Employment Relations Amendment Bill

Members, we now come to the debate on Part 2, which is clauses 29 to 41 and the schedule.

It’s good to take a call on this bill. I actually stood up in the previous part, so I’m looking forward to lots of contributions in this debate.

Firstly, can I just acknowledge that I represent Auckland Central. It has the largest number of businesses in New Zealand, and I have been aghast at some of the statements that have come out from members opposite regarding what this bill will or will not do. Here is the reality—and I am talking to this part. If you look at the front page of this statute, it is so very clear what this bill is about: it’s about union rights. This is not about fairness. This is not about reasonableness in terms of the relationship between the employer and the employee. It is far more detrimental to New Zealand than that. We know, in Auckland Central, that we have major issues at the moment in terms of the economy, in part because we have fuel taxes, we have uncertainty around overseas investment rules, we have uncertainty around immigration, and now we have a set of prohibitive rules in law that are passing through this House that are opposed by a lot of businesses, and if you look at some of the things that they seek to do, they are not only taking New Zealand back but they are also ridiculous in the absurd when you look at some of the detail.

I want to start with the 90-day trial period. I want Willie Jackson to please stand up and talk about youth employment. The reality is that while this Government pulled the bill back in terms of the 90-day trial as a result of lobbying by Mark Patterson, who’s sitting in the back seat there—so I hope he takes a call—when we got the data in select committee and asked about who was going to be most impacted, the bigger businesses, the ones that have more than 20 employees, are the ones that give the greatest number of chances to young people to get into employment. So I want the Prime Minister to come down and participate in this debate. I want her to talk about kindness. I want her to talk about kindness and what it means to snuff out, in a piece of legislation, a huge number of jobs for young people. I would like her to explain that. I would like Willie Jackson to explain that, because the reality is there will be fewer jobs for young people as a result of this bill.

I’d also like a conversation about kindness in terms of the reinstatement of certain employees in workplaces where we may have young people, vulnerable people. That’s why I support Nicola Willis’ very sensible Supplementary Order Paper (SOP) 144, and part of the reason that this SOP has been put up by this side is because we actually care about early childhood centres. We actually think it is reasonable to have a very decent debate about the fact that if you get reinstatement wrong, the reality is it is entirely inappropriate to have certain people going back into workplaces where there are young children—particularly early childhood education—but also where it comes to older people in rest homes, and that is why I back Nicola Willis’ amendment in this regard.

The other issues that we have raised in this legislative process are not just about young people and they’re not just about vulnerable people. They’re also about the basic rights of employers as well to get on and create wealth to fund our public services. That’s why provisions that are—as I would describe them—freedom to roam by unions in workplaces are totally wrong, from our perspective. The reality is they are the 1970s, and we are being taken back to the Dark Ages by this legislation, and, again—I can’t say this in this Chamber—let’s cut the … The reality is the Labour Party are not doing this for vulnerable people. They’re not doing it for young people. They’re doing it because of the unions, and this is about greater union rights. Whether it is freedom to roam in workplaces, whether it is reinstatement provisions, whether it is the inflexibility around meal breaks, or whether it is 90-day trial periods and snuffing out jobs for young people, we need the Labour Party to be honest with people like my constituents, in Auckland Central, where they’re going to not only put a handbrake on economic growth but they’re also going to hurt some of our most vulnerable.

I am, frankly, appalled at how quickly we are rushing through this bill when it affects so many of our Kiwi businesses out there. We have just finished the debate on Part 1 today. We’ve been discussing the privacy of information, the compulsion to conclude multi-employer collective agreements, the access that union workers have to a workplace, that union workers have paid time off, and the grounds for discrimination under Part 1. We had so much more to contribute in that debate, and it’s just—

CHAIRPERSON (Adrian Rurawhe): And that debate has concluded. That debate has concluded.

Well, can I please talk to Part 2 of the bill—

CHAIRPERSON (Adrian Rurawhe): Well, if you don’t, this will be over as well.

OK, Mr Chair, I will continue on to Part 2 of the debate, which is around the 90-day trial period. As my colleague the Hon Nikki Kaye mentioned, this is something that employers across the country have talked to us about: the ability to get people into work and give them a shot. We note that the Government has made a change in that they’ve allowed for businesses with fewer than 20 employees to still continue to use this bill. The issue that I have that I’d like to ask the Minister is: where does the arbitrary number of 20 come from, and what happens when there’s 19 employees, or 21—you know, can they use the bill? Why is it that we’ve got, essentially, an arbitrary figure of 20?

Now, if you look at the data on the number of businesses in New Zealand and the distribution of employees, you’ll realise that 97 percent of businesses in New Zealand have fewer than 20 staff. So my question to the Minister—and it’s an earnest question—is: why are the 3 percent of businesses different? Why is it that you must, in fact, have this arbitrary figure of 20? I would like the Minister to answer the question as to why we’ve kept this arbitrary figure.

We have Supplementary Order Paper (SOP) 115 on the Table under the name of the Hon Scott Simpson which, in fact, deals with this very issue of the 90-day clause, and I would urge the Minister and the Government to consider this, because the feedback that we have had from employers right across the country is loud and clear. In fact, if you go to the submissions—and I wasn’t on the Education and Workforce Committee—Retail New Zealand made a submission on the 90-day trials, and they said themselves that it’s going to negatively impact those workers most in need of employment opportunities—the most in need of employment opportunities. So I would urge the Minister to address that point of why we have this arbitrary figure of 20, because, clearly, those 3 percent of enterprises do employ—including, I should say, my old employer of Foodstuffs—a fantastic array of young workers, and I think the public of New Zealand and the business community of New Zealand certainly need to know about that.

Now, there are other fantastic SOPs that we’ve talked about, including the one from Nicola Willis, who’s got SOP 144, and that deletes the clause where the primary remedy is reinstatement, and this is something that I have had a lot of feedback on in my community. In many cases, reinstatement is not the best remedy for the worker or their employer, in fact. This was certainly backed up in the submissions, and in the Employers and Manufacturing Association’s submission that was made they talked about the restaurants where the tension—the relationship between employer and employee has broken down, and it just doesn’t make sense in order for—

💬 Hon Andrew Little: What if the employer’s got it wrong?

—reinstatement to be given as the primary remedy. I’ve got a case—Andrew Little, if you listen, I’ll tell you the case in my own electorate of a small restaurant in Birkenhead, where the owner of this restaurant has come to me and has said, “Look, I’ve got to get rid of this worker. It’s not working out, and I’m worried that they’re going to take a personal grievance.” I’ve said to him “Look, OK, you do what you do.”, and he’s said to me, “Look, it’s”—[Time expired]

Thank you, Mr Chair, for an opportunity to talk on Part 2 of the Employment Relations Amendment Bill. As we progress this bill through the House, I think it’s important to note that this bill is going to make an enormous difference on employment relations—an enormous negative difference on employment relations—in New Zealand. When it comes to Part 2, specifically I’d like to discuss clause 29, which deals with the employment agreements which contain provisions for trial periods for 90 days or less. What this provision seeks to do is to reduce the number of employers who will be able to use these provisions in their contracts to those employers who employ “fewer than 20 employees at the beginning of the day on which the employment agreement is entered into”.

So when we were debating this in the Education and Workforce Committee, this issue was raised by a number of submitters around how do you calculate 20, and when do you calculate it by? So—

💬 Hon Andrew Little: The number that comes after 19.

Mr Andrew Little says that it’s the number which comes after the number 19, but that’s about the extent of his understanding of employment relations and the impact that numbers like this actually have on employment relations. Does that mean 19 part-time employees, or could that be 10 full-time employees and nine part-time, or could that be 10 full-time and nine part-time? So this is the complexity of the employment law that we have in New Zealand and the types of businesses which employ a whole wide variety of different types of people.

I’d like to highlight, in particular, the work done by Hospitality New Zealand, who represent a huge number of employers up and down our country, who work with a range of different types of employers, and who have a huge amount of seasonality in their type of business and in their type of work. At different points in the year, they may have five people working for them and at other points they may need over a hundred people working for them, and so the ability for them to be able to plan and the ability for them to be able to know what types of contracts they’re able to enter into at times of the year with different employers is dramatically impacted by a piece of legislation which says an employer who employs “fewer than 20 employees at the beginning of the day on which the employment agreement is entered into”. This—

CHAIRPERSON (Adrian Rurawhe): Sorry to interrupt the member, but it’s come time for me to leave the Chair for the dinner break.

We’ll be back.

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

CHAIRPERSON (Hon Anne Tolley): Kia ora tātou, everyone. When we rose for the dinner break, we were considering Part 2 of the Employment Relations Amendment Bill. Simeon Brown had the call and he has two minutes and 26 seconds remaining, should he so wish.

I do so wish. Thank you, Madam Chair.

As I was speaking prior to the dinner break I was discussing the provision, which is clause 29 in this bill, which relates to the trial periods for 90 days or less, and that this restricts the current trial period provisions to those employers who have less than 20 employees. I was bringing to this House some of the concerns which have been raised with me as a constituency MP, as the MP in Pakuranga, and also some of the submissions which were raised during the select committee process and the issues there. One of the key issues that I did raise was around the fact that a large number of businesses will be impacted by this hard and fast 20 employee rule, which means that as they fluctuate in size, sometimes quite dramatically—at the moment we’re at the beginning of the summer peak tourism season and a lot of businesses who operate in the tourism sector have to hire a lot of people very quickly but only for a short period of time, and that restricts their ability to be able to use these provisions. The impact of that is that they will choose not to employ younger people, those who may have a work history or a range of other things which they would otherwise overlook. Those people are the ones who will lose the opportunities to be able to take up jobs in those sectors.

Also, I think of a cafe up in Howick, in my electorate, which, again, hires young people which it would otherwise have a second guess over in favour of someone more experienced. They use these provisions. They have just over 20 staff and will be restricted by this provision which is currently being put through this bill.

We have a number of questions. I guess the other question is why is it not raised as being a full-time equivalent or 20 employees? Why is it not 20 full-time equivalents, because a range of businesses will have a range of different mixtures of employees? I’d like the Minister to address the question of why he chose 20 employees rather than 20 full-time equivalents, because I think that was raised by a number of the submitters who did talk about the mixture and the flexible arrangements that they try to provide for their staff. Sometimes part-time staff are younger people and so their full-time equivalent might only be 19, but they may hire 30 to 35 individuals. Currently, within the provisions of this clause they won’t be able to use this trial period once they hit 20 employees. So my question to the Minister is to explain why he used the word “employees” rather than “full-time equivalents” to ensure that those businesses which do have more flexible arrangements are able to do that.

So that was one of the comments which were raised by Business New Zealand and also by Hospitality New Zealand in their submissions. Their argument was actually, “Look, let’s raise the bar from 20 employees to 50 employees because that will cater for a wider variety of small to medium employers.” I notice that the language in the provision is for small to medium sized employers (SMEs). They do make up the vast majority of employers in the country, but there are a range of other businesses which might not be large—might be just over 20, might be 30—but they don’t have a very large HR department like a large corporate might. They came to us and they said, “Well, we’re not exactly large but we’re not considered under this definition of small to medium, but we rely on being able to use the 90-day trial periods to be able to take on people who we might think, ‘Yep they’ll do a good job let’s give them a go. Let’s try them out and see how they go’, with the hope to then give them a full-time permanent position in the firm.” They’re not big firms. They don’t have massive HR departments who can go through and do huge reference checks, do the psychometric testing and all the other things that the other big corporates are very fond of doing these days through their HR practices. But they aren’t small to medium either under the provisions in this bill. So they sit within that gap, essentially. So they were asking, “Well, let’s increase the number to 50.”, which then allows for there to be some more flexibility, a sort of more realistic number, which reflects the makeup of the New Zealand business environment and the type of businesses that we operate here in New Zealand.

I think it’s important to reflect on the type of businesses we do have in New Zealand. We do have a lot of smaller medium businesses, trying to get ahead, working hard. They’re often exporting, and they do their best. They’re the ones who are making New Zealand the money; that bring their money into the country. They’re the ones who provide the jobs, they’re the ones who keep the economy running, and they’re the ones who ultimately pay tax to ensure that the Government can provide all of the services that it does for society. So the question they’re saying is, “Look, we’re doing everything we can. We’ve got enormous compliance in place already. Give us some flexibility here so that we can continue to provide employment opportunities. We can take young people on. We can give people opportunities to get their first job, then to succeed, and then to be able to move forward.”

So the question is why did he choose 20? Why is it not full-time equivalents rather than employees? And how does he think this is going to work in the complexity of the labour market out there in a wide variety of different industries, noting particularly the concerns from the hospitality and tourism sectors, who go through huge—and horticulture, I think they would also be very big on that as well—fluctuations throughout the year in their industries. They have to take on a lot of people all of a sudden, and they have a lot of concerns. I’d like the Minister to address some of those now. Thank you.

Thank you, Madam Chair. I thank the member Simeon Brown for his contribution and for his questions, and I note a number of members have raised the question of the 90-day trial period, so I’m happy to address that aspect of Part 2 of the bill. The member had a key question, which was: why 20, and why is it employees rather than full-time equivalents? The answer is pretty straightforward, actually: the National Party.

When the National Party introduced—[Interruption] No, hear me out. When the National Party first introduced 90-day trial periods, they were only for small and medium sized businesses. They set the cut-off point at 20 employees, and so, for simplicity’s sake, we decided to return to the original way these were introduced. So we took our lead from the way the National Party, in Government, introduced 90-day trial periods.

Now, I have heard from members opposite and, as I’m sure members can imagine, I’ve heard from a number of submitters and people that I’ve had conversations with that they see 90-day trial periods as something that helps them to hire people, and it helps people in a vulnerable position to get employment. Unfortunately, there isn’t a huge amount of research into this.

It would’ve been very helpful to the cause of 90-day trial periods and the people who support them if the previous Government had done a little bit more research on this, but what they did do is they got Treasury—got Motu—to do a piece of research. I’ll quote Isabelle Sin, who I think is Dr Isabelle Sin—who’s a Fellow at Motu—saying, “My research shows that the 90-day trial period isn’t helping people get jobs, … However, it also doesn’t make people less likely to leave secure jobs and doesn’t make employment relationships less stable. Overall, my research suggests the 90-day trial policy isn’t doing much at all.” The press statement goes on to say, “The study discovered no evidence that the policy increased the probability that a new hire by a firm was a beneficiary, a recent migrant, a youth under the age of 25, Māori or Pasifika under 25, or a recent education leaver. On the other hand, it did not substantially increase short-term hiring or make workers less willing to change jobs.”

So the upshot I take from that research is that 90-day trial periods failed in their intended purpose, which was to provide employment opportunities for people who are more vulnerable. But by the flip side, it also makes the point that the negative consequences don’t seem to be that obvious, either. So one might ask the question, quite reasonably: if there’s no harm, why remove them or restrict them, as the National Party originally introduced them, to only being available to people who employ fewer than 20 people—that is, it creates the opportunity for people to be unjustifiably dismissed. That is a risk in our employment relations policy that this Government is not prepared to stomach, because we have seen examples of those poor employers—the ones who are on the fringes and are not representative of the majority, at all—who see a loophole in the law and exploit it, and the vulnerable people who are affected by that are those working people that the National Party claimed to be supporting in introducing 90-day trial periods.

So, obviously, people know that there was some conversation across the Government about exactly what the right formation for this policy would be. Where we landed was that we would keep 90-day trial periods in place for small businesses. We do accept that smaller businesses are not going to have an HR department, so they’re not necessarily going to have access to HR resources. They might need a little bit more support in their recruitment practices. But if those larger businesses—those who employ 20 people or more—don’t have an HR department of their own, they ought to be able to get the advice and support they need to run robust employment processes, to be able to find the people that they need, and to put them in and continue their employment.

We’re not opposed to probationary periods on this side of the House. Probationary periods are still included in the Employment Relations Act. Employers have the ability to put people on a probationary period to test their ability to do their role, and if they’re unable to complete the functions of their role, it’s absolutely justifiable for them to be able to dismiss that person. But what they cannot do under the probationary period is unjustifiably dismiss someone, and that is the risk that lies with 90-day trial periods. That is why this Government is restricting the use of 90-day trial periods.

Thank you very much, Madam Chair. You were speaking so softly, I could hardly hear amongst the enthusiastic calling of my colleagues.

I do want to have an opportunity in this Part 2 debate to raise a question relating to new section 125 in clause 39, and this is to do with the provision that requires that reinstatement be the primary remedy for personal grievance. This is a matter that has caused employers some concern. Just to put some context around it, this situation often occurs or, sadly, sometimes occurs—“often” is probably an exaggeration—where, for one reason or another, the employment relationship between employer and employee does break down, and that can be deeply problematic. It can be a matter that causes both the employer and the employee, and associated workmates and colleagues, a considerable degree of angst. There are obvious matters that lead to a lack of confidence and respect and trust that occurs in such a situation. Sometimes these situations have occurred as a result of performance review, and none of it is pleasant for anyone involved.

So what tends to happen is a personal grievance occurs. That can be a long, drawn-out process that can sometimes take months, and taking many months often involves expensive lawyers, litigation, and an emotionally trying time for everybody involved, not the least of which are the people who are personally involved, because they are diverted from the business, the work, that they are employed to do or are undertaking as a business owner or operator.

What this section seeks to do is, at the end of a broken employee-employer relationship, where it’s proven by a court or authority that it was a justified personal grievance or an unfair dismissal, then the primary remedy for that will be reinstatement. Now, the difficulty with that is that it creates all sorts of challenges for a situation that is broken—a relationship that is broken—if an employee is to come back into that workplace. It’s not unlike, for instance—a bit of analogy—some of us who have known people who have been involved, or who have had the misfortune to be involved, in a Family Court situation where there’s been a breakdown in a matrimony, or a relationship problem. What would then be likely to occur in the industrial relations equivalent of that would be like the Family Court judge saying, “Well, Mr and Mrs Bloggs, it’s the decision of this court that you get back together again.”, and that’s simply not a tenable sort of process or situation to have occur. Similarly, in the workplace there are equally problematic issues around that.

Now, in new section 125, it does say where it’s “practicable and reasonable,” and, again, we come back to definitional issues that exist in other parts of this bill around what is reasonable and what’s practicable. Those are matters that are not defined, they’re not set out, they’re not quantified, and, again, some poor employer is going to find themselves acting in the capacity of a judicial guinea pig—probably at considerable expense, time, effort, and energy—to assist in defining the common law, the case law, around what is actually practicable and reasonable, irrespective of whether it provides for any other remedy as specified in section 123 of the primary Act.

So I do have some questions around that. I think that there is potentially a perverse outcome, and Minister Iain Lees-Galloway might like to spend a little bit of time addressing that. I guess the countervailing argument would be that if reinstatement is the likely outcome of a broken employee-employer relationship, then there may be some employees who would say, “Well look, no, I don’t want to have that opportunity. I don’t want to take the risk of being reinstated. The relationship has broken down irrevocably, and that would be a very bad thing.”

So I’m hoping that at some stage this evening, the Minister will take a call and talk us through the rationale for making reinstatement the primary remedy for unfair dismissal. If that’s the result of a personal grievance, then I think that we could have an explanation as to why.

Thank you, Madam Chair. I want to speak in this opportunity to Scott Simpson’s Supplementary Order Paper 115, which has the effect of deleting clauses 29 and 29A. I want to make a couple of comments around the position of the new Minister for Workplace Relations and Safety—the former union organiser—on the impact of 90-day trials and say to the Minister that he has found some research and in the researcher’s view, the 90-day trial provision—which, yes, was brought in by the former National Government—has had no material impact on the opportunities provided, particularly for more vulnerable workers, young people starting out, etc. Well, you know, academics are wonderful, obviously, and their research is useful, but I suspect what is more useful is to actually get out there and talk to businesses about their real experiences and do that in the context of the 90-day trial provision.

As a spokesperson for small businesses—as, indeed, we all are, as National Party members, because we do get out every day of every week and talk to small-business people in our constituencies and around New Zealand—I say that small businesses, and business, frequently rely on the 90-day trial to give people an opportunity. The concept that an employer would take on someone on a 90-day trial basis only to set the clock ticking and then, at day 88, out of the blue, decide that “No, don’t want that person—gone.” is simply not believable, because employers take on people because they want to give people a job, they want to grow their own business, and they want to take a chance on people. In the case of regional New Zealand and in the case of smaller centres, they may know the family and they may know the neighbourhood. It might be someone that they knew from school. You know, small communities are like that. That’s part of the cohesion of small communities, and that is part of the way business is done in regional New Zealand.

So an employer takes on someone who might not have the skill set, but they’ve got the right attitude—and, as we who’ve been involved in business all know, attitude is actually the very first thing an employer looks for—and then they can train the person so that they do have the skill set and the aptitude and the desire to continue in whatever role it is. So the notion that the 90-day trial has not been effective in giving people jobs is just nonsense. I am disappointed to hear it from the Minister—incredibly disappointed—because it is a—

💬 Hon Member: He’s quoting research.

Yes, research—he’s quoting research. Well, I can say that each and every one of us also conducts research, but we don’t do it in Wellington universities and we don’t do it in Auckland universities. We do it in regional New Zealand. We do it all around our electorates, and we talk directly to the employers and to the people that are being given a chance.

Personally, I know of several young people who have had an indifferent career at school, shall we say, who have been given a chance, and sometimes it’s a bit of a rocky road with some young people. They might have to go through several attempts at getting good employment, but when it happens, it is a wonderful, wonderful thing to see a young person happily established. I know a young guy who’s now a tyre-fitter. He loves it. He drives around in his truck, he’s paid well, and it is because an employer gave that young man a chance, and that is happening all around New Zealand.

Thank you, Madam Chair. It’s a pleasure to take a short call in the committee stage of this bill, and I guess I’d like to pick up from the previous speaker, Jacqui Dean, and talk a little bit to the 90-day trial provisions in this legislation. It did interest me, you know, the view that research from chatting to some people around the regions should be considered in the same light as peer-reviewed research from a quite well-respected economic thinktank. That’s unusual, but I guess this House has places for many voices.

I do want to just put the point though that what we’ve heard is that employers are telling us their feeling is that they wouldn’t employ these people unless there was the 90-day trial—you know, that these people wouldn’t be given a chance unless there was this ability to get rid of them in 90 days if the employer didn’t like them. But, actually, before the 90-day trials were put into law, people were given a chance for their first jobs. All of us in this House—before we’d been employed, somebody gave us the chance and employed us. That’s just a dynamic that happens. If you need a worker and you need a job done, then you look at people and you employ them and you take a chance on them, because even if you’ve got lots of experience, there’s a chance there. But, equally, the employee is taking a chance on the employer that it’s going to be a respectful workplace, where they’re able to contribute and not be treated badly. You know, we take chances on both sides of that, and that’s just how it works.

We’ve heard this view that employers wouldn’t give these jobs out unless there was this incentive, but that’s not borne out by the research—it’s just not. On the other side—and this is where I do think there are limitations on the research—the research is saying, “Well, actually, we’re not sure that it’s doing any harm either.”, but that’s looking at specific measures, from what I heard from the Minister saying that it’s not necessarily making employment less stable. So that’s looking at it across the system.

We’ve heard from employers a perception, but we’ve heard from people who were fired because of the 90-day rule. We’ve heard that from professionals, and we’ve heard that from people in entry-level jobs right throughout the system. There was a very powerful submission from a member of the Public Service Association who was a National Party member—or a supporter, if not a member—who said that he had previously supported this legislation, but, as a professional who had been let go without any reason whatsoever under the 90-day trial, he’d actually had a first-hand experience of this policy that was not favourable for him or his family. He’d been lucky enough to be able to walk into another job afterwards, but he warned this House against this provision from experience, and he was not somebody who initially had any view on this.

So I do think we do need to hold back, and that’s why the Green Party doesn’t support the 90-day trials at all. Our preference, which we’ve said all along, would be to get rid of it altogether, because we don’t believe it helps anyone.

We’ve come to a negotiation. We think this is absolutely an advance on where we’re at the moment, and there’s no doubt about that. But it’s not where we would have gone if we were developing the law ourselves. We think that this still provides a level of uncertainty, and, particularly for me, the concern is that when we have to do so much more to improve health and safety in our workplaces, this has a chilling impact on people being up to speak up and alert their employer—[Time expired]

Thank you, Madam Chair. What an excellent choice—it really is. It gives me great pleasure to follow Jan Logie, the previous speaker. Actually, I have had experience as an employer, and I’ve had an experience in utilising the 90-day trial—quite extraordinary. I’m not sure anyone else from the other side has, but anyway. I tell you, doing research like that is really very, very useful. You find out how difficult it can be.

Actually, you would think by the rhetoric that employing a person is some way just to be mean to people, to take them on and then employ them for 80-odd days, and then just burst their bubble at the last minute—far from it. It costs money to take people on. Every time you turn over an employee, there’s a significant cost to that—

💬 Hon Member: You’re not getting anything in return.

—and people will only take that step when they have to. Yes, they do need a return. That’s absolutely right—they do. It’s a symbiotic relationship. It’s ironic that indentured labour has been outlawed for many years, but it seems from some of the speakers that they want the reverse of that: indentured employers, where they have to keep people on when they are poisoning the well, often, and that can be the case where it is making it very difficult to retain other staff because those staff are not functioning well. So I can’t understand why people would be averse to that.

In most cases that I’m aware of where 90-day trials have been used—and that’s very frequently when you had the opportunity—it has given far more people choices and chances that they would not have had otherwise, and I think it’s a great shame that this bill seeks to reverse that. Speaking in support of Supplementary Order Paper 115, in the name of the Hon Scott Simpson, those two clauses—clauses 29 and 29A—absolutely need to be deleted, because it’s a significant impost on business.

I say that the 50-employee number that was suggested by many employers who submitted is actually quite an elegant solution, and the Minister’s rationale for having 20, or 19, was that it was the National Party’s idea. Well, we did know that Labour is not keen on, or capable of, extending good work further, but, you know, it was a good idea at the time it was extended, and that number was lifted up. Going to 50 is an elegant solution, I think. It is a significant impost on businesses to have an HR department to manage these things, and you do need to do that.

Once an employer gets up to a certain level of employees, it’s a significant cost to operate that business. Being an employer is a difficult situation to be in at times, as is being an employee, but I think there’s no experience in life like having to fill out your own GST return, or like having to lie awake at night wondering how you’re going to pay all the bills and how you’re going to pay for your employees, and that is what business is about. That often happens. Often, it’s another business that is not paying you on time, or you’ve got shipments going overseas somewhere and you’re having an issue getting payments back into the country and having them held up in the banking system. All of these things happen and it causes a cash-flow bind, but you’ve still got to pay your employees.

So the 90-day trials have nothing to do with that, but you have enough things on your plate when you’re an employer. The last thing you want to do is take on people that are not suitable for the job. Often, it’s the probation period that the Minister mentioned earlier, where if the person is not capable of doing the job for whatever reason, then you’re able to dismiss them or send them on their way. That is only part of it. It’s also about a culture and a team, and it’s incredibly important that you have people that will work together and be far more productive and happy in an employment situation. That means picking team members that will work together, and you don’t always know that when you do the interviews, because people do change during that period. Sometimes it takes three or four weeks to really see what the person is really like and how they operate in that team environment.

Some of these jobs are quite difficult. Quite often, I know, in the wine industry situation, I see people turning up to work outside without clothes—

💬 Hon Members: What!

—suitable for the day—not warm enough for the day—in case the weather changes—[Time expired]

Thank you, Madam Chair, and—

CHAIRPERSON (Hon Anne Tolley): Sorry, I just got caught on the people turning up for work with no clothes!

I did a bit, too. I thank members for their multiple contributions on the 90-day trial period. I listened closely, and I don’t think anything was raised that I didn’t address in my earlier contribution, but earlier in the debate, members did raise the issue of reinstatement as the primary remedy in cases where a dismissal has been found to be unjustifiable. Now, this is a restoration, again, of something that was in place when Labour was last in Government. I don’t recall when it was repealed by National—whether it was in the 2009 changes, or if it was in 2015—but this had been in place successfully for a long period of time previously without any of the concerns that members have raised.

I just want to clarify for members exactly what this bill does: it restores reinstatement as the primary remedy. Reinstatement is a remedy that is available right now. It is certainly an option that the Employment Relations Authority can find that someone ought to be reinstated to their role. What we’re saying here is that reinstatement should be the primary remedy, and the point of that is to get the conversation back to being one about how we can put this relationship back together again. Rather than saying, “How big a payout is it going to take to see someone off and never darken their employer’s doorstep again?”, let’s see if there’s a possibility to restore the relationship. Of course that’s not going to be the case all of the time, and, I dare say, probably not even the majority of the time, but it is about just changing the nature of that conversation. I would point out that reinstatement can only be imposed if the person is found to have been unjustifiably dismissed.

Scott Simpson raised the question: what if someone is reinstated against their will? Reinstatement is only an option if the employee indicates that reinstatement is something that they want.

The authority must make an assessment of whether it is practicable or reasonable to reinstate someone, and I want to raise the matter that Nikki Kaye raised. She was concerned about people who had been dismissed from an early childhood centre or maybe dismissed from an aged-care facility because they posed some threat to the children or the residents that they were taking care of. First of all, I suspect that if that was the case, in all likelihood that would not be an employment matter—that might be a different matter altogether. It may well be an employment matter, though, and if it was found that that person did pose a risk to those people, it would absolutely be something that I would expect the Employment Relations Authority to take into account. It would be highly, highly unlikely, and I would dare to go so far as to say impossible, for reinstatement to be an appropriate course of action in that situation. Certainly if the person, through an employment matter, was found to pose a risk, it would be highly unlikely that the dismissal would be found to be unjustified.

Dan Bidois also raised that reinstatement is not always the best remedy. It’s absolutely true that reinstatement will not always be the best remedy; it is simply the primary remedy.

Scott Simpson questioned the terms “reasonable” and “practicable”. “Reasonable” and “practicable” are found throughout our employment relations legislation and throughout our health and safety legislation—legislation that was introduced and passed through all its stages in this Parliament, led by a Government that the National Party was leading at the time. This is normal language. It’s well understood by the courts. It’s well understood by everybody who understands employment legislation and health and safety legislation. It’s been around for a very, very long time.

So, just to reiterate, this is about restoring reinstatement as the primary remedy—not as the only remedy and not as a compulsory remedy—and it’s simply about changing the conversation from one of “What does it take to get out of this relationship?” to being one of “Is there any opportunity to restore the relationship?”

Thank you, Madam Chair. I want to talk about the vexed subject of meal and rest breaks—a very important issue, particularly for MPs—and I want to ask: when did you lot last have a meal break?

💬 Hon Member: Oh, I didn’t.

Did you get a meal break? I just heard from a member beside me who was saying that he didn’t have time for a meal. What about a rest break during the course of the day? Have we had them?

Well, I’m so glad that this bill caters for this very subject, because if you look at new section 69ZD, “Employee’s entitlement to, and employer’s duty to provide, rest breaks and meal breaks”, in clause 35, it is a beautiful series of prose. So what’s interesting? Just look at the hours. Now, if you work between two and four hours, I understand, you’re entitled to a 10-minute rest break—a very good thing. If you work between four and six hours, you have a 10-minute rest break, plus a 30-minute meal break—very good. If you work between six and eight hours, you have two 10-minute rest breaks and one 30-minute meal break, and over eight hours, you have two 10-minute rest breaks and one 30-minute meal break—very, very good.

But then we move on to their timing in new section 69ZE—particularly subsection (4). So if you work the same two to four hours, this is what I find fascinating—the specification of when you should take these is just fabulous. Between two and four hours, you must have your rest break during the middle of the work period of two to four hours. If you work between four and six hours, you must have your rest break one-third of the way through the work period, and your meal break is at two-thirds—very good. If you work between six and eight hours, you must have one of your rest breaks halfway between the start period and the meal break, and, of course, the meal break must be in the middle of the period and the second rest break must be between the meal break and the finish time. These are wonderful things.

I just can’t believe the detail we’ve gone into through this. But my first question I want to ask the Minister is: who is responsible for this? Is this the Labour members, is it New Zealand First members, is it the Green members who have gone to such extremes to write this stuff into the Act?

The next issue I want to talk about—[Interruption] Well, that raises some speculation, doesn’t it? The next thing I want to talk about is: what about contracting out? Of course, now we turn our minds to new section 69ZEA(1) in clause 35. It’s very interesting, actually, under subsection (1)(a), that “An employer is exempt from the requirement to provide [the said] rest breaks and meal breaks … if—(a) the employee is engaged in—(i) the protection of New Zealand’s national security; or … an essential service”.

So that’s my second question: what is an essential service? Some would say that being an MP is an essential service.

💬 Stuart Smith: A wine waiter.

A wine waiter can be essential at certain times, I must admit. But what is an essential service?

I think the issue about that is very, very important, because if you think about businesses, there will be elements of a process in that factory that will be absolutely essential in that if you do not conduct it and complete it, the factory process will stop. So do you define it on the importance of the process to the factory? Do you define it, when it comes to a service, as the critical element of delivering that service? Or is it just around some nebulous definition of “essential service”, and how do you construe that and who determines that in time? As we all know, in time, many jobs are going to be lost to the New Zealand economy and we’re going to have robotics involved, and, of course, the nature of jobs changes over time. So I’m very, very interested in knowing how that’s going to be defined.

The main thing, I think, turning over the page—which is, of course, subsection (2) of new section 69ZEA—is what about an agreement to contract out of this? It only references national security and the public safety, and I think that question needs to be asked.

Fourth question: when can someone mutually agree to contract out?

Thank you, Madam Chair. I was glad that we moved on to Part 2 of this bill, because the Opposition speeches so clearly show that they have no understanding of industrial relations, nor any understanding of employment law. But, I have to say, we’re on Part 2 and it’s still the same case, which, in a way, is quite concerning, because they have been making quite a big thing about going through the country and clarifying this bill when, in effect, what they’ve done—and we know this for a fact—is they have even more confused businesses and other people in the country on what this bill actually does.

I too have gone around the country—not that I’ve made such a big deal about it. I’ve visited several of my colleagues in their electorates, spoken to the chamber of commerce—and I see the member for Coromandel laughing. Do you know what one particular employee representative said to me: “Oh, now that you put it this way, that totally makes sense. But the National Party representative never told me that.”—that was about the probationary period, it was about access, it was about 30 days, and it was about 90 days. So the very concerning thing is that that part of the Opposition obviously does not understand what this bill does.

I also have to say that I am really mystified about why they are so scared of the unions. Why are they afraid of fairness and balance in the workplace, because that’s exactly what—

CHAIRPERSON (Hon Anne Tolley): Well, I’d just ask the member—it’s very—

—the unions do. The unions hold the line for their members, and—

CHAIRPERSON (Hon Anne Tolley): Order! Order! I just ask the member to address Part 2.

Sure, sure. So I’m talking about the parts where mention was made about the rest and meal breaks, and the astonishing part from the member that spoke just before me is that it’s so disrespectful to talk about his job—his cushy job in an office, in a chair—not thinking about, for example, the meatworkers, who are working in either boiling heat or freezing cold conditions, in gumboots and on concrete, for hours on end, doing repetitive, strainful work. They need a break, and because the National Party legislated that out of the law, their employer takes advantage and makes them work continuously—non-stop—under these circumstances.

We are bringing this back. Who would argue that rest and meal breaks are just the common decent thing to do—people have a meal, something to drink, and maybe a few minutes’ rest. But, hey, the National Party obviously does not like workers—like they don’t like unions—and they would rather have people working non-stop, without any break at all.

Nobody mentioned the fact that when the 90-day trials were first brought in, the National Party pushed that through, and guess what? There wasn’t even a select committee process—did you hear all that? No select committee process, no public submissions—the National Party drove through 90-day trials without evidence, against evidence from the Ministry of Business, Innovation and Employment that it would not create extra jobs, and totally without any opportunity for the public to bring submissions through. Obviously, at that time, the National Party was looking after its mates who own businesses and who wanted to employ workers, but not quite adhere to the law that was in place. So what this bill is doing is it is righting a lot of the wrongs.

Now, we have heard a lot of repetitive arguments from the other side about 90-day trials—we heard so much of it. Reinstatement—Minister Iain Lees-Galloway has talked very eloquently and extensively to try and clarify. But the next speaker pops up and it’s like they haven’t heard anything at all—they just repeat the same thing over and over, thinking it might stick.

Now, I’d just like to mention the removal of reinstatement, because that one is very close to my heart. It is actually taking away people’s human rights. It is one remedy that will restore the worker to the way they were before they had the unfair dismissal. And let’s be clear about this: this is not about anybody being sacked for any reason; this is about somebody who has been found to be unjustifiably dismissed. It might mean that they have gone through the Employment Relations Authority, the Employment Court, the Court of Appeal, or even higher up, and still they have been found to be unjustifiably dismissed. It could take three to four years, and after that time, you say that they should still just get a little bit of money and just, you know, move on—no. This is absolutely unfair. If there’s anything that they are entitled to, it’s to have their job back, because they never did anything wrong that warranted them losing their job. As a primary remedy, it is just a matter of natural justice, and it is actually completely consistent with International Labour Organization conventions.

The Minister has already pointed out that there’s still quite a high threshold for reinstatement. For example, in 2009, out of hundreds of cases that were brought, there were only nine people reinstated, so there goes your scaremongering. Ultimately, we’re talking about someone who has lost their job when they never should have lost it. They should get their job back, if they want to.

So what this bill very clearly addresses is fairness, it’s respect, and it’s dignity. I hope the other side will start reading the bill and actually understand what it’s about, and maybe learn a little bit about employment law. But I do thank Minister Iain Lees-Galloway for taking this fantastic bill through the House. Thank you.

Thank you, Madam Chair. I just want to thank that previous speaker—Marja Lubeck. I actually just googled her name and, funnily enough, she’s a former union delegate—funny that.

She also asked whether the National Party members have ever worked in a freezing work job. My first job out of school was as a commercial fisherman, with 18-hour days. Possum-trapping, goldmining—I’ve actually employed people. I just want to talk about Part 2. I had a business for 3½ years, and I can still remember employing my first staff member. It was a very proud day for me. This staff member earned a lot more money than I did. I can still remember that after about a week, I decided to take her out for lunch, and what do you know? My card was declined. Why? Because this worker was getting paid; I wasn’t. I was taking the risk.

💬 Marja Lubeck: Oh, so sad!

Well, that’s pretty sad, to be honest—you reacting like that. I find that very sad.

I just want to take the opportunity to break this bill down and actually talk about some of the real consequences of the bill for employers and employees in places like Balclutha, Lumsden, Lawrence, and Queenstown. This bill takes away flexibility from the workplace.

I was talking to a lady last week. She is terrified of the bill. She booked an appointment, came into my office, and she said, “Hamish, I’ve always been a Labour voter, until now.” I said “Why is that? Why have you always been a Labour voter till now?”, and she said, “Under current employment law, I can pick up my children because I get to the school gate bang on 3 o’clock, but now the flexibility of the meal breaks are being taken away.” This lady doesn’t have meal breaks. She has a lunch break, but she’s quite happy to work through her meal breaks when there are customers in the store. Now, she will be turning up at 3.20, and her kids—who are five, seven, and nine—will be left at the gate by themselves, because this Government has taken away flexibility from this.

So that’s my first question for Minister Iain Lees-Galloway. Minister, is there some room for the employer and employee to negotiate some flexibility around this sort of situation? She’s an incredibly hard-working lady, and she just wants to know if she can have some sort of arrangement like the good relationship she’s got with her employer at the moment so that she can pick up her kids at 3 p.m.—incredibly, incredibly concerning.

Just last week, I visited a business, and I met the manager of this business, who’s been with the company for three or four years. The business owner employs a number of staff. He introduced me to his manager. He said “See this guy here? If it wasn’t for National, this guy wouldn’t have been given a chance.”, and I said, “Why is that?” This guy had served seven years in prison and been a drug addict—not quite as bad as the one you let in recently, Minister, but almost—but the reason why this guy got a chance was the 90-day trial.

The legislation we’ve got currently gives people a chance. It gives vulnerable people a chance, and, I hate to say it, but I actually do agree with some aspects of the previous Green member’s bill. I recently visited the citizens of Roxburgh, and they said, “Yeah, Hamish, two or three people we have met over the last few years have been taken advantage of, but for the other 30 or 40 people that have been given a shot and given a chance because of the flexibility under the 90-day trial, you just cannot go past that.”

So just some questions for the Minister. The first one’s around the flexibility for the lady who will have to leave her young children at the school gate—because you’re taking flexibility out from this—and also the 90-day trial. Minister, surely, if you want to look after the most vulnerable people, please leave in the 90-day trial.

My third question, while I’ve got a chance, is that I noticed last year that $260,000 was given to the Labour Party by unions—

CHAIRPERSON (Hon Anne Tolley): Order!

$260,000.

CHAIRPERSON (Hon Anne Tolley): Order! Order!

Sorry, Madam Chair.

CHAIRPERSON (Hon Anne Tolley): I’m sorry, you cannot refer to that and impute motives to the Government.

I’m sorry, Madam Chair. I take that back. It’s probably a good place to leave it. So two questions to the Minister, and I look forward to hearing from him answering these questions.

Thank you, Madam Chair. It is an absolute pleasure to stand up on behalf of New Zealand First to speak on Part 2 of this Employment Relations Amendment Bill, and just in the nick of time, too, because it is time for the voice of reason—which New Zealand First obviously have been—after that emotive contribution from the member for Clutha-Southland on this particular part. I might say he has some previous on this. He’s out scaring farmers as well, which is unfortunate.

I had the pleasure of sitting on the select committee on this bill, the Education and Workforce Committee. What a fascinating process it was, and we heard both sides very clearly come through. We heard from the unions and the employees and workers’ groups, who did outline some power imbalances and the fact that they had been disadvantaged by those power imbalances. The gap between those at the top and those on the bottom in New Zealand has been growing, and that’s something that this Government is absolutely committed to addressing. But, on the same token, we also heard the employers. They came in with their version of events and we listened, and I think this was the select committee process absolutely working as it should. You get various views come in, you boil down the arguments, and you come out with what I think, in this case—and New Zealand First certainly thinks—is a very good outcome for all concerned.

Certainly, also one of the mates of the National Party from Business New Zealand, Kirk Hope—I would actually quote him. “Kirk Hope said the changes resulted”—I modestly say—“from NZ First’s influence in changing the Bill and business would be grateful for its input in striking a better balance between [employers and workers].” So I think that when you’ve got the likes of Kirk Hope and Business New Zealand coming out—and whilst he credited New Zealand First for those outcomes—it’s actually the coalition working as it should. This is where we saw it, we saw that with the multi-employer collective agreements, and we saw it with the union clarifying those union access issues.

On the 90-day trial, which we took a keen interest in early on, we do note that the Motu report and the evidence is pretty ambiguous. There’s not really any one way or the other that the 90-day trials have had an effect on employment, but, anecdotally, and just our gut feel, as champions of the regions—and many of those small businesses are in the regions—is that those businesses with under 20 employees that don’t have the access to HR departments could benefit from this, and it would give people that have been marginalised in society the chance for a start in a business and the dignity of work. That actually accounts for the something like 97 percent, I think, of businesses that are small to medium sized enterprises with under 20 employees. So I think that’s a win for those businesses. It’s a pragmatic step.

But then those bigger businesses, the ones with over 20 employees—they’ve certainly shown a competence in building their business to quite a scale. They should have the ability to be able to handle their HR and they should have the ability to marshal their new employees through into solid employment. So we felt we struck a pretty good balance there.

On the rest breaks, or smoko as we used to call it in the old days, the previous contributor, once again, was trying to put some scare tactics in. Basically, we’re just returning the law to what it was previously. I’m not sure what the year was, but certainly under the previous Labour Government, this was a provision in the law. The world did not collapse, and I think that in the days when we’re looking at things like mental health, etc., we need workers to have the ability to have a break. By the vast majority, this will be done through negotiation, and will be considerate of the nature of the work. That is just the way that it will happen, and on the odd chance that they can’t come to an agreement, then there will be an ability for workers to have their smoko. I think that’s a fair go for Kiwis, and New Zealand First certainly support that. Thank you.

Thank you, Madam Chair. Members have raised questions about the rest and meal break provisions included in this bill. Andrew Bayly just raised the matter generally and asked about the definition of an “essential service”—a very reasonable question. I direct the member to part A of schedule 1 of the Employment Relations Act. He will find the definition of “essential service” in there, and—

💬 Andrew Bayly: And how encompassing is it?

Well, I encourage the member to have a look, and if he’s got any further questions, feel free to come back.

The member Hamish Walker asked an important question. He asked an important question: is there any room for negotiation? This is a point that has come up a lot, which is: are we creating a situation here where rest and meal breaks are tightly prescribed, where everyone has to take their meal break at the same time, and where there’s absolutely no room for negotiation? In response to that, I would direct members to clause 35 in Part 2 of the bill, which inserts new section 68ZE into the Act. It says, “Timing of breaks as agreed (1) If an employee and employer have agreed on the times at which the employee is to take rest breaks and meal breaks during the employee’s work period, the rest breaks and meal breaks are to be taken at those times.”

So the first port of call is: work it out. Work it out between the employer and the employee, and figure out what makes sense and what works for both parties. In the case of Mr Walker’s example, if the arrangement works for his constituent, then I encourage him, tomorrow morning, to get on the phone or write a letter and tell his constituent that she will be able to continue doing what she’s doing right now, because if that’s what works, she can figure that out with her employer.

Only in the absence of an agreement are the rest and meal breaks to be taken in accordance with the applicable provisions, and, again, all of those applicable provisions have those terms—and I know Scott Simpson doesn’t like these ones very much—“reasonable” and “practicable”. Where reasonable and practicable, they should, basically, be taken at around about the middle of the work period. But, first and foremost, this is something that employers and employees can work out between them, and it’s enshrined here in the legislation. So I do encourage members, if they’ve been misinformed—and, certainly, if they’ve accidentally misinformed any of their constituents, I strongly encourage them to get on the phone and make sure that their constituents understand exactly what this legislation does.

Thank you, Madam Chair, for this opportunity to add my voice to this debate. Before I get on to discussing my view on how I see the partial removal of the 90-day trial period, I want to respond to the member who took a call and said that there are people working in different industries—and the example she used was the meat industry—and they deserve to have a rest break. In my view, that argument was embarrassing. In the businesses that are employing 95 percent of our population, employers definitely want to look after their employees, and they do give them rest and meal breaks. It’s not like people are working non-stop, without having rest and meal breaks, and to project employers as being like that is, I think, totally inappropriate. It’s embarrassing our employers that employ—I repeat again—95 percent of our population.

When Minister Iain Lees-Galloway tried to give an explanation of why he is limiting the 90-day trial period to only small and medium businesses, it clearly showed that he is going in the wrong direction, because we started from small and then we extended it to the whole sector. But now the Minister wants to go in—

💬 Hon Tracey Martin: It doesn’t mean he’s wrong.

—yep—the wrong direction. He’s definitely going in the wrong direction. The Minister used the research and read it from his iPad, whereas members like the Hon Jacqui Dean and other members, those who took calls from my side—I fully endorse their comments that they had gone out and spoken to people.

We have heard a lot of discussion around how businesses see this partial removal of the 90-day trial period, but I want to make my contribution with regard to an employee perspective, because, yes, I have been an employer before and I’ve employed people, but I have seen the other side too, through my other roles. I have seen people literally crying and begging, wanting to get a job, and especially new immigrants. It’s really important for new immigrants, because the first thing they want is a job. They want a good school for their children. If they have a job, they can look after their families. I had several people—this is before I became a member of Parliament—come to me and say that the biggest barrier they face is that employers are asking for local work experience. So where do they produce that local work experience without getting an employment opportunity?

That is why the National Government listened to them and introduced the 90-day trial period, because then we were taking that risk away from the employer that my colleagues have already spoken about with regard to the employer perspective. Employees got the chance to prove themselves, and if it didn’t work, then that gave them the experience and that gave them the exposure to the work environment here in New Zealand which they could use as their first work experience here in New Zealand to apply for their next job. And 90 to 95 percent—what I heard from people was that their employer was very happy to be their referee. That was the most important thing those people wanted when they came to New Zealand, and it’s not only for new immigrants; it’s for women. You know, we take breaks when we have children. We want to get back to work. Who is going to look after them when they’re trying to get into employment after having a big break in their work history? Again, employers can be hesitant, so this 90-day trial period gives them the opportunity.

So the question I ask the Minister—it’s not about business; it’s about employees. The Minister is creating unequal employment standards for people. People that will be working in small to medium enterprises where employees number less than 20 will have different employment standards than those who are working in big companies, which will not be able to utilise the 90-day trial period. Why is the Minister is creating unequal employment standards for people—

💬 Kieran McAnulty: He’s already answered that.

No, the Minister has not answered, and I would like to get a specific answer. If the Minister stands up and again says that, oh, we have to read the Employment Relations Act—

💬 Kieran McAnulty: The member should read the bill.

You know, the Minister should know the Employment Relations—

CHAIRPERSON (Hon Anne Tolley): That member should take a call if he wants to contribute.

The Minister should not stand up and say that we should read the Employment Relations Act, because I really want to know from the Minister why he is creating unequal employment standards for people, and not just the standards but unequal opportunities as well. Why should people trying to get their first job experience only apply to small to medium enterprises to utilise this 90-day trial period? It’s unfair. Why can’t they apply for a job in a big company and also utilise this 90-day trial period—why not? I want an answer from the Minister, because we know that people out there are looking for job opportunities in all kinds of businesses, not only in small businesses, and we know that big businesses are big and chunky employers.

Thank you very much, Madam Chair. I could not resist the invitation to speak on this bill and to speak after Dr Parmjeet Parmar, the previous speaker, whose contribution touched on 90-day trials and big, chunky employers. I’m not too sure if big, chunky employers are in the bill, but I tell you what is in the bill: it is a clear and very evident clarification as to what this bill is about.

Part 2 clearly outlines the answers that the members on the other side are seeking from the Minister and that the Minister has on numerous occasions answered, and an example of that is 90-day trials. The Minister took the opportunity to clarify independent research as to why 90-day trials were not effective on the things that the members opposite are claiming—giving young people a chance, because young people never got a chance before the 90-day trial, and giving those who otherwise would not be given the opportunity a chance. This independent research that the Minister has quoted on a couple of occasions now clearly refutes those claims. Also, what the Minister said when he took one of his numerous contributions was that those people that are apparently being given a chance can still be given a chance—as it clearly outlines in Part 2—in a probationary period.

As the Minister said, the difference between a 90-day trial and a probationary period is very clear. It still gives the employer the opportunity to take a chance on a prospective employee, but at the end of that trial period, if they are not up to grade, they provide a very clear and reasoned explanation as to why. In fact, this Government argues that a probationary period is much better and much more effective at providing a young person with a chance who hasn’t previously had employment experience, because at the end of it they get feedback on where they’re currently not fitting the bill.

This Government argues that at the end of that period, if the focus is on giving young people an opportunity—like the Opposition claims is their focus—then surely, at the end of that period, giving them some feedback and some guidance and some areas on which they need to work is more effective at giving these young people a chance. It is my view that due to the arguments put forward by this Government—and by the Minister, in particular—on especially the issue of the 90-day trials, surely for the people watching at home, it couldn’t be clearer.

Thank you very much, Madam Chair. I appreciate the chance to speak on, specifically, clause 39, “Section 125 replaced (Remedy of reinstatement)”. I’d like to further underscore some of the comments that my colleague the Hon Scott Simpson made earlier but raise a couple of different points and a couple of different questions to the Minister.

Now, those of us who sat on the Education and Workforce Committee and heard many submissions, of which I was one, heard from several different submitters in regards to reinstatement and some of the difficulties that this section will impose for them. Now, what’s interesting is that most don’t dispute the idea of reinstatement, but they do have deep concerns about what this particular amendment will do. I’m going to refer in part to the Simpson Grierson submission and their very thoughtful contribution, not only in this section, of course, but in many instances. What we know is the current wording of section 125 of the Act provides that the authority may provide for reinstatement, and what the amendment’s doing here, of course, is saying that it must be the primary remedy.

The current wording, Simpson Grierson and others have argued, is working well and should be retained, not with the new amendment. When reinstatement is sought as a remedy, to state the obvious, it’s not always the appropriate remedy to go after. In Simpson Grierson’s experience, they’ve said that a disproportionate number of employees seek reinstatement for tactical reasons only, and they do that in order to strengthen their bargaining position at mediation or in settlement negotiations, rather than out of a genuine need to return to their former role. Now, what this does is add on significant costs and procedural delays. Now, that’s a reality and that’s come from Simpson Grierson and also employers, and I’m going to refer to some of those employers soon, having heard them in person.

So if this bill was to pass and have reinstatement as the primary remedy wherever practicable and reasonable, there will undoubtedly be unintended costs and implications for employers. Now, that stems from the fact that, by nature, trust has broken down between the employee and the employer, and there could be, as a flow-on effect, an unnecessary burden on other staff if in fact the primary remedy is reinstatement. Some of those other staff could have been directly affected by misconduct or in other situations. So what we’ve seen from different submitters and we know from, for instance, Port of Tauranga, Tourism Industry Aotearoa, Business New Zealand, Hospitality New Zealand, is that most who have been dismissed prefer to move on.

Now, how do we underscore that particular statement or something that the submitters said? We just need only go and look at some Ministry of Business, Innovation and Employment statistics, and we did that in the select committee. So we asked for the ministry to provide us with evidence of dismissals and reinstatements, and what they provided us with was a chart, and I’ve got that here. What they’ve said is that in 2013—from the Employment Relations Authority—there were two permanent determinations for reinstatement; in 2014, eight; in 2015, four; in 2016, five. That’s not a lot. That’s not a lot at all. So in respective years: two, eight, four, and five. What we may deduce from that is that it’s actually quite difficult for all for reinstatement to be a remedy let alone the primary remedy, and that’s why we oppose this particular amendment.

Madam Chair, thank you. I’ve worked so hard to get this call. Now, I’ve been listening to the contributions from across the Chamber and I’ve been listening to the interjections. With some of the things that they’ve been saying to me, I’ve been wondering how many of those good people from across the Chamber have actually been in business? Then I realised, yes, they’ve been in business. They’ve been in the fertiliser business, because they are producing it on an industrial scale.

You know the old saying: if it ain’t broke don’t touch it, OK? They’re seeking to fix a problem that isn’t there. In the last two years: 245,000 jobs created, third-highest employment rate in the developed world, 80 percent of workers are in full-time work, and wages are rising at twice the rate of inflation. That sounds like a problem that doesn’t need fixing. This bill illustrates to me that this Government is being run by the unions.

So we’re experiencing unprecedented numbers of strikes, and I want to talk about in Part 2—this bill will significantly increase the cost to business owners, remove flexibility, and it will definitely put jobs in danger. It will give unions rights they’ve never had before. What it does is it pits employers against employees. It’s going to create a little bit of trench warfare. People are going to dig in. Now, I’m a guy that’s been an employer and an employee and for 20 of years of my life I was both. So I’m speaking from personal experience. I’ve run a number of businesses.

I know that the Hon Iain Lees-Galloway hasn’t run his own business. It’s patently obvious. He’s made a few statements in the media about businesses and people that are struggling, and I think they’re arrogant statements—when you’re talking about people running businesses and trying to get by and he just says, “Well, they should close down.”

💬 Jan Tinetti: I raise a point of order, Mr Chairperson. I was just wondering, Mr Chair. This is Part 2 that we’re talking about.

I’m talking about businesses. Now—

CHAIRPERSON (Adrian Rurawhe): Order! The role of the Chair is to chair and to decide on points of relevance. I’ve just come to the Chair in the last 30 seconds. It is inappropriate to interrupt another member while they are speaking on this bill. Let’s leave me to do that job—OK?

Thank you, Chair. Now, I’ve run several businesses in my time and I have actually lain awake at night wondering how I’m going to pay the bills, the rent, the wages, and I can tell you this. When you’ve got an employee, if you get a good employee, you hang on to them. Having good staff is everything—having good staff is everything. I’ve frequently gone home with less money in my pocket and my bank account than my lowest paid employee. That is absolutely a fact.

Now, if you want to get a sort of study on the 90-day trial, just pick up the phone and call the average business owner and ask about the 90-day trial. I can speak from my own experience. I ran a business and I had six staff and everything was ticking along nicely, and this young guy walked into my business—I’ll call him Jason, because that’s what his name is—and he said he was 17 years old, no skills, nothing really to offer, and he wanted a job as an apprentice mechanic. I thought to myself, I don’t need another mechanic, I don’t have the work for him, he has no experience, he has no skills—I won’t risk it. But I had the 90-day trial period, so I took him on. Well, actually what happened was I said I didn’t have any work and he said to me, “I’ll work for free just to get experience.” So for that week he came in and he worked all week for free, and all I did was take him and shout him lunch—quite a decent lunch. And I thought, “Well, we’ll just give him some experience.”

At the end of that work I realised he was a pearler and I was going to keep him on. I created a job for him, and I knew that if it didn’t work out at the end of 90 days, or even less than that, I could let him go. I knew that I could do that. I took him on, on that basis. And you know what? That guy is now a qualified, certified bike mechanic. I put him through all his training, paid for it all, and took him on. He can now get a job anywhere in the world, because bike mechanics are in short supply. He can get a job anywhere in the world, that guy. The only reason he’s in that situation is because I knew I had a 90-day trial period to fall back on, and that’s why. I’m speaking from experience here, but I say pick up the phone and call the average business owner in Northland and ask them about the 90-day trial period and you’ll get your answer. Thank you.

I move, That the question be now put.

Thank you, Mr Chair. I stand to talk about the 90-day trial. I was an employer as well, and Mr Chair will be familiar with the organisation that I’m going to talk about, because this organisation isn’t too far away from the home of the Chair. I just want to talk about the opportunity that I had to actually employ two young Māori women on a 90-day trial. They came to me with no qualification whatsoever of what I was looking for. I said to them I was quite happy to take a bet on them. They seemed to be very enthusiastic about the job; it was a receptionist job. I only needed one person, but I took the gamble and took both of them on. And the result of that was that one of them ended up being a health promoter, because, after their first month of their 90-day trial with me, I had a meeting with them just to see how they were going—just to see whether or not I had made a good decision on being able to employ these young women.

They found that they were unable to get into the workforce, because, number one, they didn’t have any qualifications. No employer out there wanted to take a gamble on them, and I did. The other one came to learn how to run a PABX system, which is a telephone system. Her family had a business and she wanted to work for them. They didn’t have an opportunity to train her in the role that she wanted to be trained in, and so she applied for the job as receptionist in the hope that I would be able to help give her some of those skills.

Nowhere throughout the whole interview with these young women—we knew about the 90-day trial but we never ever discussed it with them, because my idea of employing them wasn’t to actually get rid of them after 90 days, like some people across the other side of the room are talking about. It was never about that; it was always about giving them an opportunity. And I think this is what the 90-day trial is all about: it’s about giving them an opportunity.

When one starts to look at employment of those that have no qualifications, that can’t get on to the employment ladder, then we have to try all ways of being able to open up opportunities for them. And I’m pleased to say that the young woman that came in to learn about telephone systems within organisations—she carried on. She did a little bit more training in other areas of human resource management—all of those things we were able to offer her on top of her employment role. So when I stand here and I look at the changes that this Government want to do around the 90-day trial, I’m actually really shocked. I’m shocked because it does disadvantage those young women.

That’s why I stand here tonight supporting Supplementary Order Paper 115, in the name of Scott Simpson. We want to make sure that young women like these young Māori women—these are the most vulnerable women that we’re talking about. We must give them an opportunity. We must be able to offer them that. We must be able to do what I did and put them through educational training to get qualifications. That’s what a 90-day trial gives an employer an opportunity. It was never ever about unions or anything like that; it was always about the person, and I think, in this Chamber, when I look at this bill and I look across the other side of the Chamber, that’s what’s missing in this bill—it’s the people factor; it’s the experience that most of us on this side of the Chamber have got in employing other people into their organisations.

When I looked through that, I looked at the meal breaks—the rests. We worked in a kaupapa Māori organisation, and we ran that. We had kai when it suited us, when it worked in for the organisations, because sometimes we hosted people. Those young women that were on reception got to learn those skills—although it was pretty easy because they came from a marae background; so they knew that side of the entertainment or manaakitanga. So the skills those young women brought along to our organisation, we learnt, we grew from. Our organisation just wasn’t about the mahi; it was also about the waiata, it was the tikanga of Māori, and we were pleased to be able to offer these young women that opportunity in an employment situation.

As an employer, I would never take on people unless I’m able to give them some money and some sort of training into furthering themselves. I’ve always worked like that, I always will do work like that, and I can say that this 90-day trial that the Government is taking away from people like these young Māori women, especially in organisations with over 20 staff—I had 21 staff, which would have meant I would have missed out under this legislation.

Thank you. I rise to take a contribution on Part 2 of the Employment Relations Amendment Bill, but before I do so I just want to reflect on the contribution of the previous two members who have spoken with what could be described as lived experience. I want to address Chlöe Swarbrick directly, who has scoffed throughout the contribution of these members, and I would say that that kind of scoffing is indicative of the attitude of some of the members present when it comes to what goes on in the workplaces of New Zealand and the attitudes of employers and their intentions towards their employees. Chlöe is welcome to take a call to respond to that if she believes that’s unfair.

Actually, what both Jo Hayes and Matt King have spoken about is the good intention of employers who want to do the best by their employees, and what this part doesn’t allow for is that good intention.

I want to address a particular group of employers in New Zealand, and that is early childhood providers, because they are particularly impacted by three aspects of Part 2. They are impacted by the 90-day trial provisions, they are impacted by the rest and meal break provisions, and they are impacted by reinstatement being a primary remedy.

💬 Hon Member: What are they telling you?

What they tell me is that they stand to compromise on the service they deliver for children because of the aspects of this bill. They talk to me about what the 90-day trial provisions mean in practice when you are looking after young children. You can have someone come in with a great qualification who seems OK, and then you see them at work with the kids, you see them at work with your team, you see them interact with parents, and you say, “This is not a good fit for this childcare centre, and we do not want to compromise the care or education of children present. We will let them go.” They also see people who come in who don’t have qualifications, who say “I love children. I’ve always wanted to work with them.” And they say “Oh, I’m not sure.” They give them a go. Those people end up being some of the best educators in our early childhood services.

Let’s talk about the rest and meal breaks. What they tell me about rest and meal breaks is that this is a workforce that is predominantly female. Often what they want to do is attract women who’ve got children at school or children in early childhood themselves, and what those workers sometimes say is, “I don’t want my lunch break; I want to leave early so I can pick the kids up from school.” But what this bill does, in Part 2, is it says if the union comes in and says, “No, these are going to be the prescribed rest and meal breaks.”, then those workers will not be able to have that flexibility into the future. These are the genuine fears of early childhood services.

I went to Christchurch. I met with Annabel’s Educare in Somerfield. I met with Courtyard Montessori, Fundamentals early childhood centre, Poppies Preschool, and Portobelo Preschool. The people in these preschools were genuinely concerned about the impact this bill would have, and in particular this provision, which we want to address in Supplementary Order Paper (SOP) 144 in my name, and that is about reinstatement as a primary remedy.

So this is the scenario: an early childhood service has concerns about the way that one of their employees is working with children and families. They take a dismissal against that employee, they get some of the process wrong, and you know what? That sometimes happens. Not all the i’s are dotted; not all the t’s are crossed. I don’t make an excuse for that. The i’s should be dotted; the t’s should be crossed. But then what happens is the court says, “Actually, because you didn’t get the process right, you have to reinstate this employee.” In the meantime, the risk to the children, the risk to the other workers, the risk to the parents is that that person comes back into that service and brings in a negative attitude, is unhappy, makes it harder for other people to do their job, or harder for other people to provide good care and education to their children.

So what SOP 144 does is provide a simple remedy. It says that instead of making that the primary remedy, what you can do is that your reservations about a returning employee can be reflected, you can consider their effect on others in the workplace, and you can consider whether it is, in fact, appropriate for the primary remedy to be this. This is about safety. It’s about employers making good decisions about the services they are providing, and about employers making judgments about the people they employ and the impact they have in their workplaces.

So when it comes to early childhood educators—some of the businesses in our community who most understand the realities of what it is to have good people working with some of our most vulnerable citizens—they are uncompromising in their view that this bill is a step backwards, and in particular—[Time expired]

Thank you, Mr Chair. So there are just a few points I want to clarify about this piece of legislation, the Employment Relations Amendment Bill, for anyone who’s listening. Some of the points the Minister Iain Lees-Galloway has previously covered, but the Opposition doesn’t seem to have heard them, so I will actually just do my best to clarify them and hope that it kind of cuts through.

One of the first points I did want to point out, though, is that I’ve also been an employer, and I’ve employed, I think, probably, maybe 30 or more young people in their first job ever. I managed to do that before there were 90-day trials.

💬 Hon Members: What!

I know. You would not think that it was possible that anyone could give a young person a chance in a job without a 90-day trial, but lived experience coincides with the research, as well. [Interruption] I don’t know, but, you know, I just wanted to point that out, and I would also point out that, unfortunately, one of those young people I had to fire for dealing drugs on the premises. I managed to do that without a 90-day trial—extraordinary! So I do just want to point out to New Zealanders who think that this legislation means that no person who’s not had a job before is ever going to get a job—it’s not true—or that it’s not going to be possible to fire anyone—not true. It’s absolutely possible to dismiss people. You just have to give a reason and follow the process. I also point out that there is a probationary period built into this, so it’s not even just that you can fire somebody and follow a due process but there’s actually a probationary period built into here.

I do just want to point out that some of the discussion we’ve heard tonight is that “Actually, if somebody is not quite a good fit in those 90 days, then the good thing to do is to get rid of them.” No concept about, actually, “Maybe you want to look at how you might make the workplace work better for that person.” or “Has their training been up to the standard that you expect?”—that maybe you want to put some investment into their development, and that, actually, if you did those things, you might get a really good result for your business in the long term? No, it’s automatically going to the idea that “Actually, we don’t want to invest in these people. We want to get rid of them. That’s the best solution.” and I challenge that. That is not my experience as a staff member, and that’s not been my experience as an employer.

So I think it’s important in this discussion that we challenge that kind of thinking, because in New Zealand we know that, actually, we’ve got some issues with management in this country, where we need to do more work around developing good management so that we increase our productivity. One of the things about good management is a concept of your staff as an asset and the idea of actually supporting them and developing them to improve their productivity and their sense of value in the workplace. So I really challenge the Opposition on the rhetoric that we’ve been hearing from them tonight in terms of accuracy but also an underlying view that I think undermines good productivity and good business in this country.

The other point I wanted to pick up on as well is the idea that we’ve been hearing about migrants, women who have had children, youth, and young Māori people—and I’m just waiting to hear, “Gays are not going to get jobs without 90-day trials.” We’ve been hearing this, and I just want to acknowledge that that is speaking to and entrenching views of discrimination. People are naming those groups because these are groups who are discriminated against, and if you’re pointing them out as a justification for the 90-day rule, then you are actually reinforcing that basic discrimination, because you’re saying that, actually, they don’t deserve a job as a right compared to an older man—compared to a white male, who has not been on anybody’s list of discussion in this committee. So I think there needs to be some very careful thinking from the members of the Opposition about the kinds of underlying values in their contributions to this debate.

Excellent. It’s a pleasure to take another call this evening on what is Part 2 of the Employment Relations Amendment Bill, and I want to speak to a new Supplementary Order Paper (SOP) that has not been discussed tonight. It is SOP 146 and it’s around getting rid of clause 39A of this bill. So what does clause 39A talk about? It talks about amending the principal Act to allow the Governor-General to “add, delete, or amend categories of employees.” in schedule 1A, and I just want to walk though exactly what we mean by schedule 1A just to understand what exactly the Governor-General is able to add, amend, or delete.

So, going to schedule 1A, it’s very clear that it defines employees who are in the service industries—so that is the cleaning or food or caretaking industries—and that applies to education, healthcare, age-related residential sectors, the public or local government sectors, and any airport or facility with aviation ability. I bring this SOP forward today because, essentially, what this bill as it’s been written allows is it allows the Governor-General to make additions or subtractions to schedule 1A, and I think that that is actually against the fundamental principles. Things like schedule 1A and changing schedule 1A should actually be brought to this House—Parliament—and it should be Parliament’s decision to amend, change, or delete schedule 1A. So I would like to hear from the Minister about exactly what the rationale is around giving the Governor-General that authority, because I believe that that is undemocratic and that we should bring this to Parliament.

I do want to speak also to SOP 144 in my colleague Nicola Willis’ name because, again, going back to the primary remedy being reinstatement, what we need to do is to actually do it on a case by case basis. That is why this is around deleting that clause, so that if an employer and an employee have a disagreement and they fall out—like the example that I demonstrated in the committee earlier tonight, in Birkenhead, where, essentially, a restaurant manager wants to get rid of somebody. The relationship has broken down. So, under this law, if the employer or the employee go to the authorities and they go through the process, and the authority rules in favour of the employee, then the damage for that will be, essentially, reinstatement. We think that, of course, if the relationship has broken down, that is just unworkable. So we’d like to, again, seek advice from the Minister around why we need this primary remedy of reinstatement, and why we do not just have an agreement in the law that says it will be done on a case by case basis, depending on the circumstances of the case in question.

That is completely consistent with the submissions that were raised in the Education and Workforce Committee. The Employers and Manufacturers Association also raised this, as well as the Hospitality Association of New Zealand. It seems like it is quite common that employers and employees have disagreements and they fall out, and it is far better to, essentially, have a reward or a payout, let the employee go free, and let the employer get on and get their business done.

So I would like to seek some further clarification from the Minister on Nicola Willis’ SOP, but also, going back to my SOP around why the Governor-General has authority over access to changes in the employees’ schedule in schedule 1A versus bringing this back to Parliament. Thank you.

Thank you, Mr Chairman. I’ve been listening intently to the debate and I’ve heard the contributions on 90-day trial periods, reinstatement, and rest and meal breaks. And although I have been looking for opportunities to participate in the debate, I haven’t yet heard anything new that I have not already previously addressed. I did hear Matt King, I think, get very close to admitting to breaching the Employment Relations Act. I won’t hold that against him, but at least it was new.

The one new point that has been raised was by the member Dan Bidois, which was the reinstatement of the ability to amend schedule 1A, which lists the occupations, the groups of workers, who have access to the provisions under Part 6A of the Employment Relations Act.

That is because as conditions change we need to have a mechanism by which we’re able to respond to changing economic conditions, and if groups of workers become vulnerable or, indeed, if we determine that groups of workers no longer need access to the provisions afforded them under Part 6A, then we need a mechanism that is faster than the legislative process. Doing that by Order in Council still requires a process. It would still require an application to be made for that application to be considered by the Ministry of Business, Innovation and Employment, and it would ultimately come to me as Minister for a decision to then make a recommendation to the Governor-General to pass an Order in Council to make amendments to that schedule. But the reason is that as things change we need a mechanism which is more responsive to those changes than the full parliamentary process, which thus far has not produced any results in terms of delivering changes to that schedule.

Thank you, Mr Chair. I appreciate the opportunity.

One of the matters that we haven’t discussed much tonight has actually been the Minister’s Supplementary Order Papers (SOPs). There are 11 that are set out in his SOP paper that the House is now considering as a committee. The first one relates to the delay of the introduction of the bill and that it would move the day that the legislation would become effective from March to 6 May. I’m keen to know what the reason for—

💬 Hon Iain Lees-Galloway: I raise a point of order, Mr Chairperson. It will certainly be an interesting debate when we debate the commencement clause. But it’s not part of Part 2.

CHAIRPERSON (Adrian Rurawhe): Yeah, that’s correct.

Fair enough. We’ll look forward to continuing that a little later on.

So in that case, then, what I will do is I’ll leave those matters for the meantime. But one that does relate to Part 2 is the question of the changes to the 90-day provisions. One area that I want to concentrate on relates to the definition of 20 employees or less. Now, under the bill it will be that businesses that employ fewer than 20 people will be still able to use the 90-day trial periods. There were submissions made at the select committee around the definition of when and how that 20 number was to be made up. So for instance, are there issues that relate to full-time employees, part-time employees, contractors, casuals, or whatever? I’m keen to hear the Minister’s explanation as to how that 20 is made up. In my electorate of the Coromandel there are a great number of businesses, particularly in the hospitality sector, that are seasonal. So at this time of the year, as Christmas and summer approaches, most of those businesses are now gearing up to a peak employment period to match the customer demand as people from all over the country come to spend their summer vacation in the beautiful Coromandel. So if one was to think about a cafe, for instance, at the top of the Coromandel peninsular—say at Colville, very good cafe, I can heartily recommend it—during the winter months the number of employees is very low. But over the summer, obviously, the number of employees increases dramatically.

The question that arose at the select committee was, well, when will the timing for the calculation of the 20 employees kick in? Is it in the middle of winter or is it the middle of summer? Is it the peak or the low of whatever seasonality that the business has? What the officials came back with and what we decided on at select committee was to include a provision, new section 67A(2) that says “…fewer than 20 employees at the beginning of the day on which the employment agreement is entered into”. Now, the challenge with that is that there is clearly then an opportunity for gaming that timing. So an employer who wanted to take advantage of still being able to use the 90-day trial period would, if they were hovering around 18, 19, 20, 21, or 22 employees, around that sort of fringe area, surely then, if they wanted to extend the use of the 90-day trial period to their businesses, wait a day, or a week, or a month to offer a new employee a new agreement, until the day at which they are under 20 employees. The day that they have 18 or 19 employees will be the day.

So I think that there are some challenges around, again, the definition of that and the potential for gaming, for want of a better term, by those employers who might be employing 20 or 21 people. Maybe they have a bit of a sinking-lid policy. They get down to 18 or 19 and then they want to be able to take advantage of the 90-day trial period. If that’s the case then this is a potential area for—abuse is probably the wrong word, but certainly gaming if they wanted to try it. I’m keen to know what the Minister’s views are on that situation.

I move, That the question be now put.

Dan Bidois’s tabled amendment deleting clause 35 is out of order as being inconsistent with a previous decision of the committee.

The question was put that the amendment set out on Supplementary Order Paper 144 in the name of Nicola Willis to clause 39 be agreed to.