Employment Relations Law Reform Bill

Employment relations is all about balance. I have learnt that, and it is important to get the balance right. Part 4, which relates to the Human Rights Act, brings in some balance. Essentially, it states that if a person were to complain, for example, about sexual harassment or racial discrimination, then obviously there are two channels that person is able to take: either to go through the human rights channel or through the employment relations channel. It is fair to say that under the Employment Contracts Act—and before I hear outrage from the National Party that this legislation is a disgrace and is all about pro-unionism, I will tell members this—people had the right to be able to choose whether they went according to the human rights way or the employment contracts way in order to try to get a resolution of their complaint. It is fair to say that the point at which they were cut off and had to choose the particular channel they wanted to go down was very early, and people were confused about whether their complaint would be proceeded with. What happened with regard to the Employment Relations Act is that it is probably fair to say that the balance went too far in the other way. In fact, people were almost able to negotiate—that is, to take a complaint through the human rights system, while at the same time taking it through the Employments Relations Authority. That was probably going too far in the other way.

This legislation attempts to bring about some balance. Essentially, it states that if a person gets to the point where he or she can lay a complaint, provides that new section 79A(4) if an employee makes a complaint under the human rights legislation the employee may not exercise or continue to exercise any rights relating to the subject matter of the complaint that the employee may have under the Employment Relations Act. So if a person makes a complaint and he or she decides that complaint is to go down the human rights avenue, that cuts off the opportunity to go through the employment relations channel. New section 79A(5) is exactly the opposite of that—that is, if an employee chooses the employment relations way to go, then he or she cannot continue on with his or her complaint through the human rights channel.

The measure is about 40 lines in length, and not particularly controversial, in my view. The issue is something that has been around since the Employment Contracts Act, where people had the right to be able to make a complaint. They should be able to make a complaint. However, this legislation is about making sure that once people have made a complaint, they must choose one channel. Once the complaint is made under employment relations law, that is the channel people must go down. They cannot continue to have their complaint looked at in both the employment relations and the human rights channel, but must choose whichever one they are in. The legislation simply states that once a person has decided to make the complaint, the complaint is heard under that particular channel, so that the person cannot have two bites at the cherry. As I have said, the issue is about balance. The cut-off point under the Employment Contracts Act was a bit early, and the decision point was a bit early. In the Employment Relations Act it was probably a bit late, and that allowed too much choice to go on. This legislation attempts to try to bring some balance back, and I recommend it to the Committee.

I note that the Minister took an extensive call and raised a number of issues that do need discussion and comment. I would like to think that members on this side of the House would have ample opportunity to discuss those issues, because it is a practice that once a Minister takes a call, there is ample discussion. I know that a number of my colleagues will be seeking those kinds of opportunities.

The issue raised by the Minister sounded superficially attractive. He put it forward as an advance, I guess, on the provisions of the Employment Relations Act. However, he claims that the Employment Relations Act went too far, and in contrast the Employment Contracts Act was a bit restrictive, but he has failed to recognise that the disputes in question are employment disputes. That is the first fundamental point. They are employment disputes. Thus, one would expect for the sake of consistency in the way in which decisions are made that that would be the track that one would go down.

The Government has made much play about the mediation processes, authority processes, and the expertise of the Employment Court with its four judges, all of whom have built up expertise. That is well acknowledged. I would admit that that is one part of the Employment Relations Act that works reasonably effectively. Our dispute with the Employment Relations Act, as we have consistently maintained, is all of the deeply entrenched union preferences. As a Government, we would strip out those preferences.

But the dispute resolution procedures are effective, and that is widely recognised. Because they are effective, they should be the choice. That is what National believes. So rather than still providing this dual-track process, as the Minister continues to do, we would say that employment disputes should be going through the systems that are well set up for them and in which people have built up expertise. Otherwise, we get inconsistency. And surely in matters of the development of the law, consistency is what is desired. I have heard numerous contributions from the Minister of Finance, who talked about the importance of our courts being consistent—it has been quite controversial, in fact—and the role of Parliament relative to the courts. We want consistency. Therefore, we want disputes to go through the provisions of the Employment Relations Act mediation authority, and ultimately the Employment Court.

Another point I will mention very briefly is that section 64 of the principal Act is repealed by clause 99. People will ask what that is about. It is actually about employment agreements. It refers back to Part 1. That is typical of this legislation. It is very complex. One has to read Part 4 together with Part 1. Clause 21 in Part 1 has in it some very complex and much more demanding provisions about what employers have to do to provide employment agreements, and so on and so forth. It is about the employer’s obligations in respect of new employees who are not members of a union. It loads the dice against people who choose not to be union members. So whilst it looks innocent, it is not; and it is wrong that it is in Part 4. The only way we can effectively debate this clause is by referring back to Part 1.

That shows the huge deficiencies in the way this bill is structured. The Government has deliberately tried to foreclose debate by putting 117 clauses into a single part, knowing full well that that would limit the debate. It is fundamentally wrong. It is a practice the Government is developing more and more, and it is dangerous for the health of our democracy. Ironically, it did not get it right, when one thinks about it, because this provision should probably have been in Part 1.

Following on from the contribution from my colleague Dr Wayne Mapp, I would just like to tell the Committee a little story about somebody who could chose between whether she claimed under the Employment Relations Act or the Human Rights Act. Before I came to Parliament I did do the odd bit of employment work for employers, and sometimes for employees—in fact, quite often. After the second case I took for one particular employee who was alleging sexual harassment against an employer, I decided that she probably would not come back for yet a third go. Each time she ended up with a payment and was able to further her university career.

The third time she turned up claiming sexual harassment from yet another employer, she really did not want to go through the Employment Tribunal, where such cases were taken in those days, because maybe they might know her too well. By that stage, I have to say I was starting to feel I had too much employment work on my hands. So where did she go? She went off to a human rights lawyer, who, not knowing the history, was much more sympathetic.

That is unfortunately one of the situations we have. I take the Minister’s point that the provision is an improvement over the ability at the moment for people to switch halfway through and decide on where they might get a more sympathetic hearing, where they might get more money, or where they might not have to front up with better evidence. Unfortunately, there is still the provision whereby people can take a couple of cases under one particular Act, then, at a later stage, come back through under another Act against yet another employer and not be found out. Unfortunately, this can still happen under the provision the Minister has here. As Dr Mapp pointed out, this is about an employment relationship. Why is it not under the employment relationship law? Why does it always have this other human rights provision, as well—the dual track, which unfortunately still allows people to choose whichever system they think they might be able to get a better deal out of or that they think might be more sympathetic to their cause?

Of course it is the human rights track that has been the cause of so much angst in the House in relation to prisoners in the management systems. I know that the Government is not enjoying that. The Minister in his other role is probably not enjoying it. It is the human rights provision that the Minister is going to confirm yet again on the poor old employer, who has to try to deal with all the compliance costs, all the litigation, all the difficulties, and is sitting there waiting for someone to bring a claim on something.

That is not to say, of course, that many claims in this area are not genuine, because many are. Having said that, there are always the odd ones—in fact quite a few odd ones—that are not particularly genuine and would not stand up to a huge amount of scrutiny.

We know that employers have got very used to just paying out. There are lots of people who advise employers that it is cheaper just to pay out. It is true. It is good advice in the monetary sense—absolutely—because the time, the effort, the angst, and the money involved in defending these claims is huge.

Of course there is always the probability of the threat of publicity—basically an extortion situation—if they do not pay up. Unfortunately, that will still be relevant here. By having this dual system, someone will be able to say: “We’re going to go down this track. We’re going to do this, or else we’ll claim publicity or try to do something to embarrass the employer.” So, unfortunately, we do leave ourselves open to that odd employee—very odd—who happens to think that that is the way to pay for his or her university education. It is a very, very sad fact, but it is true. If I have struck it, then I am sure there are other people who have struck it as well in this area.

So the Minister could maybe take a call and say why it is that it is necessary to have two different strands. I can see him nodding and I know he is thinking about it. Maybe he is thinking about the prisons.

I rise on behalf of the ACT party to say that we have a slightly different view from the National Party on this. No, we do not support either course of action. If it were up to the ACT party, we would have just employment contracts, and if there were something wrong with them, people would go to the court. The problem we have here is that the Government, and I am afraid successive Governments, have been setting up all these commissions, and we have a mighty grievance industry. One of the questions that came up in the Transport and Industrial Relations Committee was one asking the Law Society how many lawyers were involved in this sort of business 14 years ago. The answer it gave me was that there were almost none. It is now a large part of employment law.

Either in the last 14 years we have suddenly started to discriminate against everyone, or, alternatively, we have highly sensitive young ladies, such as the one just mentioned. Of course, as an employer, I know that that is so. One good story deserves another. I was asked as the director of a small company whether I would come in for a cup of tea when a person who had been on a 3-month contract was about to leave. I was told that she had not done a very good job, but the company still wanted to say goodbye to her. I went along and made some nice noises, and the following Monday we received a letter from her—she had been on a 3-month contract—saying that it was wrongful dismissal, and also threatening, because she happened to be Māori, to take us off to the Human Rights Commission.

Judith Collins: Why?

Hon RICHARD PREBBLE: Because we should have continued with the 3-month contract. There was never any understanding that it was to be more than 3 months. It is illegal to do this, so I will not name the firm.

One of the secretaries there was so outraged that she rang the person who had provided the superb reference she had, and was told that it was part of a settlement of a previous case. She had three references and so rang each referee, to find that each time part of the settlement was that the employer had to write a letter saying what a wonderful woman this was, together with the money.

Shane Ardern: I have experienced that.

Hon RICHARD PREBBLE: The member says that he has experienced that. I do not know whether members opposite know about this, but I guarantee that everyone on this side of the Chamber who hires any number of people knows that under this Government these references are now being produced, and by law we are not allowed to ring up, because it is contrary to the Privacy Act, to see whether it was actually a shotgun reference. We refused to give her a shotgun reference, and against the legal advice—I have to say mine as well; I said to settle, as it was cheaper—we contested that. She was outraged and could not believe that anyone could oppose her, because she had—I understood later—already done that four times. I say to the Minister that this part does not do anything about that problem. That is why I hope we will discuss this, because this is the first opportunity we have had to do so. This is a rort.

Hon David Benson-Pope: The ACT party knows all about rorts.

Hon RICHARD PREBBLE: It is a grievance industry, and Mr Benson-Pope is quite happy to tell people he does not have lists of projects in front of him. He cannot see that point, and that is why he cannot see that what he is doing here is putting out a licence for fraudsters. He is corrupting people. That young woman might have started off as a reasonable person, but under Mr Benson-Pope’s law she was told by the Government that she could extort money legally. That is what this legislation does, and the Government is saying that it cannot be done twice, so it is wonderful! I say that people should not be able to do it once. If people have a real case, why not take it to a real court? I say to Mr Mapp that I do not accept that these mediators are doing a great job. The only reason it is a great job is that it is cheaper than going to court. To heck with that! I do not support the legislation. I do not support any of these commissions—I think they are a whole load of rubbish. I can still remember the 1990s when we did not have one of them, and I personally think that New Zealand was a better country.

Hon David Benson-Pope: Richard from the rort party.

Hon RICHARD PREBBLE: Well I can recognise a rort, and I am saying to the member that this is a rort. Is the member saying that these things do not happen? He is not prepared to say that, because he cannot, because he has never employed anyone with his own money in his whole life. Well we should not hold that against him, because neither has anyone else in the Labour Party.

I take this opportunity to speak on behalf of National in connection with Part 4 of the Employment Relations Law Reform Bill. This is, of course, legislation that National bitterly opposes, and for good reason. Because in this legislation, and in particular in Part 4, we see a real exemplar. That exemplar is that politics has completely dominated over principle. If we wanted to see politics in action, we saw it the other night where in the precincts of this Chamber the president of the major trade union organisation in New Zealand was closeted with members of Parliament from the Labour Government, seeking to subvert their views. That is why I say, in connection with Part 4, that politics has dominated over principle.

Part 4 is, we might say, a simple enough part. Indeed it has only four sections, but what significant sections they are. What Part 4 is about—similarly to Part 3—is consequential amendments to other primary pieces of the legislation. Whereas Part 3 was concerned with the Health and Safety in Employment Act, Part 4, as the member opposite wisely notes, is concerned with the Human Rights Act.

I want to look quickly at some aspects of Part 4 that I think are worthy of particular comment. As others have commented, one of the things Part 4 does is repeal section 64 of the Human Rights Act. When one looks at what replaces it, one sees that the changes, on one view of it, may not be all that significant, because new section 79A, “Choice of procedures”, is inserted. That leads me to the second point I wish to make in this call, with the intent of taking further calls on other aspects of the part if there is the opportunity. What this Government inappropriately does is draft legislation with a very, very high degree of prescription. Because it has taken that prescriptive approach, the reality is that gaps occur.

It is simply not possible to foresee the implications of such highly prescriptive legislation. Let me give an illustration of that. What will the situation be if an employee starts down, let us say, the human rights pathway in section 79A and sees, perhaps for good reason, that that outcome will not best advantage his or her cause? One might think that the issue would be governed by subsection (3), but it may well not be. It would be possible to discontinue those proceedings and start down the other line, if some greater degree of advantage were to be seen there.

So I have spoken about how politics has dominated principle, and I have spoken about the prescriptive nature of the legislation, and given an example. But there are other examples. Why is it necessary to state, in section 92BA inserted by clause 101: “Proceedings before the Tribunal are to be commenced by the lodging of an application in the prescribed form.”? That is utterly superfluous. We then have to move to a position whereby there are regulations or rules prescribing forms. That is what I am saying when I assert that the prescriptive nature of the legislation is completely unnecessary.

I now pick up a point that other members of the National Party have similarly identified, which relates to the burdens of process. One would think, as a matter of principle, that an employment law issue might be dealt with under this legislation—that another, Human Rights Act, option would not be given.

I rise on behalf of United Future to speak to Part 4 of the bill. United Future’s concern about this particular aspect of it is that although it is right and correct that employees should be able to take a grievance to the appropriate authority, we have noticed over the years that, unfortunately, when many of those grievances are brought forward, the actual issue is not so much the grievance but the possibility of the person getting an amount of money out of it. In some parts of the industry we have 0800 SACKED numbers, and the ultimate aim is not to deal with a grievance but to get a monetary return. A lot of the things we bring into legislation, such as what is laid out in Part 4, do concern human rights, but I think we can overlegislate on many of those types of things. It becomes very complex for both the employer and the employee. I do not know whether, in weighing up and looking at the circumstances, they will be asking what the best place is they can go to, or which of the two alternatives will give them a better financial return from their grievance.

So United Future is concerned about this type of legislation, and that is why we are voting against this whole bill. As members have heard, there are many, many areas in this particular legislation that we are concerned about. As sensible as it is to have a grievance process, it does concern us when there start to be multiple choices. What will the poor employer have to do? Will the employer have to get advice, or to do studies to find out which is the best angle or the best alternative? We have serious concerns about whether this process will work.

United Future is voting against this legislation in its entirety. [Interruption] My colleagues on the other side of the Chamber seem to have been really enlightened by that. I do not know whether they have really taken as long as this in the debating process—I am talking about Part 4—to come to an understanding of what United Future’s position is.

Hon Richard Prebble: You’re either for or against it!

PAUL ADAMS: I say to Mr Prebble that United Future is definitely against it, and it is voting against this legislation. Many clauses in Part 4 do greatly concern us. We are in agreement with the other members of this Parliament who have been speaking against this part. We confirm that their comments have been very serious. I do not know whether the Minister of Labour took to heart the seriousness of their comments on this part, but I would like to confirm those comments, and say that I think those members’ concerns are very relevant. I would encourage the Minister to take the time to study the amendments, and see what good, sensible amendments they are. United Future is very concerned about this particular part, and we will not be supporting it.

It is a pleasure to take a call on Part 4 of the Employment Relations Law Reform Bill. I note that the Minister of Labour got to his feet and took a call regarding this part, and I commend him for that. I struggle to find myself in agreement with anything that the Minister had to say. He stressed in his call that employment relations were all about balance. Well, I agree with that—employment relations are all about balance. But then he lost me, because nothing in this part is about balance, at all. I find myself agreeing with the ACT member, in that there is nothing in Part 4 that I agree with. In fact, I am strongly opposed to what is being suggested here.

Of course, we are shaped by our experiences. I will relate to the Committee an experience I had with this type of legislation that explains why I am so strongly opposed to it. Back in the early 1990s I was working for a large financial institution in this country. We had a female employee who was working for the bank’s legal department. She was a lawyer, of course.

Judith Collins: She couldn’t have been a real one!

BRIAN CONNELL: I suspect she might not have been too flash. But, putting that aside, the position as the head of our legal department became available. Those who applied went through an approved selection technique called targeted selection interviewing. The woman in question did not get the position. Even though every candidate had the same treatment and the cream floated to the top, she took an action against the institution, claiming that she had been discriminated against.

Sandra Goudie: Did she have a form?

BRIAN CONNELL: Well, she did not have very good form. That was the problem.

Progress reported.

The House adjourned at 9.55 p.m.