Employment Relations (Trial Periods) Amendment Bill

Members, we now come to clause 2. Clause 2 is the commencement. The question is that clause 2 stand part.

Thank you, Madam Chair. Just in regard to the commencement, the Minister spoke about—well, she didn’t speak to some of the pieces of evidence that we did have in relation to 90-day trials not boosting wages, etc. I just wondered whether she had considered delaying the commencement of this bill to allow some evidence-gathering exercises to, for example, assess the impact of those 90-day trials and the impact that that would have had on workers and on things like wage scarring. In my previous contribution in Part 1, which the Minister didn’t address, around the impacts of wage scarring, those are really important things, right? It affects things like the gender wage gap, the ethnic wage gap; it affects overall incomes in our country.

💬 Carl Bates: What’s the question?

RICARDO MENÉNDEZ MARCH: My question is whether the Minister would have been open to considering, or had received advice on considering, a different type of commencement date so that she could have then trialled out—for maybe 90 days—the impacts that the status quo was having and to seek some further advice on what the past arrangements had. So really interested to understand why there is such a rush to put this through when the Minister had acknowledged that she’s not really basing this bill on any evidence. Looking at the coalition agreement, clearly there’s an appetite to make decisions based on evidence, so the commencement date just feels like it goes against that intent in the coalition agreement, by trying to have this Act come into force the day after the date on which it receives the Royal assent. So, again, just checking whether she’d like to honour her coalition agreement by allowing for a later commencement date to gather some more data and information.

Thank you, Madam Chair—Mr Chair. I’m sorry; I hadn’t noticed that the Chair had changed.

CHAIRPERSON (Teanau Tuiono): I have transformed.

It is certainly a transformation. Mr Chair, I have a few comments to make on clause 2, the commencement provision, and one is really for the Minister. In relation to this particular bill, which he is seeking to turn into an Act, it is exactly the same as a bill in terms of its nature of content, and so I wonder in relation to the commencement of this bill whether she had considered just recycling the 2011 bill in relation to this provision and, indeed, the whole Act and whether she got any advice on that. I’d be interested to know if she did do that; or, if she didn’t do that, why she decided not to do that. So that would be my first question.

The second thing I wanted to ask was just really about two amendments, which I understand my colleagues wish to speak to in their names. The first is in the name of colleague Ginny Andersen around clause 2, the commencement provision, seeking to replace the words “on the day after” with “90 days after”. It just seems fair, doesn’t it, that the New Zealand public gets to sit with this bill for 90 days as we expect them to sit with insecure and unconfirmed employment. So I think that that’s valid and fair and has a nice kind of poetry to it, if I could be so bold. So I commend my colleague for putting forward that amendment in relation to the commencement clause.

I have another colleague who has put forward a different amendment in relation to the commencement. This one is significantly longer. My colleague Arena Williams has suggested that instead of what is currently included in clause 2, we change it to “This Act comes into force on 9 months after the date of Royal assent.” It’s probably slightly less poetic, and I hope no offence is taken to that by my colleague Arena Williams, but it is a significant amount of time in which I think we could perhaps, if the Minister was of a mind to, do a select committee process once this bill has been passed. I’m sure we could do that within the nine-month period, and that obviously would affect its commencement. But it would mean that it was a meaningful process—that we could effectively delay commencement, which is what we’re discussing at the moment, until after a period of consideration.

Obviously, there’ll be the summer period when not as many people will be around to make submissions, and I’ve heard other colleagues discuss that in the past as well. But then we would have a significant amount of time where, prior to commencement, it would be possible for the Education and Workforce Committee—of which I’m a member; and I see our chair is also in the House—to engage with the content of this bill and hear submissions.

As I was discussing in the previous reading, a number of people have indicated to me that they would be in a position to make a submission and want to make submission on this bill. And so I think delaying the commencement in order to have a select committee process would somewhat go towards making the process of urgency, which we are now debating this bill under, slightly fairer and more justifiable—because of that delayed commencement.

So, as I said, although the Arena Williams’ amendment is not as poetic as I think Ginny Andersen’s amendment is, Arena Williams’ amendment does allow greater scope for delaying the commencement in order to go through proper process that would allay a lot of the concerns that we’re hearing from the public.

So I do wonder if the Minister has—it doesn’t have to be specifically around this particular amendment to clause 2—had advice around a subsequent select committee process that we may be able to enter into. That would be really interesting to hear. So I look forward to hearing the Minister’s comments on that and also on the substantive provisions that my colleagues have sought to introduce under clause 2 as well.

Thank you, Mr Chair. I have two points to make on this clause. The first is to highlight the need for the nine-month period that I have suggested in my amendment. As my colleague Camilla Belich has pointed out, this would allow the Minister to write to a committee of her choosing, say it was the Education and Workforce Committee, to conduct an inquiry. That has been traversed by Camilla. That is not what I will be speaking about. I would like to help the Minister consider some of the other options available to her, perhaps using a model like Scotland’s Futures Forum to discuss this kind of amendment, which has been back and forth, in and out of our statute book, and really does call for some bipartisan agreement around it.

So something like Scotland’s Futures Forum, or a citizens’ forum, which are two different things, are models of engaging with the people who a law affects, but while presenting them with evidence that has been independently gathered, so that they might make informed decisions about their policy making. My colleagues are very excited about this. They’re having a very lively conversation about it beside me.

So what Scotland’s Futures Forum allows as a lawmaking model for Parliaments like ours is to delegate decisions that have consistently been passed back and forth between major political parties where there is no agreement. This kind of model, if the Minister were to choose to take up my amendment and then allow a nine-month period, would allow her to convene a bipartisan forum that also had representatives of people who are most affected by this—employers, employees, but also experts—and to consider the evidence for this.

I think the first briefing of such a forum, which would be considering this piece of legislation, would consider, perhaps, the research of Motu. It was published with funding from the Treasury into the effect of trial periods in employment on firm hiring behaviour. That research asked the question about whether the option of using trial periods had affected the quantity of hiring by firms and the types of individuals hired, and the stability of employment relationships. It would be really useful for a committee of Parliament to be informed by the expert evidence, but to have alongside it individuals who are outside of Parliament who were most affected by this law, hearing that evidence and making evidence-based decisions.

That first briefing from Motu would show that research they conducted found no evidence that the ability to use trial periods significantly increased firms’ overall hiring. They estimated that the policy effect was statistically and economically insignificant: a 0.8 percent increase in hiring on average, across all industries.

My contention here is that it would be really useful for the Minister to be able to spend that nine months considering—with a group of parliamentarians who are interested in the long-term future, in providing certainty to employers—the evidence basis for making these kinds of decisions. It may be that that forum—

💬 Hon Simeon Brown: They just want another working group.

—and there’s some very enthusiastic discussion over this side of the Chamber also, on the Futures Forum. I look forward to discussing it with that Minister, because there are some issues in our infrastructure pipeline that could do with some bipartisan treatment too. But this would allow the Minister to consider how we get longevity in this policy. How do we find a common ground? Because I have faith that that Minister is interested in finding common ground here. That is how our democracy works when it is most flourishing, when we agree on the way that we can serve our people the best, and this is a great option for that. I hope she will consider my amendment.

Thank you, Mr Chair. I wanted to specifically talk to the contributions that have already come, and I suspect will also follow, about changing the commencement clause. Look, this is pretty standard that a commencement happens after a Royal assent. I don’t think anybody is challenging that. But would we delay it for more information? No. This has been a widely canvassed debate since 2009. Ninety-day trials have been around in New Zealand since 2009, so since that time period, we have gathered quite a wide range of information that has informed our commitment to the New Zealand public. It has informed our commitment as part of the 100-day plan. We have a clear mandate from the New Zealand public to do this change.

Thank you, Mr Chair. So I take the point that there’s no intent to delay it, but I do want to unpack how it matches the intent to use the best available data—particularly when it comes to chance or certainty this bill actually matches with the intent in the coalition agreement. Because I just heard that there is no data gathering; the Minister talked about the fact that we’ve had a debate on this. But can I just ask: is she confident that this bill honours the coalition agreement in relationship to the best use of data and evidence? So I just want to sort of pick that up.

The other thing is: will she then commit to ensuring—and has she considered then—after the bill comes into force, actually starting to collect any data? Because then, otherwise, we’re just having a situation where we didn’t have data before but there’s no intent to collect data.

So my two questions are: will she commit; will she initiate data gathering after this bill comes into force? And just the consistency with the coalition agreement.

Thank you, Mr Chair. I want to ask a question about the possibility of extending the bill to a time when perhaps people are doing better in this country, particularly low-paid workers. My understanding is that the Government has a Budget coming into effect in the April period, so a lot of the policies will kick in there. That’s when a lot of New Zealanders will actually be hit quite hard, I suspect, by things like the lack of childcare payments; perhaps the end of school lunches is my greatest fear, etc.

I understand that the Minister has a different position and thinks that everybody’s going to be thinking it’s the second Christmas because they’re getting $4 a week. I doubt that—there will be things like no support to people for their public transport costs for their children. So I wondered whether we could delay the bill—

💬 Stuart Smith: Point of order. Thank you, Mr Chair. It seems like we’ve drifted a long way from the commencement clause.

💬 Camilla Belich: Speaking to the point of order, I’d note, Mr Chair, that the member was just about to mention her concerns around commencement in this contribution—[Interruption] Excuse me, she just said the word “commencement”.

CHAIRPERSON (Teanau Tuiono): Well, I wait with bated breath to hear how this relates to the commencement.

So this relates to the bill, Mr Chair, because I wondered whether we could delay the bill long enough to see what the impact was of those other policies and then look at this bill at that stage as coming in after that impact has happened. Because if I’m right and the impact is that hurts New Zealanders, then the bill comes in after that period has happened. If I am wrong, then we’re in a situation where, in fact, the bill’s coming in after the good impact and they’ll be cushioned from the blow by all the wonderful things that the new Government’s going to do for them, ostensibly.

So I wondered if we could extend the period long enough to see the impact and therefore people like the woman I described in my speeches—who has children, who is going to be impacted by lack of childcare payments and lack of school lunches and transport costs—would be cushioned from that blow in that period, or the Government’s policies would kick in and she would be so much better off it didn’t matter. That, in fact, she was in a position where she couldn’t afford to take a job that was more risky, from a minimum-wage job, because she risked all those things.

I just wondered whether we could have that extension through the next year, or we could have an amendment which says something like, “This will kick in when a person on the average wage is, in fact, $50 better off.” Then we could do this, perhaps, at that point—when they were less exposed to the risk of it. Thank you.

Thank you very much, Mr Chair. I’d like to take the opportunity to speak to one of my many amendments that we have here tonight. In clause 2, as already referred to by Camilla Belich, there is a proposal that I’ve put forward in my name to replace the words “on the day after” to “90 days after”. It only seems fair that if New Zealanders don’t even get to say that their fundamental working rights are being legislated away, then surely New Zealanders in our democratic society can have a 90-day period to evaluate this very legislation. If they can be fired in 90 days without the right of any redress or having a personal grievance, then surely it’s a good democratic society that enables the people of New Zealand to vote this bill down, or have a course of looking at how it’s working. I think 90 days is a fitting time to be able to change that.

It’s really important that we highlight the fact of that commencement, because in that is the fact that there has been no opportunity for New Zealanders to give their views or their feedback on this legislative change which has massive impacts upon their daily lives and their working life. To be able to have that “90 days after” put into clause 2, into the commencement—that would enable an additional ability for people to be able to say what the impacts are on their lives.

There have been many instances, as a local MP, when I have had constituents come to me and say that they have had the sharp end of a 90-day trial period, which has resulted in them losing their job. One that sticks in mind most as we talk on this clause is the instance where the former employee said that the employer had four—four—different employees over the period of the past 12 months and each of them, when they had come to their 90 days, had had their contract terminated on that basis. What those employees were doing in the 90 days is they were taking up whichever hours were on offer; they were doing extra shifts; they were working hard out to be able to meet the expectations of their employer in the hope that they would have a permanent position after that 90 days, and four, one after the other, had their contract terminated with no reason. It was a fire-at-will situation for all four of those individuals.

The absolute uncertainty of those employees and the flexibility and the benefits of the employer are way out of balance. It is only right that if New Zealanders are able to be fired after 90 days, then surely we need to take a good look at this bill after the same period—90 days—to see how it is working for our people and how our workers’ rights are being protected.

Thank you, Mr Chair. I just wanted to respond to that member’s contribution. Bearing in mind her rhetoric, she may not be aware that under her previous Government, there were 90-day trials just for small businesses—for businesses with 20 employees or less. If it’s good for businesses and employees and employers in a situation with 20 or less than 20 employees, then it’s good for a large company, too.

There is a question here from Ricardo Menéndez March about data collection on 90-day trials. I’ll be looking to work with officials in the coming years on researching and evaluating the labour market as part of my wider work stream. Talking also to his query about why it’s going through quicker than he may wish it goes through, part of that is because the Government has actually inherited quite a bleak economic outlook and we are wanting to reinstate business confidence as soon as possible.

Thank you, Mr Chair. The issue, of course, when a Minister responds with political responses to genuine questions is that it allows the debate to drag on. We don’t really want it to drag on. We just want some answers to our questions. The issue that we’ve got—in defence of the Hon Ginny Andersen—is that it was a genuine question, made from genuine concerns, and all that she got from the Minister in response was a political response, not an answer.

I think the Hon Ginny Andersen has a point, because we are here, as everyone is, approaching Christmas. Now, some of us in this House might be more motivated by that, and that time frame that it brings, but we are here to debate what this bill proposes. In the bill, in clause 2, it proposes that it comes into force as soon as there is Royal assent. What we have from the Hon Ginny Andersen’s amendment is a proposal that would take into account that, over the summer break, there will be people who are taking on employment. They will be taking, potentially, a break at Christmas and taking on new work. Or they might be taking on new work heading into summer.

The issue that we have here, with a lack of select committee process, a lack of an opportunity for the public, both employers and employees—because it is a mistake to assume and state that all employers are in favour of this—is that this House is yet to be convinced that, if this comes in when it’s proposed, directly after Royal assent, there won’t be people that are dismissed with no reason. We’re yet to hear from the Minister any evidence to say that there won’t be people dismissed for no reason. In the absence of that information, I think it is utterly reasonable to propose that there is a time period that covers the summer period that allows people to take on work and demonstrate that what the Government is saying is the case—that it will allow employers to be more flexible and take more people on without impacting those that are about to start their work.

What is wrong with an idea here with a bill that proposes the idea of a temporary arrangement to see if it works, to take their own medicine and apply the same thing to this? It’s an utterly reasonable proposal. There are other proposals around the commencement date that are a bit longer, but the Hon Ginny Andersen’s amendment uses the exact same time frame that is proposed in this bill, and I think she deserves an answer.

Thank you, Mr Chair. The commencement date will play in force in summer and there are specific industries that come into life and are more transitional and/or precarious like the tourism sector, for example, where in summer there will be pockets that are more active than others. So the reason why I wanted to ask about the timing of the commencement date in relation to the industries is whether the Minister has any knowledge about the timing of the commencement date in terms of the industries that she expects to be the most impacted as a result of the timing of this bill.

I wanted to pick up on the regulatory impact statement, which we don’t have any opportunities in this debate to kind of have a back and forth with the Minister in relation to it. We do have some information from almost 10 years ago about the types of people who had a higher likelihood of starting on those trial periods, but that was 10 years ago. So does the Minister know which industries and what kind of people will be most impacted by the timing of the bill, as industries tend to hire more people in specific periods? And, if not, why did she not seek that advice in relation to the timing and the commencement of the bill?

The people that will be impacted by the timing of this bill will be all people over the next nine years of this Government.

I move, That debate on this question now close.

Thank you, Mr Chair. I have a specific point in relation to clause 2, the commencement provision. So the Minister, when she was responding to a previous question on commencement, stated that it was quite usual for the day after Royal assent to be the commencement date. So I happened to have a copy of the Employment Relations Act, which is the primary Act that this Act amends, in front of me, and I thought it would be interesting to check the commencement date in the Employment Relations Act. I noted, when I checked the commencement date in the primary Act that’s being amended that it actually didn’t have the date after Royal assent; it had a specific date, 2 October 2000.

I wondered whether the Minister had received any advice about having a specific commencement date. This is not a facetious question. It’s actually because one of the key issues with trial periods is a lot of employers get them wrong, and that’s partly because of the high standard that the Employment Court has placed on making sure that trial periods are, for example, between new employees, they can only be in writing, and they have to be before employment commences. So often employers, and specifically because this policy has been related to small employers, tend to get that wrong. I think we’ve referred to previously in the debate the high majority of the number of trial period clauses that have been to the Employment Relations Authority and have been found to be invalid.

So this relates to the commencement clause in that could she please receive some advice on whether she thinks it might be beneficial for New Zealanders to have a specific date rather than the day after the Royal assent in the legislation. That way, if employers or employees were looking as to whether, in fact, trial periods could be used for all employers or, in fact, smaller employers, they could look to that specific date in the commencement, rather than the day after Royal assent. Because, actually, finding the day of Royal assent is quite difficult. I know that the Parliamentary Service is quite helpful. I’ve seen that they do tweets on the commencement date of some pieces of legislation. They confirm—

💬 Hon Rachel Brooking: What are tweets?

—Yeah, they do. Yeah, tweets; very useful if you have an interest in certain areas. But I don’t think the general New Zealand public would be so engaged with the parliamentary process to either check the Gazette, which may be where it’s advertised—and that’s actually another question for the member: how do members of the public find out the date of Royal assent? So I’m quite interested on that, and I just think it would provide greater clarity for members of the public to see a particular date. I think it’s not without precedent, as it was in the Employment Relations Act—a specific date of commencement—and it would seek to address some of the issues that we know with trial periods, in that there are still quite a lot of issues with validity and also a high standard in the authority and in the court to look to.

If so, if she was to enlighten us with, in fact, if she had taken advice on that, what date would she be looking at? Because I think it would be unusual to have a date this late in the year, and so perhaps when people were likely to come back to work; perhaps after the statutory holidays in January could be a time period which would be clearer for New Zealanders to know. Because it might be that she might want to have it from 1 January, for example. It might be, in fact, that that’s the day after Royal assent. I don’t know if the Governor-General has plans over the summer or is still, in fact, signing bills or not, but I would be interested to know, yeah, a few things.

So advice on it, what date she would determine could be included in that, and, in fact, how do members of the public—because, genuinely, how do you find out exactly when the date of Royal assent occurs in order to know whether the bill that we’re discussing around the commencement in clause 2 actually is in place or not? So if the Minister wouldn’t mind looking at that commencement provision and just providing some reasoning around the decision to have it after Royal assent.

I can assure the member that the Ministry of Business, Innovation and Employment will update their own website to allow for members of the public to know when the official start date will be for this new law, and I look forward to the member going online and finding that out. Also recognising that most people do not go to the specific law to find commencement; they go to the governing agencies where information is usually held.

Off the back of my colleague Camilla Belich’s excellent contribution, I just wanted to ask the Minister for Workplace Relations and Safety some further questions about this commencement date, particularly relating to my colleague Ginny Andersen’s excellent amendment to give the bill another 90 days before it commences.

So my specific questions related to the fact that the bill reinstates 90-day trials for large employers. One of the matters that’s come up in the debate is that for many of those employers, one of the reasons why this side of the Chamber believes, actually, they don’t need 90-day trials is because they’re able to, effectively, manage a fair dismissal process, if they needed to do one, with a standard trial period that had already existed in law. For example, we have, often, these large employers managing employment-relation matters with HR teams. So one of my questions—as, I think, Camilla Belich pointed out very succinctly—was around the fact that we’re about to approach Christmas. So, you know, I’m really mindful for HR professionals, leading into Christmas, from those large employers, that if they, for example, use template employment-agreements—they’re quite common. So being able to give people who work in areas like human resources, like legal teams, like employment-relation teams within a large business that extra time before the commencement comes in, to ensure they’re following the updated law.

So my question for the Minister is: has she actually considered that having a 90-day delay would assist some of those large employers? What I wouldn’t want—I think none of us would want our poor HR teams having to work on Christmas Eve, updating employee templates. I think that we want to make sure everybody gets a good break over the Christmas period. So there’s some really good practical reasons why delaying that commencement clause of the bill by 90 days could be really useful for those large employers so that they can go across the summer break, using existing law, without having to update some of their internal processes. So it’s a genuine question for the Minister, just off the back of that contribution, and it’d be really good to get an answer on that, because I think we are at that particular point in time of the year where HR teams, legal teams, won’t be updating templates.

So if you’re, for example, a manager of a department for a large department store, and you’re wanting to hire people between Christmas and New Year and you want an updated individual employment agreement that you get off a website, usually, in those situations, there’d be somebody in an HR team actually updating that for you. So, from a practical point of view, it would probably be better for those teams to be working off existing law. So I’m just interested if the Minister has considered that.

Thank you very much for the question, I believe it is in good faith. Looking at employment processes over Christmas, I do like to assure the member that, of course, nobody has to take up a 90-day trial; existing law applies. It is simply an option. So if a company or a business or an employee does not feel comfortable, they don’t need to do it, because it’s not mandatory.

Thank you, Mr Chair. So just picking up the point around the updating of the website—I mean, sure, great. But the reality is a lot of businesses and, actually, workers don’t just go to the Ministry of Business, Innovation and Employment website to check up the most available information. So I guess my question in relationship to the timing of the commencement date was: what further resources does she think will be needed to go into place to ensure that everybody is up to speed with those changes in the law?

We may then be able to discuss that in clause 3, in relation to just amendments to the Employment Relations Act 2000. But my experience—why I think it’s important to pick up on the point that she had just made and to unpack it a bit further, acknowledging we haven’t had a select committee stage to ask officials about this, is what resources beyond just updating the website does she think are needed? Particularly with the timing going into Christmas and that kind of public service shutting down for a little bit, what will be needed to ensure that everybody is compliant, and that workers actually understand that if their employers are talking about changes to laws, they have the resources to navigate those changes? Because of the kind of Christmas timing, I’m concerned that just updating the website does not give people enough awareness of changes that actually have really big, impactful, material differences in their lives.

I note that there has been some new material, but this is focused on the commencement date, and we are starting to drift into other clauses. But members, rest assured there is more debate to be had.

Point of order, Mr Chair. So the previous person in the chair acknowledged that we haven’t had a select committee stage and she had originally talked about how, in the title, we can go beyond that. I just want to check: do you intend to have a specific clause in which we’re able to further unpack this bill and the fact that we haven’t had a select committee stage? Because otherwise, we’re all trying to actually, in good faith, unpack the consequences and implication of this bill and we just haven’t had that chance. So at what point do you expect that we can then have the more substantive debate because we didn’t have the select committee stage?

My observation is that members are ranging a bit further away—and that’s fine because, as people have said over the last couple of days, actually, we haven’t had a select committee process as well. So we have tried to build that into our flexibility. I also note that the previous Chair here did say that specifically within clause 1 as well, but when we start to hear repetitions, it’s time to move on.

Thank you very much, Mr Chair. I have two questions for the Minister who’s in charge of the legislation.

The first; I’d like to have it clarified: in terms of the commencement for clause 2 and when that applies in relation to an employment agreement—we’ve already been discussing specifically over the holiday period. What I’d like the Minister to answer is if somebody who was hired, say, yesterday, under an employment contract and then the legislation comes into force after the day’s commencement as specified, what is the impact of that on the employment relationship? So it’s really important for employees to be able to know if they were hired before this bill came into force, are they still going to be held to a 90-day trial period or if they are not.

The second question I have for the Minister is really in relation to my amendment. Again, I didn’t really get the answer. All the Minister said in relation to that was that small firms are already able to do this. It didn’t really address the fact that there is that ongoing unfairness and it didn’t really explain if employers are able to fire an employee in 90 days, why don’t New Zealanders also get that opportunity to be able to do that? I didn’t feel that the answer actually addressed what the question was, and I’d be really grateful for any further enlightenment that the Minister would like to provide.

I move, That debate on this question now close.

The question is that the Hon Ginny Andersen’s tabled amendment to clause 2 be agreed to.

The question is that Arena Williams’ tabled amendment to clause 2 be agreed to.