Fair Pay Agreements Bill

Members, we come now to Part 2. This is the debate on clauses 9 to 25, the “General principles and obligations”. The question is that Part 2 stand part.

Part 2 does indeed cover the general principles and obligations of the bill. It includes relatively foundational principles in terms of concepts that underlie how parties will engage in the bill. As I said in previous comments, most of these concepts are not new or unique within the employment relations system. Very often—in fact, in nearly all cases—they come across from the existing regime under the Employment Relations Act. So the principle of “freedom of association” is reconfirmed. The principle of “good faith” is reconfirmed. Issues around prohibition of preference, which is ensuring that people are not treated differently or worse because they are a member of the union or engage in bargaining and that kind of thing, are here. These are all principles and very often direct wording that relates across to the existing Employment Relations Act regime, which is well understood.

Probably two useful changes to highlight that have been recommended by the select committee to the committee of the whole House—the first is ensuring that those principles around good faith transfer over to the backstop arrangements so that, in respect of parties engaging in backstop processes, we’re ensuring that good faith continues to operate there. I wouldn’t have thought that was particularly controversial.

And, secondly, in terms of ensuring consistency with the broader employment relations system framework, there has been a slight change to the way in which good faith has been described from being the general obligation of good faith, which was in the original version of the bill, to the duty of good faith, which is the consistent language that we have in the Employment Relations Act at the moment. So a relatively small but, I think, practical changes here to ensure that those well understood and generally supported principles apply across the system in a way that’s understood by all.

Madam Chair, thank you very much. We now come to Part 2 of this legislation, the Fair Pay Agreements Bill—misnamed, according to us. I want to ask some questions of the Minister around clause 11, which outlines the employer’s and the employee’s bargaining parties presenting the interests of people covered. In subclause (2), the select committee in its wisdom—the majority—made some changes, and I just want to get a better understanding of paragraph (a), on the side of the eligible union—that is the employee bargaining party. Originally, the wording said, “may represent a covered employee’s interests”, despite some Government employees not being members of the union or any other union, and there’s a similar provision for the employers.

So this is kind of making the point that the bargaining party will represent the employee’s interests whether or not that particular employee wants them to or not. But the select committee in its wisdom changed that to “covered employees’ collective interests”. So it’s no longer the fact that the bargaining party may represent the employee’s interests; it now only has to, or may, represent the employees’ collective interests, which, of course, is a very different thing in the sense that I suppose it underlines the point that this legislation is not interested in the individual employee’s wishes and desires or the individual employer’s individual wishes and desires. It’s very much a collectivist view of the world that must be brought forward.

I suppose the point I wanted to make was that I’m intrigued as to how the Minister reconciles the two elements of this part, which sets off with great fanfare about freedom of association—it talks about that. It talks about voluntary membership of unions, which it asserts, and, yes, nobody has to join a union, which is true. But also in the same part it says that regardless of whether you do join a union, you will be represented by the union, the default union, and they will decide what your interests are—and they’re collective interests. So it’s a little bit odd. Yes, you don’t have to join a union—it’s voluntary—but regardless of whether or not you want it, the union will represent you. It reminds me of the old adage that—

💬 Maureen Pugh: Democracy is changing!

—ha, ha!—you might not be interested in war but war is interested in you. You might not be interested in a fair pay agreement but a fair pay agreement is interested in you, and you will have it whether or not you like it. It reminds me of, as a youngster, having to have the castor oil. I didn’t want it, but I had to have it and you know what’s good for you. And this party, the Labour Party, is a party, of course, that thinks it does know better than individuals.

So I’d like the Minister to take us through his logic and his thinking as to how he reconciles voluntary membership and freedom of association, these grand statements that this bill makes, with the reality that only a couple of clauses along that, regardless of whether the individual voluntarily wants to be involved in this fair agreement or not, is now immaterial. They will be, and there is no voluntary element to it. It is mandatory, it is legislated for, and then the employer bargaining party and the employee bargaining party don’t have to consider the employee’s interests—that’s actually been taken out by the select committee. It only has to consider—or it may; it doesn’t have to even do that but it may—the employees’ collective interests. I’d be interested in how the Minister distinguishes between the two, between the employee’s interests and the employees’ collective interests, and whether he may be of the view that the employees’ collective interests will always be those that are determined by the union.

That, I suppose, might be his view of the world—that the union will always determine what the individual’s interests are in any particular matter, and that they indeed know best and they are best placed to decide. Obviously, we on this of the Chamber would disagree with that proposition, but he may have some other definition. So it’s an interesting point. What it, essentially, means is that it is immaterial as to whether an individual employee or an employer wants to be covered by the FPA—they will be once this bill is passed.

How on earth that meets with the idea of freedom of association, I’m not sure. The Minister might also give us an update or just remind us how he squares freedom of association with the mandatory nature of this bill. Because, you know, we take it back to the basics. Say you’re working in a superette in Hokianga and there are two employees, and this is your job and you’ve figured out the hours that work for you and you’ve figured out what break works for you, and the owner of the business has worked out the cost structure that they can cope with and the cost structure that the community can cope with in terms of, you know, how much, fundamentally, the running of the business adds to the cost of the cauliflower and the broccoli and the milk and the bread and the things that are sold by that superette. They’ve worked it all out and it all works, and it’s above the minimum wage or it’s at the minimum wage set by the Government—they’ve worked it all out.

Now, that is not acceptable according to the Minister. Indeed, what is proposed by this legislation is that the union, which is the collective bargaining party, now is there to represent not the employee’s interests but the employees’ collective interests, whatever that is. And it may well be that the weight of the collective interests of the employees right across the country—and there’s thousands of them; most of them working for the duopoly companies, Foodstuffs and Progressive Enterprises. Their interests might be “X” and if the interests of the people working up in Hokianga are “Y”—well, tough luck because the majority always wins. So that’s how it works and that’s going to be imposed on the workers and the businesses in Hokianga whether they like it or not. Yet, at the same time, brandishing his credentials as a great democrat, the Minister has the gall to have, at the start, the big title “freedom of association”, and assert that we’re all free to do what we like and figure it all out for ourselves. I’d be interested to know how he squares those two things.

Thank you very much, Madam Chair. I’d just like to follow my colleague the Hon Paul Goldsmith’s contribution, because it does raise an issue that has been raised with me several times in recent times regarding this bill as it transitions through Parliament, and that’s how the collective bargaining relates to Recognised Seasonal Employer (RSE) workers and the types of conditions that can be imposed on employers of that workforce.

The reason it’s become a bit of a concern to that sector is if that collective bargaining imposes conditions on employers that make it difficult for them to comply. One of the things that’s raised concern is the scenario where that collective bargaining says that RSE workers’ housing—the accommodation that’s provided onsite—must be made available for other uses, for example, emergency housing. So what if those collective bargaining agreements in a negotiation between those sector groups impose conditions such as that on employers, and then that starts to raise concerns and conflicts between other legislation like the Residential Tenancies Act? I just wonder if the Minister could clarify that these types of negotiations that could be imposed on employers of RSE workers are not the intended target of collective bargaining agreements, as this bill enables, and whether those types of negotiations can be ruled out to give the sector the confidence it needs to enter those collective bargaining agreements with some reassurance that their assets are not going to be considered as part of the bargaining between the representative body and the employers or, for the likes of the horticultural sector, Horticulture New Zealand or some of the viticulture sectors that we may have. I can tell the Minister that that is an issue that is alive and is causing some concern within those sectors. So I’m just looking for some reassurance that that is not what is being prescribed or, maybe, anticipated, as part of collective bargaining.

Referring first to Maureen Pugh’s contributions, I don’t know if there’s a strong link to Part 2 here. But in respect of collective bargaining, it’s not for me, as the Minister, or the Government or any of us to determine where collective bargaining occurs. Under existing collective bargaining arrangements and under the fair pay agreements (FPA), that will be up to workers themselves to initiate if they believe that they want to enter into a collective bargaining process. If the member doesn’t believe that there need to be some improvements to accommodation and standards for some Recognised Seasonal Employer scheme workers, that’s her view; it’s not shared by me, and I don’t think it’s shared by most people. Later on, the Act should also see that there is a vetting process whereby any fair pay agreement gets assessed for its consistency with other legislation.

In terms of Mr Goldsmith’s comments, he notes the change that the Education and Workforce Committee made to specify that it’s the collective interests of employees under the FPA that the employee bargaining side has to represent. That’s appropriate and it goes to some of the other points that he makes. As I’ve described, FPAs set a set of minimum terms and conditions for that group of workers at a sector or occupational level. Contrary to some of the assertions that have been made and some of the implications made by that member, individual employers and employees at the individual bargaining level or the site collective bargaining level are still perfectly free to come to other arrangements if they wish to. So the purpose of the select committee entering the wording around “collective interests” is to make sure that that bargaining process remains focused on the collective interests of that group of workers. It would actually become unworkable were there to be an obligation on the employee bargaining side to represent the individual interests of workers, and it would very much confuse the regime.

To give an example, that worker in the Hokianga, that the member references, might want to come to and negotiate, at the individual level, a flexible working arrangement with their employer. Nothing in the FPA legislation prevents that from happening. We want them to be able to do that in that particular employment relationship. But you wouldn’t want that being caught up in a broader process of negotiating an FPA that might cover a large number of employees and employers.

In respect of the member’s points and arguments around freedom of association, those are not shared by the Government; they are not shared by the Attorney-General, who has vetted this legislation; and they’re certainly not shared by the ILO, where these complaints were taken by Business New Zealand, and, as I described in the House yesterday, you could have heard the tumbleweeds blowing through the halls of Geneva—that complaint was simply not upheld. Freedom of association, as expressed in this legislation and other legislation, is about the freedom for people to choose, in this respect, to join or not join a union, and that is totally protected here.

The member confuses that with the application of minimum standards. We do have minimum standards across our employment relations system. Certainly, Government members think that is a good thing. When it comes to the minimum wage, minimum annual leave, or minimum sick leave, it provides a basic level of protection for the most vulnerable. Certainly, the member can make arguments that that is an imposition on people or that that is Draconian or that that reduces flexibility. To some degree, it does reduce flexibility, but, in most democratic societies, we believe that having a degree of protection for people is important. Most democratic societies—and, in fact, through the ILO and other international conventions that we are signed up to—the value of collective bargaining in terms of allowing working people to have those protections in place is affirmed. It’s affirmed by conventions that all New Zealand Governments have signed up to and adhered to for around about 70 years, as well. So to the extent that the member argues that there is a lack of flexibility there, it is a lack of flexibility that has always been recognised in respect of minimum standards applying in the employment space. I think the member makes a mistake in confusing that with the question of freedom of association.

Thank you, Madam Chair. I also want to follow on from my colleague Paul Goldsmith in this freedom of association, minimum standards, and the compulsive nature of having to be covered by a union collective bargaining party, whether or not the employee wants to be. I return to concerns from the Hospitality New Zealand association. Just to give some context, they are a member-led not-for-profit organisation, and they represent over 2,500 businesses. They are representing cafes, restaurants, bars, nightclubs, and commercial accommodation—lots of little country hotels and off-licences—and they have a 120-year history of advocating on behalf of that hospitality and tourism sector. They also have major concerns about the freedom of association, and if I can give some examples—in many of these small cafes or small restaurants, they are family-owned and they have a number of family members that are working within that business. It may be that their employees are sons, daughters, nieces, nephews, aunties working together, understanding that they’re all working for a common good of that family. So their freedom of association or their priorities, if you will, are to the good of their family, and yet, whether they like it or not, they are going to be bound by the collective bargaining of the union. So they are concerned that those kinds of minimum standards that might be imposed are going to be out of kilter with the wishes and desires of those people working within those family units, who are working together to make a family business viable in a small cafe, in a small town, and particularly the regions.

So their concern is how this is going to make their businesses unviable, how these minimum standards might be imposed across that whole industry grouping, which, I mean, you can see from the range of businesses that they are talking about—cafes and restaurants may be large entities in some cities; they may be very, very small in a tiny little town like Orepuki on the south coast and Southland or some of the very small townships that have only got one cafe and it’s very much a family affair. It doesn’t appear that this legislation is going to allow that flexibility within a family entity, a family-run business where the employees are, in fact, all wanting to work together for the benefit of that family business.

So I wonder if the Minister in the chair, Michael Wood, can talk about how there will be sufficient flexibility. He’s already said in his answer to my colleague’s question that there won’t be a certain range of flexibility, but if he can explain how that’s a good thing in the sorts of circumstances that I have outlined in this question. Thank you, Madam Chair.

It’s a pleasure to take a call in Part 2 of the Fair Pay Agreements Bill. I substantively want to speak to my Supplementary Order Paper 271 in this part, but, first, I just do need to respond to some of the speeches that I’ve heard from the National Party. I’ve got to start by saying I’m a little bit worried for Paul Goldsmith. Not being able to differentiate between the threat of death and war and the opportunity for better pay and conditions in your workplace must make operating in the world quite threatening, I think. I am a little bit worried for that member, and suggest he may need to talk to somebody to try and work that through.

I do just need to say that some of the arguments I’m hearing about the small businesses and those examples around family-run businesses—we are not the only country in the world that has family-run businesses. We are an outlier in not having sector-based bargaining, in terms of comparable countries. Others have worked this through, and it has not destroyed their family-run businesses. It’s completely possible.

Also, I just need to speak to that sense of the threat of the unions, and the powerlessness of the businesses that I’m hearing represented. That is not the imbalance of power that our employment law recognises; the imbalance of power is traditionally understood as the other way round. If businesses feel that they can’t represent themselves, then there is opportunity for upskilling for them in this process, and I would encourage them to do that. This process, at its heart, is about hearing from people and sitting down together and working out those minimum standards.

I do want to speak to the point around freedom of association and how that is, as Minister Wood said, affirmed in this part of the legislation. However, part of it is affirmed in this legislation and part of it is actively undermined by the removal of the right to strike in relation to fair pay agreements. The right to strike is covered by international jurisprudence in the context of freedom of association. This has been well understood and protected through the International Labour Organization and international labour standards since 1957. This is a very longstanding right, because there’s a recognition of that imbalance of power. We’ve seen that recently in terms of the firefighters striking, and part of their strike has been telling us and the public, actually, the reality of what is going on in their stations and the risk that poses to public safety. That strike has been, while not yet resolved, incredibly important for our country. Without them striking and telling us that information, actually what we’ve heard and what we’re still seeing play out is there would not be resolution or hope of resolution.

We’ve also seen the importance of striking for our allied health staff, and that that is what made the difference, which was, again, about protecting our health system. We have seen the value of striking, and fair pay agreements could accommodate—and I and the Greens believe should accommodate—that right in terms of the bargaining process. Germany’s equivalent of the fair pay agreement does have the right to strike, with some caveats to it, and they’ve got some of the highest levels of productivity in the world and some of the best wages. That’s what we’re after. For the Greens, we recognise the right to strike as a fundamental right in playing for individuals and the collective as well as democracy, and we are proposing that it is restored to this bill.

Thank you, Madam Chair. I just want to talk to the Minister and ask him some questions around Part 2, clause 20, the “Penalty for the breach of … good faith”. So this clause of the bill talks about if employers are meddling in the system beforehand, trying to persuade their employees not to start the process, not to take part in the process, or not to ratify. So it talks here about—if they do that, then there is a penalty clause, but it talks about, in clause 20(2A)(a) and (b), those actions being “deliberate, serious, and sustained”, or “is intended to undermine the process of bargaining.”

The penalty for this, laid out in clause 196 is up to $20,000; or $40,000 if it’s not an individual. So it’s a serious penalty. And I wanted to ask the Minister some questions—around clause 20(2A)(a)—about the “deliberate, serious, and sustained.” Do all of those criteria need to be met? Because at the moment, it’s not and, and, and; it’s “deliberate”, “serious”, and “sustained.” So what is the test? Because we’re talking about quite a big penalty here for the individual. Can the Minister explain that requirement to be “deliberate, serious, and sustained”; does it need to be all three of those or just one of those? Because it does use the word “and” there, so I presume it has to be serious and sustained. Does it need to be deliberate as well—so all three of those need to be met in the test?

And then the next part is intended to undermine the process of bargaining. So I guess my next question is: what would be the test there? Because if you go back to clause 20(1) where it talks about the employer persuading their employees “not to participate in initiating, bargaining [for], or ratifying …”—what is the, I guess, level of undermining that he is expecting to be met in that “intended to undermine”. And if he could give us some examples, but, I guess, at the very low level where an employer gives everyone a pay rise and gives them an extra week’s holiday, or to try and subvert the course of the initiation by doing something that would give their employees a reason not to enter bargaining—in this case if they improved conditions and pay slightly—would that be deliberate or serious enough to meet that test? Or would the Minister expect that that would be something intended to undermine the process of bargaining, where an employer is trying to do the right thing I guess, but also trying to avoid going into bargaining—especially if it’s a really big employer or a couple of really big employers, where they’re like “Well, we really don’t want to go into this, we don’t want to have a price or wage floor. Let’s improve conditions and pay slightly to try and discourage our employees from entering bargaining.”? I guess my question to the Minister is: does that meet the test of intending to undermine the process of bargaining?

That’s just one example, but there are many others. If the Minister could give us some examples of what could meet that test. I mean, there are some obvious example—such as if the employer was to actually physically say to them “Don’t do this or you’ll lose your job.”—I get that. But there is a big grey area in the middle there, and I’m quite keen for the Minister to explore where that line is, where it’s not intended to undermine the process of bargaining.

But also, going back to my earlier question around deliberate, serious, and sustained—does it have to meet all three of those, just two of those, or one of those in that part? Because, as I say, it is a significant penalty, and just understanding where the lines are and how that test is met, I think, is very important. So if the Minister’s able to go into that, that would be appreciated.

Thank you, Madam Chair, for allowing me a call in this debate. My question elaborates on a question already asked by Jan Logie with regards to strikes. My question has two particular limbs to it.

As Jan Logie spoke, there was some concern expressed by submitters with regards to the broad concern about the removal of the right to strike. And, as Jan Logie mentioned, this is an absolute right of workers.

But my second question is with regards to the large extent of disinformation that we’ve heard with regards to strikes. And, in particular, as we heard from some submitters—Hospitality New Zealand comes to mind—that potentially people could take sympathy strikes or strikes dressed up as a health and safety strike. So I wondered if the Minister could talk a little bit about, first of all, the limits on what is a lawful or unlawful strike related to collective bargaining under the Employment Relations Act.

Point of order. Madam Chair, I’m just a little bit troubled by the speech by that member, who seemed to be implying that a particular submitter—Hospitality New Zealand—was engaging in disinformation. You know, I think it’s important to recognise that submitters don’t have the ability to answer back in this context, and I don’t think it’s within Standing Orders for a member to, effectively, accuse—

CHAIRPERSON (Hon Jenny Salesa): Can I ask the member what his actual point of order is? Because strikes and lockouts is actually covered in clause 25.

No, no. My point of order is that it is out of order for a member of Parliament to accuse a submitter of engaging in disinformation in this House.

💬 Marja Lubeck: Can I speak to the point of order?

CHAIRPERSON (Hon Jenny Salesa): There are procedures if that organisation wants to go through the process, but this is actually a debate that we’re having. As I said as the Chair of this committee, it is covered under clause 25 “Strikes and lockouts”. I call on the Minister—sorry Minister; Marja Lubeck actually got up to speak to the point of order.

Apologies. I wanted to just clarify, I was trying to be helpful. So my question was twofold. First of all, what is lawful and unlawful strikes under the Employment Relations Act in regards to fair pay agreements? And secondly, with regards to the amount of disinformation we’ve heard, I was going to quote an example of Hospitality New Zealand, who specifically spoke about strikes dressed up as health and safety. So I thought it would be helpful if the Minister could speak to that particular point. Thank you.

I’d like to respond to a number of the questions raised by members around the Chamber. Penny Simmonds raised some questions about family members working in businesses. I’ve already addressed that issue in Part 1. I’m not sure that it relates to Part 2, but just, to be very clear, because someone is a family member when they’re an employee doesn’t mean that the laws of the land in respect to the employment law do not apply to them.

Jan Logie spoke to her Supplementary Order Paper 271, which seeks for the right for strikes and lockouts to be allowed under the fair pay agreements legislation. The Government has been very clear right from the beginning that we do not agree with that and we will not agree to that in the committee of the whole House stage. I’d note two points here. The first is that all workers still have the ability to engage in strikes, and, indeed, employers have a right to engage in lockouts in pursuit of collective agreements under the Employment Relations Act (ERA). So nothing is taken away there, in respect of those fundamental rights. This is a new process of setting minimum standards at a sector occupation level, and we’ve built in very clear mechanisms primarily through the determinative function of the ERA to ensure that in the event that bargaining becomes protracted or difficult, there is a mechanism that helps parties to get agreements settled. So we do not think it is necessary or desirable for strikes or lockouts to be part of the regime, and that was indeed one of the recommendations of the working group chaired by the Rt Hon Jim Bolger at the beginning of the process, and we’ve brought through that recommendation and many others in this legislation.

Erica Stanford asked about some of the particular provisions in clause 20(2) that relate to good faith—for clarity, clause 20(2)(a). Yes, the answer is that the behaviour would have to be “deliberate, serious, and sustained” to meet the test there, so it’s quite a high bar. It is all of those factors taken as one. In respect of clause 20(2)(b)—“is intended to undermine the process of bargaining”—I hesitate to provide particular examples because none of this is particularly new. These provisions are largely built off provisions that are in the existing Employment Relations Act that the authority has interpreted over the years. They’re always very fact-specific, so when complaints about breach of good faith come before parties to resolve between themselves, or end up coming to the authority, the authority will look at all of the factors pertaining to that particular bargaining, all of the behaviours of the parties in the round, to come to a view as to whether there has been a breach of good faith. I would note that paragraph (b) is a particularly high test. It is not only the test of undermining bargaining; it is also intention, so the mens rea matters here. It has to be the intention, the deliberate intent of the party, whether it’s the employer or the union, to undermine that bargaining before that test is met.

Marja Lubeck asked further questions around the right to strike. I’ve affirmed that the Government’s clear position is that there is not a role for that under the fair pay agreements regime. We’ve been very clear about that. We’ve been very clear on pushing back against misinformation that has been out there in the public domain around this, and so I repeat and underscore that point. It is important that this debate occurs on the basis of fact and not on the basis of misinformation, and that’s affirmed in the legislation. The right to strike, even under the Employment Relations Act, are limited in respect of either striking or lockout for the purposes of engaging in collective bargaining and around health and safety, and none of that is changed under this legislation.

Thank you, Madam Chair. I’d just like a comment from the Minister, the Hon Michael Wood, about clause 16, “undue influence”. The accusations are about compulsory unionism and how that’s disinformation. Clause 16(1), “A person must not, for the purposes of bargaining, [or] for the purpose of an application … exert undue influence, directly or indirectly … [for someone to remain or join] a member of [the] union,” and there are some other parts to that as well, which sounds good. The contravention to that is a penalty—section 196. I’m just wondering whether the Minister is aware of the subtle influences that go on in workplaces—I’ve sat in staffrooms where members of the Post Primary Teachers’ Association (PPTA) don’t talk to non-members of the PPTA, they sit in a little group by themselves, and where relieving teachers won’t go into classrooms of non-members. And I just want to make sure that the Minister is aware of the subtle influences that go on in those other workplaces like teaching.

At this stage, I’d like to introduce Supplementary Order Paper 267, which says “An employee or employer may opt out of [coverage] of a fair pay agreement … if they notify the chief executive in writing that they have a fundamental conscientious, religious, or moral objection to their coverage … [the] employee or employer … is not subject to coverage of [the] fair pay agreement”. I’d just like the Minister to consider that, and, if not, whether he is actually telling the New Zealand public that they must participate in something that they have no desire to, don’t wish to, and fundamentally disagree with. Is that what he’s telling the people? Thank you.

Briefly, in response to the member’s questions, I know that clause 16, around undue influence goes either way, it’s about undue influence to be associated or not associated with an organisation. I can’t speak to the particular examples that the member gives, but, as I say, this clause, which, effectively, carries over from the broader Act, provides protections either way.

In respect of Supplementary Order Paper 267, we won’t be agreeing to that. I do note to the member that the provisions around opting out for conscientious reasons are captured in Part 4 of this bill and, effectively, link through to the existing provisions in the Employment Relations Act.

Thank you, Madam Chair. I’ve got a few more questions for the Minister on this part, first in relation to clause 13, which relates to prohibition on preference. This legislation has very many lofty words in it around the fact that a pair fay agreement (FPA) can’t be used to confer on a person, because the person is or isn’t a member of a union, any preference in obtaining employment or preference in relation to terms of employment. It says you can’t, in a misnamed “fair pay agreement”, give any preference to someone because they’re in a union.

Then the next subclause says, “However, a fair pay agreement may provide that a union member payment [is] paid”. How does the Minister reconcile those two things? We’re going to stand up here and we’ll say, look, there’s no way that any of these fair pay agreements can give preference to union members, but you can give them an extra thousand bucks or two thousand bucks because they’re members of the union—in fact, probably give them the exact amount that the union charges as the union fee. So please explain to me how that is not a preference and how that is not a completely muddled, confused, contradictory, and absurd piece of legislation. How can it not be that the allowance of paying union members an extra thousand bucks is not a preference?

I’d just like the Minister to explain how he justifies to an employer—again, I take, as an example, the poor little superette owner in the Hokianga who may have two members of staff; one of them is a member of a union and the other isn’t. The Minister and his Government, through this legislation, is forcing the employer, the little superette owner in Hokianga, to pay one employee an extra thousand bucks—or it might be more; it might be 1,500 bucks—to the union member to pay for the union member’s union fee, effectively. Notwithstanding the fact that he stands up there, puffs his chest, and says, “I’ve passed legislation that prohibits any preference, in terms of employment, to members of unions”, it is, I think, rather absurd, and I’d be interested to see how he explains it.

Secondly, on the issue of right to strike, did he consider one of the suggestions made by employment lawyers that I spoke to, and one which I raised with the select committee—he says, “Yes, yes, you can’t strike during a fair pay agreement”. But we all know, and everybody understands that there are many other things that you can strike over under the normal course of events under the Employment Relations Act 2000, coincidentally at the same time. Look, I don’t claim to be a great fan of the union movement, although, sure, they’ve done many great things over the course of history, and I am grateful for the previous Green member’s concern about my wellbeing and general attitude to life. But I’ve got no doubt that, over the years, the union membership has had many clever people involved in the union movement, and I don’t, for a moment, underestimate their ingenuity and their ability to figure out ways around particular circumstances so that they could engineer a strike through other means at the time of an FPA being considered.

When I look across the House at virtually every Labour member here who was a former union representative of some sort—virtually everyone; not everyone, but virtually everyone. I look at Marja Lubeck; she is cunning. There’s no question she is cunning, she is clever, and she wouldn’t have any trouble whatsoever in coming up with a way around this in order to engineer a strike during the normal course of events using the normal legislation at the same time as a misnamed “fair pay agreement” was being organised.

One of the things that was considered, or suggested, was—well, OK, if you’re really honest and serious about not having strikes going on during the misnamed “fair pay agreement” negotiations, then the Minister would have made an amendment to the Employment Relations Act itself banning strikes during the period of a fair pay agreement negotiation full stop. Therefore there wouldn’t have been the opportunity for clever union organisers like Marja Lubeck to come up with clever schemes and timings so as to, in effect, add striking pressures during the negotiations. So I wonder whether he’d given any thought to that or considered it, and, if not, why not? Why didn’t he, if he was genuine about not having strikes going on at the same time? Because, as I say, there is genuine fear out there, particularly amongst employer groups, that this will lead to more strike action, in particular because of the context. It is an increasingly adversarial approach to unions.

I also wanted to respond to the Green member’s comments. We’re not suggesting for a moment that this is going to destroy businesses in the country. If this law passes, it’s not going to destroy businesses; all it’s going to do is just add another layer of cost, complexity, and rigidity to New Zealand businesses. They’ll survive, but it will be harder, and that’s the only point we’re making—it will be harder. If you’re operating in a competitive world, trying to stay afloat to be able to provide goods and services at a cost that people can afford, or trying to remain competitive with international competitors, it’s just another layer of cost.

The Minister, in many, many answers, has come and said, “Well, yes, but there is a floor that we all agree in terms of the minimum wage and sick leave entitlements.” Of course we agree with that, and we’re not disputing that in any way, shape, or form. What this legislation does is it raises the floor substantially in many areas and introduces a floor into other different areas, whether it comes to enforcing penal rates on weekends, or different hours—a whole lot of things. So it raises the floor in various levels all over the place, and that’s the debate we’re having. The debate we’re having is: is imposing that higher floor and the additional costs that are implied in it a good thing and an appropriate thing at this time, or at any time, in a world where New Zealand businesses are struggling to compete?

The third point I wanted to make in relation to this part related to this whole question of when parties are deadlocked—this is clause 19, subclause (3)(d). I suppose the only question I have here is, in this legislation—the select committee, in their wisdom, changed paragraph (d) and it made the point that if bargaining parties have come to a standstill or reached a deadlock about a matter, they are not forced to keep on being deadlocked, or whatever. What happens is that they can stop, but it says here that they need to continue to bargain about any other matters that they haven’t reached a deadlock on. So that process goes on until such a time as there is a deadlock, but it’s all a little bit irrelevant. It’s meaningless, because the bill also provides that if an agreement cannot be reached, then the Employment Relations Authority steps in and sets the terms of agreement. I just wonder what the point of that is, saying that you’ve got to carry on, keep bargaining, and if you’re deadlocked in one area, keep going until you’re deadlocked in all the areas. In the end, the outcome is set and final, and that is it goes off to this little group of people in Wellington or Auckland who are sitting around the desk who apparently have the wisdom of Solomon, and they can work out what businesses up and down the country, large and small, need, want, and deserve. I’d be interested in what he thought he was achieving with that particular paragraph.

Firstly, can I recognise the deep-set and genuine fears and anxieties that the member has about unions. It’s a wonder the poor man can sleep at night; he’s so worried about what they might do if they organise and achieve better pay and conditions for working people! That is one of the intents of the legislation.

In respect of his particular anxieties and worries in respect of clause 13, we know that clause 13 is primarily about ensuring prohibition on preference—that is, that you can’t sort of push people one way or the other. He’s been very excited and very concerned about the fact that it is possible for a union to then, within a fair pay agreement (FPA) negotiation, negotiate for—it’s not required, but they have the ability to negotiate for a payment to go to union members up to the level of the union fee that applies across that FPA. It can be justified very simply. It’s about the fact that the benefits of the FPA go to all workers regardless of their union membership status, and so, in effect, the union members are paying for that bargaining process to occur; non-union members are not paying. And it can be, I think, very simply justified that a payment to the level of the union fee of those union members, effectively, puts everyone on a level footing in terms of their contribution.

Here’s the other interesting point about this: Mr Goldsmith might want to go back to the Employment Relations Act and recognise that under our existing collective bargaining arrangements, that is allowed. It is explicitly allowed and it was explicitly allowed for the entirety of the nine years in which the National Party was last in Government. So the suggestion that this is somehow a significant new inhibition on prohibition of preference is news to me, and presumably news to the National Party because they allowed it for nine years under previous arrangement, and indeed some collective bargaining arrangements included it on that basis.

In terms of his worries and anxieties around the right to strike, again I affirm that this legislation does not allow strikes or lockouts to occur in pursuit of an FPA. The member is simply wrong when he says that there are “many other things that unions can strike on”. There are only two things that unions can strike on under the Employment Relations Act, and that is in pursuit of a collective employment agreement and around health and safety matters, and those are pretty strictly policed. Any union or union member that goes on strike undertakes that decision pretty seriously; they don’t do it at whim. They lose pay when they do it. They can only legally do it in pursuit of those means. And I don’t think it would be a surprise to the member to know that that is tested out regularly in the Employment Relations Authority and the courts if the other parties don’t agree that that action was taken lawfully. It is also the case that were unions and workers to engage in the right to strike under those mechanisms, it’s unlikely that the coverage would match up to the coverage of fair pay agreements, because, by definition, employees undertaking the right to strike in pursuit of collective bargaining in nearly all cases are only doing so at the enterprise level, rather than at a sector or an occupational level. So I think the member’s just got that wrong.

Then when it comes to clause 19, this is basically modelled off section 32 in the existing Employment Relations Act, as many of the provisions are here. So it won’t be new or novel to either employers or unions. It, effectively, sets out the good-faith process that the expectation here is that parties remain at the table and they give their best endeavours to continue bargaining. And just because you get stuck on one thing doesn’t mean that you shouldn’t continue good-faith bargaining in other areas. That is what happens now under collective bargaining. And that is the way that you try and make progress towards reaching agreement without getting stuck on one particular thing. If you get to the end of that and you can’t, you’ve then got other dispute resolution mechanisms that come into effect.

Thank you, Mr Chair. I just wanted to carry on with one of the arguments that Paul Goldsmith was making, but bring in a different clause. So when we’re talking about clause 13, and the “fair pay agreement may provide that a union member payment may be paid to covered employee who is a member of a union”, what I want to put to the Minister is: is this being covered under clause 16, “Undue influence”? Because you can see quite clearly what will happen: the unions will go to all of the employees and say, basically, “We will bargain for you to get your union fees back, $600”—or however much it is; whatever the union fees are—“and you will get all this free stuff.” You can see this happening: they will go to all of the employees and say, “Hey, this service will be for you for free, paid for by the employer, and, therefore, you should join our union and be part of this part of this process.”

Now, clause 16, the “Undue influence”, says that “A person must not, for the purposes of bargaining”—for the purposes of blah-blah—for, clause 16(1)(a), “to become or remain a member of a union”. So the ability of a union to leverage the payment that they will get for the person if they become a member to then, basically, have free union membership and they’ll no doubt say here all the other benefits paid for by the employer. The question that I’ve got for the Minister is what is the bar for undue influence? It doesn’t lay out in this what that bar is. This is similar to a question I asked earlier: where is that bar? Is the bar of undue influence a union going to non-union members and saying, “We are going to get you a payment, you will get all these services for free if you join”, and pushing them into joining by offering them free stuff. Does that meet the bar of clause 16(1)(a), “Undue influence”, “to become or remain a member of a union, a particular union, an employer association, or a particular employer association”. So it’s a slightly different question than what Paul Goldsmith was asking, but it does relate to clause 13 in the ability of a union to negotiate that a union member can get that payment, in negotiating the fair pay agreement.

So, specifically, if the Minister could talk about the bar of undue influence and whether or not this payment in clause 13(2) would meet that bar.

It will always be up to the Employment Relations Authority to determine what is “undue influence”, and as I’ve said, they will have to consider things on a fact-specific basis. But the answer is: broadly, no, it would not be considered “undue influence” for a union to promote the lawful benefits that it might be able to bargain through the course of bargaining.

I move, That the question be now put.

The question is that Jan Logie’s amendments to Part 2 set out on Supplementary Order Paper 271 be agreed to.