Employment Relations (Triangular Employment) Amendment Bill

Well, it’s marvellous to be here at this point. It’s been quite the journey to get to here. Here we are tonight, in the committee stage of the Employment Relations (Triangular Employment) Amendment Bill, a bill that was not drafted by myself but a bill that I was happy to take on. I acknowledge Darian Fenton, the former Labour MP and stalwart of the union movement who originally drafted this bill.

💬 Simeon Brown: The bill doesn’t look anything like it.

But the interjections from my left are correct. This bill has gone from one which sought to include those employees within a triangular employment arrangement into a collective arrangement within the particular workplace that they found themselves in. What we found in the select committee process was that those submitters that turned up to select committee had an issue with this particular part of this bill and not necessarily the personal grievance part of the bill, and we took that on board. We said “Okey-dokes. We hear what you have to say. We will amend the bill accordingly.”, and this is what has been presented to the committee for discussion tonight.

This bill seeks one very simple goal: the extension of the right of a personal grievance to those workers that are employed within a triangular employment arrangement. It is my hope that members to my left, the National Opposition, do speak in favour of this bill. It is my hope that after a period of reflection, they have seen that this is such a simple objective. The basic provision of a personal grievance should be applied to everyone in this country that is employed. It is a right that most employees enjoy, except, of course, for those that find themselves in a triangular employment arrangement. That arrangement is when an employee is employed by a labour hire company or a recruitment company as their employee, but is then placed on assignment under the direct control of a controlling third party—what was originally drafted in this bill as a “secondary employer”. But, again, we took on board the feedback from those who submitted to the committee and we changed that definition.

I will point out that this bill does not take into account employees that work for a contractor—say, for example, a shearing contractor or a horticultural contractor. I say this because the National Opposition have mentioned this in the past. They seemed somewhat confused, so I thought I’d cut it off at the pass. I say to the members to my left that there is a very clear difference between those employees who work for a contractor and those employees who work under a triangular employment arrangement. When I worked for the shearing gangs in Wairarapa, I was under the direct control of the foreman, and no different to someone who worked for a building contractor under the direct control of their foreman. It is no different under a horticultural contracting arrangement, because they are directly employed by the people that have direct control over them.

Where it is different under this circumstance is that whilst these employees are on placement at this controlling third party, under the direct control of these companies and employers, they have no right to a personal grievance. They could be treated poorly with no redress, and we say that’s wrong. My challenge to the National Party tonight is to explain to New Zealand why you think that not all workers should enjoy the protection that you enjoyed before you came into this House.

Everybody that works for a living should have the right to redress. If we, as employees, are treated poorly, we should have the right to be able to take that to the court and explain why. That is why I am very proud to present this bill. I look forward to the discussion, and I look forward to hearing what the National Party have to say: an explanation to New Zealand as to why they think the simple principle of taking a personal grievance should not apply to these workers, who—just like us—work hard, but don’t have the protections that the rest of us enjoy.

Thank you, Mr Chair. Well, the member in the chair, Kieran McAnulty, has got one thing right, and that is that this bill, the Employment Relations (Triangular Employment) Amendment Bill, is nothing like the bill that was introduced and first drafted by that trade union stalwart who came from the trade unions, who did her compulsory parliamentary service here in the Labour Party, and then returned back to the trade union movement: Darien Fenton. She drafted a piece of legislation back in, I think it was 2009 or—

💬 Dan Bidois: 2007.

—2007—way back then—that was designed to do nothing other than grow the strength of the trade union movement. So Darien Fenton’s no longer in the Parliament. Kieran McAnulty picked this up, probably without reading it, and signed it off, and then found that it was drawn from the ballot. Then it went to select committee, and it was found wanting in every single regard. It was wanting so much that at the Education and Workforce Committee, the entire bill was rewritten, apart from two things, one of which was the title. The entire bill was rewritten at select committee.

Now, we on this side of the House do still oppose it, but we acknowledge that it’s a much better bill than it was when first introduced at first reading, and the select committee, I have to say, did some good work, not the least of which was convincing the sponsor and promoter of this bill that the union-friendly stuff all about collective agreements was utterly unworkable, totally unnecessary, and not worthy of pursuing. To his credit, he saw the logic and the good intent of that, and took it out. But still we have a piece of legislation that seeks to over-define an arrangement that works really well in almost every employment situation. It’s topical at the moment because not the least of which are things that are going on within this precinct at the moment, or that have been topical and newsworthy just this very day.

So I want to just refer in Part 1 to the definition which will be in section 5 of the principal Act when this bill gets passed—if it gets passed—which is the definition of a “controlling third party”. Many people out there in the real world, I think, don’t actually understand the meaning of a triangular arrangement. So, for many people, they will understand a triangular arrangement as maybe one where, if a reception person goes on leave for a few weeks, the employer will go to a temp agency and ask a temp agency to provide a temporary reception person for that period of time, and in due course, what happens is that the temp agency sends an invoice to the company that is hiring the services of the temp for that period of time. The relationship exists between the temp agency and the temp who is doing the work, and it’s a financial transaction between the engaging firm and the temp agency.

Now, that’s not dissimilar to thousands of employment situations all around the country. Doctors on locum, for instance, are in triangular employment arrangements. Indeed, staff employed by members of Parliament or engaged by members of Parliament in their offices—technically, those staff are in a triangular employment arrangement. They report on a day-to-day basis to the MP, but they’re actually employed by the Parliamentary Service, and that’s why these matters are topical today.

So the definition that we are confronted with is quite unwieldy, because what we’ve done is now change the definition to define a “controlling third party”—a “controlling third party”—because, for the Labour Party, it’s all about control. The definition in clause 4(a) is someone “who has a contract or other arrangement with an employer under which an employee of the employer performs work for the benefit of the person; and (b) who exercises, or is entitled to exercise, control or direction over the employee that is similar or substantially similar to the control or direction that an employer exercises, or is entitled to exercise, in relation to the employee”. Now, that is a definition that will be lost to almost all employers, to almost all labour hire and temp agency organisations, and, actually, to most people out there in the real world. This is a complicated piece of legislation and unnecessary in every respect.

Thank you, Mr Chair. Look, I just want to start by saying, in the context of events today, I thought that Scott Simpson’s attack on Darien Fenton was scurrilous, and possibly even bordered on bullying. He said that she was a trade union member and that that characteristic of Darien Fenton had led her to bring this bill, and then he went on to say that Darien Fenton may not even have read it. I don’t know if he was implying that Darien Fenton couldn’t read it, but if that’s what he meant to say, then that could definitely tip over into bullying. I think we should all be very, very careful how we address each other. A personal attack of that nature really should have no place in this House.

I also want to say that the policy debate is the one that we should be having here. We are going to have a debate in particular about the economics. The economics is essential. Some people call it the dismal science, but it’s very difficult to make labour laws without understanding the way that the supply and demand of different quantities interact and how they lead to prices. I note and, I have to say, I highly agree with amendments that have been made in the previous stage, and I think that they should be retained. I think that the bill as drafted comes much closer to matching its intentions in its current wording than it did before, and I want to explain why that is.

It is not possible to raise wages sustainably by restricting the supply of labour. That’s what this bill would have done by imposing collective agreements, by ensuring that if a person working on a particular site was not with the employer that employed other people on the site, they would none the less have to be in the same union agreement. That is a way to constrain the number of people who might offer their services to work on that worksite, by requiring them to be part of just the one collective agreement. It precludes other workers from coming along and saying, “Hey, my best opportunity might be a triangular agreement. My best opportunity might be to come and work on this worksite but, actually, I won’t be getting paid as much or the same conditions as the people who are there now.” That’s what that provision in clause 5 would have done, and I think it’s very right that it’s been got rid of, because it’s got us much closer to a bill that reflects its true policy intentions in its current drafting.

The reason why unions can’t sustainably raise wages is, I think, best explained by Henry Hazlitt in his brilliant 1945 book, Economics in One Lesson. I think that this Parliament could be immeasurably improved if more people were to read that classic tome—particularly chapter 20. I can see Dan Bidois is getting a bit excited there. He’s twitching because he’s read it and he’s a good economist, and he knows that chapter 20 explains why clause 5 of this particular bill was such a bad idea. It explains why it is that trying to constrain the number of people that can work on a particular worksite is not actually going to raise wages, but it takes some explanation, Mr Chair, and I really hope you’ll give me a second call because it’s some quite interesting and important economics that I think the committee could benefit from a wider exposure to.

It goes a little bit like this. While it, in the first instance, would seem that constraining the number of people that can work on a worksite will mean that there’s less competition amongst workers for wages and that wages will actually be raised by that constrained supply of labour on the worksite, the problem is that they cannot actually raise productivity on the worksite by constraining labour supply. So the only result is that the price of goods and services produced is higher than it would have been had we not had a clause 5 - style restriction on how many people could actually work on a particular worksite.

Of course, those costs—those monopoly rents held by those particular workers—have to be passed on to the consumers who purchase the product. They might be paid by those people who supply the capital that makes the particular workplace possible, but nevertheless those increased costs are passed on to other workers. The wages earned by those other workers are worthless because they have to pay the monopoly—[Time expired]

Those were the words of a man driven by an Ayn Rand world view, hanging on by his fingernails to relevance. This bill is about fairness—simple fairness—something that that side of the House really doesn’t practise, doesn’t understand, and certainly doesn’t allow to prevail in our country when they have the Treasury benches. Thankfully, this side does.

Ultimately—to boil it down—for workers employed by one employer but working under the control and direction of another business or organisation, it allows those workers simply to apply to the Employment Relations Authority to have their host employer, or controlling third party, joined to a personal grievance. It’s not that complicated and it’s ultimately about fairness. Certainly, in the select committee process—and I was on the Education and Workforce Committee for part of the time—it was identified that there is a gap in the law around fairness, and that is what Kieran McAnulty’s bill is seeking to address. So for all those listening at home and thinking “What on earth is this all about?”, this is what it’s about.

I want to just reference what the select committee was told by officials during the process of its deliberations, just to explain how that works. They referenced the case of Boyce v Kelly Services (NZ) Ltd. In this case, an on-hire worker was on assignment with a controlling third party and the assignment was ended early by the controlling third party and with little notice due to the worker being unable to work on a particular day. The authority found that the worker was unjustifiably dismissed, not by the controlling third party that entered the assignment, but by the on-hire firm. It made no effort to provide ongoing work for the worker or to represent the worker’s interests to the controlling third party. That third party was entirely within its rights, they found, to end the assignment, and the on-hire firm had the responsibility and duty of good faith to attempt to resolve the situation for its employee. Had they met their duty of good faith, it would not have been an unjustified dismissal.

What the officials said to us was that the status quo already allows employees to raise personal grievances if they have been unjustifiably dismissed, even if they’re working in a triangular arrangement. The bill does not propose to change this or to shift the responsibility of—

💬 Andrew Bayly: You don’t need to read it, Clare.

—well, it’s because I don’t think that the members over there understand—providing work to the controlling third party, but, rather, what it does is it provides on-hire workers with the ability to raise a grievance which relates to the actions of the controlling third party and provides for that third party to be responsible for their actions if they led to the grievance.

That is what this bill is about. It’s quite simple. It just gives that worker, who has very little power and very little opportunity to address issues that arise in their employment, anyway—and, as I think the member from the National Party said, he seemed to think that it was thousands and thousands of workers. Where is the fairness for them?

It’s a small bill and important—small can be important—and is fixing a gap in the law. It’s about fairness. Let’s just get on with it and pass it.

Thank you so much, Mr Chair, for giving me this opportunity to take this call. This bill when it came to the select committee had two components, as we heard from the member in charge and also from the member who just finished before me. During the select committee process, as another member from our side said, this bill was rewritten entirely. I won’t use those words, so let me describe it.

In Part 1, there was clause 4, clause 5, and clause 6, and that was it. So clause 4 has been fully rejected and there’s a new clause 4. Clause 5 has fully gone, clause 6 has fully gone, and there appears to be a new clause 5, a new clause 6, a new clause 7—there was no clause 7 before—clause 8, new clause 9, and new clause 10. So the Education and Workforce Committee didn’t only rewrite this bill but they also provided for other provisions that were required to make this bill actually a bill. The member clearly didn’t understand when he decided to take this bill up. Before the select committee process and during the select committee process, the member had the opportunity to decide to pull out, rewrite this whole thing, and bring it back. But, no, the member didn’t do that. I don’t know if it’s visible, but I’ve deliberately got this coloured copy, because all the red marks are crossed out and the blue ones are the rewritten parts. So we can clearly see that.

Now, let’s come to what the member Clare Curran, who just finished speaking before me, said. The member repeatedly kept saying that this side doesn’t understand. From day one, we opposed this bill for several reasons, and one of the reasons was the collective bargaining issue—the provision in this bill. The Ministry of Business, Innovation and Employment advisers thought that it was a risky thing and should be taken out. Yep, they said that the aim of this provision was to improve the terms and conditions of on-hire workers, extending access to collectivism, protecting the bargaining position of already unionised workforces. But they said that the bill does not align well with the objectives and has significant risks, so that’s why that provision was taken out.

Talking about submitters, we had this huge number of submissions coming from E tū—that is, the union. Seventy-two submissions were facilitated by E tū. So, of course, they thought “This is 72. This is going to be the biggest delivery by the Labour Government.”, giving them the opportunity to bring more people into their union. That was a big goal of this legislation. It has been chopped into half, so what we have left now is just one provision that we have already heard about.

But in this I want to share my concerns about how the controlling third party has been defined. The member came up with this idea of having a primary employer and a secondary employer. If a person is registered with a hire company, that hire company becomes the primary employer and the place where that person actually goes to work becomes the secondary employer, and that was going to create a lot of confusion. So in the select committee process we said that the secondary employer should be the controlling third party and that they should be only employee and employer—that’s fine.

Let’s look at this definition now. It says, “ ‘controlling third party’ means a person—(a) who has a contract or other arrangement with an employer under which an employee of the employer performs work for the benefit of the person;”. So I have concerns about this “benefit of the person;”. Why only for the benefit of the person? “Person” here is the controlling third party. When somebody goes out to work, they’re not working only for the benefit of their employer. It’s mutually beneficial because the employee also gets benefit out of it. It’s not just the income, but there are so many other indirect benefits that the employee gets. But the member is very happy to accept this as the definition of the “controlling third party”.

This is a very typical attitude of the Labour Party that when people go out to work, they’re only working for their employer, not for themselves. People want to be in employment because employment, of course, gives them income but it gives a lot of other things too. So I have concerns about this definition, and it would be really good to have an explanation from the member to understand how this member thinks that this is appropriate to say that “controlling third party” means a person for whom this employee of the employer performs work for the benefit of the person. The person here is a controlling third party, so the person goes out to work for themselves too. That’s why we reject this provision as well in this bill.

I thank the member Parmjeet Parmar for the invitation to explain why I support the definition of a “controlling third party”. This side of the House understands that there is a power imbalance in an employment relationship. That is why there are minimum conditions applied to ensure that employees are treated fairly. That is why it is called a controlling the third party, because in an employment relationship, there is an element of control. I point the member to this quote, which was said in the House on 3 March 2016, which I have very quickly become rather fond of. It reads, “I can fully understand that feeling of power imbalance between employers and employees. That has come through quite a lot.”

💬 Mark Patterson: Who said that?

Parmjeet Parmar. Dr Parmjeet Parmar, in a previous Government, when it was National’s idea to include minimum standards for employees, said that that member understood the power imbalance between the employee and the employer relationship, yet she had five minutes to explain to the House why she disapproves and opposes this bill. Did she? Did she, my foot. What she did was she stood up and she complained that the bill had been redrafted. Whoop-de-doo! That is what the select committee process is for. You bring a bill up to the select committee, you listen to the submitters, and then you change it.

CHAIRPERSON (Adrian Rurawhe): Don’t bring me into the debate, thank you.

I apologise, Mr Chair. I am rather perplexed, however, that on the other side of the Chamber we’ve had two speakers from the National Party. Both of them have complained that this bill has been changed through the select committee process, and they have both highlighted the very part of the bill that has been removed as the reason why they oppose it. They have referred to submitters in front of the select committee that opposed this bill on the basis of the part of the bill that’s been removed.

I have heard no argument from the National Party as to why this bill as it is presented to the committee right now is bad for employers, is bad for employees, and should be opposed. They’re opposing it on the basis of what it used to say, not of what it does say. It’s quite typical of the National Party, living in the past—living in the past—not thinking about now and not thinking about what is right. I do wonder why Dr Parmjeet Parmar, the chair of the Education and Workforce Committee, was so worried about the power imbalance between employers and employees on 3 March 2016, but doesn’t seem to care on 22 May 2019, and I’ll tell you why. This is what I think. When it’s their idea, it’s good, and when it’s our idea, it’s bad—that’s the guts of it. This is the level of debate that the New Zealand people can expect from the National Party when this is the case.

I will point to the committee’s intention that both of them pointed out—both speakers, the Hon Scott Simpson and Dr Parmjeet Parmar—about union influence on this bill. I’ve got another quote, and I quite like this one.

💬 Mark Patterson: Who’s this?

Well, let me say the quote first, Mr Patterson. This quote says, “The first thing is that unions have a very vital role in our economy and in our workers’ representation, and [we] understand and acknowledge that. Collective bargaining has a very important role as well.” That was on 22 October 2014, the Hon David Bennett—David Bennett. He’s about as right-wing as you can get, but when the National Party put forward a bill that looks to seek and to preserve minimum standards for workers’ rights, they’re all over it, kowtowing, making themselves look good.

But here, the proof is in the pudding. This is where the rubber hits the road, and in a very basic bill that extends the provision of personal grievance to all workers, workers that that side of the House—

💬 Dr Parmjeet Parmar: Explain the definition—explain the definition.

—and the member that’s interjecting—sought to provide for when they were in Government, and they now oppose it when they are not.

I think that sums up very clearly that in the opportunities that they’ve had to oppose this bill and outline why, they’ve talked about parts of the bill that no longer exist and they’ve talked about things that in the past they supported. I don’t think that side of the House has any opposition to this at all; they’re simply playing politics.

Thank you very much, Mr Chair, and thank you to the member in charge of the bill for that quite colourful run of clichéd and rather hackneyed colloquialisms. I’d say to him that he’s a conscientious member. I suspect he’s an insomniac, because he’s spent a lot of time reading Hansard over the years, and the problem he might find is that people might remember something he just said—that the way his opponents make policy is it’s a good idea when it’s on their side and it’s a bad idea when it’s on our side. Well, what he might find is that if his career progresses, those words will come back to haunt him once or twice, I suspect. I can’t speculate whether any members will bother to look up the Hansard to see what he said, but if they did, those are some words that might come back and haunt him.

Mr Chair, I thought it was also a rather loose speech, if you don’t mind me saying. The purpose of the committee of the whole House stage is to debate whether or not the bill as currently drafted and its wording suits the intention of the bill that the House agreed to during the second reading. I don’t think we got near that, particularly when the member was talking about the integrity and philosophy of members opposite him throughout most of his speech. That’s demonstrably a long way from where the bill should be.

CHAIRPERSON (Adrian Rurawhe): Order! To the member, it’s entirely the role of the Chair to decide. I’ve been listening to all contributions very carefully and some have strayed. Most have then come back to those clauses. So a general encouragement to everyone contributing is to get to Part 1 of the bill quickly. Kia ora.

Thank you, Mr Chair. I don’t mean to at all trespass on your territory; I was simply trying to be helpful. As an example of what could happen if members were to stray, I might take offence at what Clare Curran had said—that I was scrambling for relevance—and it occurred to me that Clare Curran saying that one is irrelevant is like Albert Einstein saying that one’s a physicist, because she’d know all about it.

But perhaps we should just stop saying things like that to each other—OK—and maybe get back to talking about Part 1 of this bill and whether the way that it’s worded will achieve the kinds of intentions that we’d like to achieve. I was just saying before—and it’s a shame I couldn’t carry on, because I was just getting into some really interesting economics, and I know it’s interesting, because Dan Bidois told me so. I could see him getting excited in his chair. I was talking—

💬 Hon Stuart Nash: You’ve wasted three minutes already.

Well, I know, Mr Nash, and the problem is that members of your party have been so—how shall we put this—rambunctious and disorderly that it’s become difficult to give my economic sermon. I’m trying to get back to it, but Stuart Nash is interrupting me again. But, as I was saying, it might be that clause 5 of this bill restrains the supply of labour on a particular worksite, and it might be that restraining that supply of labour will make the price—i.e., the wages paid on that particular worksite—go up. That’s absolutely true. The difficulty is that those costs are passed on to consumers, and the problem—

💬 Hon Dr David Clark: What about a competitive market?

—with this idea is that workers are also consumers. Ah, Dr David Clark is entering into the debate into economics and I welcome him. The problem is, Dr Clark, that this law—and this is why it’s so important that clause 5 has been taken out. I’m glad—

💬 Hon Dr David Clark: The profit goes down because the market’s competitive, surely, for the employer.

Well, that’s a very good observation, Dr Clark, because, you see, the point is that clause 5 of this bill would stop the market being competitive. It would require all people on a particular worksite to have the same collective agreement. That’s why I’m so glad it’s gone. So, Dr Clark absolutely gets it. I think he’s got a lot of potential as an economist.

What does Dan Bidois think? Dan Bidois is not so confident. But I look at the alacrity and the pique with which David Clark grasped that point. I think that even though he sort of grasped it back to front—he was sort of pulling the plough backwards—he grasped the point counterintuitively, and I think he’s got some potential. So we’re going back to the story. Ha, ha! He’s surrendering. He’s waving a white flag. The effect is that those increased wages end up in costs of products that are passed on to consumers, and workers are also consumers. Of course, the answer might be, if we follow the logic, for—[Time expired]

It’s a pleasure to take a call at this committee stage on the Employment Relations (Triangular Employment) Amendment Bill. I would like to thank the previous speaker for bringing us back to a rational debate here tonight, which is an important debate about the economics of this bill and the impact that it has on the business community and our society as a whole.

It is very clear that we are opposed to this bill. We are opposed to this bill, not just because of the things that were taken into account and changed in the select committee, but because we don’t think it is necessary. This is a bill that was started 12 years ago, and yet our society has moved on. This bill is really about flexibility. We believe on this side of the House in having a more flexible and efficient labour market, and we don’t think that personal grievances—in particular, in Part 1, these clauses—

💬 Hon Scott Simpson: Who introduced this bill?

Darien Fenton, I believe was the—

💬 Andrew Bayly: Who’s Darien?

Darien Fenton was the author of this bill originally and then it was reincarnated in Kieran McAnulty’s name. I don’t think he’d read the bill at that stage, but no doubt he’s read it now, although he didn’t refer to it in his previous speech. But it is a watered-down bill, and we don’t believe that this bill is needed. It’s going to make us less flexible in our workplace. It’s all about the cumulative costs that are facing these labour hire companies that have organically grown in a free and competitive market, as David Seymour, the previous speaker, said, and there are going to be fewer opportunities in these labour hire companies, because why would you go to these companies and why would these companies hire if the cumulative costs from all these changes going on in this Labour Government are going on?

So, to our philosophy, we don’t believe that these labour hire companies are evil like this Government sees them. They are providers of a huge amount of opportunity. The majority of these labour hire companies are in fact very good employers, and the people—most importantly—choose this form of working for a reason: because it’s flexible. Yet this Government on the other side of the House believes that they are victimised and that this clause in Part 1 is to seek to redress those victimised workers.

We don’t think that this bill solves a problem. There is no problem. In fact, if there is a problem, one thing that came from the Education and Workforce Committee is that we should license these labour hire companies, and something I’m very passionate about—and we’ll make sure it’s a priority in our next Government, post - 2020—is making sure that we look at labour hire companies and regulation and a framework to encourage this type of practice, similar to what has happened in Queensland with their labour hire licensing law.

To our philosophy, what is in Part 1 that I disagree with and I think needs to be removed in its entirety is the lack of flexibility that this gives employers who have sought to engage these labour hire companies. It’s about productivity, and this bill, in fact, does nothing for productivity of both labour hire companies but also the companies that hire these workers, or what we call secondary employers.

So it is very clear, and I would like to ask a question in my remaining minute around how this law will, in fact, reduce flexibility in the workplace. I’d like the author of this bill to address the impact that this law will have on flexibility, because, time and time again, the feedback that we get from the member’s own electorate, which he doesn’t represent because he’s a list member, is that businesses in the great electorate of Wairarapa are saying to us that that they deserve and want a flexible labour market. I would like the member in the chair, Kieran McAnulty, to, hopefully—or not “hopefully”—address that problem, because that is something that’s coming up within his own electorate about the businesses and the impact on productivity that it will have.

We don’t support this bill. We don’t think it is necessary. Part 1, I think, needs to be removed in its entirety. I would like the member to address how this is going to impact productivity.

Tēnā koe and thank you, Mr Chair, for the opportunity to comment on some of the nonsense that has come to us from members on the other side of the Chamber. It started pretty much with Kieran McAnulty, our member in the chair and the recipient of this bill, talking to the Opposition about what this bill exactly means. However, as they are doing now, they’re trying to drown out any sound of a reasoned debate with their nonsense repeat of slogans. Our member in the chair fairly clearly explained that there is a gap in the current employment legislation that will not allow people that are employed by labour hire companies to raise a personal grievance. Now, a personal grievance is all that this bill is addressing—very correctly stated. So their keeping on repeating “We get it all.” but then not listening to what is being explained to the other side will just end up in this being an endless debate as we continue to explain what this is about.

So at the moment, the labour hire worker cannot raise a personal grievance. I say to Mr Dan Bidois, our colleague from the other side from Italy, that this has nothing to do with a lack of flexibility. This has nothing to do with a loss of productivity. This is about a person who is unable, when he is either unjustifiably dismissed or when someone tells him just to not come back the next day—they can’t raise that as an issue. It’s a recognised human right that everybody else has in the world, except for in this part of the legislation, where that is written out of the law.

Now, we also heard from the member Scott Simpson about our submitters. Well, actually, without any exception, every single one of the submitters has acknowledged that there is exploitation in the industry. So every single labour hire company that came before our Education and Workforce Committee said, “There is a problem in the industry and we need to address it.” This is a start, and I’ll tell the other side exactly—again—why.

Mr Simpson mentioned the issue that has been flagged up recently with the environment here in Parliament and how we are dealing with some of these issues that have arisen, and he mentioned in particular the triangular employment arrangements that are part of that. Now, it is a really good example showing the problems that triangular employment relations bring with them, because the person is unable—because they’re scared of maybe losing their job—to raise any health and safety issues they may see. The most common complaint that is not raised under these employment arrangements is sexual harassment. Now, imagine this: you are a labour hire worker, you are being bullied—

💬 Simeon Brown: Mr Patterson did a good job.

—you are being harassed, you are suffering sexual harassment—and I believe that is not a laughing matter, Mr Brown. You are suffering sexual harassment, and you cannot bring that up, because what happens? Your employer—

CHAIRPERSON (Adrian Rurawhe): Order! Order! Don’t bring me into the debate.

Sorry. The employer is not allowing that worker to bring it up, because if the worker were to do that, they would just be told not to come back the next day. That’s the end, and there is no personal grievance ability. So what happens? The person—

💬 Melissa Lee: The labour hire company is the employer.

—is quiet and the sexual harassment and the bullying continues, and, Ms Lee, I don’t think that’s acceptable. You might think that’s acceptable, but we on this side of the House believe that needs to be addressed. I think it’s appalling, that attitude.

💬 Melissa Lee: I raise a point of order, Mr Chairperson. I would hate to stop the member in her tracks in her speech, but when she’s actually telling mistruths when she’s actually calling out my name and it’s going to be recorded on the Hansard, I think it is actually very wrong for a member to do that when I have not actually said anything that that member tries to claim that I have.

CHAIRPERSON (Adrian Rurawhe): This has been a robust debate. I haven’t heard anything from the member Marja Lubeck which I would consider to be out of order, and so she will continue.

Thank you, Mr Chair. So we know from the recent annual health and safety reviews from WorkSafe that too many workers get hurt and injured on the job. Our very poor health and safety statistics are evidence of the fact that we need to make sure that workers in the country remain safe. This bill is only starting to address that massive gap in our legislation. We on this side of the House are convinced that workers need to be safe in their working environment, and that’s why we completely endorse this bill and commend it to the committee. Thank you, Mr Chair.

Mr Chair, thank you for this opportunity to speak on the Employment Relations (Triangular Employment) Amendment Bill, and I want to bring members’ attention back to the actual bill we are considering. It is this one here. There’s a lot that’s been removed from it, and there’s very little that remains, and what’s important is that we don’t fall into the trap here of dressing this up as a major move forward.

That would be a complete triumph of spin over substance, because what we’ve had Marja Lubeck, the member opposite, just claim is that somehow members on this side of the House think that bullying and harassment is acceptable. I find that allegation outrageous. Of course we do not, nor would we expect any employer to engage in that sort of behaviour, and, in fact, the current law does not allow employers to engage in that sort of behaviour.

We need to be very clear that the current law already allows people who are employed by labour hire firms to raise personal grievances. This is a matter that members on the opposite side of the Chamber and the member sitting alongside the chair this evening seem very confused about, so I’m going to go to the departmental report, a neutral report from the officials. I’m going to read from it what they said about the current provisions relating to personal grievances. They say, “The personal grievance provisions in the [Employment Relations] Act already apply to the relationship between the worker and the on-hire firm,”.

So what I put to you, very clearly, is that these personal grievance measures already exist and that, in fact, all that Mr McAnulty’s bill does is have a little party about how you divide up the pie of the personal grievance. What it actually does is it inserts a new section 103B, which allows the employee or the employer to join a controlling third party in a personal grievance. So what it’s actually saying is “You already had a personal grievance, but now we’ll let you jump through a thousand more legal hoops to decide how those two people involved in your employment relationship divide up the liability.” This is about how two people involved in working with someone divide the liability when one of them has done wrong. This is not a great step forward for workers’ rights, and to cast it in those terms is verging on being disingenuous.

What is also does is a whole bunch of tricky process things, and on this side of the House we know that where you introduce additional processes—there’s a whole section in here, a new section 115A about how you notify the controlling third party and what that looks like, and there’s a new section 123A about the remedies—and when you insert these sorts of things and you create the potential for dispute between two parties as to who is liable, you are making hay for lawyers. I would put to you that making hay for lawyers in this way won’t actually benefit individual employees.

But, you know, what I do want to do is I want to thank Mr McAnulty, because what he did with this bill was he gave us the opportunity to hear from real labour hire companies and to hear the reality of what they do for workers in our workforce. We heard from some extraordinary people who have provided opportunities to New Zealanders from all walks of life.

We heard, for example, from the Shamrock Recruitment Group, based here in Wellington. It is an organisation that has given literally hundreds of New Zealanders a pathway back into work. What the Shamrock Recruitment Group said to us was that in its original form—and I quote—“Put simply, this Bill caters for an employment and contracting market in New Zealand which existed two decades ago, and is not fit for purpose in 2018.” That’s why the bill that we are considering tonight is so, so different from the one that first came into this House, because, put simply, that bill had the mentality that members opposite had, which is that it was written for a world that no longer exists. We now exist in a world where people actually enjoy the flexibility of individual employment agreements in individual circumstances.

I just want to tell you a couple of examples from Shamrock Recruitment Group that they shared with me. When I sat down with them and said “Tell me about the people whose lives you’ve changed.”, they said, “Well, let me tell you about the women that we hire who want to be able to have the school holidays off. We give them flexible jobs. Let us tell you about the people who we hire after hours because they are removing asbestos from buildings and we’re able to work around their day jobs. Let us tell you about the people who are students at university and whose timetables we can work around.” Actually, this bill seeks to demonise third-party hiring agencies. Actually, they create flexible employment opportunities for dozens of New Zealanders.

This bill is not a great step forward. It just creates a whole lot more process to the benefit of no one. Thank you, Mr Chair.

I thank the member Nicola Willis for her comments, particularly the reference to the departmental report. I am puzzled, however, why the member chose to stop halfway through a paragraph, so perhaps I might be able to enlighten the committee on what followed what that member referred to.

She is correct that the departmental report said “The personal grievance provisions in the Act already apply to the relationship between the worker and the on-hire firm,”—of course it does, because that is the whole point. The employee is employed by the labour hire company, but they have no provision to take a personal grievance against the company that they are under the direct control of.

It continues: “This part of the Bill has the effect of mirroring those personal grievance provisions for the controlling third party”—there we have it. These employees do not have the right to a personal grievance under the controlling third party, although Nicola Willis, due to her speech, would make it sound like they do, by quoting the departmental report. It would appear that Nicola Willis forgot that I also have a copy, as do the general public.

The fact is that it doesn’t matter how they spin it or how many times they complain that the bill has changed or how many times they refer to submitters that were complaining about the part of the bill that has been repeated—which is a common theme of all the speakers thus far—this part of the bill is very simple. As it currently stands, the departmental report confirms that employees under a triangular employment agreement do not have recourse through a personal grievance against the controlling third party—that is the point of the bill—and the other side say that they do not need to.

There is no example available where they can show that a worker who was treated poorly by a controlling third party was able to take that third party through a personal grievance. There is an example where, through E tū union, some workers took Sky Chefs to court, and the court said that they were essentially full-time employees. It doesn’t apply here because the law has not changed. Actually, we should look at this because the court is sending this Parliament a very clear direction that these employees should be treated as the employees under the direct control of the controlling third party, and this is what this bill seeks to do.

Since I last rose, we’ve also heard from two speakers that this bill is not necessary. Either they cannot have been listening or they cannot have a heart, and I’ll explain what I mean by that. In the first reading and the second reading and now, again, today, I alert the House to the example of a worker who was employed by a labour hire company and placed on placement with a controlling third party for seven years. Now, there are some serious questions to raise about why a company is using a labour hire company to take on an employee for seven years, but that is not what we’re here to discuss tonight. What we are here to discuss tonight is the specific conditions as to how she was dismissed. This employee was under the direct control of a controlling third party for seven years. She found out she was pregnant and was dismissed the next day. Now, if the National Party are comfortable with that, by all means, I invite the members to stand up and say so, instead of skirting around the issues and saying it’s not necessary.

What we say is that in any circumstance when an employee is unfairly dismissed—be it the extreme of the one that I have just given or any small example where a worker is treated poorly—they should have the recourse to a personal grievance that the rest of us enjoy. Thus far, I have heard nothing but repeated arguments and failed arguments to explain to this committee and the nation why they oppose this bill. They have failed to directly address that. They’ve talked in rhetoric and all sorts of flash words. They’ve even resorted to having a crack because I’m a list MP—you know you’re winning the argument when that is the best they’ve got. All I’ve heard tonight are pathetic attempts to try and prove to their mates why they oppose the bill, when in previous attempts they’ve said that they support the exact thing that this is trying to achieve.

Thank you, Mr Chair. Could I begin by agreeing with the member in charge of the bill, Kieran McAnulty, that it’s really not necessary to attack people for being a list MP or for any other characteristic of their own when there are so many good reasons to attack the bill, and I was just getting to them when my last speaking slot ended. So I hope that this time there won’t be too many interruptions from other members around the committee and we can get down to some really good economic analysis of clause 5. This is now the third call in which I’ve been trying to do this—

💬 Chris Penk: Repetition.

—and it hasn’t been particularly easy to get there. But I think what we’ve established so far as we’ve traversed through chapter 20 of Henry Hazlitt’s Economics in One Lesson—someone’s saying I’m being repetitious. Well, you know, I guess the problem is that there have been so many interruptions so far. The difficulty with constraining the supply of workers who can work on a particular worksite is that it may push up wages for them, but workers are also consumers, and if the same thing happens on every worksite, then we may get higher wages in a nominal sense. But the great difficulty is that those higher wages are passed on in costs, which, of course, in their role as consumers, those same workers have to pay.

So what union membership can do, if it’s restrictive of who can work on a particular worksite—as clause 5 would propose—is it can certainly push up the wages of a certain worksite, but that is just to advantage some workers at the expense of others, who have to buy the goods that those workers consume. Then the next question is: what if everybody did it?

💬 Hon Iain Lees-Galloway: No, still not talking about the bill.

Well, then we’d end up with no particular worker being better off, because productivity hasn’t increased, just price levels. Iain Lees-Galloway—he’s come to join in the discussion, and I welcome him, the Minister for labour—

💬 Hon Iain Lees-Galloway: If I did, I’d speak to the bill.

He’s very welcome, and he’s complaining that I’m not speaking to the bill. Unfortunately, Iain Lees-Galloway hasn’t been here to enjoy this committee stage, and if he had been, he would understand that we’re talking about the removal of clause 5 from the bill during the select committee phase. I’m saying why I think that’s such an important change that’s—

💬 Hon Iain Lees-Galloway: Yes, but this is the committee stage.

—been made, and it’s taken some time. Well, no it’s really about—

💬 Hon Iain Lees-Galloway: Do you remember what stage you’re in?

The committee of the whole House stage, as Iain Lees-Galloway will know—

💬 Hon Iain Lees-Galloway: Yes, I do know.

—is all about—well, he doesn’t know what he knows, and he doesn’t know much. But the problem is that the committee stage is all about deciding whether the wording of the bill as reported back from the Education and Workforce Committee truly reflects the intentions that the House agreed to at the second reading. I’m not sure that Mr Lees-Galloway did know that, because he just looked a bit surprised right then. So that’s what we’re debating. I’ve been saying, and I’ve been giving a very robust public policy and economic case for why clause 5, as currently drafted, certainly meets those criteria.

However, I’d like to push on to other clauses, namely clauses 6 and 7, because those ones, as Mr Lees-Galloway, being a King’s College old boy—great result on the weekend, incidentally—will know, come after No. 5. Numbers 6 and 7—25 grand a year and he learnt that much, I know. The fact of the matter is that those sections, as the member in the chair has said multiple times, extend the personal grievance provision to people who are on the same worksite. We’ve heard a bit about this. The member in charge recently challenged the National Party to decide where they stand on the existence of personal grievances, and I think the member in charge has got a point. If it’s true that personal grievances are a good thing, then surely they should apply to people whether or not those people are in a triangular employment relationship. It seems like a rather strange and arbitrary division to make.

So I think, really, in order to decide whether to support clauses 6 and 7, does the committee think that personal grievances are a good legislative instrument? This got me thinking about another, I guess, labour economic theme. Mr Chair, with a little bit of luck you’ll give me another five minutes and I can actually really get into it, and who knows? Mr Lees-Galloway might join in the discussion and Dr David Clark might look up over his papers again, having put away the white flag that he was waving last time he got into a debate with me, and then we can really get into some detail around whether personal grievances are a good thing. I suspect that I’m going to run out of time but I’ll try again.

I move, That the question be now put.

Thank you, Mr Chair. That’s precisely the opportunity that I was hoping for. I hope that I can make a contribution that will further enlighten the committee, because the question is not whether or not personal grievances are a good thing—that’s a version of the question—but it’s actually whether or not we as a Parliament should make them mandatory, because it’s quite possible in contract law that people will have personal grievance provisions and that they will enter into those kinds of arrangements without Parliament making them mandatory. So it’s not even about whether personal grievances are a good thing, but about whether or not they should be made mandatory in law, and the funny thing is that what we have is a situation where people are voluntarily entering into a labour law arrangement where you don’t have to have a personal grievance availability. So we actually have two types of employment law. That’s what this bill, ostensibly, would seek to fix.

The question is: would it be better if we actually gave everybody the option of going to a workplace where they didn’t have personal grievances against the person operating the workplace—not just some people who happen to be in what the member in charge of the bill would describe as a loophole, but where everybody could actually choose to be in an employment relationship that didn’t have personal grievances? The question, really, is: why do people believe that there is a power imbalance between employers and employees? I know what the Labour Party’s answer is: “Oh, you’re from Epsom. You don’t understand. You don’t know what the working people go through.”, and blah-blah-blah. It’s all totally untrue and quite an unfair mischaracterisation of myself, having grown up in Whangarei, where my first job was at TDC Sawmills.

But, putting that aside, they miss a perspective, which is that of the employer. If they think that workers and employees seek desperately for jobs, then they should see how hard employers seek for employees. If it’s the case that employees and employers are equally desperate to find each other and form relationships that are productive and where they can work hard and generate new wealth, then it would seem that, actually, there is no asymmetry in the relationship.

If that is true, then we can get back to the question of whether or not personal grievances, or at least whether this Parliament should be making them mandatory, is something that is necessary at all, because if it’s true that employers and employees are both equally invested in trying to find jobs and trying to find workers, and there’s no asymmetry of power, then, actually, it’s not clear why this Parliament needs to screw the scrum and make sure that one side has to have a different level of power than the other. You certainly, as an employer, don’t have anything like the same sort of rights to stay in the working relationship when you’d like to get out of it that employees have. Why should this House put that asymmetry in place?

I’d ask the member in charge of the bill, and some of the members opposite that are scoffing, why is it that they think there’s an asymmetry of power between employers and employees, when both of them report that they’re desperate to find the other one, with equal measure as far as I can see. Maybe they think that employees are less intelligent—you know, is it a question of their ability? Do they think that as a group there’s some sort of inherent difference—

💬 Marja Lubeck: Yes, yes—that’s it. That’s the word here: “inherent”.

—that makes them in greater need of protection from the State? Are they actually saying—I think Marja Lubeck was just saying that employees are somehow an inferior group of people. Well, that’s offensive, and on a day that we’re trying not to bully each other, to say that everybody who’s a worker or employee is inferior—coming from the Labour Party, of all parties—is a disgrace. So it can’t be that employees are inherently inferior people.

So why is it that the Labour Party believes that employees need additional protections and can’t work out how to enter into a labour arrangement just like everybody else? If that’s true, and if personal grievances, it turns out, are not something that this Parliament needs to enforce on employment relationships, then it would seem we don’t need clauses 6 or 7, and that would be a reason to dump Part 1 and abandon that part of the bill.

Thank you, Mr Chair, for the opportunity to properly run out an argument—[Time expired]

Thank you, Mr Chair, for the opportunity to contribute here in the committee stage of this particular bill. You’d be forgiven if you thought that this particular atmosphere that we have traversed in this bill was simply to undermine labour hire companies, and that’s what those of us on the Education and Workforce Committee found as we traversed through the public submissions stage and, certainly, listened to the contributions from our colleagues across the table from us. There was a pervasive attitude that if you weren’t in full-time employment, then something attributable to a labour hire company was precarious or vulnerable or an undesirable type of employment, but what we heard from submitters from labour hire companies was actually a very different story. I remember with clarity one particular company coming to represent from South Auckland and the way that they were able to offer some flexible and some really good arrangements for their employees and how they were getting people into employment—the type of employment that they wanted and look forward to.

I would like to just quickly run through what clauses have changed, but I want to bring out one particular submission in relation to those clauses. It was a late submission and it was from Auckland Council, and the fact that it was late is really telling.

So, as we know, the bill does two things. First, those employees in triangular employment will automatically be bound by any collective agreement in the workplace of their secondary employer, and, second, those employers will be able to raise a personal grievance against their secondary employer. We go on to amend section 5 in clause 4, and insert a new section in clause 5 and a new section in clause 6. So, as my colleagues have said before, the original bill was gutted and what we have here is something quite new.

In Auckland Council’s submission, which was late—and that allowed them to do something very specific. It allowed them to analyse the submissions that had already come in, and analyse them quite clearly and succinctly. What Auckland Council said was that noting the submissions that had already come in to support the bill, the types of concerns that kept popping up in those submissions of support didn’t appear at all well-connected to the solutions that the original bill was offering. Now, I realise that the bill has completely changed, but this is important to understand what Auckland Council saw as the tenets of the original bill. For example, they said that the solutions were a real mismatch to unfair treatment by a secondary employer, there was a mismatch on lack of clarity around entitlements as a temp, there was a lack of understanding of the relationships or terms of the contract, and there were even problems—basic problems—with the agency and the primary employer.

So this is my primary question for the bill’s sponsor. What they were saying, then, was that a better solution, if that’s what was coming through—and we know the bill’s been gutted. Why were these concerns addressed in the way that the bill now addresses them when, in fact, as Auckland Council points out—and this is what they said—surely we should be just ensuring primary employers are providing adequate information and support to the temporary employees for their contract? Better contracting could have been a different solution.

I’d like to back up what my colleague Dan Bidois said in relation to these concerns. Another solution could have been a registration system. Why didn’t we debate that and look at that—a licensing of the industry. Some of the industry players said that, and they offered it themselves. Why aren’t we looking at that? They wouldn’t mind having that discussion. They weren’t afraid of that discussion.

A reference has been made again by my colleague to the Queensland legislation, which is, essentially, a fine system, an infringement system, and a beefed-up inspectorate. So when you look at what Auckland Council analysed from the original bill, and they were saying it didn’t even match up to what the proposed intent of the bill was, why then did we go down this path and not do what they were suggesting?

What we’ve seen tonight—and it was shown, yet again, by Denise Lee’s contribution—is the same old arguments rolled out again and again. They have a crack at the bill for being changed, and yet I note Denise Lee stood up and read a description of the bill that isn’t this bill, but the old bill. She said that the bill seeks to do two parts and that it seeks to include workers in the collective arrangement, despite the fact that we’ve covered, again and again and again, that that part is no longer in the bill. Her colleagues accused us of not reading the bill and she’s made herself look utterly foolish by reading the old bill—I mean, good Lord!

What I will point out to the members, and especially David Seymour, is it is now 10 to 9. There is no mathematical way we can get to the End of Life Choice Bill. So those that are wanting to filibuster, you’ve done your job, so good on you. But those of you that are wanting to discuss—

CHAIRPERSON (Hon Anne Tolley): I’m not—

You’re dead right, Madam Chair. You’re dead right—I would certainly not accuse you of doing that. But what I am happy to accuse the other side of doing is saying the same old thing but not saying anything different, because they’ve actually failed to outline why they oppose this bill. They’ve pointed, as Denise Lee did, to the submission of Auckland Council—just like Nicola Willis did—forgetting that we’ve got exactly the same information as them. What Denise Lee failed to point out was that in Auckland Council’s submission, their primary opposition was to the collective agreement clause that is no longer in the bill. Every single National speaker has opposed this bill on the basis of the part that no longer exists.

Now, I’m not blaming Denise Lee, because she didn’t know that it was taken out, despite the fact that she’s standing up and talking about it. But nevertheless, here we are at the committee stage. It’s an opportunity for people to look to improve the bill, just like the select committee—although every single National speaker has pointed out that the bill has changed, despite the fact that that is what the point of the select committee is.

The only person thus far on the Opposition benches to speak to this bill was David Seymour. Even though he framed his speech as a lecture in economics and he was speaking to the Associate Minister of Finance at the time, he still addressed the bill, and I will acknowledge him for that. As I said, he’s achieved his goal—we won’t get to his bill tonight. He’s accused us of speaking in clichés. He’s accused us of speaking in colloquialisms. I have a cliché for Mr David Seymour: get some mates. Get some mates, David Seymour, and then perhaps you’ll be able to say that your opposition to this bill reflects the views of the country. But as you stand there as a one-man party, you can hardly say that your particular point in opposition to this bill has broad support.

I must admit the National side don’t have anything on David Seymour, because at least he spoke to the bill, at least he bought original arguments to this, and at least he wanted to discuss whether or not the provision of taking a personal grievance, which this bill does in extending it to those workers in a triangular employment arrangement—at least he discussed that. He didn’t go down the route of complaining that the bill was gutted at select committee. He didn’t go down the route of having a crack because I’m a list MP, not an electorate MP. He didn’t go down the route of saying that this wasn’t needed and then referring to the submitters that opposed the part of the bill that no longer exists.

We have heard numerous speeches about this part of this bill. They all said the same, but they all said nothing.

I move, That the question be now put.

Motion agreed to.