Fair Pay Agreements Bill

We come now to Part 11. Part 11 is the debate on clauses 229 to 244, “Miscellaneous provisions”, and Schedule 4, “Consequential amendments”. The question is that Part 11 stand part.

Thank you, Madam Chair. I am, to the delight of the Minister, really keen to go back to the personal information. So under Part 11, there are clauses around what can and can’t be done with personal information that is given by the employer to the bargaining—the other side, the employee side—and it sets out here around what can and can’t be done with that information. My question to the Minister is, there’s nothing in here that says what the bargaining side for the employee, most likely the union, needs to do with that information once the fair pay agreement (FPA) is concluded. So it talks about, in clause 234A under “Employee contact details”, using the information by the initiating union for initiating the FPA. It talks about a proposed variation, but it doesn’t talk about a renewal. So my question is: what are the Minister’s expectations around the data once the FPA is concluded? What happens to that information for those employees who have elected not to become a member of the union? Is that information that’s held by the union then required to be destroyed? Or are they able, in fact, to hold on to it and use it three to five years down the track for the purposes of a renewal? It’s not clear here whether or not it’s allowed under this proposed Act.

The reason that I’ve got some concerns is that’s a long time to hold on to someone’s details. I understand, and here it is very clear that it says at the time it’s only able to be used for those—for initiating bargaining, the variation, or talking about an FPA as it’s under way. My question to the Minister is what happens once an FPA is concluded and that information is—what happens to that information; does it have to be destroyed? Or is it able to be used in three to five years’ time to initiate a renewal of that agreement? Or will the union be required to get new contact details at that time of the people who are covered? Or are they, in fact, able to use the information that they already have from three to five years ago, assuming, maybe, that many of those people are still in the industries that they’re in? I guess that the point is that because we have a workforce that moves between jobs quite a lot, you will probably be in a position where three to five years down the track, in fact, many of those employees who were covered by the initial FPA have moved on, don’t work in that sector any more, and potentially won’t be included in any renewal. So the question is: can the union use that detail to say to all of the prospective people who were part of that FPA five years ago, “Hey, we’re doing this again, it’s going to be renewed. Would you like to take part?”, or, in fact, is it a requirement that they get new information at that time?

Secondly, what happens to that information once an FPA is concluded, if it’s not required for a renewal? There’s nothing in here that I can find, and the Minister can point me to it if I’ve missed it, around destroying those details once the process is finished and the variations have been concluded in a reasonable period of time. I guess the question there is: how long can those variations go on for? Can they happen over the whole five-year period before we get into a renewal phase? So can that information be used on an ongoing basis, for variations up to how long, and at what point would that information be required to if, in fact, it is required to be destroyed? If it’s not required to be destroyed, I guess, the point is why not? I’ll leave it at that. But I’ve got further questions around privacy to carry on with. Thank you.

For the purpose of these provisions and all of the other provisions that relate to the use of employee information in the bill, it’s important to note that the provisions of the Privacy Act apply across all of the information that is collected, and the primary thing for members to be aware of there is that the information that is collected needs to primarily be used for the purposes for which it was collected. So in this case, the purposes for which it is collected relate to the fair pay agreement that is being negotiated. That means that the information can be retained for the duration of that fair pay agreement, including variations that might occur during the term of a fair pay agreement, but it cannot be kept beyond that period.

When it gets to the point of renewal, the process of collecting information will have to, effectively, start again and go forward on that basis, so it can’t be kept beyond the expiry date of the fair pay agreement. At the point at which the information can no longer be validly used under the Privacy Act, my understanding is that the party would have to dispose of it.

Thank you, Madam Chair. I rise to take a brief call on—particularly speaking to and seeking the Government’s support for Supplementary Order Paper 272 in my name, which is looking to make an amendment to create a review of coverage of the Act. To give some context to this, this is about the fact that our current labour market—a visible feature of it is fragmentation and employers seeking to reduce their costs through contracting people rather than employing them. It has been a concern for the Green Party, right from the beginning of this process, that the fair pay agreements are only providing coverage for employees and that there’s a potential risk of employers deciding to contract people instead of employ them, to reduce their costs.

I want to acknowledge that the Government has had a working group looking at how we can, as a country, create more stability and certainty and reduce that fragmentation. That has been the Tripartite Working Group on Better Protections for Contractors, and there are recommendations that have come out of that group and that reported at December last year. The Greens were hoping that some of those recommendations, the work from that, would have been able to be integrated into this piece of legislation to protect against that concern of increased fragmentation. What we’ve got in the bill is Subpart 3, which has already been covered, about where there are penalties—there’s a specific part in the Fair Pay Agreements Bill that says, “An employer must not engage a person under contract for services if—(a) the real nature of the relationship is that the person is the employer’s employee; and (b) the employer engages the person under a contract for services, rather than as an employee, to prevent the person being, in relation to a fair pay agreement, a covered employee.” So it’s a specific prohibition against doing that, and there are penalties that have been established in the bill. I acknowledge that. However, that’s—in effect, my understanding is that is a restatement of our current law, as people should not be doing that, and it’s making that specific to the fair pay agreements.

However, we know that we have widespread problems of employers contracting out already. I think the Uber decision yesterday, which is so fantastic—and I do note that, you know, at the heart of this, and while I heard from a member from the ACT Party yesterday saying every Uber driver he’s ever spoken to has wanted things to remain the same, the fact is these Uber drivers went to court because their arrangement denies them the minimum wage, holiday pay, protection from unjust dismissal, KiwiSaver contributions, and the right to unionise and collectively bargain. Sounds like a great deal to me! Not. And that’s why we want to protect against more people being put in those precarious situations, rather than having the protection of employment law and the protection of fair pay agreements.

If we want us to be lifting everybody up, we actually want to make sure that we are getting the right people under the cover. So our Supplementary Order Paper is kind of a midway point, really. We haven’t got the ability to do all the policy work to integrate the tripartite working group into this piece of legislation, but what we’re suggesting is that the department, after three years, do a review to consider the effect the fair pay agreements have had on sectors where there is a significant proportion of employees that are under contract for services. So it’s a specific commitment to look at the impact of this and make sure that that concern has not been realised.

Responding to the member’s comments and proposed Supplementary Order Paper (SOP): as has been outlined, earlier parts of the bill do partly address this issue about the possibility of misclassification as a contractor, and, as the member points out, the Government has a broader work programme under way which I do expect us to make progress on in the coming months.

The reason why the Government won’t be agreeing to the SOP put forward by the member—it’s the same reason that I have not agreed to other changes that have been proposed at various changes of the bill’s passage—is I think it would be a mistake to look to address the employee contractor classification issue specifically within the Fair Pay Agreements Bill. This is quite a fundamental issue about how workers are classified across our economy. It’s a very significant and technical issue that needs to be worked through carefully, and when we get to a conclusion on that, I think it needs to be applied consistently across the employment relations system. I think it would be an odd outcome for us to end up with particular provisions in the fair pay agreement legislation that might change the landscape for classification for people who are covered by fair pay agreements but not change things for other workers who are not covered by fair pay agreements. So my view is that we need to get the fundamental questions around classification right across the whole employment relations system, and that will then flow through to all workers regardless of whether they are covered by fair pay agreements or not.

Thank you, Madam Chair. As I mentioned, I wanted to carry on a bit more with this privacy stuff around “Employee contact details”, clause 234A. I’d like to get an answer from the Minister—we’ve talked about this in previous sections where it related, and this is around the unions’ ability to contact non-members to advise them that if they join the union, their union fees are likely to be paid back if—once the bargaining is complete and the fair pay agreement (FPA) is in place, that they will negotiate for a provision in the FPA that allows those union fees to be paid back. So we’ve talked about this earlier but this is under this particular clause. Clause 234A(1)(b) says you’re not allowed to “use the contact details for [purposes] that is not related to the relevant proposed agreement”.

So my question to the Minister is: is it relevant to the proposed agreement for a union to write and use the contact details of the employees—to write to them all to say—this is in the very early stages of bargaining—“If you join the union, it’s going to cost you, you know, 300 bucks, however much it costs to join a union”—I don’t know, I’ve never joined one, but if that’s how much it costs—

💬 Hon Michael Woodhouse: More than that.

—more than that; could be—“if you join the union and pay your fees, we will negotiate to have those fees paid back to you.” So, in effect, you get the free benefit of being part of a union. So my question to the Minister is: is that appropriate use of employee contact details under clause 234A(1)(b) for the purpose that is related to the relevant proposed agreement?

💬 Hon Judith Collins: I would have thought so.

Yeah, it probably is, but I want to check that because, in effect, it’s relevant to every single proposed agreement, because he’s allowed that ability for unions to do that.

As we talked about earlier, we had this discussion in earlier parts around the fact that you are able to entice people into the unions by talking about this potential free union membership as part of the FPA deal, and you won’t fall into those penalty clauses by enticing people into a union. You can’t do anything else, as I understand it, but you can use that.

So the question here is, under this clause, is it an appropriate use of employee contact details to use them to write to all of those or email or phone up or whatever you decide or even walk into a premises of an employer and pitch yourself to the potential union members to say, “Well, yep, you’ll have to pay up but we might even defer your fees, potentially, so you don’t have to pay anything, because we will make sure that it’s paid back in the FPA that we can include.” So the question is: is that allowed?

It seems to be under this clause 234A(1)(b) specifically about that FPA. But my question is that this would apply to every single FPA because that’s allowed to be bargained for under every single FPA. So I just want to be very clear that that is something that is allowed. We know there aren’t any penalties for doing it. But are the contact details specifically allowed to be used for the purposes of attracting people into the unions by saying to them that you won’t have to pay any fees and, basically, your fees will be free?

The purpose of the provision of the employee contact details is for unions who form the bargaining side and are the bargaining parties to be able to communicate in a two-way fashion with people who they are representing. It is a—

💬 Hon Judith Collins: But they’re not. They’re not representing.

A member over there says “They’re not”; the member needs to read the legislation. The unions who represent employees in bargaining represent all covered employees regardless of their membership.

💬 Hon Judith Collins: But what if they don’t want to be represented by them?

Well, the member just needs to read the legislation. That is how it is written.

In respect of the provision of employees’ information, they have to be able to communicate with those employees. That communication will be two-way. So traditionally in the way that employees are represented in these processes, there will need to be a process of asking them what sorts of issues they want to bring forward into the bargaining, of confirming what those claims will be, of going back to those employees and saying, “Here’s where we’re at in bargaining.”, at the end of the process, and of going back to them and saying, “Here is the proposed deal for you to be able to vote on.” So, by definition, that does need to be able to include any of the claims or the issues that the union intends to pursue within the bargaining process. That could include seeking for there to be the payment as described by the member, which we have covered in previous parts and that I have affirmed can be part of bargaining processes. A union cannot guarantee that that will happen, because it will be a part of the bargaining process.

💬 Sam Uffindell: Can you seek to not be represented by the union?

I hear the great chagrin of members opposite about this point. They forget, again, that this provision is one that is in the existing Employment Relations Act that happily sat there for the entire nine years of which time they were in Government.

Thank you, Madam Chair. I’m not wanting to drag this out, but I just do want to explore the issue in terms of my Supplementary Order Paper (SOP) a little bit more with the Minister in the chair, Michael Wood. As I heard him say, the Government can’t support the—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! The member is addressing an SOP which should have been debated as part of Part 1.

Sorry, Madam Chair—so SOP 272, which is part of Schedule 1?

CHAIRPERSON (Hon Jacqui Dean): Yep, yep—Schedule 1 was debated as part of Part 1.

Thank you very much, Madam Chair. I want to have a further conversation in regards to section 234B subclause (1)(a) and (b), and it is the same clause in which my colleague Erica Stanford just asked some questions. But I’m taking a different angle on this because I think the points that my good colleague from East Coast Bays, Erica Stanford, noted is around—you know, the reality is there’s going to be some individuals captured who don’t want to be captured by this process.

But my specific questions relate to the requirements under 234B(1)(a) that “the contact details are stored separately from any other information held by the union;”. The question for the Minister, particularly, is: how does he envisage that that will occur in practice? Because the majority of this information, no doubt, will be held electronically. The requirement under the legislation, here, is that it is stored separately from any other information held by the union, so one would take from that that there would be an expectation on unions to establish a new contact database system, separate systems from their existing contact systems that they hold. Obviously, that’s going to result in, I guess, quite a high degree of additional requirement for resource, but also around the duplication of system processes. So that’s the first question around, practically, is that what the Minister’s envisaging from paragraph (a).

The second question I’ve got relates to 234C(1)(a), and this is around personal information. I’m specifically looking at paragraph (b) of that 234C—hopefully, for those at home, they’re following all of these references to the legislation; I appreciate it is a bit challenging because there’s a number of numbers here. But this point is in regards to—so that information can be used for the purposes of bargaining, and it can’t be disclosed to any person except in a form that does not identify the individual. So, particularly, (a) is where I’m trying to link that back to the point above, because what are the checks and balances that give someone, particularly the individual that doesn’t want to be captured by this—what are the checks and balances that are within the system that ensures that their personal information is, firstly, stored separately. Secondly, what is the ability for an individual to be able to seek assurance that that is the case? Is there a process that’s going to be put in place in order to be able to request information in regards to that? What is the monitoring and review process that will be in place to provide assurance and substantiation in regards to the fact that this is occurring? Because the legislation refers to 234B(3), where a union intentionally or recklessly fails to comply with subsection (1), which I discussed at the start. I mean, they’re going to be liable to penalties.

So what I’m interested in—and that’s my third question—I didn’t think under privacy you had to meet a threshold of being reckless. Actually, I’m looking at the Rt Hon Judith Collins in regards to privacy. I mean, I think the disclosure of personal information is very much black and white: you either disclose it or you don’t. It’s not that you have to be reckless or that you’re intentionally doing that. So that’s applying—I mean, I’m not a lawyer, and I would never presume to be one, but just as a simple accountant, I would think that—

💬 Hon Michael Woodhouse: Never just a simple accountant.

—crikey—thank you very much, Hon Michael Woodhouse; from one accountant to another. You know, why are we putting this additional layer that you actually have to meet a higher threshold in regards to that disclosure of information? So I’m wanting to get—I mean, I think this is quite a concern. I want to see what their processes are around assurance in regards to that, particularly around that threshold, because a penalty will be applied.

And the last question that I’ve got, and I know I am linking a number of clauses, but I think it is important, is around 234(2)(a)—right, follow that through, hopefully, no problem—“A record must be kept—(a) in written form;”. So going back to my first point—[Bell rung] Madam Chair. Madam Chair.

Mr Simon Watts.

💬 SIMON WATTS: Thank you very much, Madam Chair. I didn’t think it was going to go on so long, but it’s obviously getting a little bit more complex than what I originally envisaged. But the point I made at the start around the fact that this information needs to be stored separately—you know, you’ve now got a case that some employers will be able to keep this information in a written form. Let’s just think about the practicality of how this is going to happen: is that going to be a separate storage cabinet? You know, all of that stuff. What consideration has been done in terms of—I’m sure there’s been a huge amount of thinking around practical implications of legislation, but what I’ve, hopefully, just identified is a number of issues, so I’m interested for the Minister to just comment on those four questions. Thank you.

Happy to answer some of the member’s questions here. The first point that might just be useful by way of clarification is that clause 234C is dealing with a slightly different area, in respect of personal information. It covers information that is provided to the bargaining side. That is not about the contact details of employees, which is primarily where our focus of our discussion around these issues has been previously. So, for example, it could be that bargaining sides request from each other details about—I don’t know—salary levels across that particular sector, or that kind of thing, but it’s not dealing with contact details of individual employees, which is primarily what we’ve been focused on in this area.

Important to note that when it does come to employee contact details, which is captured in clause 234B, that, as is the case right across the system, there’s an opt-out provision. So employees who do not want their details passed on can, through a simple mechanism, choose for that to be the case. So, in respect of Mr Watts’ concern that some might be captured who don’t want to be, there will be a clear choice for people if they don’t want their contact details included there.

There are, then, obligations that are built in in respect of how unions do manage that information, and Mr Watts points to one of those obligations, which is the obligation to store those details separately to other information. That is important. Unions will likely have databases of information that they send information out to their members and other interested workers about a range of different things that the union does. These provisions require the information is stored separately so that it can only be used for the purposes relating to fair pay agreements. So, yes, it will be up to the union exactly how they do that, but they will have to store that information in a separable way so that it is only used in relation to fair pay agreements. I think that’s important.

The member raises a concern and a question about whether there’s a higher standard that’s been put in place there in respect of people who might have concerns about privacy and use of personal information. I can confirm for the member, if we go to clause 234C(2), that, in the first instance, “Nothing in this Act limits the rights of an individual under the Privacy Act”. So individuals continue to have recourse to the Privacy Act in the way that they would in any other area of law.

What we’re talking about in respect of clause 234B(3), which is the intentional or reckless tests, is potentially an additional penalty that could be applied to a union, over and above remedies that will be available through the Privacy Act if they meet that test and do breach the requirements of the bill. So it’s not softening the test or the requirements on the union; it’s adding in, effectively, another test which can open up to another penalty if they’re not in compliance.

The question is that Jan Logie’s amendment to Schedule 1 set out on Supplementary Order Paper 272 be agreed to.

The question is that the Minister’s amendments to Schedule 3 set out on Supplementary Order Paper 264 be agreed to.

Amendments agreed to.

Schedule 3 as amended agreed to.

The question is that the Minister’s amendments to Schedule 4 set out on Supplementary Order Paper 264 and in the tabled amendment be agreed to.

Amendments agreed to.

Schedule 4 as amended agreed to.

Clauses 1 and 2