Crimes (Theft by Employer) Amendment Bill

Members, we come now to clause 4. This is the debate on new section 220AA. The question is that clause 4 stand part.

I would first like to sort of take some time, because it’s a little bit odd for me to be speaking, and I feel a little bit like I’m out of sorts. I’d first like to just ask the member Camilla Belich around supporting the amendment that New Zealand First has put forward, and I’d like to take a bit of time to kind of explain why New Zealand First’s position is where it is on this piece of legislation.

Firstly, just if you’d indulge me, Mr Chair, the background on this space is that I have done a lot of work in the labour exploitation area and recognise the vulnerability of these communities and, therefore, have had to rely a lot on the immigration legislation that looks at the protections for temporary workers and unlawful workers in this country. There is a real disconnect around the balance between those who are vulnerable workers, for different reasons, and that they have a position where they are losing wages.

At the same time, New Zealand First is a strong advocate for our New Zealand businesses, for our hard-working Kiwi battlers: our farmers, our entrepreneurs, our small-business owners, that are incredibly diligent employers. They rely on their workforce significantly and treat their workforce incredibly well because they know the investment that they have made is the backbone of their business. We are talking about a very small sector.

Our concern that New Zealand First had in this—and it’s been touched on in the discussion so far—was that we needed to ensure that there were not only intentional actions, not only the mens rea to deprive, but that there was no reasonable excuse. That will capture, I think, a lot of the concerns that have been raised in the committee today: that if there’s a payroll glitch, if there is a delayed time sheet, if there is a dispute over a time sheet, if there is a cash-flow issue—all of those factors that would generate a reasonable excuse would ensure that this component of legislation is really focused on those who we are targeting, not the hard-working Kiwi battlers that we know contribute so much to the backbone of our economy but those who maliciously and intentionally seek to use their power control of vulnerable workers and not pay them.

I know we’ve talked a lot in this House—and if you’ll indulge me to explain further why this is an issue—about the personal grievance model and the opportunities. The challenge with the personal grievance model is, yes, we can go through the employment process, but when we’re dealing with employers who are intentionally intending to deprive workers, the grievance process is seldom used, and if it is used, there is no recourse or exposure to the employer regarding their reputation—and brand reputation is a significant issue, that when there is a company that is held accountable for something as serious as a crime, there will be a change of mindset. There won’t be an invisibility about this process. I think it’s important to get some context.

The reason New Zealand First is speaking on this legislation is because we recognise that just as we have hard-working Kiwi businesses, we have hard-working employees who on occasion can be victimised because of that power imbalance. I think it’s important to recognise that when we talk about “without reasonable excuse”, when we’re talking about the protections that we’ve expressed in concerns in this House about the onerous conditions, there are no onerous conditions. Most of our employers are doing exactly what they do and there’s no additional conditions coming from this legislation. They pay their staff; they make sure their duty of care to their employees is met. We are talking about the employers who will profit off the backbone of hard-working New Zealanders who are here to make a buck, and I think this is where we want to see the balance.

My question, really, is asking the member to accept this amendment, to recognise that intention and “without reasonable excuse” provides the balance that we think is important in this piece of legislation. Thank you, Mr Chair.

Thank you very much, Mr Chair, and thank you to the member Casey Costello for that very thoughtful contribution to this debate, which I think does really sum up the purpose of this legislation. It’s not meant to punish people who’ve done no wrong. It’s not meant to be an extra bureaucratic cost. It is simply punishment for those who intend to commit theft, and so I’m grateful to the member for providing this very good Amendment Paper to the House, and I do support this Amendment Paper.

I think that in both of its major changes it really adds a clarity to the bill and clarifies that it’s not a bill that covers mistakes in payroll. It’s not a bill that covers errors. It’s not when people forget. It’s “intentionally”, “without reasonable excuse”. It really makes that wording stronger, and so I do thank the member for that suggested wording and I do support this Amendment Paper.

I also support the aspect of the Amendment Paper that makes this, I think, a better piece of legislation by making sure that the way that theft is treated in relation to this new small part of the Crimes Act is consistent with the rest of the Crimes Act as well. I think it’s a beneficial amendment, and I encourage all members across the House, even if you’re not voting for the substantive bill—I would like to request that you consider this Amendment Paper, because I do think it is beneficial and makes the bill, hopefully, a better piece of legislation.

In relation to the member’s other comments, I agree with that; this is about balance. It is about making sure that there are serious consequences for serious wrongdoing. I know that I speak for the whole House where we do, of course, support the work that employees do. We know it’s not always straightforward to be an employer, but there has to be a line. The line in this case is when you intentionally, without reasonable excuse, take money from your employee. There must be consequences for that. It helps good employers. It helps employees. It makes people answerable for what is a crime and creates balance within the Crimes Act to make sure that crimes that employees commit and crimes that employers commit are treated the same under the law. I thank the member for that contribution and encourage the House to support the amendments that she’s proposed.

Thanks, Mr Chair, for allowing me to take an additional call on this and to start off by speaking about the Amendment Paper. The member Camilla Belich raised, earlier, the opportunities we had to improve the bill and we in the National Party want to just thank New Zealand First for bringing this Amendment Paper to the Table and indicate that we’ll be supporting the amendment.

I do have some concern about the wording “without reasonable excuse”, and I expect that there will be some litigation through the courts over time to determine exactly what “without reasonable excuse” would mean. That could be somewhat expensive; it could have some impact on employers who have genuinely, for a particular reason, a set of circumstances, ended up with a delay in payment of their employees or withheld a payment for a reason they have felt is entirely reasonable but becomes, in the view of the court, not a “reasonable excuse”.

I suppose that speaks to a broader concern that we still have about the substantive clauses of this piece of legislation, one of which being that—despite the assurances that this isn’t a high burden for business; it isn’t something that businesses who are doing the right thing are going to have to worry about—it will add to the challenge that good employers have who are trying to do the right thing all of the time and, whether they be farmers, as my colleague Grant McCallum spoke about before, or other businesses, has the potential to create additional mental health challenges for employers, particularly small and medium businesses that this country is built on. I’d like the member to speak to us and share with us her view on the potential impacts of this legislation on the mental health of small and medium employers across New Zealand.

I’d also like her to speak in terms of the substantive intent, and I hear this intent particularly focused on employers who employ migrant workers. This has come up a number of times today about the role of employers who have taken advantage of migrant workers, and it makes me wonder if the member would consider more targeted legislation, or regulation even, that focuses on that particular problem. This potentially is a very broad-brush approach that captures all employers, even those—as has been said—that are doing the right thing, that are trying to go about running their businesses effectively and efficiently to grow the productivity of this country, to grow the wages and salaries of employees through doing that.

An example of what I’m saying would be the removal of accredited employer status for employers who are caught doing wrong in terms of this type of intent. If that is the true policy intent behind this bill, then I wonder if the member would be open to either a bill that is much more targeted in its policy intent or engaging the Minister on regulation, for example, that did something like the removal of the accredited employer status in those immigration cases.

The last thing I’d like to raise at this point is regarding the data on the size of the problem. We’ve heard the anecdotal scenarios that the member has shared; we heard several anecdotal examples in the Education and Workforce Committee, but I still am yet to hear data, “In 2024, X number of these cases were identified”, “In 2023, Y number of these cases were identified”, “In 2022, C number of these cases were identified”. I really struggle with potentially adding a piece of legislation to the statute book here in New Zealand and adding another layer of administrative burden, something else that HR practitioners have to get their head around, without that data. I’m keen to hear the member’s response to those questions.

Thank you, Mr Chair. I’m happy to respond. I want to point the member Carl Bates to the existing offences under the Immigration Act 2009; there are special penalties already for the exploitation of employees and temporary workers that are made under the employment legislation, and that comes with a penalty of up to seven years’ imprisonment and a fine of up to $100,000. My response to the member is the idea that targeted legislation obviously has merit; it’s already in place in our statute book. What this bill intends to do is, in fact, provide the protections that migrant and temporary workers currently have to the rest of New Zealand in respect to wage theft.

In respect to his question in relation to data, the document I pointed out to him earlier that was provided by the Ministry of Justice to the Education and Workforce Committee states that in 2020, there were 77 cases of wage arrears in the Employment Relations Authority; 2021, 61 cases; 2022, 107 cases; 2023, 130 cases; and 2024, 30 cases. Now, not all of these cases will necessarily reach the higher threshold of theft, but some of them may. It does show that there is a significant issue of wage arrears currently in New Zealand that is being dealt with in the Employment Relations Authority.

I can assure the member that the cases that get to the authority will be a very, very small percentage of a much larger issue. Like the member, we heard very, very compelling stories of exploitation through the select committee process. I want to acknowledge the people that were brave enough to share those stories with us. This is a big problem. We do need to look at this data and, if this bill was to be passed, I would encourage the collection of data to make sure that in the future we are able to have this offence put in place and also look at the instances of when this has occurred.

The last thing I want to just remind the member of is that this is a prosecution provision in the Crimes Act. This means that it has to reach a very high threshold under the prosecution guidelines. I appreciate that, of course, with all changes to statutes there’s the opportunity for arguments and case law, and that’s the foundation of our justice system, but to prosecute someone for the crime of wage theft, I have confidence in our prosecutors and in our police that they will only take cases that are likely to succeed. In fact, that is the wording in the prosecution guidelines, that that must be a criterion that’s met. I understand the member’s concerns, but I think that the way that we have prosecution set up and the good people that we have working in the police will make sure that that is taken into account at the time that they decide to prosecute that offence.

Thank you, Mr Chair. I appreciate the opportunity to speak to this next part of the bill. Firstly, on the Amendment Paper that our colleagues in New Zealand First have put up, I’d like to thank them for doing that. Certainly, for a bill that is, I think, of questionable use, it at least adds a little bit more certainty for small-business owners in New Zealand—in particular, the small-business owners because of the extra stress that it could well put on them from having to deal with the burden of potentially being accused of a crime over getting payment wrong.

I’ll just pick up on what the member Camilla Belich said towards the end there about the data. I think it would be really helpful, around the data, if we could get a breakdown of the data, if it does exist, of small business versus large business, just to see where the burden sits in this space, because with small-business owners—being one myself—it is up to the owner, the worker, the person who does all the work to actually have to do the book work and all that themselves as well; whereas, the larger business have specialist skills and people employed in this space. It would be really, really helpful if we could actually have data that separates those out into small and larger companies with more professional people available.

One of the other things that does worry me about the bill is the list of the punishments that you’ve got here in terms of imprisonment of not exceeding a year. Is that really appropriate in this situation? That seems to me to be very heavy-handed, along with a fine of up to $5,000.

💬 Hon Mark Patterson: Tough on crime!

This is the thing, you’re talking about small-business people, who are the heart and soul of this country, who you’re putting the extra burden and pressure on of potentially going to prison. That is a heck of a burden to put on somebody in a small business, where you’ve got the day-to-day worries of running your business on a regular basis. And a $5,000 fine—for a lot of small businesses, particularly in the very, very tough economic situation that we find ourselves in now, a $5,000 fine is a substantial amount of money for a small business to find, so I really would like to think that we could maybe have a look at that. Then there’s the larger fine of $30,000. That is a significant amount of money—significant amount of money.

Look, anyway, I thank you, Chair, for the opportunity to make my contribution on this. I look forward to the response. Thank you very much, Mr Chair.

This is just a clarification point really. The Amendment Paper put forward by the Hon Casey Costello would replace section 220AA(2), which outlines what we’ll be liable for and actually just makes it consistent with “theft” as currently in the Crimes Act. I thank, again, the member for that. I think that strengthens the bill to have consistency as in what’s already a punishment in the Crimes Act.

The question is that the Hon Casey Costello’s amendment to clause 4 set out on Amendment Paper 243 be agreed to.

Amendment agreed to.