Fair Pay Agreements Bill

We come now to Part 8. This is the debate on clauses 164 to 195, “Variation, renewal, and replacement of fair pay agreements”. The question is that Part 8 stand part.

We’re well into this debate and, in the earlier parts, the Minister would stand up and give a bit of an introduction to the part and talk about it—he seems to have lost enthusiasm and is wilting under the pressure. But at least he’s here; he’s not in Antarctica or Scott Base or anything like that, having time off when the House is sitting—

💬 Hon Michael Woodhouse: Christchurch Airport.

—and there’s work to be done. Christchurch Airport; yeah, that’s true. But here we are on Part 8, which I suppose encapsulates the madness of this whole thing, because when the misnamed “fair pay agreements”, the “mandatory union deals”, were introduced, the Prime Minister stood up, was at great pains to say, “Oh, look, there’ll only be one or two of these—there’ll only be one or two of these.”, which was a very odd way to, sort of, defend and describe a piece of legislation. They’re bringing in this great triumph, but “We recognise that it’s probably not a good idea, but there will only be one or two of them.” That’s what she said.

But the reality is there’s going to be lots of them if they get a chance, once this goes through. Everybody’s lining up. So we’ve got the Unite Union or I think it is, or it might be E tū, that’s collecting signatures or votes, as we speak, trying to get to the minuscule threshold that earlier on we got to. Because anyway, once you’ve got an agreement in place, what happens? Well, then somebody wants to change it. You want to vary it or we want to renew it or we want to replace it.

So the poor little small business that’s just trying to make a buck—they’re dodging the ram-raids every second night, there are smash and grabs every other night, and then there’s all the other trouble and strife that they’ve got. They’ve just got over COVID; they can’t find any workers because the Government is competing for all the workers with their “make work” schemes like Jobs for Nature and so forth; and they’re struggling to make ends meet and keep the business going, and every week the Government passes some new regulation or legislation which makes them do other things—things that they don’t want to do, things that aren’t a focus of their business, the things that aren’t actually helping them get the products to the customers, which is how you make a living.

And this part, Part 8, goes through the long, tedious, convoluted process of how each of these fair pay agreements, once they’ve been brought in—the good news, however, is if we do get a chance to form the Government this time next year, there may well not ever be any such agreements, because we have committed to repeal this legislation forthwith. Given all the convoluted nature of all these things, notwithstanding the efforts of Unite or E tū or whichever it is, which is gathering the numbers and the signatures to try and start this ball rolling before the legislation is even passed—it seems very unlikely to me that a fair pay agreement will be concluded before the next election, and people will have to have a chance to have a say about it.

But, nevertheless, there is the slight possibility that it might. And then there is even less a slight—well, who knows what would happen? But the reality is that before long, we’d be into the process of having gone through the whole process of having a fair pay agreement—the undemocratic start where only a tiny minority can get into it; then the bargaining where they’re not talking about things like productivity or the issues that really matter; then the ratification process that doesn’t matter. Even if the majority of the employers don’t want it, they don’t ratify it, it still happens because it goes off to the Employment Relations Authority.

Once it’s all gone through and applies to everybody, whether they like it or not—you happen to be a 25 percent salesman. If you think of a member of Parliament, we’re 25 percent salesman, 25 percent researcher, 25 percent policy analyst, 25 percent social worker, I suppose—we’d be involved in all four of those fair pay agreements if they went through, and then you have to decide which one’s which. Am I more a social worker than a marketer, or am I more a researcher than a policy person? It’s hard to work out. I don’t know. And all the people, everybody will be scratching their heads around the country trying to work out what’s what, and where it all fits in. It’s all part of this bizarre kind of regimented 19th century view of the world that you are this and you are that, and never the twain shall meet, and it’s all opposed to the basic agility and flexibility that we have.

Anyway, getting through to the questions to the Minister as my time races off: why is it, Minister, that when it comes to applying to have one of these agreements, in clause 190, “Test for initiating bargaining to renew or replace fair pay agreement”, we still only require these tiny, small 10 percent, or 1,000 people? It should be 50 percent. And why has he not considered having a more democratic basis to decide whether or not you’re going to have one?

Thank you, Mr Chair. Happy to start this new part. And here we are—I’m talking about clause 172—back to giving out information. We’ve gone through this in earlier parts of the bill, but we’re back to it again where if there is a new employee, then the employer has to, unless the employee disagrees, hand over their information, their personal information, to the union or whoever is the person on the employee’s side of the bargaining table.

My question here is in terms of that information that’s held by the bargaining party on the employee side, especially when they are one of the unions. Now, my question is around the length of time that they are permitted to hold that information, because we are in the part that’s talking about the variations and potential renewal of fair pay agreements (FPAs). So is there a time frame that the union, or the bargaining party on the employee side, is allowed to hold on to that information for, if that person is not a member of that union especially? So if you’ve handed over your personal details because you are part of an FPA and you’ve agreed to that, what is the length of time? Because it’s not laid out anywhere here.

So because it’s personal information, I’m keen to know from the Minister how long he expects that that union would be able to hold on to that information for. Given that there may be variations or renewals of FPAs into the future, does that allow the union to hold on to that information for the purposes of contacting people who are part of the FPA for future variations and renewals, or do they have to get that information anew every single time? The reason that I’m asking that question, of course, is because people are entitled to know for how long someone holds on to their personal information and then also for what purposes they are to use that information for.

So I’ve already talked about the renewing of FPAs or variations of FPAs, but, in earlier sections, we’ve also talked about the potential of the unions to sell benefits to potential union members in that their fees might be offset—if they are part of a union then they might get their fees back in the FPA, which is a nice little sales pitch that the employer has to pay for. That’s in an earlier part, but it’s relevant here because here we are again requiring the employer to pass over details of a new employee under this Part 172. So here, in this part, I’m keen to hear from the Minister around how long that personal information will be held by the bargaining party, the lead bargaining party—potentially, probably, most likely a union—into the future. Are they allowed to hold on to it for a renewal? Are they allowed to hold on to it to get in touch for a variation, or, under renewal and variation, will they have to get those details again, anew, every single time?

Also, what are the restrictions of use—under 172—for this particular information? Is it only for the purposes of the FPA or is there a line in which it’s not able to be used, especially in the instances where a union is trying to say to potential new union members who aren’t yet signed up to that union—are they allowed to then use that? For example, in this case, under section 172, could they use that to say, “Hey, if you actually join the union”—and, you know—“you will be able to get your union fees back under the agreement that we will negotiate, because we’re going to negotiate those extra fees back for union members.” therefore enticing them into the union. Is the information allowed to be used in that manner under this particular clause, 172 in Part 8—the part that we’re on?

So three questions there: How long can they hold on to it for? Can they hold on to it for the renewal, for the variation? And are they allowed to use it in instances where they are trying to sell union membership?

For the benefit of the member who’s just resumed her seat, Erica Stanford, clause 172 doesn’t actually specifically relate to employees providing their information to a union; 172 is about is about the information that the employer must provide to the employee when a variation has been initiated, and that specifically links back to clause 171(6). That is the information that the employer must provide.

But to respond in good faith to the member, whenever a union, under the legislation, collects information about the employee, firstly, the employee has the ability to opt out of that; secondly, once the information has been provided, it is for the particular purpose. So at the time of the initial negotiation of a fair pay agreement, it is for the purpose and the duration of that period, and the same will apply in respect of the variation.

Mr Goldsmith got a question in in the last 20 seconds of his five minutes—well done there. In respect of the 10 percent or 1,000 representation test for a variation, as we’ve canvassed at length, that was a proposal that goes back to the excellent work of the Fair Pay Agreement Working Group led by the Rt Hon Jim Bolger. That was the representation test for the initiation of a fair pay agreement that establishes a level of support that is possible to reach, but none the less ensures that there is a level of support before an agreement has been initiated, and we believed it was appropriate to keep that level consistent for a variation.

Thank you, Mr Chair. Strident though Mr Goldsmith’s critique of Part 8 was, I don’t think he went far enough, because this is the most confusing and concerning part of the bill so far. I want to just touch on a scenario of parties to an agreement that is being varied. The coverage clause in the interpretation section talks about variations, including variations on the work or the type of work, and, if applicable, the industry. So, effectively, what we have here is once an agreement has been reached—I don’t know, let’s say with the trucking industry—and then some employee decides that it would be good to have the agreement varied to include courier companies that weren’t previously in it. Now, the employees and the unions are quite happy with that because they want a growth strategy, they want to increase the union base, and the employers probably don’t care so much. They’ve already gone through that and the costs of bargaining could be spread if there were more employers joining the agreement by amendment.

The problem is it doesn’t appear to me that Part 8 provides for that new part of the freight sector to be even consulted on whether they want to join it. The only people that need to agree to a variation to the agreement are the existing parties to the agreement, and that’s in clause 166(1). If they both agree, they can do it; if they don’t agree, they can discontinue it. And there is a possibility at clause 168(1) for a new bargaining party to join it, but there is no requirement for them if they are affected by the variation.

Now, I’d also point out clause 61—we are going slightly back, but this is all relevant to Part 8 variations. Clause 61 requires the chief executive to approve an eligible employer joining the bargaining party but it is not required to amend its inter-party side agreement. So not only is it not able automatically to join, it doesn’t appear able to stay out. And if there is an inter-party side agreement, it has no choice but to agree to it.

So we’ve now got this long tentacle of one fair pay agreement having been agreed in an industry or part of an industry drawing in other parties without any approval by them. And my question to the Minister is: what part of that scenario is wrong? Because it’s pretty clear that variations can include extending the coverage clause into other types of work, and potentially other industries. If that’s the case, we come back to the problem that I raised in Part 6, which is that fundamental principle of privity in contract law being breached once again, where contracts are binding on parties that aren’t a party to the agreement. They might get pulled into it, incredibly unwillingly, but they weren’t part of the initial negotiations. So my question, Minister, is: what part of that scenario is incorrect? Reassure the committee that that scenario could not happen, because of my reading of Part 8, that’s exactly what could happen. And not only could it happen, I believe that’s the intent.

Very happy to provide a quick response, which I hope puts the member’s mind at ease. Clause 169(3)(b) ensures that “(3) A variation of a fair pay agreement may relate to any term of the agreement, except for a term that specifies—(b) the coverage of the agreement;”. So that scenario could not occur.

Thank you, Mr Chair. I suppose I’ll start with a question rather than finish with a question here. Part 8 talks about the variation, the renewal, and the replacement of fair pay agreements. What’s the thing that’s missing as an option? The elimination or the termination of a fair pay agreement. There is no such thing. And that is the fundamental part of this bill, which we call “mandatory union deals”, because not only are the employers drawn into something which they don’t necessarily want to be drawn into—and the workers as well—freedom has gone out the window; you could be working away happily in your workforce and without your intention or will or desire, you’re suddenly drawn in to an agreement that you don’t necessarily want to get drawn into because a very small minority of a workforce decides that they want to be part of something.

Everybody’s drawn in and then it happens. Regardless of who votes for what—the employers vote against it—it still happens. Then once they’ve got the fair pay agreement, you would have thought this Government, in its wisdom, would say, “OK, well you’ve got a fair pay agreement, here are some options: you can overtime, you can vary it, you can renew it, you can replace it, but we’ll never ever let you terminate it.”

You will never be able to get out of this, ever, according to the way that they go about this. And that’s just the way they think. Once you’re in, it’s like, what is it—

💬 Hon Member: Hotel California.

The Hotel California. That’s right, you can never leave. You join the fair pay agreement unwillingly and there is no provision anywhere for anybody to ever get out. You can’t. Unless, presumably, if you quit your job—you might be let go, I don’t know whether they extend that beyond that. They certainly will hold on to your details and wait for you to come back.

So why, Minister, are there not sections in here outlining how the parties can get out of a fair pay agreement if they don’t think it’s doing the job that it does? Let’s think of what some examples of that could be. I was ruminating on this, actually, yesterday—on labour weekend. We’re driving past and I noticed that most of the cafes, for example, don’t open anymore on public holidays—just don’t open. They used to in days gone by; they don’t now. I presume that’s an outcome of the combination of the penal rates that have been around for a while and the very substantial increases in the minimum wage that has increased significantly to the point where it no longer makes sense to open up.

Now, if a fair pay agreement for hospitality comes through, and they ramp that up even further—and they bring in things such as unsociable hours or they want to have even a higher penal rates—it might come to the point that very few places are open on public holidays, and on weekends there might be fewer things open.

We’ve seen a real example of this in Sydney in recent times, in some places where you just get less choice—and that’s something that the Ministry of Business, Innovation and Employment in the regulatory impact statement raised as a potential risk of this legislation. So it may well be that a few years down the line, people will look and say, “Well actually, all these things that used to be open at all hours and people who used to enjoy hospitality at all hours aren’t anymore. And maybe this wasn’t such a good idea after all.” But there is no way out, unless I’m missing something.

So the question I have for the Minister: is there a way out? Am I missing it? Is it in Part 10 or 11 that workers and employers can take stock after two years and say, “Actually, this was a bad idea. It was not a fair pay agreement but a flop. It’s made the industry worse, it’s made us less productive, it’s meant that we’re not able to meet the desires and hopes of our customers and consumers—it’s not working.” What happens then?

Now, they could sort of vary it, I suppose. That’s very gracious of the Minister; he’s allowed a variation, but I don’t know what that will do. They could renew it or they could join up with another one, or they could replace it with another one, but they can’t ever have the opportunity to get rid of it.

So I say to the Minister, why not? Why not? What good reason has he got to offer to the people of New Zealand on this particular topic? Thank you, Mr Chair.

Thank you, Mr Chair. I’d like to reiterate my support for comments from my colleague the Hon Paul Goldsmith then. I was looking at clause 169 where a bargaining party must not request agreement to bargain for a variation of a fair pay agreement before the fair pay agreement is commenced. I’m not sure that that’s the right approach. I think we should be allowing people to suggest changes, ideally, before it’s implemented, right? I mean, that is a lot easier for everyone if you know where you are before the agreement is established. I mean, you could look at what your Government is currently doing around the agricultural space, with when and how. There will be a bit of push and shove—we had DairyNZ in tonight, and we’re talking about where you guys have moved to and where they’re likely to push back to. Just throughout all agreements, there is typically push back and forward. So, Minister, I’d ask you to reconsider that bit there. I think it’s probably in everyone’s interests, especially the workers, to make sure that there is clarity around what they can do and what is in the agreement so that the variations can be put in before it is implemented.

I also wanted to raise a question around what this means for existing employment agreements. I think I know what it means, because, effectively, what the fair pay agreement—

💬 Marja Lubeck: Why are you asking the question, then?

—is going to do is going to come over the top of it. My question is around—and you will hear it; you just need to hear me out, because there needs to be some context. Because what happens, if you have agreements in place, people enter into these of their own volition, of their own free will, and they think they’ve got some stability, and business owners think that they have got fixed costs and conditions that they have to meet going forward, and employees who enter into it, they have the pay and the conditions that they thought they were going to obtain as a result of going into it. You’ve, effectively, then, got a fair pay agreement put across New Zealand, put across the sector or an industry or whatever it may be, capturing people that we have continually reiterated will be captured, whether or not they want to, because 1,000 people, or 10 percent, have been wanting to say, “This is what we want to do.” You are, effectively, creating almost some sort of sovereign risk in the employment market where people are having employment contracts that they’ve entered into retrospectively removed and replaced by a sector-wide agreement. I think that creates a real risk, and I think, Minister, what you need to consider is the real risk that businesses here in New Zealand, employers, will move offshore where they can get a lot more certainty around this.

So, Minister, I want to know what engagement you have done with employers around this—Business New Zealand; I know they were quite critical of this. I wonder what feedback they gave you around the retrospective ability of employment agreements, as they exist today, to be replaced by a fair pay agreement. Thank you, Minister.

Sam Uffindell’s, the member who’s resumed his seat’s, comments were almost exclusively, in principle, points of objection to the fair pay agreements system and, indeed, any kind of minimum standards that might be implemented through any means. They don’t particularly relate to this part. The one specific point that he raised was in relation to clause 169 where bizarrely he has suggested that after the parties have agreed an agreement and ratified it but before it’s started—maybe in the period of one or two months before it has commenced—they should be able to engage in a variation process. Well, given that his side of the House has complained about there being too much complexity, his suggestion to change that would simply introduce more and doesn’t have any merit at all. Mr Goldsmith mainly spent his contribution talking about something that, by his own definition, is not in this part—

💬 Hon Paul Goldsmith: Well, it should be.

Well, there we go. He’s just answered it. What he spoke about is not in this part.

I move, That the question be now put.

Thank you, Mr Chair. The point I was making to the Minister, who seems very pleased with himself not to have to answer it, is just because something is not in a part doesn’t mean that the point can’t be made that it should be in the part. And the part which deals with what to do with a fair pay agreement (FPA) that isn’t up to scratch in some way or does need to be changed in some way—a part that deals with that doesn’t have the option of actually eliminating it or repealing it in any way, shape, or form. The Minister can sort of hide behind some technicality to not answer it, but I don’t think he serves himself well. He doesn’t serve himself well or this Parliament by not doing so.

And then it struck me as highly amusing that he would attack our newest MP, Mr Uffindell, for suggesting that it would be a terrible thing or a ridiculous notion to try and vary an agreement before it had come into place. This was the very same Minister who introduced this bill into the House and on the very same day brought in a variation to the bill that he brought in. Before the bill had been passed he was changing it, which goes to show he didn’t—

💬 Simeon Brown: A pothole in the process.

Well, yes, he’s ignoring the pothole in his own eye rather than dealing with the issues that he faces.

💬 Marja Lubeck: Taking cheap shots now—talk about the bill.

Thank you for the encouragement on the other side of the Chamber. This has been a long debate; there’s no question about that. And the reason why it is a long debate is because it’s a very long, complicated piece of legislation that is going to fundamentally complicate our working environments. And so what we’re left trying to work out is how this works. And the question that I raised, and I have an amendment which amends clause 190, which I have referred to in passing but I want to go into a little bit more detail now, which again raises this issue of why there is such a weak and low threshold for these changes—I suppose I’m answering my own question as to why the Minister did not include the ability to repeal a fair pay agreement under this part, because the hurdle to starting that process of repeal is so ridiculously low; you only need a thousand workers. And so if there are 200,000 workers in an industry, you only need a thousand of them to start a process to vary or renew or replace the agreement. That’s all you need. You just need a handful to get together and then you can change it all and uproot everybody’s lives and take them through a long, expensive, detailed, distracting process when people are trying to compete in their businesses against the rest of the world and do well, and instead they’re mucking around with these complicated processes. So a low threshold is fine for doing that.

But you would never see the Minister coming in and saying, “Well, only a thousand of you and then you can start the process to repeal it.”, because there is no process to repeal it and that is a fundamental flaw in this legislation. Once you’re in, you’re in; you can’t get out. And once you’re in, you’ll never get a chance to vote on whether you’re in, because it just happened regardless. Once you’re in, you’re in and you can’t get out. That, to me, is a disgrace and is one of the many reasons why this bill needs to be repealed.

I’ve already responded on numerous occasions to the questions and points that have been raised around the representation test of a thousand employees—

💬 Hon Paul Goldsmith: Not effectively.

—and 10 percent. I did so about five minutes ago. The member is wrong when he indicates that there can never be an end to an FPA. FPAs, as described in this part, have a span of three to five years. If the party that initiated the FPA does not reinitiate it and if there’s not a renewal, then the FPA will cease to exist.

I move, That the question be now put.

The question is that the Minister’s amendments to Part 8, set out on Supplementary Order Paper 264, be agreed to.

Chris Baillie’s amendments to Part 8, set out on Supplementary Order Papers 266 and 270, are out of order as being inconsistent with the previous decision of the committee.

The question is that the Hon Paul Goldsmith’s tabled amendments to clause 190 be agreed to.