Fair Pay Agreements Bill

Members, we come now to Part 3A. This is the debate on clauses 62 to 80K, specified employer bargaining parties and default bargaining parties. The question is that Part 3A stand part.

Thank you, Madam Chair. I’ve got a logistical problem here, which I’m just trying to deal with—everything’s folding over. Thank you, Madam Chair.

So we come to Part 3A, which is in relation to default bargaining parties. The question here is in relation to what happens if a default bargaining party, particularly, doesn’t turn up. And we’ve had this rather confused answer earlier in the debate from the Minister around the fact that Business New Zealand is, effectively, the default bargaining party and is the group most likely to represent—I’m sorry; I’m just trying to find the exact phrase—the largest number of employers. So is the implication that if any time that they don’t voluntarily take up the position, the fair pay agreement process is immediately sent off to the Employment Relations Authority for them to adjudicate and just decide? And all this part is supposed to deal with situations where that happens and the process by which the Chief Executive of the Ministry of Business, Innovation and Employment works out that the bargaining side hasn’t been formed.

I suppose I want to start off with that broader question of how the Government thinks this is a fair process to impose on New Zealand businesses and companies and workers. Because what we’re saying is, regardless of whether companies and employees want to engage with the process—and, again, we’re thinking of the little cleaner operation in Haast or the superette in the Hokianga; they’re busy, they’re trying to find workers, they’ve got all sorts of problems and trouble and strife, and life and business is not easy. In Haast, they’re looking for tourists and in the Hokianga they’re just trying to find somebody to buy their bread and milk and so forth. And they’re supposed to be somehow engaging in this process, or some part of some group that is going to represent their interests. The expectation is that the Minister is supposed to identify the employer party that is the most representative organisation of employers in New Zealand, which is Business New Zealand.

Now, if they have decided in their wisdom not to want to be—and also, are perfectly entitled to do, then what happens? It’s still not clear to me whether another business group could turn up and then make the case; say, it was retail workers—whether, say, Retail New Zealand, which is not an organisation that has been in the habit of negotiating agreements such as this. So it’s a whole new sort of task for them. But, for example, if they decided to put their hand up and say, “Well, we’ll be the bargaining party.”, can that happen? Can the Minister say that they are the most representative body under that test back in Part 1? I’m not sure. But if not, and if nobody puts their hand up, then the chief executive goes through a little process—not much of a process; a little process—to determine that nobody’s turned up. Now, it’s a fair question to ask how thorough the chief executive has to be in figuring out how many how many people he has to ask. Does he knock on how many doors to find out just whether or not there is anybody there? But I’d be interested to know what the Minister thinks of that and whether he’s got it right.

Thank you very much, Madam Chair. I’m interested in particular in clauses 64 and 66 within, of course, Part 3A, and the reason that I’m interested in that is just to drill down a bit into this concept of the specified State employer. Particularly, I note that clause 64 applies to certain “specified State employers in specified circumstances:”, and one of them is the Chief of Defence Force as appointed under the Defence Act. So I’m interested if the Minister can provide a bit of context about how a scenario might play out whereby defence personnel would be somehow entering into these discussions or negotiations for bargaining from the employee side.

We see that the legislation contemplates that the Chief of Defence Force himself or herself could be represented, effectively, by, I think, the State Services Commissioner—excuse me, the Public Services Commissioner, as that person is now—and that’s fine as far as it goes. Of course, the context for the question is that the Employment Relations Act doesn’t apply to New Zealand Defence Force (NZDF) personnel other than civilian employees, roughly speaking, and, of course, there’s a more general context about pay and conditions for New Zealand Defence Force personnel whereby, for example, the Minimum Wage Act doesn’t apply to them.

We’ve had an example in the last couple of years where personnel of the New Zealand Defence Force were found to have been paid below minimum wage, which I think we can all agree—

💬 Dr James McDowall: It’s still a third of them, Chris.

My colleague and friend Dr James McDowall points out that it’s still the case that that can take place. I think we’ve had some kind of assurance from the Minister—no, excuse me—the Chief of Defence Force, I think, that it wouldn’t, in fact, take place. But the law of the land still says that our sailors, soldiers, and air personnel can be paid at lower than the minimum wage, and so, of course we’re all in favour, I think, probably—hopefully, across the House, and certainly on the National side of things—of ensuring that our defence personnel are not taken advantage of in an employment context, notwithstanding that between that and the exclusion of healthy homes standards and so on for defence housing, it would indicate perhaps that the current Government isn’t paying very close attention to their conditions of service and so forth.

Nevertheless, I’m interested to know how this would fit with that. In particular, and for good reason, arguably, defence force personnel don’t have the right to organise. They don’t belong—can’t belong, indeed—to a union and so forth, and I’m not suggesting, of course, any difference of policy position in relation to the legislation as a whole, but if the bill is useful and good in the way that the Government says it is in relation to the general population of New Zealanders, I’m keen to know if there are scenarios in which the Minister can provide some context about how things might play out in the context for NZDF personnel.

I thank the members for their question. I do feel that I’ve dealt with Mr Goldsmith’s question previously on a number of occasions, but, to clarify, the way that process works is that there is a three-month period for parties to come forward on the employer’s side to represent employers at the bargaining table. If that does not happen, if those parties are unable or unwilling to form, there is a one-month period then for the default bargaining party to come forward. That is, as we’ve described on a number of occasions, the most representative body, which, clearly for business organisations, is Business New Zealand. They would be that body. There is not a multiplicity of bodies which can come in at that point as the default body.

In terms of Mr Penk’s questions, he’s right in identifying this point around specified bargaining parties, which are an important part of the legislation because, very often, these particular bodies who are identified in this part will operate very differently and have quite different drivers to other employers. So it is important there is the capacity for them to be involved directly in the bargaining and to be represented through the public service commissioner. In respect of whether there are any other particular legislative constrains or rules, for example, around some of those particular inhibitions on the rights of certain people within defence to be able to organise, etc., etc., any fair pay agreement that is agreed gets vetted by Ministry of Business, Innovation and Employment at the end; we’ll deal with that in a later part. It has to be consistent with every other law of the land.

Thank you, Madam Chair. It always amazes me—and I’m going back to a comment that the Minister made earlier on Part 3—that you have Ministers and bureaucrats in Wellington, the non-productive part of our economy, that always seem to enjoy finding ways of applying legislation to the productive part of the economy who are out there actually working and trying to get ahead, and for which most of them actually take good care of their employees and actually protect that relationship.

But maybe I was being a bit unfair because I wasn’t sure whether or not the Minister in the chair had actually any private sector experience himself—and he has apparently, as a Christmas tree salesman. I don’t know whether or not that entailed him having his own employees and understanding the responsibility in the relationship—

💬 Simon Watts: Hope he declared the cash income.

Well, that’s right—worrying about making payroll, but actually giving him an understanding of how the private sector actually works. So I’ll give him the benefit of the doubt and I’ll say, yes, he has got that private sector experience. So when he’s making his decisions as a Minister, he’s actually quantifying and he’s making sure that he captures the real costs that are associated with the type of legislation that you bring in as a lawmaker.

But I do want to seek clarification on the point that Mr Goldsmith raised, and it’s a very good one in terms of around the bargaining: why has he gone to a default setting after the 90 days, or whatever the period was, to go to Business New Zealand, because in his case, as a Christmas tree salesman or business owner, I would have thought that Retail NZ would probably be the best person to understand his business and to be able to represent it and go into those negotiations. So why has there been a favouring or a compulsion towards Business New Zealand rather than actually recognising that the different associations, whether it be Retail New Zealand or Hospitality New Zealand, which actually have a much better and intimate knowledge of what their members need, how to represent them, and actually advance and make those negotiations probably far more credible and smoother than actually—

💬 Chris Penk: There should be a Santa “clause” for Christmas trees.

Ha, ha! It should be. That’s right. They should introduce a new clause on that. The Minister stood up and said, “Look, if they don’t come forward in 90 days, then we’ll default back to Business New Zealand.” Why have they done that? Why is Business New Zealand getting treated differently than other industry representatives like Retail New Zealand and Hospitality New Zealand? Thank you, Madam Chair.

Thank you very much, Madam Chair. An interesting perspective from the Hon Mark Mitchell in terms of that business. But I want to cut to a different angle, if I may, to give the Minister a little bit of time to come back with an answer on those good points.

I want to look at clause 64(d), actually, and it builds on the points that were raised by the member Chris Penk previously around Defence, but in particular, a point where he refers to Health New Zealand. We’ll be familiar with the Health New Zealand entity that the Governments have set up in terms of their—

Order! My apologies for interrupting the member, but the time has come for me to report progress.

Progress to be reported.

House resumed.

Mr Speaker, the committee has considered the Fair Pay Agreements Bill and reports progress. I move, That the report be adopted.

Motion agreed to.

Report adopted.

The bill is set down for further consideration in committee next sitting day. The House stands adjourned until 2 p.m. today.

The House adjourned at 12.56 p.m. (Thursday)