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Employment Relations Amendment Bill — Second Reading

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Employment Relations Amendment Bill

Second Reading

Hon LIANNE DALZIEL (Acting Minister of Labour): I move, That the Employment Relations Amendment Bill be now read a second time. This bill ensures that our most vulnerable employees will receive the additional protection they deserve in restructuring situations. It is when a business restructures that these employees are at risk of their employment conditions being undermined. The Employment Relations Amendment Bill will stop that from occurring. Specific groups of employees such as cleaners and food service workers across a wide range of commercial arrangements will now have additional protection, and, as a former secretary of the Canterbury Hotel and Hospital Workers Union, I am delighted to be able to contribute to the second reading debate this afternoon.

It is pleasing to see the bill return to the House with a small number of technical amendments that ensure the bill clearly sets out how protection will apply in every circumstance. I have great gratitude to the members of the Transport and Industrial Relations Committee, who worked tirelessly over this legislation and have returned it in such good form. These amendments make sure that the bill will finally deliver on the original policy intent of the 2004 amendment to the Employment Relations Act, and I do thank the Transport and Industrial Relations Committee for its fine-tuning of the bill.

This bill ensures that if a vulnerable employee is to be affected when his or her employer loses a contract for services, the employee will have the right to choose to transfer to the business that takes over that work. The bill rectifies the loophole identified by the Employment Court in 2005, when the court found that the protection provided to vulnerable employees did not extend to subsequent contracting situations. This bill does not represent a change in the Government’s policies with regard to vulnerable employees. It is about ensuring that Part 6A of the Employment Relations Act delivers on the original policy intent, and that the intended protection cannot be circumvented in certain types of commercial arrangements.

The amendments recommended by the committee will provide more certainty about the way Part 6A will apply in practice. Amendments recommended by the committee clarify, for example, that the Employment Relations Authority has the jurisdiction to impose a penalty if a vulnerable employee is not notified of when and how he or she can choose to transfer to a new employer. The bill as introduced provided that, in certain situations, employees had a right to bargain for redundancy entitlements if their new employer proposed making employees redundant as a result of the transfer of employees. In response to concerns about consistency with the common law and the risk of the drafting being too narrow, the committee recommended amending the bill to reflect that this right to bargain for redundancy entitlements arises if the new employer proposes making employees redundant because of circumstances or reasons arising from the transfer of employees. I agree with the committee’s recommended amendment, and I will also be recommending a further amendment to clarify that where employment agreements have dealt with redundancy entitlements in those specific situations, those agreements will prevail.

This bill provides that annual holidays and other employment-related entitlements are carried over and cannot be paid out by the previous employer. The committee identified that it may not be clear where the responsibilities of the new employer begin and the responsibilities of the former employer end with regard to these entitlements. The committee has recommended amending the bill so that different employers’ responsibilities in this regard are clear.

Concerns were expressed by submitters that this bill will mean that when businesses take over a contract for services, they may be required to take on underperforming employees. That is not the intent of the bill. The additional rights are provided at the time of transfer and do not provide vulnerable employees with a job for life. If an employer has concerns about an employee’s performance, the employer should deal with the performance issues in a constructive manner by acting in good faith, informing the employee of any weaknesses, and providing the employee with the support and training necessary to improve his or her performance. Following those principles will assist businesses to perform efficiently and effectively. In the long term, implementing this kind of practice will lead to New Zealand having more high-performing and productive workplaces.

I have heard suggestions that small and medium-sized businesses should be exempt from the provisions to protect vulnerable employees. I wholeheartedly reject that suggestion. As Minister for Small Business, I say that letting employers off the hook in terms of treating people well and in good faith is not good enough. It is not good enough for employers, because their businesses will not grow if they do not learn how to treat people properly. New Zealand’s employment framework is based on the key concept of one law for all employers, regardless of size. It is important that we do not change this policy and exempt some employers from good behaviour. The employees affected have been singled out for additional protection because they are particularly at risk during restructurings. Those employees are vulnerable, regardless of the size of their employer. Exempting small and medium-sized businesses would result in some vulnerable employees losing their additional protection. This bill is about ensuring that protection is extended to all vulnerable employees, as was intended in 2004; it is not about reducing protection.

Two Supplementary Order Papers are being released alongside the revised bill. The first will provide for a review of how the revised Part 6A of the Employment Relations Act is operating, 3 years after its commencement. The Government supports this Supplementary Order Paper, because it is consistent with our commitment to regulate fairly and effectively. Regulation works best when it is monitored and measured to establish what impact the new and revised regulation is having in practice, and to confirm that it is both fair and effective, or to make changes accordingly. Nobody in the Opposition could disagree with having a review to see how the revised regulation is working in practice.

The second Supplementary Order Paper concerns the disclosure of information on the labour costs of the employees who would be affected by restructuring. I have heard the concerns businesses have expressed that they will be required to take on extra costs they may be unaware of when they take over work in the sectors to which the additional protection applies. For example, a business may tender for a food catering contract at a price that will not allow it to sustain the payment of the transferred employees’ terms and conditions. In the long term this could result in the vulnerable employees being adversely affected, because they are more at risk of being made redundant following the transfer. Job losses could be more likely if the new employer was not aware of the total cost of the obligations it would be required to take on if its tender offer was accepted.

To reduce the risk of such an outcome, and thereby increasing the protection provided to vulnerable employees, the second Supplementary Order Paper provides that in a proposed restructuring situation the current employer must disclose the total labour costs of the affected employees when that information is requested by potential new employers. The information will be provided in an aggregated format. Providing for the disclosure of aggregated information strikes a balance between issues such as commercial sensitivity of labour costs, privacy of individuals, and providing businesses with the information necessary to make an informed decision about whether to restructure or enter into a restructuring.

The second benefit of this new requirement is to business. A transparent process for tendering or any other change of contract situation will ease pressures on business. Without this requirement businesses were concerned that they would have to tender blind. Now businesses will be aware of any additional costs and can work those costs into any proposals to take on new work that are subject to the additional protection provided to vulnerable employees.

I am confident this bill closes the loophole on protection to be provided to vulnerable employees that was exposed last year. The revised bill is about clarifying the application of Part 6A of the Employment Relations Act and delivering on the original policy intent. This bill balances the need to allow businesses to grow and contribute to New Zealand’s economic transformation with the need to provide protection to specified employees who are particularly disadvantaged when businesses restructure. Once again, I thank both the Transport and Industrial Relations Committee for its report and those who made submissions. The additional clarifications will ensure that Part 6A of the Employment Relations Act finally provides the protection we intended it to give. I commend the Employment Relations Amendment Bill 2006 to the House.

PAULA BENNETT (National) : The Employment Relations Amendment Bill is simply not necessary. It is largely motivated by the practice of some district health boards successively tendering out their cleaning operations. Frequently, the new contractor would take on the existing workforce, but on reduced conditions. We heard evidence in the Transport and Industrial Relations Committee that some cleaners in a single hospital had had as many as six contractors in succession. We are not without sympathy for those vulnerable workers, who saw themselves being moved from contract to contract—not at all. The Government has simply chosen a blunt instrument to fix this particular and relatively narrow issue.

Large companies providing vulnerable services are likely to be the least affected, as many are covered by multi-employer agreements in their respective sectors. When work done by such a company is contracted to a company that is covered by the same agreement, the affected employees will receive the kinds of provisions envisaged in the proposed changes. No law change would be necessary. This amendment bill is not necessary and could, in fact, have dire consequences for the very workers whom Labour is supposedly trying to protect.

I was appalled to hear the Minister say that the bill would not affect small businesses and that it was the vulnerable employees working for those small businesses who deserved to be protected. Without a doubt it is the very vulnerable workers who will be most at risk under those sorts of changes. One needs to think just of the family-owned business that contracts for services and wins a contract. That family-owned business may have two or three employees whom they have had for some time, have been looking after, and have been giving the kinds of benefits they know they deserve. When that business contracts for and wins a tender, it will not be able to employ those people in that very job; they will, under these law changes, have to take on the employees who are already working in the job. That is simply not right, not correct, and not fair to those very vulnerable workers whom Labour is purporting to help through this bill.

Members need to think about the example of a contractor who is doing a poor job—there are ones who are not doing a good job. We are constantly hearing from Labour that what can happen is that one can dismiss workers or be sure to tell them they are doing a poor job. But the reality is that it is really difficult to get rid of a contract one is under. If contractors were quite clever and thought they would be losing that contract, it is quite simple as to what they would do. If contractors really were reaching that conniving level and had a contract they knew they would lose to one of their competitors when it came up for tender, they would simply—because the conditions of that employment would go on to the next employer, as the Minister stated—put those conditions of employment at such a high level that the next employer would have to take them on, so that it would not be beneficial to run the business.

If those contractors knew the contract would be lost, had been told things were not working well, and knew that the company they were contracted to was not happy, they would simply double the employment conditions of their employees. The employees would be happy; they would be getting twice the money, and all of a sudden they would be on 6 weeks’ annual leave. They would be happy because the contractor had put in extended sick leave provisions, and provided other conditions. The contractor would lose that contract, and another contractor would get it. That contractor would have to take on the same employment conditions that those employees were under. All of a sudden, the contractor’s expenses would more than double, and all of a sudden the business would be unable to work effectively. The business would go under, and those vulnerable employees would go under.

  • Sitting suspended from 6 p.m. to 7.30 p.m.

PAULA BENNETT: This bill is, in effect, interfering with contractual rights. Decisions to contract out work are made for good business reasons, and, yes, employers have an expectation that the work will be done to a level that meets their needs.

Let us talk for a little bit about the case that brought this amendment to Parliament, the Dunedin Kindergarten Association, because it is a classic case. The contract had finished. It was not a contract that was being rolled over; nor was it one that was being terminated. The contract had finished. The association then went out to tender because it felt the job that had been done to date had not been satisfactory. It went out to tender because it was not pleased with what had been happening in that kindergarten. In fact, even though it had spoken to the cleaners many times about the level of their work, it was the belief of the parents and the teachers that the kindergarten was actually being left in an unsanitary and unsuitable state for children to learn in. That was simply not good enough. So the association did what any other good employer would do in terms of business sense, even though it was a State-sector employer. It simply went out to tender to see whether it could get contractors that would meet the needs of its business and actually do the work to a level that was satisfactory. It is simply unthinkable that the very people who were not doing their job satisfactorily, who were leaving the kindergarten in an unsanitary state, would then be working for the next company that won the contract.

So believe it or not, I say to the Labour Government, it is not always about money. Sometimes it is about the service and sometimes it is about having an expectation in relation to the quality of work that will be done—standards that everyone actually has a right to be working to. The workers cleaning the kindergarten were not providing a service that was good enough, and under this amendment they would be back at work the following week even though the kindergarten had gone out and negotiated a new contract. Our children deserve better. This simply is nonsensical, and it is the main reason for us voting against the bill.

I want to talk a little bit about the National Party’s minority view in the commentary on the bill. I think it is really important to put it on the record, as well. We say that the bill is “an unreasonable restriction on the freedom of businesses to manage their operations. It will affect all business, whether large or small.” We really believe it will be those small businesses that will suffer most under this amendment, and it is those vulnerable employees who are working for those small businesses who will find themselves worse off. If the employer they are currently working for loses a contract, and if they wish to continue their employment with the employer, then they could certainly find themselves in a position of being redundant and of actually being worse off.

A classic example is family members who are working in a family business that then take over the contract of another family business, and that family is expected to take on the workers of the previous contract. Again, it simply is not sensible. The bill will also make it harder for new contractors to improve the quality of the work it does, to reorganise the way that work is done, and to generally improve its productivity. This Government is constantly talking about productivity, but time and time again the employment law it is passing is not fulfilling that main goal that it says it has. Ultimately, under this amendment everyone will suffer—the new contracting company, the entity that wants to change the contracts, and the employees, who will be stuck in a declining section of the economy unable to improve that productivity.

The bill’s provisions will replace the present Part 6A provisions of the Act. The object of preserving the jobs of existing employees in contracting situations is undoubtedly well intended. As I stated earlier, it is about the district health boards and about those vulnerable workers who work for those boards. They were seeing themselves being turned over and actually ending up—in my understanding of the submissions and the advisers we heard from—with worse employment conditions than the ones they had when working for the same body. I do not think that anyone who sat on the Transport and Industrial Relations Committee did not see that as an issue and did not want to see it fixed. It is the way we are fixing it that the National Party vehemently opposes. It is yet another case of Big Sister coming in, laying down the big hammer, and actually taking over, when, instead, smaller amendments and small changes could have been made to contract legislation. This bill will affect small business, and we will most certainly not be supporting it for that reason.

The likely consequences are not quite as clear-cut as may initially have been thought. An immediate effect will be the preservation of existing employees’ jobs at the expense of potential employees who might otherwise have gained employment, to say nothing of the possible preservation of the employment of employees whose performance may have actually caused the loss of their employer’s contract.

The National Party will not be supporting this amendment. Ultimately, we believe that everybody will suffer—the new contracting company, the entity that wants to change the contract, and the employees. If we are serious about protecting vulnerable workers we need to open up the market place more and give those in the larger contracts, which we believe are already protected under the law, what they need.

Hon MARK GOSCHE (Labour—Maungakiekie) : As chair of the Transport and Industrial Relations Committee, I am very pleased to see this bill being reported back, and I will be even more pleased when it has its third reading. It always surprises me that when I listen to the Opposition speakers on this matter, they just have no concept of what it is about. They probably never will, because they do not notice the people who clean their offices after they go home. Paula Bennett said the bill was about only a few hospital workers. Well, she should look at it more carefully, because it is about the cleaners who clean her office and who clean this building. It is about the people who feed all of us up in the cafeteria or the restaurant. Those people are very low-paid and have for many years suffered under a regime that the National Party supports—a regime of contracting out and taking a chance the next day as to whether they will have jobs. If they do have jobs, it is likely to be on lower wages and lesser conditions. But the National Party supports that. I did not hear a proposal from the National Party, either in the select committee or tonight, that would replace this law. It actually supports that type of thing.

Let us just consider what this is about. It is about the people at Wellington Hospital who came and submitted to the select committee. They have been working at the hospital for some 15 or 16 years and have had six or seven different employers—some of them the worst ratbags that have ever been in this country, who came here and set up to clean, cook, and do the orderly services in our public hospitals, without which our public health system would collapse. Those employers came here on a loss-leader contract and put all those workers’ jobs to the sword. They just up and ran away and said: “We can’t hack this any more. We’ve taken the wage cost as low as we can. We’re still making a loss, so see you later.” That is what the National Party supports. That is the sort of law that party put in place when it was in Government. That is not the sort of law that the vast majority of people in this House support.

This amendment bill makes a simple technical change to the law. The policy is quite clear. The workers it affects are the most vulnerable workers. They are the people who cook and clean and who do the laundry. They are the people who keep our schools, universities, and polytechs clean. They are the people in the age-related residential care area. They are the people who shift the dead bodies in the hospital system. They are the people who do the dirtiest, most unpleasant, most lowly paid jobs in this country. I pay credit to them and take pride that this Government and Labour, along with the Greens, the Māori Party, and the New Zealand First Party, are prepared to say that those people are special. They do dirty, low-paid work. They deserve to be protected. They do not deserve to come to work one day and find that the multinational company that used to employ them has gone into liquidation and said to the public of New Zealand: “Bad luck. We’re not going to clean your hospitals any more.”

That is what the National Party supports. Its members will get up here and moan and grizzle, and they will say: “This law is about the big, bad employers. What about the small employers?”. Well, they should have opened their ears in the select committee to the woman who came and said that she worked in a medical centre and was employed by a small family business. She was its only cleaner. What happened? She was on an hourly rate of, say, $11.50. The contract changed and the small family business got turfed out. She did not. She was employed the next day by the bigger company. The big company dealt to the small company by actually paying that worker less.

David Bennett and Paula Bennett, if they had opened their ears and listened to the cleaner who came in and made that submission, would have recognised that a lot of small businesses get screwed by such behaviour. They get undercut by the big players who can come along and say: “We’ll clean up much more cheaply than that small New Zealand business, we’ll cut the workers’ wages, we’ll take away their conditions, we’ll make them work harder, we’ll cut their hours. You’ll get a cheaper, nastier service, and then you’ll come along and complain and we’ll sack the worker for you because it’s all their fault.” In her speech, Darien Fenton will outline some of the stories that were told by those workers.

This is not a new problem. I recall, when I was secretary of the Hotel, Hospital and Restaurant Workers Union, when Auckland Hospital used to have one cleaner per ward. In those days we did not have the cross-infection that we have today. We did not have people going into hospital and coming out with a new disease because the hospital was not cleaned properly. No, we had one cleaner per ward and—

Christopher Finlayson: Have you ever cleaned anything in your life?

Hon MARK GOSCHE: That young man over there says I have never cleaned in my life. Well, that is how naive he is. I have done those jobs, unlike him—who has no experience of real workers in this country—sitting down there in his big, flash law office and pretending he knows something about it. I have seen those workers in Auckland Hospital go from cleaning one ward in 8 hours to cleaning two wards in 6 hours, and people expect the hospitals to be as clean as before. Then they say: “It’s those workers, they’re useless, they’re lazy. We should contract them to another contractor so we can get rid of all those lazy workers.” It does not work like that. The contractor goes, the workers stay, the workload goes up, and the hourly rate goes down. And the National Party supports that. It absolutely supports that. It loves that and wants to entrench it in our society for ever. That is the absolute bankrupt ideology of the National Party.

I cannot believe that people like Paula Bennett, who says she has been a cleaner, and David Bennett, who says he cares about low-paid workers, can come here and read their research unit notes out with a straight face. They know what they heard at the select committee—real workers telling real stories about the huge workload that they have to try to perform in their miserable 4 or 5 hours for their $10.25 an hour. Then they have the audacity to expect their jobs to be there tomorrow! No, the National Party says, those workers should not have that expectation; they should be flexible and they should be ready to work for any employer for any amount of money. That is what the Employment Contracts Act was about and the National Party wants to bring that Act back with knobs on.

At the select committee, Maurice Williamson said he wanted the Employment Contracts Act back without the soft bits, and he was serious. He said National did not deal to the workers and the unions hard enough last time and Maurice is looking forward to dealing to them again. He reckons that the 90 days’ probation period in Wayne Mapp’s Employment Relations (Probationary Employment) Amendment Bill is no good because a good employer can find out in 9 days.

Hon Member: Drop the zero!

Hon MARK GOSCHE: So he wants to drop the zero on that one. I will give Maurice Williamson credit for that—at least he was honest on that one. But in every other aspect, he wants to deal to those workers, and deal hard.

What can be expected from the National Party when they are living in the 1890s? They are living not in the 1990s but in the 1890s. They want to bring that era back. Labour is opposed to that and all sensible members of Parliament in this place are opposed to that.

I want National members over there to stay up until midnight tonight. I want them to sit in their offices waiting for the cleaners to come to clean up the mess those members make, and tell those cleaners: “I don’t support you having job security.” I challenge one of them to do it. At midnight tonight, when the cleaners start to arrive, I want every one of those National Party members over there voting against this bill to sit in his or her office, wait for the cleaner to arrive, and say: “I do not care less about you. I voted against the bill today.” Then let us see whether the rubbish bin gets collected.

SIMON POWER (National—Rangitikei) : What a bitter and unhappy member Mark Gosche is. He used to be such a jovial character. I remember reading of his humorous antics when the Employment Contracts Act was in force. He was a member who was far more skilled at enjoying himself in life. What a bitter and twisted member he has become. It is no wonder that union membership is down in New Zealand when members like that are the bastion and the face of unions throughout the country. Workers around New Zealand think: “I might join a union. That could be of some benefit to me.” Then they see Mark Gosche stand up here in the House, give a speech about the Employment Relations Amendment Bill, and they think: “What a bitter way to get my rights heard. What a strange level of representation that member would bring.”

The key here is whether this legislation is good law; that is the question. Many members in the House who were here in 2000 working 4 or 5 nights, through the night, to the wee hours of the morning, on the Employment Relations Act will remember that—by my reckoning—

Darren Hughes: The good old days.

SIMON POWER: Those were the good old days before Mr Hughes arrived! This particular legislation is on—at least—its twelfth amendment. What does that tell members of the New Zealand public? It tells them that the legislation was shabbily put together in the first place. The dozen amendments we have seen since then are all designed to turn the screw on workers out there who have decided they are capable of making their own representations to their employers, and are capable of negotiating with their employers over their conditions and their workplace arrangements without union hacks getting in the way of what would otherwise be a calm, well-thought-out, and rational negotiation process.

If the Employment Relations Act had done what it was supposed to do, and was going to fulfil all the expectations of the Labour Party funding arrangements that exist with the unions, then two things would have happened. Firstly, union membership would have increased—well, it has not, it has gone down. Secondly, if this legislation had been designed to work, the Labour Party would have the $450,000 it needed to repay the pledge card—that money that it owes the New Zealand taxpayer—but it does not; it does not have that money on hand. The reason is that people are not joining unions, because for people of my and the member for Otaki’s generation, unions have had very little meaning in the way that we have dealt with our own arrangements and negotiations in the workplace.

But what is most disturbing about this new legislation is that National members who were on the Transport and Industrial Relations Committee tell me that at every opportunity they tried to get these provisions to not apply to smaller and family businesses, which make up about 80 percent of the businesses in New Zealand. But no, what happened was that Labour would not exclude small or family businesses from the provisions of this legislation. New Zealand First also refused to take the opportunity to allow smaller and medium-sized businesses the flexibility they need to continue to do business in New Zealand.

But what disturbs me the most about this legislation is that it is taking us back to the most bizarre workplace environment that one could possibly imagine. Let us take a situation where one contracting, tendering, service-providing business does a sloppy job, and the employer—who, funnily enough, might want to stay in business to provide people with jobs—decides to shift that contract or tender to a different business entity in order to improve the quality of the business and the opportunity for his or her workers: Well, he or she is stuck with the same people who did the appalling job in the first place.

Paula Bennett: It doesn’t make sense.

SIMON POWER: It does not make sense, because that just drives the business down. When business is driven down, people lose their jobs. The Government has a simplistic view that all it needs to do is create another piece of legislation. This bill ties people into jobs, rather than allowing opportunity for those looking for new jobs or new opportunities. The bill locks inefficiency into the business model. It prevents business from employing people and promoting them. It prevents business from paying them bigger salaries and wages, and providing better working conditions.

But that does not matter to Labour, because for it the important thing is that its coffers get filled. But this bill will not work, because, frankly, this type of hard-nosed, arm-twisting approach to union membership does not work in this century. In fact, it did not work in the last century. Things have moved on. Union membership is down, and the reason is that unions are nothing but bargaining agents. Let us call them what they are—bargaining agents. What gives that particular bargaining agent the legislative and statutory protection to drag in membership and negotiate collective contracts that other bargaining agents do not have? I will tell this House what it is. It is the financial arrangement between Labour and those unions that provides the difference in treatment between one type of bargaining agent and another. Well, I have news for Labour. Time has moved on. The sad little games that used to be played—[Interruption] Darien Fenton is here; that is good. Labour has some bright new talent!

Hon Maurice Williamson: What?

SIMON POWER: Labour has some bright new talent, and next we will hear about a step back in time to the good old union days. I say to Labour to stop thinking about the unions and start thinking about the workers.

PETER BROWN (Deputy Leader—NZ First) : I have to correct the member who has just resumed his seat, because somebody out there might have been listening and taking note. I say to the honourable member that he should have used the most recent figures on union membership. The figures I have obtained show that union membership has gone up of recent times. The member usually makes sense, but he is wrong on this occasion. If the National Party doubts me, it should check with the library. The member might be right on one account: the percentage of the workforce in terms of union membership has gone down slightly, but that is because workforce numbers have gone up—something that never happened under National. And, try as we might, even New Zealand First could not get them up when we were with National.

When it comes to unions, National members are dead scared of collective strength. They want it for themselves, but they resent working people having some sort of collective strength. I have another piece of information for members opposite. There is nothing in the Employment Relations Amendment Bill about unions—not a single word! It would not be a bad idea if members opposite read bills from time to time. They should read the bill before they stand up and take a 10-minute call on it. I have to say I am disappointed with Simon Power’s contribution. He is a man of some intelligence; he is a lawyer. He did not say one thing in regard to the bill.

Let us face a few facts. In the last term of Parliament the Government passed the law that deals with vulnerable workers. In listening to the last National Party spokesperson one would think this amendment bill is new law, but the law governing the protection of vulnerable workers is already in existence. But, typical of the Labour Government, it did not get it right.

The Government needed some help, so we in New Zealand First said to ourselves that there is something not quite right about having a workforce that stays on and does the job, but with rotating employers. It is sort of like pooled labour, and we were not terribly happy about that. But we have to recognise that 99 percent of the law is already there, and is it not right and proper that the law becomes right and proper? We thought there was some merit in getting it completely right.

This bill has come about only because of the judicial decision on the Gibbs and Crest situation down in Dunedin, which was spoken about by many members earlier on. The Government is absolutely keen to offer protection to vulnerable workers. New Zealand First looked at this legislation objectively and fairly. We believe basically in direct employment, where the employee goes where the employer goes. We could call it “employment purity”.

Hon Maurice Williamson: What does that mean?

Paula Bennett: Ha, ha! [Interruption]

PETER BROWN: I tell those members to close their mouths for a minute and listen. Employment purity and fairness can often be complementary. They work together, but where there is conflict between employment purity and fairness, then Parliament must come out on the side of fairness, if we really want a decent society. We will not have a decent society if we bow to employment purity—or fiscal purity; call it what you like—at the expense of fairness. I hope those members opposite have taken note of that.

Some of us on the Transport and Industrial Relations Committee listened to the cases put forward by vulnerable workers. They were heart-wrenching and brought tears to the eyes, if one was listening genuinely. We heard frequently that when there was a change of employer, the workload went up or the wages went down, and quite often both the workload went up and the wages went down. Worse still, staff numbers were reduced, so there were fewer people on less pay doing more work. Is that fair? No, it is not.

So New Zealand First decided to rethink this issue. We spoke with the Government. We said that we were not committed to this forever; we said that we wanted a review. I advise the House that Supplementary Order Paper 53 in my name will be on the Table at the Committee stage, if it is not there already, stating that there will be a review.

But that was not enough for us. We know of concerns about employers not knowing the liabilities they take on when they buy a contract, or re-tender for it.

Hon Maurice Williamson: Are you going to get Noel Ingram to do the review?

PETER BROWN: No, I will not. If that member would sit and listen for a while, he might learn a little.

At the insistence of New Zealand First, the Government has produced Supplementary Order Paper 54 in order to provide for full disclosure before the tender is handed across. So, with respect to what Paula Bennett said, there will be no case for doubling the wages and increasing whatever and letting it fall into the lap of the second employer, because before employers take on the contract they will know what they are up for. There will be full disclosure both in the public sector and in the private sector.

Supplementary Order Paper 53, which will be on the Table by the time the bill reaches the Committee stage, is a direct reflection of New Zealand First’s input into Government policy. We told the Government that this needed to be done. I want to be fair to the Government—because I have been quite critical of it before and I am likely to be critical of it again. The Government told me that it had the numbers without us. I said: “Well, you will not get the principles without us. We want this bill.” The Minister said to me that it would go ahead with the Supplementary Order Paper, because we had approached the Government in good faith. So this is another New Zealand First gain for this country and for the employers of this country.

Much of the National Party assertions and allegations are false and based on academic theory. We are talking about vulnerable workers who need some protection. The current Act protects them to some degree, and this completes the picture, which is what the Government intended to do last term. This is not new legislation or new political policy; this is completing what the Government intended to do last time. But, as a result of New Zealand First’s intervention, we are getting full disclosure, so that employers who take over a contract will have the full information about what they are taking over.

I see that National members are laughing with envy. They know when political parties stand in this House and achieve something. We have achieved in the last week more than they have achieved in 9 years, and I know that that hurts. There will be a review in 3 years. Employers and employees will have a chance at that point in time to say whether the legislation is working properly or whether it needs a bit of adjustment, and the matter will be looked into objectively.

But I emphasise that New Zealand First claims the credit for these two Supplementary Orders Papers that are going through. Modesty is out the window now; we claim the credit, and we think that the Government will give protection to vulnerable workers whether or not we are with it. However, what we do have is full disclosure for the employers. We think that that will make a huge difference to this legislation and will be to the advantage of all involved.

After listening to vulnerable workers when they came before the Transport and Industrial Relations Committee in particular, but some have also spoken to us privately, I say that there is a case to be addressed. This bill attempts to address the issue, and I believe, as a result of New Zealand First’s intervention, the Employment Relations Act will be all the better for it.

SUE BRADFORD (Green) : The Green Party is pleased to see the Employment Relations Amendment Bill return to the House for its second reading. At the time it was introduced we said that we supported the bill and that we hoped it would work its way quickly through the processes of this House and pass into legislation. I am glad that is what has happened, for the sake of all those who are affected. The Green Party does not have membership on the Transport and Industrial Relations Committee, so I would like to take this opportunity to thank the members involved for their work in considering this legislation. I know that it was particularly difficult because it deals with complex and technical issues. The Green Party endorses the report of the select committee, including its amendments, and also the two Supplementary Order Papers that Mr Brown has just referred to.

During the first reading debate on this bill I stated that its intention was not new. Parliament had already agreed to it in the passing of the amendments to the Employment Relations Act in 2004. It was an unintentional error that gave rise to the need for this amendment to the legislation. It is useful to quickly traverse the background that led to the need for this bill. Parliament has ended up having to take a second cut, or, in fact, a third cut, if one counts the original Employment Relations Act in 2000, at the issue of transfer of undertakings because the Employment Court decided in Gibbs and others v that the law as currently written did not apply to that situation. The matter then went to the Employment Court, and that was around the issue of workers who had been cleaning premises belonging to the Dunedin Kindergarten Association. The cleaning contract was re-tendered and the previous employer, Southern Cleaning Services, lost the contract to another firm, Crest Commercial.

As soon as Crest Commercial won the contract it gave notice that it did not intend to employ any of the current cleaners, but was going to subcontract to what it called independent franchisees. There is no doubt in my mind that those workers were in the kind of vulnerable situation that we were talking about and trying to deal with in 2004. Their circumstances were similar to those described by many of the submitters to the select committee that heard evidence on that earlier Employment Relations Amendment Bill. I was part of that committee at the time, and I believe there was no doubt in the minds of the Labour and the Green Party members present that we thought we had produced a bill that supported vulnerable workers in exactly the situation that applied to those cleaners in Dunedin. This new amending legislation simply reinforces what we thought we were doing when we passed that Act in 2004.

In the first reading debate on the bill before us tonight I made the observation that the Employment Court case that gave rise to this bill also raised some other issues that had to be addressed. One of those issues was the claim by the new contractor, Crest Commercial, that it was not going to be employing staff but was going to engage those independent franchisees. I said then that I was concerned about the growing use of these so-called independent subcontractors—a total nonsense—and the way in which corporations and larger employers use them to reduce their costs, as Mr Gosche referred to so graphically earlier on tonight. I am therefore pleased to see that since the introduction of this bill the issue is being given further attention through Darien Fenton’s Minimum Wage and Remuneration Amendment Bill, which was introduced last week.

So back to the bill in front of us today. I note that the bill, as reported, contains some amendments as a result of the consideration of the select committee. The Green Party supports these amendments and believes that they clarify and improve the original bill. It is good that new sections 69C and 69D in clause 4 clarify the definition of a new employer to include a person who does not have, or does not intend to have, employees. This will ensure that a further loophole is not created this time around so that firms or individuals not currently employing workers, or in the case of the Employment Court case that gave rise to this bill, a firm claiming to be subcontracting to independent franchisees, is still covered by this legislation. We support the amendment in clause 4 that clarifies that the Employment Relations Authority may impose the penalty referred to in new section 69G(4). The amendment to the wording on the date of transfer—section 69I(4)—is sensible and will provide more certainty for both employer and employee.

The Green Party also supports the intention of section 69J, which provides for the service of a worker to be treated as continuous for the purposes of determining leave and parental leave entitlements. We have no problems with the amendments in this section that make it clear as to when the responsibilities of the new employer begin and that the new employer will not be liable for parental leave complaints against the old employer. We endorse, as well, the widening of the redundancy bargaining provisions in sections 69A and 69N to give workers the right to bargain for redundancy entitlements if they are made redundant because of any situation arising from their transfer. Finally, we have no problems either with the technical changes to the transitional provisions.

Turning to the two Supplementary Order Papers referred to by Mr Brown and the Minister earlier on, I reiterate that both of them are supported by the Green Party. We fully back the Supplementary Order Paper that requires, in a restructuring situation, the disclosure of information on labour costs of employees affected by a restructuring by the current employer to a potential employer at their request. We note that this will be disclosed in an aggregated format and will protect the privacy of individuals. We also support this measure because it will reduce the downward pressure on the terms and conditions of the vulnerable employees that may be caused by an underestimation of the costs a new employer would have to take on following a successful tender. This can only be good for the vulnerable workers concerned. Finally, the Green Party will also be voting for the Supplementary Order Paper that provides for a review of how Part 6A of the Act is working 3 years after commencement. This makes for good policy, and the Green Party has no problem with that.

We campaigned to keep the transfer of undertakings provisions of the original Employment Relations Act in 2000 and were sorry that we lost that battle, which Mr Power referred to earlier tonight, way back then. We supported the inclusion of Part 6A in the amending Act in 2004. Today we continue to stand by the clarification of that legislation so that it achieves what we wanted to do all along from 2000 onwards—that is, to provide a whole lot more protection for some of the most vulnerable workers in this country.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : Kia ora, Madam Speaker. Kia ora tātou te Whare. In considering the Employment Relations Amendment Bill, I note that this House has been considering a number of other proposals for better relations with Australia; I thought I would share a little story from over the ditch.

Late last year 20 construction workers got sacked by D3 General Contracting without wages, holiday pay, or redundancy. D3 General Contracting was contracting to Northpac, a company with sites all over the world. Those 20 workers were Māori. According to the union, D3 General Contracting had not paid any of its workers their entitlements or superannuation since April 2005. Northpac, however,continued to build on the site where the workers were laid off, but the effects of D3 General Contracting going into receivership were immediate and dramatic.

One of the workers, a whanaunga of mine from up north, was evicted from his home, and one of his mates, a whanaunga of my colleague Mr Te Ururoa Flavell, Rāwiri Iti—52 years of age, with four kids and six mokopuna—got dumped on the scrap heap. Iti later told the media: “ ’cause most of us are Maori, we’ve been through it all before in New Zealand back in 1992. We know the effects this has on people and their families, both physically and mentally.”

During the course of the industrial action, Northpac offered a one-off payment of $25,000—one-tenth of what was owed—and tried to bribe one of the workers with a $5,000 payment to move the picket line from in front of the office.

Union spokesman Steve Keenan said the situation was the same as that caused by the industrial relations policies that had forced his family to leave New Zealand in the first place: “In New Zealand I was getting $19 an hour plus overtime rates, but when the laws were changed in 1991 and we went onto individual bargaining contracts I ended up with $9 an hour and no overtime … and that’s after fourteen years’ service!”.

This story is not just about 20 Māori workers fighting for their rights in Sydney. It should also be a warning to us here at home to be wary of legislation that results in vulnerable workers being threatened: workers made vulnerable when an employer sells or transfers his business; workers who lose a long-term contract to in-house employment; workers who face the loss of terms and conditions, and loss of income, as a result of changes that arise when a business gets sold.

These are real problems—problems happening right now, as low-paid workers lose their jobs every week. These problems are so current that, as we speak, unions representing 500 workers in supermarket centres all around the country are in mediation to prevent Progressive Enterprises from bringing in contractors to do the work of the locked out workers. The National Distribution Union and the Engineering, Printing and Manufacturing Union are filing on behalf of workers who service up to 150 Countdown, Foodtown, and Woolworths stores—that is, about half of all of our supermarkets. All this is going on despite the fact that engaging other workers to perform the work of union members involved in industrial action is supposed to be illegal under the Employment Relations Act.

It is a fast and furious world out there, and restructuring situations and contracting change-overs are becoming part of our employment reality. This bill aims to make it clear that, under the Act, workers have a right to transfer their employment terms and conditions. The recent decision of the Employment Court in Gibbs and others vshowed that the provisions of the current Act were not clear enough. Hopefully, this bill will tidy that up.

Without this amendment, vulnerable workers can lose their jobs or have changes imposed on them—such as changed hours of work or increased workloads, with associated stress—when there is a contract change. The Māori Party believes that this bill will help the many Māori workers and their whānau who are regularly affected by changes in contract relationships. We should not need to be reminded that the impacts of these changes can have serious consequences for workers and their whānau.

The Service and Food Workers Union reckons that changes in employment conditions impact hugely on workers with low incomes, forcing them to juggle a whole series of other balls—like whānau commitments, childcare, shopping, partners’ employment, and other jobs. Workers faced with reduced income caused by changes to their employment conditions are being forced to take up more jobs just to pay the bills. Job stability goes on the line and relationships get strained at home, and the Service and Food Workers Union says that people lose their jobs just because of the stress of trying to cope.

Our support for this bill is also in line with our policy of supporting and, where necessary, improving the Employment Relations Act 2000 to safeguard the rights of workers. One of the recommendations from the select committee process that we took particular note of was the proposal to amend the Act so that employees could have the right to bargain for redundancy entitlements. That would enable workers to negotiate redundancy when the job ends, or it is restructured, or for other reasons.

We also accept the proposal from the Transport and Industrial Relations Committee that although entitlements like parental leave and holidays can continue, employment complaints should not carry over to a new employer. Workers have to move on and pick up the new job without the old hassles.

Quite simply, this is a sensible bill. It is about ensuring clarity, transparency, and fairness, and on those grounds the Māori Party is happy to support it.

I make just a little postscript to the story of the boys in Sydney. After 3 months of picketing and the suffering that goes with that, the 20 workers won back their full entitlement—more than $250,000 in wages, holiday pay, and severance pay—because the legislation was in place to ensure that their right to bargain for redundancy payments could be enforced.

What will make an even happier ending to that story, though, is having the same legislation in place here so that we can ring them up and tell them to come on home because it is all good here in the hood, as well. We can say that back home there are plenty of jobs and good employment conditions, and the mighty Māori Party is in the House, “defending Maori rights and advancing Maori interests, for the benefit of the whole nation”. Well, one out of three ain’t bad, I suppose—a bit more work on the jobs and conditions of employment to go. Kia ora tātou.

GORDON COPELAND (United Future) : As is well known in this House, United Future is a centre party. On the one hand we completely support the right of free association of workers. We support workers’ right to enter into collective bargaining arrangements, and support all of the other rights that have been established in this country for a very, very long time. Some members who do not live in Wellington should walk up Bolton Street on some occasion, where they will find on the right-hand side, just above the Bolton Hotel, what looks like a church building. In it they will find a memorial to the person who established the 40-hour working week in New Zealand many, many years ago. So we have a very proud record of retaining the rights of employees.

However, there is another side to the coin, so on the other hand United Future also supports free and open markets. We support free and open competition, because it is through competition that people are inspired to improve workplace practices, the quality of their work, and, indeed, the labour productivity of their employees—something that New Zealand has done very badly on in recent years. Our productivity has risen by people just working longer hours, instead of actually working smarter and more skilfully within the time limits they are given.

Therefore, on that second tier United Future has some very real philosophical problems with this bill. This bill states that new employers must become party to any collective agreement that binds employees electing to transfer—that is, the bill gives employees the right to transfer to a new company that has taken over a contract that has been terminated, on the same terms and conditions as previously and as part of the same collective agreement that binds the transferring employees.

I would like to give the House some alternative scenarios to the ones that were given earlier by, say, Mark Gosche. He talked about cleaners, so let us suppose, for example, that some cleaning work was not up to scratch. I have to say, in all honesty, that I meet nobody of my generation who regards the cleanliness of, for example, Wellington Hospital as satisfactory. It is not. It is grubby and dirty, and it has no relationship to the clean hospitals that I knew a generation ago. We have seen in that whole area a great slide in standards. If the contract of the people who are not maintaining a place to the required standard comes to an end, the new contractor has to take on board those workers, who were not up to scratch in the first place. United Future can see absolutely no sense in that. That is actually a spiral downwards, to a kind of lowest common denominator outcome.

We believe that the mixture of rights and responsibilities that I mentioned earlier, and that we stand for, should actually lead in the opposite direction to that. It should lead to the incentivisation of better work standards and better productivity. We should see that it is important, if people are not fulfilling a contract’s conditions, and if on a performance issue a contract has been ended, to bring in people who can improve performance. One will not do that by using exactly the same people as before.

So this bill has been a bit of a line-ball call for United Future, but we have decided in the end that from our point of view it does cross the line into an area that is intrusive, statist, “pink-think”, and nanny-ish. We do not believe that it is the route towards improving relationships or work standards. We believe that those things should be addressed through the process I have mentioned, with a balance between, on the one hand, the right of employees to free association—to unions, to collective bargaining, etc. —and, on the other hand, the right of companies and firms to compete with each other in the interests of better standards. Price is not everything. People are often prepared to pay more for a better quality of work. So the quality of work cannot be left out of the equation, and the bill, in our view, does that.

I want to add one more thing to that comment. Some of the submissions that we received stated—and, indeed, the Department of Labour officials themselves agreed—that this bill would impact on small businesses far more than on large companies, particularly when it comes to terminating contracts and tendering processes. The lowest level of involvement in business ownership of any sector of New Zealand society is that amongst the Pasifika communities. We believe that this legislation will endanger the survival of fledging Pasifika companies, many of which are involved in cleaning contracts and the like. We do not think this legislation will help those businesses; we think it will harm them. We want to see those businesses prosper, see small businesses graduate to become bigger businesses, and see bigger businesses graduate to become large businesses. That is the pathway to economic success. We think, therefore, that although this bill is well intentioned, it breaks the old maxim that the end does not justify the means. Just because the Government has a good end in mind, it still has to find the way to do it, and to do it effectively, with good outcomes for all.

We believe that this bill fails that test. Accordingly, United Future will not be supporting it.

DARIEN FENTON (Labour) : I am really pleased to be able to speak on this bill, which has come back to the House. I am pleased also that it will soon provide the protection that many vulnerable workers have waited a long time for. In the debate tonight we have seen the difference between those who come from relatively privileged backgrounds and those who do not. Some people have no idea what life has been like for those workers who are covered by this bill.

We received a number of very good submissions on the bill. Gordon Copeland was not there, he did not hear the cleaners, but I listened to them, as did members on this side of the House and our colleagues who are supporting the bill. If anyone has any doubt about why the bill needs to become law they should listen to the cleaners. If members wander along the road some time they might see some cleaners in purple jackets saying they are looking for a Clean Start, and this bill is part of that. It is about making sure that the invisible army out there, cleaning our factories, our hospitals, our schools, our airports, and our universities, 24 hours a day, 7 days a week, are able to have a decent job and decent work. We all know our lives are made easier and better by these workers, and we know that the expectation of them is high standards and professional cleaning delivery, yet their lives and jobs are marginal. It interests me when cleaners get the blame, as they did from the previous speaker, for example.

I want to describe to members one cleaner who came before the Transport and Industrial Relations Committee. She talked about her work as a cleaner at the university. The area for which she is responsible has 30 rubbish bins, seven toilets, two showers, six handbasins, one urinal, three carpeted flights of stairs, a concert hall, a library, 12 offices, two studios, a workshop, and six practice rooms. All of that has to be cleaned in 4 hours.

Three-quarters of cleaners in this country work on a part-time or casual basis. Fifty percent earn less than $10,000 per annum, and 75 percent earn less than $20,000 per annum. This is a shamefully low-paid industry—and free wage bargaining and all of the things the previous speaker spoke about have not delivered better pay and better standards—but the productivity is huge. Cleaners in this country are expected to clean between 850 and 1,000 square metres per hour, which is much higher than the internationally accepted benchmarks and impossible to achieve without compromises to quality. In North America, for example, the standard rate is 300 to 400 square metres per hour.

So New Zealand cleaners are more productive than most in the world, but what is their reward? It is loss of jobs, often at short notice, and a competitive tendering process that can be repeated up to four times a year when contractors seek to win contracts by reducing employment, pay, and conditions. Even when those cleaners are employed by the incoming contractor, they often face “take it or leave it” situations of jobs with less pay and, more often than not, reduced hours of work. Those whose employment is terminated have no claim to redundancy compensation and often no other job to go to.

Gordon Copeland talked about the standard of cleaning in hospitals. It is interesting to reflect on that, because I probably agree with what he said about it, but I do not think it is the fault of the cleaners. During the 1990s, and the health reforms in 1993, 3,000 jobs in cleaning and catering were taken out of hospitals in Auckland alone. Those workers are expected to do huge amounts of work in a lot fewer hours. But the funny thing is that cleaners have enormous pride in the work they do. They are frustrated that they are unable to provide the level of service they would like to because they are constantly urged to work harder and faster. Each time the vicious competitive tendering process takes place they face a new employer who seeks to win the business by cutting wages, cutting hours, and intensifying the work.

This bill is not only about improving the job security of cleaners; it is about improving quality and standards across a low-paid industry so that services are tendered for on the basis of service delivery and value for money, rather than the race to the bottom that we have seen over many years in the cutthroat world of competitive tendering. Everyone wants to see quality services. Why should not cleaners and other workers covered by this bill not have quality jobs? Why should the jobs of cleaners, food service workers, caretakers, and laundry workers be just throwaway jobs?

With more secure and steady jobs, good workers are more likely to be attracted to those jobs and will remain committed to them. This brings increased stability to a very unstable industry—to tenants, clients, and business. It brings higher standards, less turnover, trained workers, improved occupational health and safety, and a minimisation of the risks to property owners. What is so wrong with that? Let me see. National believes that this bill is an unreasonable restriction on the freedom of businesses to manage their operations. What about the unreasonable pressures on the property services industry, of vicious underbidding and the never-ending race to provide the cheapest price? When standards drop to substandard the reputation of the industry suffers, and it is suffering in our country. That hurts everyone—property owners, investors, tenants, contractors, workers, and patients. That will end with this bill. The bill will make a huge difference to tens of thousands of low-paid workers, many of whom are women, Māori, Pacific, and new migrants.

I repeat what I said on the first reading of the bill. It is not about preventing contracting out or undermining competitive tendering. It is simply about ensuring that workers have the right to transfer to a new employer while at the same time the new employer has the right to make business decisions in relation to the workforce when the transfer is completed. We on this side of the House made a promise that we would address this inequity in the labour market and provide protection for some of our most vulnerable workers. Unlike some parties, Labour is delivering on its promise. We keep our promises. I look forward to this bill becoming law.

DAVID BENNETT (National—Hamilton East) : It is truly a sad day for New Zealand and this Parliament to see this bill progress under the arguments put forward by the Labour Government and its lapdogs in New Zealand First, with supporting arguments from the Greens and Māori Party—which had some genuine elements. I must admit that I am deeply disappointed at the way that Labour has tarnished this legislation. There may be genuine concerns out there, and they came through at the select committee, but this is not the way to argue to do what you are doing now. You are using the concerns of the very people who get you into this Parliament, to make legislation for your own benefit. All you are doing is supporting the unions. All you are doing is putting up something that pays back the unions.

Darren Hughes: Point of order—

The ASSISTANT SPEAKER (Ann Hartley): I know the point you are going to raise. The member brought the Speaker into the debate probably about seven or eight times; it is usually just a couple of times. But he just needs to remember not to do that.

DAVID BENNETT: My apologies.

This is a case where we are losing the ambition of ordinary New Zealanders. I will give an example. Family A have a cleaning business and they have the contract to clean a large intermediate school. Family A comprises a mother, father, and their young son who has just left school. He is keen and wants to transform the family cleaning business into a nationwide cleaning business. He has a vision and a passion to succeed. Family B clean at the nearby smaller primary school. Family B comprises a mother and a father. Family A and family B negotiate to transfer one of the contracts. They negotiate that the contract changes. Family A buys the business off family B.

Darren Hughes: This can’t happen.

DAVID BENNETT: It can happen. This is an example of what can happen. Family A can buy the contract off family B. They buy the business because they see real financial gains from having that cleaning contract. The legislation means that specified employees—namely, those in family B—must be assured of the right to transfer to the new employer, family A, under their current terms and conditions of employment. In other words, family A, who wanted to grow their business, now has to incorporate family B into the equation. This means that they will be worse off, because if they had stayed with their initial cleaning contract, they would not have had to take on those extra people.

Family A had the incentive and desire to build their business, take on that cleaning contract, and do it with their three people. They had a real desire to make the most of their opportunities, to build a small business into a medium-sized business, and to turn that medium-sized business into a nationwide business. That is something they will lose under this legislation, because under this legislation they will have to take on family B as staff under their original terms and conditions.

Why would Labour members do this to their own people? Why would they stifle the ambition, hard work, and desire of their own people? Well, there is a reason. It has to pay the unions back. That is all it is; it is a payback to the unions.

Let us look at New Zealand First, for example. Why is it supporting this bill at this stage? New Zealand First members said they went to Labour and said: “We have an option for you.” The reality is that Labour went to them. Labour wanted New Zealand First’s support because it had to satisfy that union vote. In the first reading of this legislation, New Zealand First members said: “New Zealand First will not support this bill, because we believe that it could lead to protection of incompetence or less than quality service.” New Zealand First said: “Should they have … an automatic right to job protection—should they have been engaged no matter which company had the main contract? New Zealand First says that, no, we should not be extending that sort of protection to anybody. We do not extend it to normal occupations, so why should we extend it to employees who are not delivering the service …” to that employer. New Zealand First was against the bill at the first reading, and suddenly it has changed, for a couple of Supplementary Order Papers that are on the Table.

There is a reason why it has done that. It has been paid off. Labour has got a deal with New Zealand First. I do not know what the deal is. Maybe the deal is to keep Ron Mark in the House. I do not know. Maybe it is to keep Winston’s job open while he is sick. But there is a deal going on there. There is something going on between those two parties on this bill.

Going back to family A, often when one is setting up a business—which Labour members would never know, because none of them has ever been in business—the formative years of the business can be quite tense. People make mistakes. They may take on things they did not expect. Family A may take the contract on, and buy the business off family B, without knowing what this legislation actually means. That is quite likely. They will learn the hard way what this legislation can do. They will see their dreams go down the toilet. They will see their ambitions stifled by this Government and this legislation. That is not fair to ordinary New Zealanders. They are the people who voted that party into this House. They are the people who need our representation. Only the National Party is providing that representation.

This law will apply in a number of cases. It will apply whether a contract is terminated or expires. It will apply whether or not a contract starts immediately. It will apply to all the things that the members of family A would not have expected. They made a commercial decision to buy that business, and have now been stung by this legislation. Essentially, the Big Brother arm of Government has applied to family A. Instead of letting them get on with a commercial decision based on profitability and productivity—which is something Labour says it wants to encourage—the decision has been overruled by a Draconian law created out of the major unions and, for reasons of political correctness, enacted by Labour.

This law will destroy ambition and keep vulnerable workers in such cleaning roles. It will destroy small businesses. It will mean that vulnerable workers are able to be employed only by major institutions. There will be only three or four major employers in this industry, and that cannot be good for vulnerable workers. Vulnerable workers need to be able to build up businesses like any others.

It is amazing when one sees Mark Gosche and members of the Labour Party come in here and talk about how they are ready and willing to have hard-working Kiwis cleaning their offices and homes. Yet they will not give those same people the opportunity to make a break in life. It is good enough for Labour to have them cleaning their houses, but not good enough for Labour to give those people the chance to excel and build a business. What is the logic behind that? Why would Labour want to hold back these people? Well, there is a reason. Labour has been holding back everyone in this country. Labour thinks that if people are under its thumb, it can control them; that if people are dependent on Labour for their income, they will vote for Labour. This is another example of that logic. We have to break that cycle for all New Zealanders. If we break that cycle, then all New Zealanders can stand up, fight, and achieve.

As we go through this legislation we see Labour’s contempt for ordinary New Zealanders and its failure to give ordinary New Zealanders the start that family A wanted. Family A had a dream—a Kiwi dream. It is a dream we should cherish and support. It is a dream we should not kill by overwrite legislation. It is a dream that should not be destroyed in this House.

Labour says it knows better than those people. Labour says it knows what those people want. It will not give vulnerable workers the choice. Labour knows better. What right has it got to tell a person what he or she knows? What do the Labour MPs know that the vulnerable worker does not know? I say Labour should have faith in the vulnerable workers and put some trust in them. They are just people like everyone else. They have ambition and drive. Let us support them. Let us back our people. Let us not back a Government that thinks it knows better and wants to make and control all the legislation that goes around.

It has been a real eye-opener for the New Zealand public to see how Labour has used its political agreement with New Zealand First to turn on the very people it should be supporting. The very people who need a break are held back by this legislation. It will come back to haunt those people in the future. Now they have the opportunity to progress; under this legislation, they are stuck in a system that has only a few employers, a system where nobody can grow, a system where family A—the mother, the father, and the son, or the daughter—cannot achieve their goals. That is the dilemma and the great discomfort of this legislation.

DARREN HUGHES (Labour—Otaki) : At the conclusion of that speech, it is the position of the New Zealand Labour Party that we want that member of Parliament, David Bennett, to have a very long career in politics. We want him to be a National Party MP, sitting across the House, representing the values of the National Party, for decades and decades to come, because only then will people get to see what these people really stand for.

That was a truly pathetic speech about some of the lowest-paid and vulnerable workers in New Zealand. Let me tell members one thing. The member started his speech by talking about family A and giving an example of a cleaning contractor at a school. He is a member of the Transport and Industrial Relations Committee, whose report we are debating in this Parliament tonight. If the member had done just 30 seconds of research he would know that the Ministry of Education has a collective agreement for all cleaners at schools, whether they are private contractors or contracted by the board of trustees. The example he gave, over a 10-minute speech, was false and wrong. He got it wrong the whole time. That is the case for every single school in the public education system in New Zealand.

I cannot speak for schools that are not part of the State system. Maybe the member knows something about schools that are not part of the public education network, which Labour members of Parliament do not know about. The only schools I can think of are schools that are a secret organisation or part of a secret sect. Maybe the Exclusive Brethren church might have rules like this for the cleaners at their schools. I am a Labour MP and I do not know, but I do know that his speech could have been researched and given completely differently from the way it was given tonight.

The member got up and spoke about ordinary New Zealanders. National Party members gave those same lines when they opposed the Employment Relations Act in 2000. They said ordinary New Zealanders would lose their jobs. They said the economy would go backwards. They said no one would ever get a pay rise. Here we are, 6 years later, and we have the lowest unemployment rate in the world. Let me tell the member for Hamilton East about that. Those are the kinds of things we have done, after 6½ years of fair industrial law for working people in New Zealand.

Under the industrial law that we have supported by way of that legislation, we have raised the minimum wage six times in 6 years. It was opposed every single time by the National Party and its friends and secret sects like the Exclusive Brethren church. These are the most extraordinary things that they say. Ever since the Exclusive Brethren bought the naming rights to the National Party, became its principal sponsor, and purchased the New Zealand National Party, National has changed its entire view about the way employment policy goes with regard to industrial relations. Now National Party members come to the Chamber, believing the Exclusive Brethren view of employment relationships, which is that it is a master-servant relationship. There is a big boss and there is a little worker who has to do what he or she is told. National members are proud of that approach, but we on this side of the House do not stand for that.

We stand for employment law that protects the most vulnerable. We stand for saying that there should be laws that make sure nobody is left out because he or she has a job that does not pay much. Here is another difference from National Party members. They talk about hard workers. How do they define hard workers? By the amount of their salary and wages. If they are paid $60,000, $70,000, or $80,000 a year, they are hard-working ordinary Kiwis. But if they are paid $11 an hour, like the cleaners who will come into this building long after those Tories have gone home tonight, they are not hard-working people. They are not people who deserve the protection of this Parliament and this place. That is the disgrace of the speech that we heard tonight.

Tonight we are talking about cleaners, food catering workers, laundry workers, aged-care workers, and residential-care workers. These are the kinds of people who need laws like this from this Parliament. These are the kinds of people whose wages are higher now, under a Labour Government, than they were when the National Party ran this place. When Labour became Government, $7 an hour was the minimum wage. Today it is $10.25. Working with the Greens, New Zealand First, and the Māori Party, we will get it to 12 bucks by the end of this Parliament. That means those vulnerable workers whom we protect tonight will get $200 a week more, before tax, in their pay packet because of the kind of legislation we pass.

National Party members can line up with their exclusive friends and their sects and cults, and all that sort of thing, for as long as they like. We in the New Zealand Labour Party and parties that support this Government and support ordinary people will proudly vote for this bill tonight. I commend it to the House.

A party vote was called for on the question, That the amendments recommended by the Transport and Industrial Relations Committee by majority be agreed to.

Ayes 68 New Zealand Labour 50; New Zealand First 7; Green Party 6; Māori Party 4; Progressive 1.
Noes 51 New Zealand National 48; United Future 3.
Question agreed to.

A party vote was called for on the question, That the Employment Relations Amendment Bill be now read a second time.

Ayes 68 New Zealand Labour 50; New Zealand First 7; Green Party 6; Māori Party 4; Progressive 1.
Noes 51 New Zealand National 48; United Future 3.
Bill read a second time.