be paid more. In fact, I was one of those in London a long time ago, and that’s quite right: nurses, accountants, and labourers—temporary workers—tend to be paid more than full timers.

💬 Marja Lubeck: Ha!

Absolutely right. “Ha!”—there’s a scoff across the room. But has that person across at the back behind Mr McAnulty ever employed anybody? Has she ever employed anybody? Contractor—has she ever employed a contractor? Has she ever employed full-time workers? Has she ever run a business? And if she has, she will know that to get someone on short notice, short term, is expensive. You have to pay over the odds because of the nature of the work. And that is a good thing because that enables more people to enter the workforce on the basis that suits them. It allows flexibility in the labour force.

This proposal from Mr McAnulty will actually reduce flexibility, reduce the ability for people to enter work on a temporary basis, because they are going to have to comply with a bunch of regulations that are set, quite rightly, by those who are in different conditions, by those who are wanting, and are in, let’s say, full-time employment. But temporary workers are a different group; they want different things, they have different needs. Whether they are temporary or full time, there is room for exploitation. There is room for prejudice against pregnant women, homosexuals, different races. Triangulation doesn’t cause that; triangulation is not the problem. So I suggest that dealing with the nature of exploitation, as we have been doing for many years, is the right method, and that this bill should be opposed.

I too commend Mr McAnulty on bringing this bill to the House, and I see he’s one of the rising stars of the Labour Party, as I saw him on the breakfast telly this morning in his regular gig. It’s good to see him, though, rolling his sleeves up and actually doing a little bit of work, and this is classic Labour Party legislation.

Of course, as the party that came out of the Blackball mine in 1916, this is exactly the sort of legislation you would expect a Labour Government to be bringing to the Parliament. It’s important when we look at employment that we aren’t doing so through a backward lens, because we have a lot of disruption coming up in our workforce. Again, I think it is the Labour Party that has led the way on this in the last Parliament. The Hon Grant Robertson had the Future of Work Commission, which looked to address and looked forward at some of these issues that are coming at us. This bill here looks to amend the Employment Relations Act of 2000, and 2000 is an age ago in terms of where we’re going at the moment. Many issues are with us now that were never even envisaged back then.

New Zealand First gives qualified support, I might say, to this bill. We will support it through to select committee. One of the things that New Zealand First takes great pride in is being a voice for small and medium sized enterprises, particularly in our regions. We have stood up within this Parliament for the rights of small employers to retain the 90-day trial period. We have won concessions within the food safety bill for those small cafes and food businesses. We are looking out for their interests, and this will be the lens that New Zealand First looks at this bill with in the select committee process.

My colleague Clayton Mitchell, who is our official spokesperson on this bill—our workplace relations spokesperson—is doing quite a lot of work at the moment on this with employer groups, looking at some of the international best practice on some of this. We totally accept that this is an area that we have to look at. We’re looking at some of the examples in Australia. Their casual loading provisions—there’s some stuff around there on percentage of time worked, some detail around that that we would like to bring to the table in the select committee process. So we look forward to doing that, and Clayton will be a constructive contributor.

I think, as legislators, we need to be cognisant of these changes that are happening in our workforce. We are no longer—look, there’s so many occupations that just will not exist in 10 or 20 years’ time. I think, as politicians, we will be pretty safe because we’ll make the rules that we are here for ever, but for the rest of society, they don’t have those safeguards, so we have to keep looking forward. There are technology disrupters out there, they abound, and we just have to look, as best we can, into the future at what those challenges are going to be.

So I think this bill gives us the opportunity within that select committee process to do just that, because I don’t know what the numbers are, but there will be vast numbers of people that are employed under these casual triangulated contracts, and probably, as we go forward, there will be more and more. So we need to make sure that the safeguards are in place.

This is a bill that affects people, as Mr Jackson said. We need to inject fairness into the balance of workplace relations, and New Zealand First totally accepts that. But we also have to accept that a job is often only there because employers have taken a risk to create that job in the first place. We don’t want to be stymying those employers—people that are risking their own capital—so we’ve got to make sure we get the balance for the employers as well as for the employees. We have to ensure that there is flexibility, so that the unintended consequences of these good intentions are not that people actually don’t get employment or miss out on opportunities in the first place.

So these are the questions that New Zealand First will be looking to address, and address constructively, at the select committee. Thank you, Mr Assistant Speaker.

Kia ora, Mr Assistant Speaker. Can I commence, as others have done, by congratulating the member Kieran McAnulty for having had his bill drawn after just four or five months in this House. As Mr Woodhouse noted, he and I are both feeling a little bit frustrated that after nearly 10 years, neither of us have had that privilege, and Mrs Wagner after nearly 12 years. So some people get the luck. But anyway, that’s the way it is.

I have no doubt that the member is well intentioned, but he’s taken over what is, essentially, a union-drafted bill that was originally sponsored by the union organiser and our former colleague Darien Fenton. It is, at best, a naive piece of legislation, but, more obviously, it’s a fairly cynical measure that is designed to reward the unions, who are clearly looking for a little bit of payback for all the work they did in helping that Government to get into office last year.

I’m assuming that the Greens will probably support the bill, but we will find out in a moment. So that’s why I was really hoping to hear, a moment ago, that New Zealand First would not. In fact, when I look at what I understand New Zealand First to believe in, I can’t for the life of me figure out how they could be supportive of this piece of legislation. So it was very, very disappointing to hear that Mr Patterson is indicating that they are, and I really didn’t feel that his heart was in that speech at all. It was a fairly confused and rambling speech, and I doubt whether many people listening will have a clear idea of that party’s position.

The bill seeks to amend the principal Act, which is the Employment Relations Act of 2000. It will do so in several retrograde and very dubious ways. It may well be welcomed by the unions, but it certainly won’t be good for labour relations, business confidence, or the investment that is needed for economic growth and job creation that all MPs ought to want to foster when we come to this House. It certainly won’t be a piece of legislation that any of us can be proud of.

The three main provisions of the bill are outlined in clauses 4, 5, and 6 and they are deeply misguided. The member who sponsors the bill told us earlier that the intention of the bill is not to undermine the sound business model that companies rely upon—or words to that effect—in order to be successful, profitable, and therefore secure, which, of course, all employers need them to be. All employees, therefore, are hugely dependent upon those conditions. Yet, undermine that model and those vital conditions in relationships, and it most certainly will, and that’s why we on this side of the House are so strongly opposed to this bill.

I echo and strongly endorse the concerns that were outlined by Mr Woodhouse in his very incisive contribution earlier in this debate and also the comments of the member for Wairarapa a few moments ago. Triangular relationships describe situations whereby a worker is hired by one employer but works for another.

Such arrangements are common in my city of Hamilton. The electorate of Hamilton West, that I’m proud to represent in this House, has many such examples. Under current labour legislation, Hamilton is a growing, thriving city. We’ve enjoyed steady growth, having survived the domestic recession that we inherited when National came into office back in 2008 and the global financial crisis that followed.

We’ve enjoyed several years of economic growth right around the country. I think in the last three years it’s averaged 3.3 percent. That is a very good sign. Strong business confidence has, of course, gone hand in hand with that, and it’s led to many—

💬 Todd Muller: Almost as good as Tauranga.

Almost as good as Tauranga, the member for Bay of Plenty tells me. It’s led to many new businesses getting started in the Waikato, and that’s, of course, brought many new jobs, which people in my electorate need. As a result, this country now enjoys the highest rate of employment that we have had in our history. We should celebrate that.

Many of those businesses are supported and enhanced by the availability of temporary labour, which is sourced through labour hire agencies. I’m thinking in my electorate of a wide range of industries that are all prevalent and doing well, such as construction, nurses in the health sector, retail outlets, the hospitality sector, and so on. They’re all doing well.

But this bill will undermine that confidence in those employment relationships. It may, as I said at the outset, be good for the unions by making their lives in recruiting easier, but it won’t encourage employers to take a chance on migrants or first-time job seekers or the most vulnerable in our communities. We should not support this bill.

Thank you, Mr Assistant Speaker. Firstly, I too would like to congratulate the member Kieran McAnulty for getting a bill drawn.

💬 Kieran McAnulty: This is getting embarrassing.

Yep. Ha, ha! I’ll hold back my, you know, kind of envy but I think it’s really great when good luck coincides with a good bill. It’s not always the way, but in this case it is, and the Green Party is very pleased to be able to support this piece of legislation.

While we’ve heard from the previous speaker, Tim Macindoe, that anyone supporting this bill is clearly just in debt to the unions and possibly union lackeys, I would like to start my speech by acknowledging Kamlesh Prasad and Liutofaga Tulai, who were two working people who, with the help of their union E tū, took a case to the Employment Court, after working for years at minimum wage or just above minimum wage, with no holidays, no sick leave, or KiwiSaver and even having to pay their own ACC coverage, for years. Liutofaga had worked for 34 days in a row without a break—

💬 Marja Lubeck: 60 hours a week.

What I had is 62.8 hours a week, on minimum wage, as a parent trying to sustain her family.

This case was taken to the Employment Court on their behalf, from their union E tū, challenging that arrangement, which was justified because of their supposed employment by the labour hire company Solutions Personnel, when their day-to-day management was with LSG Sky Chefs, who provide food for many of the planes moving around this country. It was a clear case of exploitation that was being justified by this triangulated arrangement. The courts decided that those two workers were under the day-to-day control of LSG Sky Chefs and, therefore, should be considered employees of them, rather than the labour hire company.

That was recognising that, in our legislation as it stands at the moment, we’ve gone to some efforts to try and recognise that some employers may want to pretend that people are contractors, when in actual fact they are employees. Despite what we’ve heard from a previous speaker, often that means less compliance costs for the employer. They may not have to pay for sick pay or holidays or ACC, and all of that burden is put on the person in the contracting arrangement.

That’s fine, if you’ve set yourself up as a consultant with lots of social capital and you’re going about your business in that way. Fine—that’s fine. This bill will not affect those people. But it’s not so great when people are vulnerable workers who are being set up to be exploited just to keep the costs down for the business. When we heard from the previous speaker that this bill will be bad for business and that it undermines the model for business in this country, what we heard was that exploitation, from their view, is built in to the model of successful business in this country.

This bill just protects people against exploitation. It doesn’t stop contracting, it doesn’t stop labour hire companies; it stops exploitation. That is all it does. So when you’re saying that undermines the business model, you are saying exploitation is inherent in your idea of a successful business model, and that is not something we support on this side of the House. We want our business model in this country to support good employment practice and basic, decent rights, and it clearly does not when people are able to be employed by a labour hire company and undermine the working conditions of the staff who are in employment arrangements—so that companies are incentivised to pay less by going to an employment labour hire company.

Thank you very much, Mr Assistant Speaker, and it’s great to be able to rise on another member’s bill tonight. Let me just congratulate Kieran McAnulty for having yours drawn. I think it was on the same day as mine, so congratulations and well done.

💬 Hon Member: Very special.

It was very special—quite the bonding moment, I felt. I was reflecting on the speech that I’ve just been listening to, where the Green Party was saying it’s more likely to stop exploitation. Well, I think it’s more likely to stop people being employed, I think is how you could sum up this piece of legislation. We already have, in our legislation, legislation which addresses exploitation, and National has done a huge amount over our time in Government: increasing the support for the labour inspectorate, passing legislation to eliminate zero wages, modernising New Zealand’s paid parental leave scheme—all these changes which have made a huge impact and have supported workers in their workplace and in the relationships that they have with their employers. We promote a fairer and more productive workplace by providing protections and benefits to both employers and employees.

I think this bill could probably be more summed up as just ticking another one off the union’s shopping list—for their support of the Labour Party over nine long years. This is just a few of the things on their shopping list: forcing businesses to accept multi-employer collective agreements, even when those businesses were not part of the negotiations; union leaders being allowed to walk into businesses whenever they want; reintroducing a 30-day rule where new employees must be treated as if they are union members for the first 30 days, and this is despite the fact that unions represent just 10 percent of private sector workers.

The question I’ve got is: why was this bill not put in with Labour’s Employment Relations Amendment Bill, which was passed on 1 February as part of their 100 day plan? Why was it not included? If it’s such an important piece of legislation, why was it not put in place as a Supplementary Order Paper or something like that, to make a change under that?

This bill will make it harder for people to get on the employment ladder—for migrant workers, young people, and those who are looking for a first job. National does not support this bill. Thank you very much.

Tēnā koe, Mr Assistant Speaker. I don’t know where to start—all of that rhetoric, and one by one I would like to tackle them, but I have five minutes, so I can’t even say thank you to Mr McAnulty for this bill because I’d run out of time before I get there.

First of all, I’d like to agree with the member of the Green Party Jan Logie. She is absolutely correct in everything that she says when she talks about the fact that this bill doesn’t actually give anything more to workers than terms that are already agreed to by the employer. This only applies in places where there is already a collective agreement. That means that the company has already agreed that that is the cost of doing business, so all the Opposition is allowing by not agreeing with this bill is that the employer gets out of an agreed employment agreement by employing people at lesser terms and conditions.

So this bill is about fair treatment for working people. It is well overdue. We have seen nine long years of a Government that, quite frankly, does not give a—does not care—

💬 Hon Members: Ha, ha!

—I forgot where I was for a moment; I thought I was in a different kind of meeting—about working people or their families. They don’t want working people to get a fair share. We have seen, over the last years, working conditions going backwards. People are struggling to make ends meet. As a result, we see child poverty, homelessness, and kids growing up in cars. We’re going to stop that under the leadership of our Prime Minister, the Rt Hon Jacinda Ardern. We are starting to attack these neglected problems of the past.

Now, coming back to this bill, the labour hire companies—and I agree with the member Michael Woodhouse—actually can fulfil a legitimate role in short-term labour requirements—

💬 Hon Member: That was my point.

Yeah, exactly. If companies need staff and it’s a short amount of time, and there’s an unreasonable burden on the administrative side, they can employ people for a short term. But what has happened recently—we’ve seen a shift from that legitimate practice to situations that have led to exploitation of workers in New Zealand. So instead of these agencies recruiting staff for short-term staff shortages, they are increasingly using that resource to fill what should be permanent positions, and the member Jan Logie pointed out the case of Miss Tulai, who worked for four years under a temporary contract, up to 62.8 hours a week—minimum wages, no holiday leave, no sick leave, no ACC, paid her own ACC cover, no KiwiSaver, no input in health and safety laws, and, of course, this was “her choice”.

As soon as a labour hire worker starts building up any entitlements because they have been at a company for quite some time, or even if they simply speak up on any issue they see in a workplace that they don’t agree with, there’s the threat of just not coming back the next day, because, under the current law, that labour hire worker has no ability to challenge that dismissal. Having no right to raise a grievance and having no secure hours also makes labour hire workers extremely vulnerable to sexual assault and harassment at work.

So the workers have no job security, no leave entitlement, no sick leave, and no annual leave. They’re even denied the basic human right of maternity leave. They have no voice on health and safety in the workplace. They have no career prospects. They have no training. There is no skills development for them, and because, also, they have no guaranteed or predictable hours of work, they don’t have a guaranteed income. With that comes an inability for families and people to make any plans. They can’t get a mortgage. Basically, what is being done is denying working people a fair go at getting ahead. These people are treated as a commodity to their employer—a liability. They’re treated unfairly, without respect. They have no dignity. This current law shifts all of the responsibilities to the very vulnerable workers, and that just isn’t right.

If this bill gets passed, it will not increase costs beyond what the employer has already agreed is fair through a collective bargain. It will still enable labour hire operators to operate in the way they were meant to, and the employer will still have the ability to deal with increased labour demands without facing an unreasonable administrative burden, but it will stop exploitation of workers by giving labour hire workers equal rights and treating them decently and respectfully. Working people are, first of all, people, not a commodity, and I commend this bill to the House.

Thank you, Mr Assistant Speaker. I rise to take a very short call in opposition to this Employment Relations (Triangular Employment) Amendment Bill. The reason that I oppose it is quite simply on the basis of the second purpose of this bill which relates to giving leave to apply to the Employment Authority to join, for want of a better term, one employer with a secondary employer for a personal grievance, and that’s simply because that already exists in New Zealand law. Provided there is a nexus of liability between one party and another, you can go to the court and join the two as defendants. Therefore, this just confuses the issue. The judiciary and lawyers have been doing this for some time. This confuses the issue.

My first question to the member would be: what is the threshold of that application? Let’s assume that it’s a very low threshold—OK then, two parties are now joined; they’re jointly liable. How are we going to apportion the liability between them? This bill simply opens up a can of worms with regards to questions as to process and how this is going to work. When you’re talking about a remedy for what a person who is bringing a personal grievance seeks, what if there is a person on a secondment between one employer and the next?

Sitting suspended from 6 p.m. to 7.30 p.m.

Thank you, Mr Assistant Speaker. I’d like to start this reply by offering my sincere thanks to our coalition partners, New Zealand First, and our confidence and supply partners, the Green Party, for acknowledging the need for action in this area. In indicating support for this bill to send it to select committee, the Labour Party, the New Zealand First Party, and the Green Party have sent a clear message to this country that exploitation of workers and treating them like commodities is not acceptable behaviour in this country.

I want to acknowledge the FIRST Union and E tū union and the employers, small and large, and the groups that represent them that have met with me in preparation for this point in time where we have presented this bill to this House. The perspectives that they offered me throughout that process buoyed me and encouraged me, because they acknowledged, across the board, that there is a need to stop exploitation of our workers in this country.

So I was dismayed that the National Party stood in opposition to this. Despite the clear message that something needs to be done, they have reverted to form and dismissed any attempt—any reasonable attempt—to look at workers’ rights in this country, and I hope, when we get to select committee, that the National Party will work constructively with us to find a mechanism that is fair for both employers and workers to try and stop this behaviour that is totally unacceptable in this country.

Mr Woodhouse spoke about the case of Prasad v LSG Sky Chefs New Zealand Ltd, and what I took from that is that he thought the outcome of that case, which was indeed celebrated as progress, was enough to fix this issue. He couldn’t be more wrong. All that case did was indicate that there is some need to try and address the issues that triangular employment arrangements raise.

We also saw that Mr Scott’s contribution to the debate this evening was simply to point out that he himself is an employer and to suggest that my colleague Marja Lubeck did not have an understanding of the issues, because she did not know what it is to be an employer. It is an aside, but I would point out that Marja Lubeck has indeed got experience as an employer. She understands both issues of the debate, as I do, and it is such narrow thinking as this from Mr Scott that brings down the integrity of this debate. Referring to prior experience as an employer as an argument simply creates too simple an opposition. You can as easily argue that it makes him blind to the issues, but that isn’t the case.

Being an employer does not negate one’s ability to understand that fairness is a fundamental right—that it doesn’t have to be us versus them. Working productively means working together with respect showing dignity. Employers I have spoken to throughout have been thoughtful and alert to the issues which arise in triangular employment arrangements. I’ve spoken with employers right throughout this process and anticipate that they will participate very constructively in the next phase of this bill going through to select committee. They acknowledge the need for changing the law in this area.

So to make this contribution, that this bill is somehow not something that would be welcomed by employers, is not based on any real engagement with this issue, but, I would suggest, simply the National Party going back to form—one argument, again, that we hear so often from that party in response to a clichéd idea of what they see as the Labour position on all things.

This bill provides an easy and effective way to address the issues that have been outlined today, and it makes a clear right to seek leave to join a secondary employer to the right that we all enjoy, that we all take for granted: that if we are treated poorly in the workplace, we have a right to bring on a personal grievance.

The fact is that in this country in 2018 we are still dealing with the issues that we were facing 60 to 70 years ago of exploitation and discrimination in an area where there is an absence of law here with triangular employment arrangements. All we are proposing here is to have a conversation at select committee to find that mechanism that will ensure fairness in our workplace. I thank again our support partners for backing this bill. I’ve heard so many examples that would prove the need for increased protections. It is right that those examples be heard and examined in this House through the select committee process. It is indeed to deal with this issue and treat it with the respect that it deserves. Thank you.