Employment Relations (Employee Remuneration Disclosure) Amendment Bill

Members, we now come to the Employment Relations (Employee Remuneration Disclosure) Amendment Bill. We now come to Part 1. Part 1 is the debate on clauses 3 to 6, “Amendments relating to employee remuneration disclosure”. The question is that Part 1 stand part.

Thank you, Madam Chair. I am rising to discuss some tabled amendments that I have, and I’m looking forward to having—hopefully—a decent debate with the member in regards to some concerns that we obviously have with this bill, and ways we think that we can improve it.

If I start with clause 5 in the new section 110AB(1)(b), inserted by clause 5, I have an amendment tabled to replace “refuses or omits to offer or afford to the employee the same terms of employment, conditions of work, fringe benefits, or opportunities for training, promotion, and transfer as are made available to other employees of the same or substantially similar qualifications, experience, or skills employed in the same or substantially similar circumstances” with “reduces the employee’s existing terms of employments and conditions for work or fringe benefits”.

The reason that I am raising this is mainly because we see that there could be some unintended consequences with this issue. A scenario, possibly, could be that somebody discloses their salary to a few colleagues—for example, after a seminar, say, on pay equity. A few weeks later, that individual applies for a high-demand training programme offered by the company, but then isn’t selected. They could then potentially file a personal grievance over this, because they could argue that they’re being punished for disclosing their pay to other employees. I’m wondering how the member would feel about that, and if this is, in fact, the intent of this legislation or not.

I think we need to be really careful about what we say “detriment” is. I think it would be very fair that we claim that things that are already part of a person’s employment are, in fact, what would be considered to be a detriment, not things that could be futurely perceived, for example. We want to make sure it’s about reducing existing entitlements or conditions rather than speculative or emotionally driven complaints or claims like reduced job satisfaction or ungranted opportunities. I’m really keen to hear the member’s thoughts and opinions on this amendment bill.

Thank you, Madam Chair. It’s a great opportunity for us to ask some questions to the member, Camilla Belich, and also to see what the member’s position is on various amendments that we are proposing. I want to start by asking some questions. In the select committee process, I want to acknowledge, the member had the opportunity to present her case and also to answer some questions, but this is another opportunity that’s available to us, which is great.

I would like to understand from the member in charge of the bill about the data that she has seen, or any evidence that she has seen, that this particular clause has been the direct reason for somebody’s dismissal. It will be great to understand if the member can produce some kind of evidence or can tell us about any evidence that the member has seen where this particular clause that this bill is about has been the direct reason for anybody’s dismissal. There can be other reasons, but I want to understand if this clause has been the direct reason. That’s one question that I have to the member.

Going forward, Madam Chair, I also want to say that, yes, the member has spoken before about this legislation being implemented in other countries—like the UK, as she has mentioned, and other countries—but we cannot just pluck legislation from another country and bring it here, because we have to assess the environment that we have in our own country, so that will be really important for us to understand.

Going to Part 1, I would like to talk to one of the amendments that I have proposed. This amendment is in clause 5 in new section 110AB. My amendment is to insert after subsection (7)—this is another subsection (8)—that this section applies only in relation to employees whose total remuneration is less than $180,000 per annum.

We have heard from the member again and again that this amendment will help with the reduction of the gender pay gap. Now, in our view, it’s actually a real stretch. The other point is that if the member is really serious about this—and also the member has said before that this is to help those who are in low income brackets—so if this is about helping people, those who are earning lower incomes; then if this bill is focusing on people, those who are earning higher incomes like above $180,000, that means the priority is not right for this bill.

The reason here is that when people are earning more, they have the ability to negotiate or bargain better than maybe some other members. Sometimes there are other circumstances where members might accept a lower income and are stuck in that position. So why not change this bill to say that this section applies only in relation to employees whose total remuneration is less than $180,000 per annum?

The other reason for this is that sometimes when people are employed at that kind of salary scale or package scale, those people bring very exclusive or specialist kinds of skills—skills that are not easily available—and sometimes some people are even attracted to come and work in those positions from other countries. So there needs to be some kind of incentive for these people to work here, and those kinds of skills are unique, as I said; specifically needed by the company. They may not be a direct match, so when it comes to talking about pay gap, then there is no direct comparison for those who are earning really, really high salaries.

It will be good for us to understand from the member what her position is on this proposed amendment and also if the member could highlight any data or evidence that the member has, where, as I have said before, this is a direct reason of somebody’s dismissal. Again, what has happened overseas may not be something that we can apply here directly. We need to see our own evidence to see how we make changes in our legislations, so two questions.

Thank you, Madam Chair, and thank you to the members for their contributions so far. I just thought I would respond to some of the questions and some of the amendments that are being proposed, and also just to give a slight introduction to the committee of the whole House stage.

I was extremely pleased to see this bill pass through its second reading, and I thank members of the House for supporting this bill. I think that there were very compelling reasons given not only in the select committee process, which was traversed at second reading, but also in the evidence provided at second reading of the benefit of transparency. I’ve been really heartened at the public response to this as well. There’s been quite a bit of commentary—more than I was expecting—on this particular bill, and I think it is because people do see the fact that transparency—you might describe it as greater sunlight—on pay is a really good disinfectant for things that might be happening that we would like to address within the workplace. Thanks to the House very much for allowing the bill to get to this stage and thank you to the members for their contributions. I take these amendments in good faith and I will respond to the proposals as they are addressed.

For the first amendment that was discussed by Laura McClure, which was the change that she suggested, that the definition of detriment be changed in this bill, I regretfully wouldn’t support the member’s amendment. The reason is that one of the purposes of this bill is to prevent difference of treatment once a remuneration disclosure has been made. One of the areas where there often is difference in employment situations is when offering opportunities. There are, obviously, detrimental effects that can happen short of dismissal and losing your job. This particular example would limit that to something that has a detrimental effect on the employee’s employment. I think you heard the explanation for that from the member Laura McClure, which was that it should be focused on existing employment.

Well, my experience working in employment law is that often the way that someone might be marginalised at work for an act that their employer didn’t agree with is through refusing to offer things that are listed in this bill: training, promotion, and opportunities. If those are found to be the reasons—because someone has made a remuneration disclosure—I think that is unfair. I think that is outside the spirit of the bill. So I don’t accept that there is a good reason to limit this in the way that the member has done. Therefore, I won’t be supporting her amendment, but I see what she’s attempting to do there and I don’t think that it adds to the bill. In fact, I think it would limit the bill in a way which is outside the purpose. But thank you to the member for that particular amendment.

Parmjeet Parmar was also a member of the select committee. We’ve traversed a number of the issues that she’s raised in a number of different hearings. I do have a number of examples, and she would also have been aware of these, in select committee where many, many submitters—and we had over 200 submitters—did actually put forward examples of detriment that they did face in the workplace. I’m happy to read those out for the member if necessary, but they are all available in written submissions as well. They are stories of people facing detrimental treatment because they have disclosed their pay, being threatened with detrimental treatment, and we have cases reported in New Zealand where people have lost their jobs. So this is a real issue that was proven in the select committee process, and there are significant examples to show that. That is the purpose of this bill and that is why I do think it’s an issue in New Zealand.

In relation to her amendment, I don’t also agree with this: limiting it to $180,000. I don’t think these types of bills which seek to limit discrimination are assisted by having arbitrary remuneration numbers inserted so that they wouldn’t apply to someone earning above a certain level. I don’t think that it is proven with evidence that there is less discrimination or unfair treatment for people on higher salaries. Yes, they receive a higher salary, but they may have additional responsibilities, or they may have a large family they’re supporting. It may be that this figure is considered to be a lower number in relation to the median wage in time. I don’t think those are particularly helpful. I don’t think they’re in line with the purpose of the bill. Thank you very much to the member for suggesting those amendments, but it’s not something that I will be supporting. Thank you.

Thank you, Madam Chair, and I thank the member for responding to my proposed amendment. What was really interesting about my first question, which asked the member about the data or evidence, was that the member cited what was heard in the select committee process, but obviously the bill went to the select committee process because the bill was drafted before that evidence came before us in the select committee process. My question was: what evidence did members see before she drafted this bill? Could she cite examples, give us any evidence and cases that are in the public domain where there has been a case of dismissal directly because of this clause? I would like to seek assurance from the member that that has been the case because of just this clause.

Now, another interesting point that comes up from that is that I’ve heard before the member saying that there was work done by the Education and Workforce Committee in the previous term, and it’s because of that work that the member came up with the idea of this bill.

Hon Dr Duncan Webb: What section is this?

Dr PARMJEET PARMAR: This is about the response that the member has given, and I’m asking another question on that basis. To Duncan Webb, this is my response to your question that you’ve just asked. If that was the case, then I also want to know from the member what kind of assurance did the member seek, before drafting the bill, from various other employment lawyers or maybe some employers as well, because that will give us some assurance that the member did proper homework before proposing the bill. Just relying on select committee evidence is not sufficient as far as I’m concerned.

I would like to talk about my other amendment. It’s very interesting to see that my other proposed amendment of the threshold of $180,000 per annum income is not agreed to by the member, whereas the member actually wanted to favour low-income people. My other amendment is, again, a very, very practical amendment. It is, again, in new section 110AB, inserted by clause 5. This is to be inserted after subsection 110AB(7). This is new subsection 8. This section does not apply to an employer who employs fewer than 20 employees at the time the relevant conduct occurs. This is very important because most of our businesses are small businesses and when they have less than 20 people working in a business, they often—I would say most of the time—don’t have a dedicated human resources (HR) department. It’s maybe the director or the manager who is also the HR manager and everybody in that company is very close to each other. Everybody knows each other really, really well.

Given the tough economic circumstances that we are coming out from, and as this bill is not a business-friendly bill, as we can see, as I have said before, that it will help solve the gender pay gap is also a big, big stretch. In that regard, I would ask the member to tell us why she would not agree that the subsection should be inserted as is proposed in my amendment. Most of our businesses are small businesses and they don’t have a dedicated HR department. They don’t have the kind of resources to go through very, very complex legal situations that might arise because of such situations with people raising issues like that.

Also, another important point is about the privacy of employees. It’s OK for one employee to go and ask another employee how much they earn, and if that is disclosed—this employee X asked employee Y how much they earn, and if employee Y earns more than employee X, employee X goes to the employer and says, “Employee Y earns more than me. Why? Why am I not earning as much as employee Y?”. Then we are putting that employer in a very difficult situation because the employer will have to reveal some information about the other employee, employee X, as well. That means they are basically getting into that space which is actually the privacy of other employees.

This bill doesn’t provide any protection for that employer, because without discussing that other employee’s situation, the employer will not be able to justify to this employee who has raised this concern with the employer. This bill actually creates lots of problems for businesses and even employees: employers, employees. This is not the kind of bill we want and we really believe that this bill actually is a token bill when it comes to fixing the issue of the gender pay gap. It will be good to understand from the member where she sits with this proposed amendment, and if she doesn’t agree with it, why, and also address the privacy issues that will come up for the employer.

Thank you to the member Parmjeet Parmar for her comments. I’ve got a case with me here—it is a 2015 case—Kar v Bakers Magnum Ltd, trading as Bakers Harvest, NZERA Auckland 216.

In terms of the background to this bill, as the member is aware, this came from a briefing that the Education and Workforce Committee did on pay transparency in the last Parliament. We heard a significant number of submitters that submitted to that briefing, which was very fulsome. I think, in terms of the evidence and the reasoning for having a member’s bill, actually having a member’s bill that comes from a briefing at a select committee, which we did hear submissions to, is probably one of the more evidence-based types of members’ bills that you can have. At that briefing, we also heard evidence from the Pacific Pay Gap Inquiry, from the Human Rights Commission. They had several examples cited of the secrecy around pay for, particularly, lower-paid Pacific workers being extremely detrimental to their working conditions. This was one of the recommendations that they put forward. I appreciate the member’s question, but I think, in terms of most members’ bills that come to this House, this is one that has a particularly high level of evidence and discussion around it before it was put forward into the members’ bill biscuit tin—just to respond to those.

On her amendment, limiting it to employers who have over 20 employees, I appreciate that this is something that has arisen in relation to other employment cases; however, in this particular bill, there isn’t actually a requirement for an HR department to do anything active. There are many employment bills which do require active change or resources to be put in by the employer; this is not an example of one of those. This particular bill simply requires the employer not to discipline or put their employee in a position of detriment for disclosing their pay. It doesn’t require an HR department to be resourced. It doesn’t require an employer to change its employment agreement necessarily, because it just makes those clauses ineffective. I don’t accept that there is an evidential basis for limiting it to only large employers. I do feel that there is a lot of evidence to suggest that whether the employer is a large employer, or whether the employer is a small employer, those situations of pay secrecy or gag clauses in contracts will be detrimental to employees working in that space. In fact, that can be even more so in a small employer where there isn’t a large workforce where you can feel, “Oh, well, maybe it’s just that manager treating me unfairly.” In a small workplace, it might just be one manager, it might be even more detrimental and difficult for an employee in that particular situation. I don’t accept that particular amendment.

I’d also remind the member that while this particular bill does actually cover situations where there is a gag clause in an employment agreement, adverse treatment for a remuneration disclosure reason is prohibited under this Act, regardless of what is in the contract. In situations where there isn’t a contractual clause, this would also apply.

Thank you, Madam Chair. Thanks to the member Camilla Belich for her description and advice she has given the committee on that particular amendment.

Look, it is a real concern to us here in the ACT Party around our small to medium sized enterprises (SMEs). Given my colleague Parmjeet Parmar has already discussed that this is 95 percent of our businesses, I do think the human resources side of things is difficult, but one of the biggest costs that we are finding on our SMEs is when we have personal grievance cases. I know that this Government is trying to deal with some of those, and I’ve got a member’s bill before the committee at this point in regards to this as well.

One of the concerns that I did have with this potential bill is it being misused in order for an employee to create a personal grievance when there are circumstances that arise. For example, they’re put under a performance management review or they’ve been given a couple of written warnings—

Hon Dr Duncan Webb: Which clause are you referring to?

LAURA McCLURE: —and they know that they may be on their way out. The clause that I’m talking to, for the member across there, is new section 110AB(3), inserted by clause 5.

The amendment that I’m talking to is my amendment to replace “a substantial reason” with “the sole reason”. If the intent of this bill isn’t for people to have nefarious claims and have actions against their employer—for example, where this isn’t the case; where it’s not about pay transparency or the gender pay gap, for example—if we change the wording to being “the sole reason”, this would actually cover that off. I think that we need to clearly say where there are targeted cases of retaliation. For example, like I said, somebody may have been going through the dismissal process, they may get dismissed, but it turns out that a week prior they actually mentioned their pay to another colleague. Will they be able to just use that as a personal grievance, for example?

The other thing that this bill does is it puts the automatic presumption of retaliation on the employer to prove that. I think that’s an awful lot for a small business. You can just imagine the cost of that and how that will actually be really hard for those small businesses to bring that cost forward. I mean, I’m thinking it could be hundreds of thousands. Like, we know that a general personal grievance at the moment can cost an SME anywhere between $10,000, going up into $50,000. I mean, that’s enough for you to close down your business overnight if you’re just employing two or three people.

What I’d be quite keen to know from the member is whether she would consider my amendment to remove “a substantial reason”, which I think is quite vague—I accept that there are some examples given of that—and change it to “the sole reason”, because if it is the sole reason, then that makes it much more fair for both parties and it keeps that balance nice and even.

Thank you, Madam Chair. To the response that the member in the chair, Camilla Belich, gave to my questions before, the member gave one example, and I would say that if that is the only example that member can give in terms of evidence, then I would say this: here we have this member trying to say that this is a problem and this can solve this gender pay gap issue, whereas we can see that the problem is not there. If we change that kind of circumstance, how is it going to have any influence on the problem that we are trying to solve? It won’t. That is why we have repeatedly said that this bill is just an overstretch, and also this bill is being stretched to that kind of discussion of gender pay gap to get sympathy around this bill, which is not going to help anybody. It would have been good if the member was able to provide more concrete examples.

We have a number of amendments from the ACT Party, because we really want to see that this bill, if it goes through, goes through in a form that is workable and is practical. We do not want this bill to just go out and punish businesses. Coming to my amendment in clause 5, inserting new section 110AB, this is another one—this is to insert, after subsection (7), subsection (8), “An employer’s conduct must not be treated as adverse conduct for a remuneration disclosure reason under this section if the conduct arises from the employee’s disclosure of their remuneration causing demonstrable harm to the employers.” This is like business operations or client or customer relationships or any kind of contractual or legal obligations to third parties.

Here, it’s really important that businesses are protected, because there can be cases where employees can use this. Not everybody has this clause that they cannot discuss their remuneration, but because this discussion has come up, it is important that if there is, and they are—because the bill actually says that they don’t have to oblige with the contract, which we totally oppose. People should be really obliging to every clause in their contracts, but if it goes through, then that would be the case; there could be some people who can really mislead the environment around them to cause some kind of damage to their businesses. For example, if a company has employed two salespeople, one salesperson can go out and try to get the deal from their customer and might project themselves to look more important than the other salesperson and might say that that salesperson is being paid more than the other salesperson, and that may not be actually true. In that situation, what that salesperson is doing just to get the deal is actually compromising the reputation of that company.

Now, another example of that is if somebody just goes out to the media and claims that that person—without actually going around and finding the actual situation of why that person is being paid less than the other person—is being paid less than the other person and somehow that person is being exploited. No kind of exploitation is good, but if somebody just goes out, that causes harm to a company’s reputation. In that situation, my proposed amendment says that an employer’s conduct must not be treated as adverse conduct for a remuneration and disclosure reason under this section if the conduct arises from the employee’s disclosure of their remuneration causing demonstrable harm to the employer. If the member doesn’t agree to my proposed amendment, I would think that the member finds it’s OK for employees to go out and do something that would actually harm the reputation of the company for their personal gain—as I said in my first example, where a salesperson wants to get the deal and projects themselves as a more valued employee of that company, and in the second situation where the employee actually is totally misled, doesn’t understand the actual situation and goes out to media and misrepresents the company.

In these kinds of situations, it can really harm the reputation of the company, and it will be really serious if the member doesn’t agree to my proposed amendment taking these kinds of scenarios into consideration. I would like to hear from the member.

Thank you, Madam Chair. Just to maybe answer this question—hopefully, once and for all—for the member, the member has asked repeatedly what evidence there is that this is a problem. She has asked for a case; I have given her a reported case in New Zealand. She has asked me for examples; I’ve told her about a study that was done talking to a number of low-paid Pacific workers in New Zealand. She has asked and still fails to understand that this is an issue in New Zealand, and so I’ll actually read some examples of where this is actually a problem in New Zealand.

We heard in one workplace where salary disclosure for union members, the submitter said in their experience this led to getting paid unfairly for doing the same work as others by comparing salaries and roles. The submitter highlighted that this was particularly important to women who were being underpaid at work.

Another submitter said they had lived and worked in Australia. They had seen firsthand the benefits of similar legislation. The employee said the ability for employees to discuss their remuneration openly without fear of reprisal has already started to contribute to reducing pay inequities and fostering workplace accountability.

Another submitter said, on the pitfalls of having no transparency, that they were being paid less than a colleague who had fewer qualifications, less training, and worked fewer hours than them. The submitter was concerned about this, particularly as the employee was Māori and their colleague was not. When they attempted to raise this issue and inquire about the reasons behind the discrepancy, they were told they would not talk about it.

Another submitter said they were contractually obliged not to discuss their pay with their colleagues. They became aware that employees who started working with them after earning more than them—and they were unable to discuss this with management or use this information to increase their pay.

These are New Zealanders who are suffering under a system where no pay transparency currently exists in relation to pay secrecy in New Zealand. The member can choose to ignore that, but I choose not to, and that is why I put this bill forward to the House. So I hope that answers that question once and for all.

In relation to the amendments that both members from the ACT Party have put forward, look, in relation to the amendment changing it to “sole reason” for substantive reason, I would refer the member to the substantive bill in clause 5, which puts in new section 110AB. In this particular situation, the employee would need to prove that they had essentially been treated detrimentally in order to fit this first test as outlined in new subsection (1). They would then have to prove that the employer engaged in adverse conduct and that that was a substantial reason for their conduct. That burden of proof would rest with the employee in order to prove the limbs of that case, so I don’t accept that the burden of proof is entirely on the employer. Without the employee proving up to new subsection (3), they would not be able to have a case that would be answerable under this piece of legislation. So that’s the burden of proof issue.

In terms of the substantive change to this, the reason that I don’t consider that “sole reason” is a good change for our new subsection (3) is because that would make the threshold for employees taking cases to be very, very high and would necessitate ignoring any other reason that may have affected their treatment. Otherwise it would essentially mean that they can’t take any action under this. If there was anything at all associated with the relationship that the employer could prove—and often in these situations there may be a negative or a relationship that is not working as it should be essentially anything that was negative about the employment relationship could be used to nullify their claim under this bill. I feel that that standard is too high, although I appreciate the member’s—as I’ve said to her—very useful reasoning and justification that she’s put in there and I appreciate that. I have read it; I don’t consider that it is a good change.

In terms of the amendment put forward by Parmjeet Parmar in relation to, I think, inserting in clause 5 a reason around adverse remuneration conduct and saying that, essentially, if the employer could prove that there was detriment to them because of the disclosure, they would not be able to take a claim under this bill. I do consider that this is a very substantive clause that would complicate this particular, quite simple bill.

Additionally, it’s important, I think, for all members to realise that good faith is a fundamental principle in the Employment Relations Act—I have the Employment Relations Act here. It is the primary principle in everything within—

Laura McClure: It’s not always used, though.

CAMILLA BELICH: Well, the member says it’s not always used. Well, that is a breach of the Act. If you can prove that good faith has been breached, then that is essentially an overriding principle in the entire Employment Relations Act.

We did actually discuss this specific point at the Education and Workforce Committee and we looked at should there be clarifications to make sure the mischief that I think the member is trying to achieve with this particular amendment would be avoided. The advice that we received was that good faith was such a powerful, sufficient deterrent from actions that are contrary to it that we would not need to make further changes under this bill. I appreciate what the member has put forward in this particular amendment. However, I do think it would be unnecessary. I do think that what has been put forward is quite vague and unnecessarily complex, and because of the overriding duty of good faith, I do not believe that it is necessary in this particular bill.

Thank you, Madam Chair. I thank the member for all the detail, and clearly, she’s very deeply across everything that she’s hoping to achieve with this bill.

I’d like to just bring the member’s attention to, as well, one of the amendments that touches upon clause 5, which is one of the clauses that we’re covering right now. This is the amendment bill put forward by the member Dr Parmjeet Parmar. Just a point of note: I think there was a mistake with the wording in clause 5, new section 11AB(2)(a), doctor. I’m presuming it’s supposed to be 110AB, so the zero is missing from this tabled amendment as put forward. But, yes, we’re drawing our attention to this one, where Dr Parmjeet Parmar suggests that we replace the words “any other person” with “any other employee who is employed by the same employer”. Again, that’s clause 5, new section 110AB(2)(a). I’m not part of the excellent Education and Workforce Committee that considered this bill, but as an outside observer I did wonder if the member in charge of the bill could please speak about whether she is in support of this tabled amendment or not.

Also, giving consideration to the commentary, which talks about “This bill would ensure that employees can voluntarily discuss and disclose their own pay rate to others” and, in another part of the commentary, “with colleagues and with family”, can the member please clarify: is it supposed to be with everyone that people can disclose this information, which is what I initially understood? But reading that commentary, is there a kind of presumption that it’s going to be directed just towards disclosing this information with family and friends and other colleagues? And, going on from that, how does the member feel about that amendment in light of the question that I’ve just asked? Thank you.

Thank you, Madam Chair, and I thank the other member for her contribution and for spotting the typo in my colleague’s amendment.

Look, I do have some concerns. It’s one thing to share your remuneration with your peers yourself, but what I note is that this bill stays quite silent on what happens when you share that with somebody and then they share it with somebody else. I’m talking about clause 5 here. I’ve got an amendment on the Table to insert after new section 110AB(7) that “nothing in this section permits an employee to disclose the remuneration of another employee without that employee’s express consent.”

Look, I think that that really comes down to a couple of things. Mainly, it’s just your privacy in general. When you disclose that to somebody else without giving them explicit permission to share that, you have no idea which way this could be used. It may be that you share that with an employee who you have a good bit of back and forward conversation with and it’s just an off-the-cuff conversation, but that other employee, at some point in time, may have, like, an argument with a manager, for example, or they may find a reason for deciding to disclose your pay without your consent. I think it would be very sensible in this bill to protect employees as well, who potentially could have their remuneration basically disclosed without their consent.

I’m interested to know whether the member would look at supporting this, because I do think that this is quite sensible and I do think it’s something that has possibly just been overlooked. I wasn’t part of the select committee process, so it may have been discussed. However, if it hasn’t, I think it’s something that we do need to consider because, yeah, I’ve been an employee and I’ve been an employer, and when you think about sharing that with somebody, you don’t necessarily expect that to be shared with others, and I think that you may need to actually give consent in order to do that.

Madam Chair, thank you. Thank you to the member for your explanations and the back and forth that you’ve been engaging with in answering the questions. We are concentrating quite a lot on clause 5 with some of these amendments that have been put forward—so in some of these amendments, concentrating on adding and changing some additions after new section 110AB, inserted by clause 5, in the bill. The proposals by Dr Parmjeet Parmar and Laura McClure would change substantially, from my reading, some of the intentions of the clause and what is intended under subsection (5) of new section 110AB.

During the select committee we had quite a lot of back and forward and discussion about who should be able to be disclosed to and have discussions with. This is one of the issues that actually came up in the second reading as well. Some of our colleagues discussed how they know that their children might go down to the pub or be talking about it with—

Mike Butterick: I think that was me.

Dr VANESSA WEENINK: Yes, actually, Mike Butterick, it was you who spoke about your daughter and the fact that she would discuss these things. For many people, it’s seen as a natural part of life that you would discuss this. Many people wouldn’t even realise that there may be something that prevented them in their contract from even discussing it.

I remember, in the select committee stage, there was a lot about what would be the practicalities of trying to put a ringfence around who is the person you speak to or not, around whether or not this had to be another employee—that was something that we discussed—and whether or not you may consent or not, or whether or not, if somebody asked you about your pay, you would be compelled in any way to discuss it. I remember that was a really clear one: of course you don’t. If somebody asks you what your pay is, you’re completely at liberty to say, “I’m not going to speak about that” and “I don’t want to talk about that; it’s private to me.” There’s nothing in this bill that would change that.

Also I don’t believe that there’s anything in subsection (5) that if we were to change—because we did spend a lot of time on this and I feel that there’s not much further to clarify. We asked a lot from our advisers to make sure that we got the clearest and also the broadest application.

I’m just wondering, from your perspective, if we were to narrow who you can speak to or who you can’t speak to—also if we were to change some of the definitions of how an employer would be engaging in adverse discussions. The way that we’ve got it with the two subsections (5)(a) and (5)(b) at the moment, it’s saying that, basically, “an employer also engages in adverse conduct if the employer or a representative of the employer, in relation to the employee,—(a) organises to take any action referred to in subsection (1) or threatens to organise” and all of that—that was one—or if they specifically request, induce, instruct, authorise, or assist another person to engage in other activities.

Do you think that is a wide enough application of what could be ways, in your experience—because I understand you have some experience in employment law. And were there examples of ways in which employers have used some of these tactics against their employees? Some of those examples that you mentioned earlier show that there were a variety of ways in which people have felt that they had detriment in their employment. We’ve used many different words in these subsections to be able to describe ways in which an employer might engage in that. Further, in subsection (6), we go on to further highlight ways that could be a detrimental effect, including the remuneration and other aspects of that. In your consideration of either any of the amendments that have been put forward, but also throughout our discussion, was there anything else do you think that we could have added or that these amendments would help with? Thank you.

I move, That debate on this question now close.

Thank you, Madam Chair. This is my first opportunity to contribute to this amendment bill debate, in Part 1. New Zealand First has been clearly against this bill. In our view, it’s flouting contract law and is a bit of a dark path we’re going down. Are there no lawyers left in the National Party?

In terms of Parmjeet Parmar’s amendment, in new section 110AB, inserted by clause 5, to replace “any other person” with “any other employee who is employed by the same employer”—which is the thing that the previous speaker, Vanessa Weenink, had picked up on—if we are going to go down this dark path, are we going to at least try to ring-fence that around the people that we could agree would have some relevance to disclose this information to? Are we going to dilute contract law to where it can be just willy-nilly? You can spray it all around, but two competing businesses or companies—you’re not necessarily comparing apples with apples. The employment at Bunnings and Mitre 10 might seem, on the outside, exactly the same, but they could actually have quite different tasks within them and quite different job descriptions. It’s not necessarily a fair comparison.

I think if we are to go towards this, and it looks like we are, it would be prudent to bring this back to disclosing within the relevant cohort of people who could benefit. The member’s assertion and some of the anecdotal evidence that comes through the select committee—if we’re to pick up on that, then they’re the people that are most likely to benefit from inter-employer or inter-workplace relations and apples with apples comparisons that we want to be making here; not apples with oranges with other employers.

From a New Zealand First perspective, I think we would look seriously, or we think the Parliament should look seriously, at that particular amendment from Parmjeet Parmar. Thank you very much.

Thank you, Madam Chair, and thanks, members, for their contributions. I’ll just go through some of the points that were raised.

Thank you to the member Rima Nakhle for raising one of the amendments that has been discussed to limit the people that the disclosure can be made to. We did look at this in the Education and Workforce Committee, about who the disclosure should be made to. If you look at the changes that have been made in the select committee report, one of the purposeful objectives was to ensure that the purpose of the bill, which is to make sure that you can disclose your own pay to any person that you want to, was done and drafted in a very purposeful way. We did think about should it be—as Mark Patterson has mentioned—other employees only within the business.

The problem that we had when we went down this path is that there is, I think, an assumption probably from a lot of people that when they go home and they talk to their friends and family, they’re able to discuss their pay. At the moment, if they have a clause in their contract, that is not the case; that is technically a breach. I think that that’s not sensible.

The other thing is that when you go to a new job, one of the first things your new employer might ask you is what you’re currently being paid. Technically, that would be a breach of your employment agreement, and obviously that’s unworkable in reality. Those are two examples of where someone would not be an employee, where I think it is important that they’re able to disclose that. That practically brings the law up to date with what is custom and practice.

The third point I would make on that is that the issue that we do have in New Zealand workplaces is that often we have people doing similar work, or the same work—and they might be working alongside each other but they might technically have a different employer or one of them might be a contractor and one of them might be an employee. Limiting it to people with the same employer would limit the effectiveness of being able to have those discussions about your own pay. We did look at it. I want to thank members for their amendments on this, and also, for asking questions about it. I don’t think it’s practical, because of the reasons that I’ve outlined, but it was something that we received advice on, and we did consider it genuinely within the select committee, but it wasn’t something that we thought would be useful for the bill. That’s in response to that particular point.

The amendment that Laura McClure has put forward in relation to clarifying that you are not able to talk about other people’s pay, that is already the case with this bill. There is nothing in this bill which permits anyone to take any action in relation to another person’s pay. So, although I appreciate this amendment, I don’t think it is necessary because there is nothing in this bill which allows disclosure of other people’s personal information. This only applies to your own personal information. I appreciate the amendment; it’s not necessary because this bill does not allow the conduct which this amendment would prohibit. That’s the response in relation to that.

Laura McClure: Really?

CAMILLA BELICH: Yes, really. In relation to the questions that Vanessa Weenink talked about in kind of an overall around the purpose of it, yes, I do think a lot of these amendments do run contrary to the purpose of the bill. To remind members: the purpose of this bill is simply to allow people to talk about their own pay, without fear of retribution. Simply, that is it. It’s not about other people’s pay, and it is not limiting the person who you have that conversation with. That is a very simple objective of it, and I thank the member for reminding me of her colleague Mike Butterick’s excellent speech in the second reading around his daughters. I too enjoyed that speech and felt that it was very compelling, and good to hear those reasons from a father about their daughters being able to talk about their pay. I thank the member for that, as well.

I think I have covered all of the questions that members specifically had and also the amendments that were specifically raised.

Thank you very much, Madam Chair. It gives me great privilege to stand and take my first opportunity to speak on this legislation in the committee of the whole House. I’ve enjoyed listening to the variety of different contributions from colleagues on this side. Didn’t particularly enjoy the contribution from our colleague in the Green Party of trying to shut down the debate—we’ve got plenty of points to discuss and iron out. I love it when the boot’s on the other foot on members’ days. Isn’t it really refreshing? Isn’t it a really nice opportunity? My question is in relation—

Hon Dr Duncan Webb: Well, let’s see if you do more than a 30-second speech.

TOM RUTHERFORD: I’m going to speak to the bill, Mr Webb. It’d pay for you to remember that when the boot goes on the other foot tomorrow, Mr Webb, because we’ll be reminding you of—

Hon Members: Doctor!

TOM RUTHERFORD: Sorry, Dr Webb—Dr Webb.

Hon Member: The Hon Dr.

TOM RUTHERFORD: The Hon Dr—someone check the documentation. Under Part 1, under new section 110AB, if we go down to (4), it says, “For the purposes of subsection (3), a remuneration disclosure reason is presumed to be a substantial reason for the conduct unless the employer proves, on the balance of probabilities, that the reason was not a substantial reason for the conduct.”

I’m concerned by the word “presumed”. It is very close to the word “assumed”, which I was taught when I was a child, that if you assume anything you make an ass out of you and me. I would be keen to understand from the member in charge, Camilla Belich, why there is the possibility to include a word like “presumed” in here, when actually we need to be more formalised in our language. We shouldn’t be making presumptions on people’s cases or their conduct or when they’re having discussions around remuneration.

Is there consideration from the member in charge around whether an alternative word than “presumed” could be used in replacement to that word? I think that is rather concerning and leaves it rather wide-ranging and open for people if they’re going into that space. Or are we prepared to leave a word like “presumed” in there, which could open up many caveats and many questions for people when they are discussing remuneration disclosure reasons, and, in this case, to be a substantial reason for the conduct unless the employer proves?

I would really love some clarity as to why the word “presumed” was chosen over any other viable options that would be available in, say, a thesaurus.

I move, That debate on this question now close.

The question is that debate on this question now close. All those in favour say Aye—

Dr Parmjeet Parmar: Point of order, Madam Chair.

CHAIRPERSON (Barbara Kuriger): I’ve started voting. The point of order will need to come later. [Interruption] Quiet during voting!

Dr Parmjeet Parmar: Point of order, Madam Chair. The microphone wasn’t on.

CHAIRPERSON (Barbara Kuriger): Well, I’m sorry, but I’ve started voting. You can make a point of order after we’ve completed this vote.

My point of order was that I didn’t get a chance to speak to many of my amendments, so now I think it’s fine; we have the chance now. Thank you.

Well, that is no guarantee when we have a piece of legislation. Amendments are put up and people can have the opportunity to speak to them, but it doesn’t necessarily happen for all of them. The other thing I will say is we get lots of comments as Chairs about how long committee stages should and would take in various situations, including members’ days and other days. It would be just good for people to put that in mind when they generalise in other circumstances.

Thank you, Madam Chair. I would like to take the opportunity at this stage in the debate—and I’m glad that we’re continuing to be able to discuss some of the tabled amendments that have been put forward both by Dr Parmar, who I think would love to speak on—

Dan Bidois: Parmjeet Parmar.

Dr VANESSA WEENINK: Parmjeet Parmar, who would be very eloquently speaking about her own amendments as well. It’s not that I want to jump in and steal your thunder here, Dr Parmar, but it is something that I just would like to speak to as well.

There are, as it was mentioned before, quite a number under Part 1—most of them pertain to clause 5 and are adding or subtracting a new section. One of the amendments—I’m just trying to find the right number—4.40.10—I beg your pardon, this was one from Laura McClure—

Laura McClure: Let me talk to this.

Dr VANESSA WEENINK: —who will also, I’m sure, speak at length and eloquently as well about her suggested amendments to this bill, noting, of course, that you have a bill that’s going through the committee as well. It’s another great committee activity for us to be looking at with your bill that you’ve got through us.

In Laura’s proposed amendment to “Insert after subsection (7)”, adding in that “an employee’s disclosure of their remuneration is protected under this section only if the employee has first notified their employer of their intention to make the disclosure.” What this amendment would be saying is, basically, that an employee would have to say to their employer that they were intending to discuss their remuneration or some element of their remuneration with another person. I guess this is to show that the employer needs to be somehow pre-warned about that or to be notified prior. To me, this sounds as though it would add in quite a lot of complexity, and in terms of people’s daily lives, if we think about what that might really mean, it might mean that they might go and say to their boss, “I intend to go and discuss with my husband what my remuneration is tonight when we’re in bed.”—not that that should be a good topic of conversation in bed.

Dan Bidois: Pillow talk.

Dr VANESSA WEENINK: It’s not exactly pillow talk, but you know. I just wonder if the member thinks that that would be a sensible kind of expectation to have. My assumption is that you probably won’t be supporting this amendment, and I just wonder if you can elaborate on some of the reasons why you think that this is probably not a good idea.

I’ve come up with one very trivial example of how this might affect people, but I’m sure that this could be applied even in the example that the member Mike Butterick gave about his daughter. Would that mean that his daughter would have to say to his boss, “I’m going to the pub tonight, and I might tell somebody. It might just happen to come up that we’ll be talking about what our jobs are, what we do, and what the pay and conditions are.”? They might have different shifts, and they might talk about what the shifts allowance are. They might get extra pay or bonuses as part of their work. For example, if you’re a professional, sometimes you get an allowance for attending meetings, or you might have an allowance for professional fees. Would you need to just pre-warn, under this, any disclosure that you might have about any element of your remuneration if this was included as one of those potential additions and amendments that has been included in this tabled amendment? If there are any other reasons why, I expect that you will probably not accept this tabled amendment.

Thank you, Madam Chair. One of my questions that I asked before has still not been answered by the member, so I would like to repeat that for the member. The question was about the employer breaching other employees’ privacy. That is one employee, when they go out to their employer to tell them that they have found out from another employee that that employee is being paid more than them. Then the employer, obviously, will have to discuss some of the circumstances around why that other employee is being paid more. Where is the protection in this bill for that employer for breaching that privacy? That protection is not there.

I’ve just repeated that question in short, and I give the opportunity to the member to answer that question, because this is actually a very serious thing. If the employer goes and explains what the other employee’s circumstances are or what their situation is or why that employer decided to pay more, there might be some personal information or other information that the employer will have to disclose to this other employee, so it’s a very, very serious concern for us.

The second point here, that we have heard from the member in charge of the bill, Camilla Belich, was about good faith, and that’s a very good thing in the employment legislation. But here, on the one hand, the member is saying there can be a clause in the agreement but that should not be enforceable, and, on the other hand, the member is talking about good faith. So despite something in the agreement, the member is fine for that not to be obligatory, but on the other hand she wants the whole employment relationship to rely on good faith. It’s a really good joke, actually, and I would like the member to elaborate on that and tell us how she can rely on good faith when, despite something being in the agreement, she is saying it should not be enforceable.

Now, coming to my other proposed amendment, the member from the National Party Tom Rutherford mentioned the word “presume”. One of my amendments is, again, as clause 5 is the main clause in this, in new section 110AB, which is to delete the words “or substantially similar”. My proposed amendment is that we delete the words “or substantially similar” in both places, so this subclause will say, “refuses or omits to offer or afford to the employee the same terms of employment, conditions of work, fringe benefits, or opportunities for training, promotion, and transfer as are made available to other employees of the same or substantially similar qualifications, experience, or skills employed in the same or substantially similar circumstances;”.

“The same” is fine because “the same” means both people have the same role—both people have the same level of experience. But when we start talking about “substantially similar”, there can be different interpretations of what is “substantially similar”, and that opens up a lot of disputes because one individual can interpret “substantially” different from the other individual. So interpretations can differ and there can be challenges there.

It actually introduces legal uncertainty in the legislation, and it increases the likelihood of disputes arising because of there being substantially similar qualifications or substantially similar circumstances. There can be so many variables in any work environment, and, already, we know there are because these are people. We don’t have clones of one individual working in a workplace that will perform exactly the same way like the other individual, because they’re not the clone of another individual. Every individual is different. They bring their own attitude, their own kind of way of approaching the job they have been given, and now this bill introduces some more variables in there to complicate the situation by saying “substantially similar qualifications”. What does “substantially similar qualifications” mean? What does “substantially similar circumstances” mean? “The same” is there.

My proposed amendment is that we keep “the same” but remove “substantially similar qualifications” and “substantially similar circumstances” to ensure that we are not creating a legal uncertainty for employers. Also, even for employees, it can be quite confusing because it can lead to some expectations which, actually, are not the right expectations for them to have.

This is actually a very serious issue here, which makes this bill really impractical and not workable, and it will be important to hear from the member to see how the member plans to make this subclause practical, because at the moment it is not.

Thank you, Madam Chair. Just to respond to some members on their questions, the member Tom Rutherford referred to the wording in the primary bill, talking about the word “presumed”. This is a very common word used in legislation, especially in the Employment Relations Act, and removing that word or finding that word unacceptable would lead to a number of legislative changes in a number of different bills. It is quite a common word that is utilised in this particular piece of legislation. But thank you to the member for that comment.

The examples brought by Vanessa Weenink in relation to the amendment by Parmjeet Parmar, I think, in relation to—

Dr Vanessa Weenink: Laura.

CAMILLA BELICH: —oh, sorry, Laura McClure, in relation to the notification of your boss before you make the disclosure, I agree with the member. I don’t think this would be practical, and I think it would go against the purpose of the bill, because it isn’t how human conversations usually work, and it would probably lead to people doing what they currently do: talking about their pay, believing that they’re able to do that but breaching the Act by not telling their employer first. The example the member raises about talking to one’s partner is a good one, I think. I think most people in New Zealand would expect that they’re able to disclose that if they have a clause in their contract. Unfortunately, that’s not the case.

There was also a discussion around removing the amendment, which I think talks about bonuses and commissions in work. Often we find in pay discrimination, one of the key ways that pay is given to one group of people over another is through additional payments like bonus and commissions. So I think removing “bonus and commission” from this definition would be very problematic.

I’d also highlight that at the Education and Workforce Committee we did remove payments for owners of businesses. I note that was a particular improvement by Vanessa Weenink, who has had some experience working in an environment as an employee and also as a business owner. So that was looked at in detail and changes to not include that were not seen as a way to take this bill forward.

In relation to Parmjeet Parmar’s comment around protections for employer, this is really the whole point. The protections for the employer already exist. The employer is not facing discipline or dismissal through disclosure of the employee’s pay at the moment. That is something that the employer can do without breaching a contract. And if you do look at the Privacy Commissioner’s website, they actually cite pay secrecy for employees as something which is specifically raised as an issue that might be problematic for employees, not for employers. So I’d refer the member to that.

In relation to the points around good faith and that not being enforceable, the member will be aware that we did look at banning these clauses in employment contracts. The reason that we decided as a committee not to move forward with that was because of how difficult that would make the administration for businesses. So we save businesses money by not forcing them to take clauses out of their contract. That seems to be what the member is advocating for. There is no breach of good faith in having unenforceable clause in an unemployment agreement. As a party that often says that freedom of expression is important, it’s somewhat ironic to see this extremely, extremely limited.

Todd Stephenson: Freedom of contract? Freedom of contract as well.

CAMILLA BELICH: The ACT Party has obviously chosen freedom of contract over freedom of expression, and I will just leave that there for—

Todd Stephenson: Both can exist.

CAMILLA BELICH: Well, you’ve obviously picked one on this particular example. Also, in a substantially similar point of view, the member raised the fact that people are not clones and at the same time advocated for a change to treat people like clones. People often are not exactly the same in employment situations. They often have slightly different experiences; they often have slightly different pay. There might be a justified reason for that. The reason that it’s “substantially similar” is to not put such a high threshold as having to find an identical person where you have identical experience and identical conditions and identical start date in order for this bill to be effective, because that would be prohibitive and would allow situations of unfairness to continue without having a remedy.

Thank you, Madam—

CHAIRPERSON (Barbara Kuriger): We’ve heard a lot about you tonight, Mr Butterick; we might as well hear from you.

MIKE BUTTERICK: Well, you might regret saying that, Madam Chair—yet! Thank you. I just had a question for the member in regard to 110AB(1)(b) in regard to “refuses or omits to offer or afford to the employee the same terms of employment, conditions of work, fringe benefits, or opportunities”—and I note there’s a number of things in there—“training”, “promotion”, “transfer”—and then it talks about “experience, or skills employed in the same or substantially similar circumstances”. I just really wanted to talk about whether there was any consideration to using a productivity metric or something in there, because I’ve employed people over the years and they do have the same skills, same experience—you know, all those sorts of attributes—but sometimes, some are better than others and more efficient. Have you given consideration to including that in there?

Tom Rutherford: Are you talking about output and efficiency?

MIKE BUTTERICK: Yes, I am talking about output and efficiency and productivity.

Thank you, Madam Chair. Welcome back to the Chair, Madam Chair. I want to first of all, actually, make just a quick comment: this is a very important subject matter, and I’m proud of the fact that the National Party is supporting this bill. Thank you to the member for all the diligent work she’s done, but, please, to the other side of the House, it is very important that we get this right. This is what the committee of the whole House process is about. It’s about getting it right to the utmost, where we can go away and have a good night’s sleep knowing that we exhausted all the questions that we had. Please, please, be patient as we do that.

I’d like to thank the member for answering the question with respect to the amendment that Dr Parmjeet Parmar put through about the words “with any other person”, bringing that to clause 5, new section 110AB, and going to new subsection (2)(a), “an employee discusses their remuneration with any other person,”. I thank you for the answer that you gave. If you don’t mind, if I can just ask an offshoot question to your answer.

To the member Camilla Belich, am I to understand that you’re OK—and part of what you will see going forward is there are going to be situations where employees discuss their pay with media, for example. I think media is the big question mark from what I’m hearing from our colleagues in the ACT Party. For me, that is a bit of a question mark as well. Were those discussions had in the select committee process? I think you said yes. But, with respect to media, is that part of your expectations in the future that, yes, employees will discuss their pay with media outlets? If that’s the case, then that’s OK—just as long as I can understand the whakaaro behind that. That’s the first question I have, please—almost like a supplementary to your earlier answer, please.

The second question I have is—coming back to, again, clause 5(5) It begins with the words “To avoid doubt”, and I found that a bit peculiar. I’m not used to seeing that type of language in legislation, and it stood out to me, and I’d like to please seek clarification, and, perhaps, I’d like to be confident going forward. “To avoid doubt”, being written in that way, is it kind of saying that there is some doubt, and, if so, should we have clarified the doubt in the previous new sections, as opposed to saying “To avoid doubt”? Because “To avoid doubt”, respectfully, as I said, did stand out to me as a bit odd in proposed legislation. I’d like the member to please speak to that and to whether that did come across in your conversations in the select committee process as well, and with the ministry officials giving advice.

The first one is about “with any other person” extending to media. Is that something that you think will be normal? And, if so, that’s OK—just as long as I can please hear what your thoughts are around that just so that I can prepare my neighbours in Takanini going forward that are good employers but sometimes find themselves in certain situations. This is just to prepare them for that going forward. The second query was with respect to the words “To avoid doubt”. Is that saying that there is a lot of doubt, and should that be something we work on? Thank you.

Thank you, Madam Chair. I would like to draw the member’s attention to the amendment suggested by Dr Parmar—

Mike Butterick: Which amendment?

Dr VANESSA WEENINK: The amendment is to clause 5, a new section—

Mike Butterick: Which number?

Dr VANESSA WEENINK: Well, it was at 4.40.08 on the Amendment Papers, for the members to refer to. So that’s clause 5, new section 110AB, insert after subsection (7) a new section, which would mean that this section does not apply to an employer who employs fewer than 20 employees at the time the relevant conduct occurs.

During the select committee we heard from a range of employees and employers, some who employed fewer than 20, some only had five people in their workplace, some were large employers, and some of the submitters also represented groups who employed quite large substantial numbers. The intention of this amendment would be to substantially limit the number of employees to which this would apply to. And from the intention of the bill being to, in a small way, contribute to reducing some of the chilling factors that apply if there are any forms of pay secrecy that is involved in an employment contract—or even just the culture of not discussing and disclosing pay with each other. Having that only apply to a certain type of employer, those who are, I guess with 20 employees—fewer than 20 or less usually is a small to medium employer, I think, under the definition. The fact that actually many businesses in New Zealand, I think a quite a substantial proportion—I don’t know the exact numbers off by heart—[Interruption] I beg your pardon; what’s that you say?

Laura McClure: About 95 percent.

Dr VANESSA WEENINK: About 95 percent of employers actually employ 20 or fewer. So I think if this new amendment was to be considered and applied, that would mean that this potential Act would only apply to 5 percent of employers; I’m not sure in terms of the actual numbers of employees. So the intention of this tabled amendment appears to be to try and frustrate completely the objectives and purpose of the bill and would be completely contrary to what is trying to be achieved here.

I’m very proud to stand as a member of the National Party in support of this bill. We have done so since its first reading. We are on the side of fairness and this also is related to natural justice. This particular amendment—and I wonder if the member agrees—has the appearance of trying to overturn the entire point of this bill. It demonstrates that the ACT Party obviously have put in their disagreement and their opposition to this, and this is one way in which they’re trying to frustrate this process. I can understand their tactic in doing that.

Now, the other amendment that drew my attention was—again we’re still in Part 1—again in clause 5—

Mike Butterick: What numbered amendment?

Dr VANESSA WEENINK: This is yet another one from Laura McClure that we would insert another clause. In clause 5, after new section 110(7), again inserting a new subsection, subsection (8): “This section does not apply when the employee’s disclosure of their remuneration was materially misleading or inaccurate.” And again, I guess that would be lying, that would be misleading people, and that would be out; that would be a breach of the law anyway. So I’d just like your response on those.

Thank you very much, Madam Chair. I’ve got a number of questions I would like to ask—

Hon Dr Duncan Webb: Oh, look, I wouldn’t assume he’s an ass.

TOM RUTHERFORD: What was that, Mr Webb?

Hon Dr Duncan Webb: I said I wouldn’t assume you’re an ass. There’s conclusive proof.

TOM RUTHERFORD: Madam Chair, I take offence at that statement made by Mr Webb, and I’d ask that he withdraw and apologise, please.

CHAIRPERSON (Jenny Salesa): Can the Hon Dr Duncan Webb withdraw and apologise.

Hon Dr Duncan Webb: I withdraw and apologise.

TOM RUTHERFORD: Thank you very much—oh, he’s going in contrition.

My question relates to new section 110AB(6) and the definition of “remuneration”. If we look at it in part of the legislation, it says the definition includes any other type of payment for work but excludes payments as business owners. That’s as shown in new paragraph (b) over the page.

How will this apply to contractors, consultants, or those with complex employment relations and arrangements with the business? There’s no mention in here of anybody who has that kind of employment relation with the business that’s involved. So how would that apply to contractors, consultants, or those with complex employment arrangements? Could this create, let’s say, some uncertainty for businesses using mixed employment models?

Steve Abel: This is repetition.

TOM RUTHERFORD: I don’t think it is repetition, Steve Abel. I haven’t asked this question before. I haven’t asked this question previously, so I am interested to get some clarity as to how it would apply to contractors, consultants, or those with complex employment relations.

The other point in there is on new section 110AB(6)(a)(ii). It says, “allowances”. Has there been any consideration to actually flesh out further what is included in allowances? Does that include, say, personal vehicles or vehicles provided by the employer? Does that need to be disclosed? Why does said employer get a $50,000 vehicle and another employee get a $25,000 or $20,000 vehicle? What about health insurance? Some providers, for example, provide their employees with different health insurance. What if there are staged or levelled health insurance based on the remuneration that you receive or the level of your employment and whether you may be a manager?

Dr Vanessa Weenink: Or on sabbatical.

TOM RUTHERFORD: Yes. What about if you’re on a sabbatical, for example, as well? Does it need to actually be fleshed out in the legislation? Allowances is a very broad term, so has there been any consideration as to including things like vehicles? I talked about health insurance—well, if you go with Southern Cross, for example, then what about if you get Wellbeing One or Wellbeing Two? What if you have dental or vision? There are many, many different prescribed versions available in insurance. Does that need to be disclosed between different employees as well? Because there are many, many pitfalls that could be incorporated in here if we’re not very careful.

Steve Abel: What about a different question? You’ve already asked that one.

TOM RUTHERFORD: I haven’t asked this question, Steve Abel.

Steve Abel: In this call you have.

TOM RUTHERFORD: I have not. No—no.

Steve Abel: Move to something else.

TOM RUTHERFORD: Well, I love this. I really, really love this. This fills me up with a lot of things because, for once, the Green Party are complaining about members on this side taking calls. Let’s just remember this exact feeling in about 16 hours’ time when the boot returns to the other foot, and Dr Lawrence Xu-Nan and Steve Abel and Francisco Hernandez stand up and they flesh out two-, three-, five-minute calls in a row and they continue on and they continue on—

CHAIRPERSON (Jenny Salesa): Order!

TOM RUTHERFORD: —members on this side—

CHAIRPERSON (Jenny Salesa): Order! Members on my left side are most welcome to take calls.

TOM RUTHERFORD: That’s very—

CHAIRPERSON (Jenny Salesa): But shouting across the House is not the way to do it.

TOM RUTHERFORD: Thank you very much, Madam Chair. I appreciate your ruling there. I’ve always been told in this House that interjections must be short, sharp, and witty, and I’m looking forward to receiving some of those because we haven’t had any, as of yet.

But I want to reiterate that my question revolves around allowances, vehicles, insurance, and ensuring those are available. Are they included in here? Are they included—different values of vehicles? What about the insurance on the vehicle? For goodness’ sake, where does the line actually get drawn? Because “allowances” is a very shallow, very small word here, but it can have wide-ranging implications for different employees when they’re discussing their remuneration with their colleagues, and I’m keen to gain some clarity on that from the member in charge.

Thank you, Madam Chair. I am very happy to contribute to this debate again, and I appreciate that some clauses have been debated by other members. One that has not been discussed yet is my amendment to section 110AB, in clause 5. My amendment inserts subsection (8), and this section applies where the employee made the disclosure in good faith and not with the purpose of causing harm to the employer or the other employee. Why I find this appropriate is that the member has already discussed at length that good faith applies regardless.

So if that were to be true, there would be no issue with adding an explicit provision like this to set the scene to make sure that we don’t have those nefarious claims coming through a personal grievance step. I think that in terms of talking about the potential costs and the risks to business when someone does make a potentially nefarious personal grievance, it’s always on the employer to foot those costs and to go out there and do that. While I think that, yes, good faith may apply, it’s still sometimes extremely hard to prove with pieces of legislation like this where we have all kinds of different terms that I don’t think are very clear, and to be honest are going to be making a gold mine for a bunch of employment lawyers out there.

I think it’s very fair to explicitly state it, and if the member does believe that people are disclosing their pay in good faith and in the eyes of transparency and in order to help with the gender pay gap, then including a section that explicitly says that the employee made this disclosure in good faith and not with a purpose of causing harm to the employer or the other employee is, I think, a very fair way to explicitly state this. I’m interested to hear what the member’s thoughts are on this.

Thank you, Madam Chair. Just to respond to some of the queries raised by members—and thanking the members for their engagement on this bill. I agree with Vanessa Weenink: yes, and I think we have covered this before, limiting it to companies with over 20 would significantly change the impact of the bill and is possibly contrary to the purpose of it. So that’s one reason that I wouldn’t support that.

In relation to the amendment, which talks about people raising issues of pay in a nefarious way or lying: yes, that would be a breach of good faith. In relation to the member Tom Rutherford’s question, the definition of remuneration was carefully considered by the committee and benefited from advice from advisors. It is a wide definition and it includes, at the end of that clause, any payment made for work. So it is seen to be a wider definition of pay and that was the advice that we received when considering this bill.

In terms of his other questions, it applies to employment relationships only. Non-employment relationships would not be covered by this particular piece of legislation, and sabbaticals are considered to be usually still part of employment. In relation to Laura McClure: yes, the member is correct, good faith already applies. So my response to the member would be rather than put an additional clause that doesn’t add anything new to the bill, we should leave it out for clarity and simplicity because it already applies to the substantive Act which we would be amending.

Thank you, Madam Chair. Before I talk about my other proposed amendment, which I haven’t spoken about, I want to repeat a question that I asked the member in charge of the bill; this was about the privacy of another employee. So I’m repeating this question again. I’ve already repeated it once, so that’s why I’m saying I’m repeating again: when one employee goes to their employer saying that another employee has disclosed how much they are earning and wants to raise that as an issue with the employer, the employer—when they discuss the circumstances of the other employee—is breaching privacy of the other employee. The response that I got from the member was that employers already have too many protections.

This is really undermining the privacy of the other employee. So how can the employer go about talking about another employee without it being seen as a breach of their privacy? Because they will have to obviously explain what the circumstances are, why this other employee’s being paid differently, to the employee who has raised this issue with the employer. I think I have given enough opportunity to the member to give an answer to this question, and she has not been able to provide any good answer so far.

Talking about my other proposed amendment—this is, again, clause 5. In clause 5, my amendment says delete new section 110AB(2)(b); in clause 5, new 110AB(2)(c), delete new subparagraph (ii). In clause 5, after new section 110AB(7) insert—this is a new subsection which says, “Nothing in this section prevents an employer from including in an employment agreement a term that prohibits an employee from inquiring about another employee’s remuneration.”

This is very important because sometimes there will be some employees, those who will feel that they don’t want to disclose—so the bill says, yes, it’s a voluntary thing. When somebody approaches you in the workplace, asks for your remuneration, it’s up to you if you want to disclose or not disclose. But that can create a lot of friction in the workplace because people will know that there is no such clause in anybody’s agreement. Another thing I would like to highlight here is that there can be some employees, those who might come under pressure and feel that they have to reveal what their remuneration is. That should not be the situation we should be putting employees in because that way we are taking the choice away from them.

Here the example is: if, for example, there are five or six employees sitting around a coffee table and one employee goes to the first colleague of theirs, saying “How much do you get?” and the person says, “$50,000.”; goes to the next one, says they earn $50,000; asks the third employee and that employee says, “$55,000.” Then when that employee goes around the table, comes to maybe the last one, the last one may not want to reveal what they earn but just because the previous four have already revealed what they’re earning, this last one who is questioned by this employee who is inquiring of others how much they are earning will feel that pressure of that work environment where they have to reveal what they are earning.

This is going to put people in that kind of situation. Otherwise, other employees will think that “Oh, this person is not a team player, doesn’t want to discuss what that person earns, whereas everybody else is willing to share that.” That’s why I’m proposing this amendment, which is to protect such people.

Another example I would like to give here is this: maybe an employee discloses what they earn today—for example, 30 July; somebody says, “I earn this much.” After three or four months, this employee again approaches the same employee asking, “How much do you earn?” At that point, during that time, that employee has decided that they don’t want to actually disclose what their remuneration is. At that point, they say to this employee that “Look, I’m not happy to disclose what my remuneration is.” In that situation, this other employee will make guesses—

Laura McClure: Feel bad.

Dr PARMJEET PARMAR: Not only feel bad but also will guess that maybe that other employee’s remuneration has gone up and that’s why, now that the other employee doesn’t want to disclose, maybe it is because he’s received an increment since the last time that employee disclosed how much that employee was getting.

There are so many complications that this bill is going to lead to, and that’s why we are working hard in the ACT team to make sure that this bill—if it goes through—goes through in an improved form, not in the current form, which is not going to be helpful for any business environment. It will only help unions, and that’s why we are proposing this amendment. I would like to understand from the member if she could respond to the examples that I have given and how and why she thinks this amendment should not be supported.

Before I take the next call, I want to say that even though I’ve just come to the Chair at about 9 o’clock, I have been following this debate from upstairs and I have had a conversation with the Chair before me. There’s a lot of speeches that are really repetitive. I would like to hear some new information, some new clauses, and some new speeches. I mean, you’re welcome to take the calls, but do give us some new information.

Thank you, Madam Chair. I have been an employee and I’ve also acted for an employer. I’ve managed projects of up to 240 people, delivering ultra-fast broadband and other major projects. This involved being responsible for the welfare, the health and safety, the employment terms and conditions, and all of the other benefits and obligations that each employee and each subcontractor and members of subcontractors’ staff had in terms of the engineering construction contracts that I was either supervising or managing as project manager.

I cannot imagine in what world, having engaged people on different salaries and different wages based on their experience, based on all of the matters that an employer needs to take into consideration when making a decision about whether I offer this employee a four-wheel drive ute; a two-wheel drive ute; a fuel card; that they pay for their own fuel and seek compensation and expense that out; whether some employees, because they work slightly late, get a taxi home and they get that taxi paid for—whereas others who regularly work late, maybe the same hours, we’ve paid them through their salary in recognition that, say, if you have to work late on a Friday night to complete the accounts for the monthly claim, that’s included in your overall salary package and you don’t get a taxi chip.

All of these matters come down to an individual consideration between an individual employee or subcontractor or contractor—not included in this, but they are the same people, for all intents and purposes, doing the work on the building site—and the employer. If all of these matters may or may not be disclosed—must be required to be disclosed if asked, which is what I understand the intent of the bill is—how on earth is an individual, hearing these matters being discussed in their workplace, meant to make sense of all of these things and balance them, to determine in their own mind whether their package, what they are paid plus benefits, is equivalent to or fair compared to the person working next to them? Well, it’s not possible.

I think what the member in charge of this bill has fallen for is the fallacy that a single person or judge can determine what’s right for each individual, subject to a regime. That is a fallacy, and I challenge the member Camilla Belich, to explain which individual will have the perfect knowledge to make the perfect decision, and how to explain that perfect decision to any number of employees who, for whatever reason, have a different balance of salaries and wages and benefits. I don’t understand it.

I’ll tell you who else tried to do this. I’ll tell you who else: the Soviet Union tried this. Somebody in a bureaucracy in the Kremlin worked out how many nails, how many screws, how many nuts, and how many bolts they needed so that they could build trucks and other machines. It turned out that there was not one person who knew the number of nuts and bolts of various diameters that should be ordered in any given week, in any given month, so they could build the things that the Communist Soviet Union wanted to do. They had total State control.

CHAIRPERSON (Hon Jenny Salesa): So how does that, Simon Court, relate to the bill?

SIMON COURT: I will bring it back to the bill. The point is, Madam Chair, there is no one individual, whether it’s in the Kremlin or sitting in this seat as Camilla Belich is right now, who has the perfect knowledge to put together the individual nut that is what the employer needs them to do and the bolt that is the employee that fits that nut.

So what I would ask the member in the chair, when considering does the member have this perfect information—or imagine, at some time, if she ever happens to be an employer in the private sector; highly unlikely for a Labour MP, but, you know, I mean, the earth does go around the sun once a day. Does the member truly believe that when an employee’s disclosure of their remuneration is potentially misleading or inaccurate, they shouldn’t be subject to the same kind of punishments anyone else is for having misled people in their workplace?

I move, That debate on this question now close.

Thank you very much, Madam Chair. Unfortunately, I think, for the member, he didn’t quite get the wording quite right on the closure motion there. We have had more practice on this side.

But I want to talk about new section 110AB(2)(a), which says, “any other person”. I recall the comments previously made by my colleague Vanessa Weenink on this topic, but I want to flesh this out. It says that the bill allows employees to discuss their remuneration with “any other person”, which explicitly includes not just workplace colleagues—it doesn’t just include workplace colleagues—but, potentially, competitors. What about recruitment consultants? What about journalists—and I know Parmjeet Parmar and other members of the ACT Party have talked about journalists and the media—or anyone else?

While I strongly support the principle of pay transparency and being honest about things within a workplace and with family members—I think it’s important to have a husband and wife, a husband and husband, a wife and wife, or whatever their arrangement is, discussing what their pay is in a well-functioning household. Is something happening in the Rutherford household at present, as we prepare for our wedding and are discussing what our new lives together will be like? Our wedding is in January, so we’ve still got a bit of runway.

This unrestricted scope does seriously raise legitimate commercial concerns, and I want to consider a scenario. Let’s think about a scenario where a senior executive in a competitive industry discusses detailed remuneration packages, including things like their performance bonuses and retention strategies, with a recruitment consultant who also works with direct competitors. This information could literally be used to poach staff—particularly key staff—or undermine competitive positioning. That’s what I’m looking at.

Similarly, in small communities of specialised industries, unrestricted disclosure could lead to, effectively, potentially, in some cases, a race to the bottom. So I would welcome the member Camilla Belich’s answers to some of those questions.

Thank you, Madam Chair. I will just quickly respond to some members’ questions. In response to the member Dr Parmjeet Parmar, it is not correct that an employer, when questioned by one employee about another employee’s wages, has to disclose any of that employee’s wages. That is not a requirement of this bill and it’s just simply not correct that there’s any requirement to do that.

Dr Parmjeet Parmar: It doesn’t provide the protection in the bill

CAMILLA BELICH: It’s absolutely not correct. If the member would like to take another call to ask further questions, she would, but I believe I’ve addressed that question, and also, just to clarify, I did not say that employers have too many rights. This is not about removing employers’ rights; it’s about allowing employees to talk about their pay.

In relation to the member Tom Rutherford’s question, “any person” means any other person, and the disclosures have to be in good faith. Hopefully, that addresses some of his concerns.

I struggled to find a question in the member Simon Court’s speech, but I would simply say—

Simon Court: Are you a communist?

CAMILLA BELICH: I am not. It’s interesting that you raise that. I won’t repeat it for Hansard, but it’s not correct. I would say to the member that if I could try and ascertain a question from his speech, it is simply the fact that all people are not the same and all conditions are not the same—I entirely agree. If there is a justified reason why people are being paid differently, there is absolutely nothing in this bill that affects that at all. If two people go to their employer and they say, “I’ve been treated unfairly.”, and the employer explains that to them and they accept that reason or they don’t accept that reason, that is the end of it. That is what occurs in that situation.

This does not set in place a regime to address inequity. It does not put in place a regime to address unfairness. There are other bills that do address that, including the Equal Pay Act and including the pay equity bill—which does still exist—so that information could be utilised in other forms of legislation or other ways that the employee may have policies in order to take something forward. But this particular bill simply allows employees to talk about their own pay.

I move, That debate on this question now close.

The question is that Dr Parmjeet Parmar’s tabled amendment to clause 5, new section 110AB(1)(b) deleting the words “or substantially similar” be agreed to.

The question is that Laura McClure’s tabled amendments to clause 5, paragraphs (b) and (c) of new section 110AB(1) and the deletion of the definition of “detriment” in subsection (6) of new section 110AB be agreed to.

The question is that Dr Parmjeet Parmar’s tabled amendment to clause 5, new section 110AB(2)(a) replacing “any other person” with “any other employee who is employed by the same employer” be agreed to

Dr Parmjeet Parmar’s tabled amendments to clause 5, new section 110AB(2) deleting paragraph (b), subparagraph (ii) of paragraph (c) and inserting new subsection (8) is ruled out of order as being inconsistent with the principles and objects of the bill.

The question is that Laura McClure’s tabled amendments to clause 5, new section 110AB(3) replacing “substantial reason” with “the sole reason” and deleting new section 110AB(4) be agreed to.

The question is that Dr Parmjeet Parmar’s tabled amendment to clause 5 deleting subparagraph (iii) in paragraph (c) of new section 110AB(6) be agreed to.

The question is that Dr Parmjeet Parmar’s tabled amendment to clause 5 inserting new section 110AB(8) to exclude employers who employ fewer than 20 employees be agreed to.

Dr Parmjeet Parmar’s tabled amendment to clause 5 inserting new section 110AB(8) is ruled out of order as being inconsistent with the principles and objects of the bill.

Laura McClure’s tabled amendment to clause 5 inserting new section 110AB(8) to require employees to notify their employers before disclosing their remuneration to another person is ruled out of order as being inconsistent with the principles and objects of the bill.

The question is that Laura McClure’s tabled amendment to clause 5 inserting new section 110AB(8) to clarify that the section only applies to employees who disclose their remuneration in good faith be agreed to.

The question is that Laura McClure’s tabled amendment to clause 5 inserting new section 110AB(8) to exclude employees who materially mislead when disclosing their remuneration be agreed to.

The question is that Dr Parmjeet Parmar’s tabled amendment to clause 5 inserting new section 110AB(8) and (9) to exclude employees who earn more than $180,000 from section 110AB, be agreed to.

The question is that Dr Parmjeet Parmar’s tabled amendment to clause 5 inserting new section 110AB(8) and (9) to permit an employer and employee agreeing to a disclosure restriction clause in their employment agreement be agreed to.

The question is that Laura McClure’s tabled amendment to clause 5 inserting new section 110AB(8) and (9) to prevent employees from disclosing the remuneration of another employee without express consent be agreed to.