Young JonathanJONATHAN YOUNG (National—New Plymouth): I am pleased to rise and stand—I would like to make some brief introductory comments on this bill that we are looking at in the Committee of the whole House. This is because I chair the Transport and Industrial Relations Committee and I was away from Parliament at the bill's second reading. I am not going to make a second reading speech but I just wish to make some comments. The Transport and Industrial Relations Committee by majority recommended the bill not be passed. I understand that the member the Hon David Parker—and I acknowledge him here today—has brought through Supplementary Order Papers 203 and 204 and I do acknowledge the intent of the sponsor of the bill the Hon David Parker was to protect some of the most vulnerable workers in our workforce who he believes are working in contracting arrangements but may be receiving less than the minimum wage. Many of those working in lower-paid contracting industries are overrepresented in New Zealand's low-income statistics. Those overrepresented include women Māori Pacific Island people and disabled people and I believe the reason why we as a committee cooperated with the member and gave him and officials adequate time to look at potential solutions to this problem was that I think we all agree that we do not want to see vulnerable people being exploited. We are not for that by any means. Some submitters considered that contracting arrangements are becoming increasingly common so that businesses can reduce costs and avoid the duties and obligations that they attach to employees such as holiday pay sick pay ACC compensation and levies and the like. Those are great concerns. We did hear anecdotal stories so we are able to understand how some people feel but we were unable to ascertain actually how big this problem was which we made comment about in the report. We acknowledged that there are some issues in the workplace for low-paid workers who are classified as contractors but the issue we believe certainly on this side of the Chamber is not adequately remedied by this bill. Ensuring that a contractor's remuneration is no less than the minimum wage which is what the intent of the bill is does not we believe meet the bill's intended outcome as noble as that outcome is. Contractors still have their ACC levies their sick pay their holiday pay deductions to be made after which the balance that a contractor may receive could still be less than the minimum wage. I think that as we progressed through consideration of these matters we came to understand that there is quite a distinction between those who are self-employed or are contractors and those who are employees. There seems to be an opportunity for clarity to come and I would say regulatory monitoring of the classifications that workers are under. I think that it would be fair to say that we believe that this is the nub of the issue that needs to be addressed instead of actually treating every contractor as an employee—i.e. making their remuneration to be a time-based payment as opposed to other forms of contract arrangement. We oppose the bill although we understand the intent and support the sentiment of that. We oppose the bill not for political reasons at all but for practical reasons. We do not believe that the bill addresses the real issue. Can I just highlight in my time that I have right now—just to touch on some of the reasons why. We believe that there are existing provisions in the Employment Relations Act that address the problem that this bill seeks to remedy. The problem the bill seeks to remedy is workers placed in employee-like situations but as contractors without the benefit of employee protections such as minimum wage entitlements etc. as I have mentioned. The remedy proposed in the bill is to require principals" engaging contractors and those providing services listed under schedule 2 to record the time a contractor takes to undertake the work and the remuneration paid then to maintain those records for not less than 6 years as evidence that they have paid the minimum wage or above. I understand that some of the thinking behind this bill comes from—I am just happy to reference at this point—the International Labour Organization's Employment Relationship Recommendation 2006 (No. 198). Article 4 states that "National policy should at least include measures to: (a) provide guidance for the parties concerned in particular employers and workers on effectively establishing the existence of an employment relationship and on the distinction between employed and self-employed workers;". We understand that the Labour Government in 2006 endorsed these and rightfully so. It also states that national policy should "(b) combat disguised employment relationships in the context of for example other relationships that may include the use of other forms of contractual arrangements that hide the true legal status noting that a disguised employment relationship occurs when the employer treats an individual as other than an employee in a manner that hides his or her true legal status as an employee and that situations can arise where contractual arrangements have the effect of depriving workers of the protection they are due;". So we understand those measures in that recommendation that was endorsed by the then Labour Government. But article 8 says this—and this I think is perhaps the point of difference or the point that we feel should not be contravened—"National policy for protection of workers in an employment relationship should not interfere with true civil and commercial relationships while at the same time ensuring that individuals in an employment relationship have the protection they are due." So essentially what we are doing in order to fulfil articles 4(a) and 4(b) is putting in a process where contractual obligations and commitments are being narrowed down to be based and measured on an employment basis which is an hourly rate. That I see as an interference of true civil and commercial relationships. I think that the objections that we are hearing from the commercial and contracting fraternity in our country are that although they agree with the intent that vulnerable people must not be exploited they do not want to see the interference in civil and commercial relationships. But there has to be another way to address this problem and that is what we believe. We believe that there are many other measures to do that and no doubt perhaps in time I will take another call hopefully and be able to address that. Thank you."