Employment Relations Amendment Bill — Third Reading 
Employment Relations Amendment Bill — Third Reading 
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Employment Relations Amendment Bill 
Third Reading 
Hon RUTH DYSON (Minister of Labour) 
: 
 I move  
That the Employment Relations Amendment Bill be now read a third time 
. This bill gives effect to the Labour-led Government’s intent of ensuring that the terms and conditions of employment of New Zealand’s most vulnerable employees are protected when their work is restructured. The bill also encourages businesses to utilise existing talent and facilitates productive employment relationships that are built on good faith. This bill will protect specified vulnerable employees such as cleaners and food-catering service workers. The terms and conditions of employment of these specified employees have successively been undermined when the work they do is contracted out passed on to another business sold or transferred or brought back in-house. 
The bill will mark an improvement for employees who deserve to be treated better. They are the mums and dads of New Zealand who work hard to provide for their families. In the past their terms and conditions of employment have been undermined time and time again when the price of their labour is reduced to undercut competitors in restructuring situations. This bill will provide additional protection at the time of restructuring. It does not mean that the specified employees are assured of jobs for life. There are existing mechanisms that can be used when dealing with performance issues in employment relationships. These mechanisms are based on good faith dealing with each other fairly and developing processes to support effective working relationships. 
An employer who is concerned about the performance of an employee should inform the employee of his or her concerns and provide the employee with any support or training needed. Ultimately an employer can dismiss a poorly performing employee if after following a fair and reasonable process poor performance remains an issue. The bill does not affect an employer’s ability to do so. Simply allowing poor performance to continue—and a business consequentially losing the contract—is not effective business practice. This type of practice will not result in the kind of high-performing and productive workplace that is critical to our economic transformation. 
All too often it is claimed that vulnerable employees are poor performers when in a restructuring a new employer increases the amount of work expected while simultaneously decreasing the number of hours within which to do that work. This is typical of the type of cost-cutting exercise that goes on during restructuring situations. This bill will protect employees made vulnerable in restructuring situations from having to bear the brunt of this type of practice by providing for continuity of employment on existing terms and conditions—including for subsequent contracting. 
The effective protection of specified vulnerable employees will happen only if this bill applies to all businesses. Is a cleaner any more or less vulnerable because of the size of the company he or she works for? No. In order to be effective these protections must apply across the board. In line with the rest of New Zealand’s employment law there should be one law for all employers. 
The Government’s policies with regard to vulnerable employees have not changed since additional protection was first introduced in 2004. This bill ensures that the original policy intent of those 2004 amendments to the Employment Relations Act is delivered on. Further this bill aims to clarify that original policy intent. As such it includes examples that describe how the protections will apply in practice. This practical approach will assist in the interpretation of the Act and also in determining how the provisions will apply to a range of commercial arrangements. 
A change made to the bill at the Committee stage will ensure that businesses can make informed decisions about whether to take on work that will be done by employees who are covered by the extra protections. By requiring the disclosure of labour costs to potential new employers the level of protection provided to vulnerable employees will be improved. The vulnerable employees are less likely to be adversely affected as a result of a contractor entering into a new contract to carry out the work those employees currently do and underestimating the labour costs it will take on if the vulnerable employees choose to transfer. 
Potential risks will also be minimised for businesses deciding whether to restructure as businesses will not have to tender blind for contracts to which Subpart 1 of Part 6A of the Employment Relations Act applies. This issue was raised with me by both the Employers and Manufacturers Association (Northern) and Peter Brown of New Zealand First and I thank Mr Brown for his constructive engagement on this and other matters relating to the bill. 
This bill balances protection for those employees who are most vulnerable with rights for businesses that will be subject to additional obligations. The bill does not implement a large-scale shift in employment rights; instead it just delivers on what Parliament intended in 2004. I conclude by thanking the Transport and Industrial Relations Committee for its diligent work on this bill. The changes recommended have made the bill clearer and more effective. I am confident this bill increases protection for vulnerable employees during restructuring situations which is a time when their terms and conditions of employment are most at risk of being undermined. I commend this bill to the House. 
Dr WAYNE MAPP (National—North Shore) 
: 
 This bill is indeed Labour’s pay-off to its union funders. We have been hearing in this House—and in the last couple of hours in fact—a lot of accusations traded to and fro. Labour members seem to think that they can run this argument that National sells its policies to big business. That is the essence of their argument. Yet here today we are debating in the House real legislation that is a direct pay-off to Labour’s union mates. There is a word for that: some might say it is hypocrisy though I appreciate that that is a word I am not supposed to use. 
This is a classic case of legislation for money. If members opposite are offended by that they have only to look at their links with the unions. The Labour Party actually puts members into the House at the unions’ direction. Let us go through a few of the names. Darien Fenton was put in here by the Service and Food Workers Union last year. Sue Moroney was put in by the Nurses Organisation last year. Mark Gosche was an organiser in the union movement. Rick Barker was another organiser in the Service Workers Union. Ross Robertson was in a rather strange union—a freezing workers union. Paul Swain and the hapless Mr Phillip Field were put in by the union movement. 
Actually Mr Field needs to be worried—the people who put one in can take one out. What have we been reading in the paper today? Mr Little said his union would replace Mr Field. Did members note that it was not the Labour Party that said it would replace Mr Field; it was the Engineering Printing and Manufacturing Union. That is how close the relationship is. The union did not go through the pretence of saying that it thinks the Labour Party should replace Mr Field—no no it stripped away the pretence. What Mr Little actually said quoting him directly was: “We will replace him.” It is as simple as that. 
The Labour Party is in fact the trade union arm in Parliament. That is why we get legislation that represents solely the interests of trade unions. It is worth reflecting on the prayer we say in the House because that prayer says we should act without fear nor favour for anyone and for the benefit of all New Zealanders. Is this bill for the benefit of all New Zealanders? The answer is absolutely not. 
I did listen to the previous speaker the Minister of Labour—although I would have to say it was pretty boring—and the bill apart from being just a straight pay-off is also economically bankrupt. I want to take the House through that proposition. The Minister of Labour in essence says that we cannot have productivity gains in this industry because people have to be offered the same terms and conditions. She also said that it has been a terrible thing that people have been expected to clean more premises more quickly and more efficiently. We have to ask ourselves whether this is the same Minister and the same Government that keep talking about increasing productivity. Does she understand what productivity is actually about? Productivity is about doing more work in the same time. I know that Mr Assistant Speaker will understand this because it is an interest of his. It is not a question of slave wage conditions or anything like that. 
Increases in productivity are about three fundamental things. The first is extra capital going into the business which means more sophisticated more advanced equipment. It means better management practices. In truth in many cases it will be clear from an examination of a work practice or a worksite that if workers did it a different way they would be able to do maybe 30 percent more work. Usually the people best able to see that are new players in the business because that is where the innovative ideas and imagination come from. So productivity increases are also about more effective management techniques. Finally the third component to that is a more highly skilled workforce. That again means more skills and more efficiency—doing more work in the same time. 
If we say that it is a terrible thing that people are required to do more work in the same time it is kind of like saying: “Let’s go back to the pick and shovel to build our roads and let’s see how long that will take.” It is remarkable. I look around Auckland and I acknowledge that quite a few roads are being built. There are actually not a lot of people doing that. Some of the reasons why are more machinery and more advanced management systems. If we look at the old photographs we see that worksites are completely covered with people and the work probably took longer. 
The Government’s approach to this is fundamentally flawed because it is standing in the way of innovation. It is forcing new firms to take on people on the same terms same conditions and same work practices as previously. That is what “conditions” actually means—the same work practices as previously. One cannot get more cleaning done as in this instance if that is the approach. During the submission period a number of submitters complained about the fact that they now had to clean more rooms and so forth than previously. They went back over 5 years 10 years 15 years and so forth. I say to those submitters—and I said it at the time—in truth work changes. We cannot expect to do today what we did 20 years ago. We cannot expect to have the same work practices. That is exactly what the reforms of the last 20 years were all about. It was all about getting a more efficient faster-growing economy with higher productivity. 
I now want to turn to the issue of the smaller employer and I am sure that other members will see this point. National through Mr David Bennett put forward an amendment to this provision and we expected that New Zealand First would vote for it because it always says that it is the friend of small business. 
Paula Bennett 
: They’re a lackey. 
Dr WAYNE MAPP 
: Well there it is. My colleague speaks the truth of this today. The leadership of that party are showing themselves to be lackeys. That is not a good space for New Zealand First to be in and it does not want to stay there if its members want to be back here in 2008. 
Labour and New Zealand First have denied the opportunity for small businesses with 10 employees or fewer to provide employment to their families by tendering for work. It is completely impractical for a small employer whose team is intended to do the work to take on all of the staff of the previous team. If small employers are loaded up with redundancy costs they are cut out from having the ability even to tender for the work. That is fundamentally flawed. It is obviously true across the board but it is particularly true of small business. 
National will be voting against this bill. We think it is economically flawed for the reasons I have indicated. More seriously though we are fundamentally opposed to legislation that is a naked pay-off to special interests. This Parliament is not supposed to be under the control of outside interests but that looks to be exactly the case in this situation. For that reason the bill is fundamentally wrong. 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 That last part of Wayne Mapp’s speech was quite astounding. What he was actually saying was that people on this side of the House are guilty of caring—of listening to the lowest paid most vulnerable workers in the New Zealand. The people who clean Dr Wayne Mapp’s office every night and the people who feed him in Bellamy’s every day are the privileged workforce of New Zealand because they get to do that for him. The fact is that their employer might change tomorrow—a new employer might come in the next day—and if this law is not passed those people could not be guaranteed the same wages and conditions for doing the exact same job. It does not seem to strike Dr Mapp and his colleagues that it is unfair for that to happen just because an employer has changed. Well we on this side of the House and all the parties who support this legislation believe that the arguments about productivity that Dr Mapp rehearsed are utter nonsense. It was years and years ago when those things were done. 
I explained in my second reading speech about the Auckland Hospital situation where there was one cleaner per ward. The ratio was dropped so that there was one cleaner per two wards then conditions dropped further so that the cleaners did not even get a whole day to do their work in. What better productivity gain could be expected without getting to the situation where the hospital was unsafe? Would cleaners have to keep on giving blood before the members opposite were satisfied? The next stage in the regime—which is of a kind that National wholeheartedly supports—after dropping the number of workers cleaning the hospital then dropping the number of hours they could take to clean it was to pay the cleaners even less. They now work for roughly the same amount of take-home pay as they did in 1990 because their penal rates have gone their overtime rates have gone and their allowances which actually built up their earnings have gone. As a result even though they have had hourly wage rate increases through the last 15 years many of them are still earning the same as they did in 1990. They are the parents of the future. They are the Maori Pacific and Asian workforce who have come to this country—or in the case of Maori who have been here for ever—and actually make our economy survive. But National’s recipe for them is to punish them some more—to not pass this law to not protect their rights as workers. National would allow those multinational companies—and there are about four or five of them; all are multinational—to screw those workers harder. That is National’s recipe which we reject. 
Labour says that if a worker turns up to work tomorrow and his or her boss has changed because the contract has changed that worker should not lose money or conditions. If workers are working hard and doing the job why should they not get the same pay tomorrow as they do today when they are doing exactly the same work and to the same standard? If they are not doing the job they can be disciplined and the workforce can be changed. 
But this is not the case. The Transport and Industrial Relations Committee heard from workers who had been at Wellington Hospital for something like 15 or 16 years and they had been through six different employers. Many of those employers were absolutely hopeless at doing the job. Their management was so bad that the hospital kept flicking them out. But the workers remained there stock standard every year. The promise of better management techniques and greater productivity was a lie told to those people. 
We do not want a country where our most vulnerable most hard-working and most reliable people are actually punished under law as National would have it. That is why I am extremely proud to be part of this Government and to repay those people who keep us healthy in hospital who look after us when we are old and who clean our schools so that our children have clean schoolrooms. They certainly require a payback from this Government for the work they do and they are getting it with this legislation. 
PAULA BENNETT (National) 
: 
 I rise to speak about the Employment Relations Amendment Bill and I would like it to be noted that this is the 15th amendment this Government has had to put through on the Employment Relations Act which was rushed through in the year 2000. The Government was keen to rush that measure through at that time but from talking to businesses in the uproar that happened I know that businesses spoke loudly and said no they could not have it go through. They said it would be detrimental to businesses detrimental to productivity and detrimental to what they were trying to do. 
For once Labour actually backed off because the polls started to go down and as we know that is completely and utterly how Labour is run. Labour is not run on the basis of principle or on what it is trying to achieve; it is run purely on what the polls say that day. So Labour backed off and said that it would not put this measure through. But now here it is a few years later deciding that it will not listen to businesses. Labour does not particularly care about productivity so it is trying to put this bill through now even after hearing time and time again of the effects it could have on small businesses in particular. 
I suppose this is an opportunity for me to speak on behalf of my colleague David Bennett who tried to put through an amendment that would have helped 2300 cleaning businesses. We have been hearing about vulnerable workers—and no one denies them their rights—but how about vulnerable businesses? How about those people who get up on a daily basis and struggle? How about the family-owned businesses—the very cleaners whom we were just hearing about—who have taken a bit of a risk and a gamble and who have taken on the contract themselves? They are not big businesses; they are not making a lot of money. But they are working for themselves and their families and they are going out there every night just as the other cleaners are. 
No one denies those people the opportunity to try to grow their business a little and perhaps to take on another contract. Yet under this legislation they will have to employ the workers from the previous contract. It is as simple as that. So a family business that wishes to employ its family members will not be able to employ them—and that is just wrong. During the select committee process the Transport and Industrial Relations Committee certainly heard from cleaners and we certainly heard from people who work for health boards as Mark Gosche the previous speaker said. No one in that room was without sympathy for what those employees had been through with six different employers and their working conditions being changed. We were pretty keen to see those wrongs put right. But when a big stick is taken to fix a very narrow problem that affects detrimentally many other businesses. How can that be good for New Zealand? How can that be good for the people whom we are telling to get out there and give things a go? 
Why would cleaners in one of those businesses actually take a bit of a gamble and put in for a contract themselves? Why would people get a bit gutsy and think of actually putting themselves out there trying to do something taking a risk and taking the next step when all that will happen is that they will be kicked down by this legislation and this Government? This Government tells people there is no point in their doing that because they will not to be able to employ whom they want anyway. They will not be able to run their business in the way that they wish to because the Government is Big Brother—Big Sister—and it knows what is best for them. This legislation will not work. 
I think we need to look back at the amendments to the principal Act and at what has happened since 2000 when it was passed. The effect of the Holidays Act has been to have businesses shaking in their boots. A survey showed that 74 percent of them said the Holidays Act has drastically increased their costs. Yet here we go putting through another amendment that will just make the situation worse for them. The Otago District Health Board for example said it had a $520000 increase in wages and employment costs last year. That $520000 did not go directly to the patients who needed it. It did not even go into the workers’ pockets necessarily. It merely went into the bureaucracy of running the health board and the provisions of the Holidays Act. Air New Zealand is another example. It said it had to put another $17 million into its costs with no hint of productivity increases at all. The Meat Industry Association said that 39 percent increases in sick leave and $17 million more on the bottom line mean the industry cannot employ more people cannot increase wages and cannot support the very workers whom this Government goes on about. 
How can this Government talk about productivity when there has been a 550 percent increase in lost workdays in the last 12 months? Over 32000 person-days of work have been lost because of industrial action. How is that an increase in productivity? I ask the Labour Government how that is good for New Zealand. How are we looking ahead and joining people together to negotiate and come up with answers that work in the best interests of New Zealand? That is the only way we can start to grow. It is the only way we can increase productivity and see New Zealand take the next step which it can do because it has the guts and the right people to do so. It is only mindless legislation that currently holds New Zealand back. 
How can we increase productivity? We can do that by joining people together instead of constantly segregating them under the legislation that we enact. We can say to employers and employees that they both have something invested in seeing a business go ahead. 
Lindsay Tisch 
: A win-win. 
PAULA BENNETT 
: It is a win-win for everyone. If productivity grows wages go up and there are more holidays. We cross over. But instead the Government is pitting one against the other. It is making it nigh to impossible for small businesses to get ahead and accomplish what they want to do for the workers out there. It constantly says to them through legislation like this that it will make their work more and more difficult. 
Another piece of legislation that we are looking at at the moment covers the youth minimum wage. There is a strong argument for increasing it when we hear about youth workers one aged 18 and the other aged 17 who stand next to each other while working together in fast-food chains doing the same work yet being paid different minimum wages. I sat there and by crikey my own head was nodding—I heard the argument from the young people and it was a strong one. Then I sat back and started to think about the issue. I thought about who would be most affected by increasing the minimum wage. Yet again it would be our small businesses. 
Yet again it would be the mechanic who works in Timaru who does not have a huge workforce and does not make a lot of profit and who takes on a couple of 16-year-olds from the local school. Quite frankly they do not help productivity; they do not make him any money. But he wants to employ them for the sake of his community and because he wants to help out the kids at school by giving them a part-time job. So he does pay the minimum wage. But actually that works for everyone. The kids are happy about it because they get the chance to find out whether they like the work and want to be a mechanic. At the end of it there is a good chance that they will get an apprenticeship. The mechanic says he will no longer be able to employ them because it is just too hard for him to do so. He says he keeps being hit time and time again with added costs with added bureaucracy and with compliance issues that he just cannot cope with. 
Let me take the example of the hairdresser down the road who takes on a couple of girls after school—and they usually are girls just as mechanics are usually boys—and on a Saturday morning. During the process of looking at this bill the hairdresser rang and said she could not continue to employ those girls. She does not make any money from them and she is not going home every week with wads of cash in her pocket. Things are getting harder and harder for her and she is not able to keep them on. So we can look at those examples. 
Is there room for some of these changes in big business? Yes but do we constantly have to legislate and bang down on the small businesses that without a doubt are the backbone of our country? We are constantly making it too difficult for those people to achieve what we need them to achieve in order to see New Zealand continue to be the absolutely fantastic country that it is. 
I hope that in some respects this is it. I accept we ain’t got the numbers to see this bill not go through the House today and that Labour has done its work with New Zealand First and has that party on board. But I just ask the Government to stop—15 amendments is enough. I ask it to let small-business people have a go at getting on with what they do—which is running their businesses—and to stop changing stuff and making things more difficult for them. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I say to the member who has just resumed her seat Paula Bennett that if she did make any reference to the Employment Relations Amendment Bill at all I missed it completely. She did not know what she was talking about. She sat on the Transport and Industrial Relations Committee and listened to submissions yet she does not have a darn clue what the bill is all about. She was talking about the Holidays Act Air New Zealand and goodness knows what else. 
This bill is about vulnerable workers—people who are on the bottom rung of society. They need some help—legislative help. For the member’s enlightenment the Government passed the bulk of the legislation that helps vulnerable workers 2 or 3 years ago. The Minister recognised and acknowledged that. This bill is but to close a loophole—and the member did not even understand that. This bill relates to the  
Gibbs and others 
 v  
Crest Commercial Cleaning Ltd 
 case in Dunedin but I will not go into that now because I do not have enough time. But I urge the member to read a little about what she is meant to be talking about because she is not only letting herself down but also letting the National Party down. 
Three important aspects of this bill went through at the Committee stage and they all went through after a strong effort was made by my party New Zealand First. The first one is that we put the whole thing up for review within 3 years and the Minister of Labour Ruth Dyson and the Labour Government agreed. So if the legislation is wrong and does not deliver what it is meant to deliver it can be relooked at and restructured accordingly. 
The second aspect is far more important. The bill states that there will be full disclosure. I should explain that this bill deals with a contract that has expired and is then up for tender. People tendering for that job will be obliged to take on the workforce of the initial contractor but when they submit their tender they will have access to somewhat detailed information. They will not know every individual’s wages and what have you but they will know the total bill. So they will not be tendering blind and that is fair. Why is it fair? It is because the employees who retain their jobs will retain their conditions. They worked darned hard to get those conditions at a reasonable level and it is not fair by shifting them from one contractor to another contractor that they lose the lot. 
We have heard many examples even tonight and certainly we heard them in the Committee stage of this bill and at the select committee of cleaners—who principally are the people we are talking about—being told they could keep their jobs but they would have to clean more rooms and their hourly rates would go down as well. New Zealand First said we had a low-wage society as it was and we asked what we would be doing for New Zealand society if we kept knocking the guts out of the lowest-paid workers. So we accepted the Minister’s Supplementary Order Paper 54 which amends the legislation to provide for full disclosure. Had the Government not come up with that there was a question mark over whether we would have supported the bill. 
Another Supplementary Order Paper in my name came as a result of a National Party representation to me. I spoke to the Minister on behalf of the National Party. Those members did not speak to the Minister directly; they came to me. They asked what would happen if the disclosed information changed—for example if the employer increased or doubled the pay after the information had been disclosed. Those members asked whether that would be fair. I said to Mark Blumsky that he might have a point but I read the bill again and I said I did not think that situation could occur. I asked the Minister whether that was a realistic possibility. She agreed with me; she could not see how that situation would occur. But we both thought there could be some devious employers out there who on thinking they would not retain their contract might double the wages of the staff just to make it absolutely difficult. So I produced Supplementary Order Paper 55 in response to the concern expressed to me by Mark Blumsky along those lines. 
One would think that the National Party would have supported that Supplementary Order Paper. Even if it did not support anything else one would think that it would support a Supplementary Order Paper that came about from an idea of one of its own members. But no it did not. However the Supplementary Order Paper got through and it amended the Minister’s Supplementary Order Paper. 
As the Minister divulged tonight she received a representation from members of the northern division of the Employers and Manufacturers Association about introducing a Supplementary Order Paper that would provide for disclosure. I thought those were the guys whom the National Party thought it supported. But National members voted against that Supplementary Order Paper. As I say that amendment was very important to New Zealand First. We would not have given our support to this bill had that amendment not been in it. But it is in the bill; thus we are supporting it. 
I will spend the last few minutes I have on the National Party’s amendment. Those members wanted to exclude small employers from this legislation. How dumb can they get? That would have meant that the small employers who employ 10 or fewer employees would be excluded and if their contract was up for tender their employees would not go along to the new employer. If they worked for a big employer they would go over but if they worked for a small employer they would not count. They would lose their work—they would lose everything. They would have no protection whatsoever. 
New Zealand First members are very straightforward people. We said that everything had to be obvious it had to be fair and it had to be in the long-term interests of the people we wanted to protect. It is a sad commentary on New Zealand that vulnerable workers need some protection in this society. They cannot fight competitive market forces; they need to be protected by some legislation. 
This bill closes the loophole in the earlier legislation. It should have been done 2 or 3 years ago when the Employment Relations Act first came in. For that reason and for reasons of fairness New Zealand First will support this bill. Thank you very much. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker. Kia ora tatou te Whare. A couple of months back on International Justice for Cleaners Day I asked the Deputy Prime Minister what level of wage and salary increase he would recommend for cleaners including those who clean our offices here in Parliament. I did not get an answer. I would like to think that if I were to ask that same question again today I would get an answer. Mind you even if Dr Cullen does not want to talk about the low wages that thousands of cleaners food workers laundry workers and caretakers earn in Aotearoa at least this bill will do something to enhance their job security. 
This bill means that every now and then regardless of the yelling and screaming in this House—and the posturing pontificating and the downright bad manners—we can do a decent day’s work. We can actually make a difference. I say that because a decent day’s work is a luxury when we consider some of the terms and conditions many Kiwi workers are faced with. Our cleaners here for example are on low wages and they work really hard spend lots of time away from home and work long and difficult hours. There are often safety issues too especially for women who are working in a large building—sometimes working alone—because often no buses are running when they finish work so they have to walk home. I know that because our cleaners are just leaving here when I come to work early in the morning. 
The attack on a Kelston Primary School cleaner a couple of months ago also shows just how vulnerable cleaners working at night often without security can be. Not only are the working conditions of cleaners poor but they are paid as little as $10.95 an hour and get little recognition for their work. If that is not bad enough they also suffer from a high rate of chemical-induced skin disorders. So doing something to help cleaners’ job security is something to be proud of. 
I recall that just over a year ago while we were hot on the election trail cleaners working for Spotless Services at Kaitaia Hospital went on strike over the poor conditions they faced at Kaitaia Hospital Bay of Islands Hospital and Whangarei Hospital. Their actions brought to the attention of the nation the plight of our most vulnerable workers and their strike brought the media flocking to Kaitaia. They spotlighted the issues of pay poverty penal rates and overtime. 
The Maori Party is happy to support any efforts to protect the rights of vulnerable workers as we now do in our support for this bill. The bill clarifies the protections for workers affected by the sale or transfer of a business or the contracting out of their work. This bill will safeguard terms conditions and continuity of employment for vulnerable workers like cleaners. Without that protection people working for contract companies can lose their jobs through successive contracting. But with this bill in place vulnerable workers will be allowed to transfer their employment terms and conditions to the person who takes over that work. 
I wanted to go back to the situation of the cleaners today because it was really the cleaners and particularly the decision of the Employment Court in  
Gibbs and others  
v 
 Crest Commercial Cleaning Ltd 
 that showed up the flaws in the legislation—that vulnerable employees have less protection than ordinary employees. The cleaners’ Clean Start industrial campaign has also helped keep the heat on this issue. They have shown us how hard it is for vulnerable workers to raise their concerns about workloads pay and conditions and do all this while holding down several jobs at shamefully low pay in order to make ends meet. But I also want to highlight the wider group of vulnerable workers—food workers laundry workers caretakers and cleaners—who are contracted in contracted out and often contracted off. New Zealand Council of Trade Unions research shows that contracting and casual work often result in a deterioration of health and safety for workers. 
This bill comes about because the first bill suffered from too much haste to achieve a bad result. Although it was clear that the original Employment Relations Law Reform Bill was intended to cover outsourcing and contracts changes made at the select committee meant that it did not. So as the court said in the Crest Commercial Cleaning case: “The extent to which a court can divine and apply Parliament’s true intended meaning to ill-expressed legislation is at the heart of the case.” The rest is history. Without this bill there are no obligations on new contract companies to offer employment or similar terms and conditions as workers had with the outgoing company. How does that translate on the factory floor? Well it means regular job losses the loss of terms and conditions a reduction in wages and hours increased workloads and the loss of entitlements as demonstrated in discrimination against unionists and the undermining of collective bargaining. 
During the course of this bill we in the Maori Party have done our best to raise scenarios in the House of construction workers in Wellington supermarket workers in Palmerston North and cleaners in Kaitaia. Far far too many of those people are Maori Pasifika or other migrants. Why are we not surprised that poorly drafted legislation often makes already vulnerable workers even more vulnerable? I quote again the findings of the court in the Crest case: “Every week these situations are occurring and every week workers continue to lose their employment their hours their service based entitlements their wage rates.” So having had Parliament declare them the most vulnerable of all workers these cleaners have ended up with the least legal protection of any workers in New Zealand. In the meantime this cycle of employment insecurity and oppression continues. 
Next week we will celebrate the anniversary of the last apartheid test played in this country between the All Blacks and the Springboks. On that same day we will also commemorate the 30th anniversary of the death of Steve Biko a black activist from Azania who was beaten to death by the South African police while being held in detention. On the 20th anniversary of his death President Nelson Mandela said: “It is the dictate of history to bring to the fore the kind of leaders who seize the moment and who cohere the wishes and aspirations of the oppressed.” 
I send my warmest congratulations and solidarity to all those vulnerable workers who have stood on the picket line signed petitions and taken their cases to court in order to put an end to exploitation and oppression. With this bill we also pay our tributes to those cleaners those brickies and those laundry workers who have come to the fore seized the moment and taken the risks knowing that the driving thrust of their work will be to overcome oppression. It is because of them that the Maori Party stands today in support of the Employment Relations Amendment Bill. Kia ora tatou. 
DIANNE YATES (Labour) 
: 
 I rise to speak to and support the third reading of the Employment Relations Amendment Bill which is otherwise known as the “Vulnerable Workers Bill”. I thank the previous speaker Hone Harawira for his support of the bill as well. As he has rightly said it is about job security for the most vulnerable workers in this country. They are the people as he said who work while many of us sleep and who are doing the jobs that many of us do not want to do. 
Many of those people are new New Zealanders who are trying to forge a new life for their families and give their kids a chance in New Zealand. They are working extremely hard as we know. They are laundry workers—people from the Service and Food Workers Union mostly—people working in the aged-care sector caretakers and a whole range of people. Those people are working very very hard and they do a lot to keep the wheels of this country moving and growing so I was absolutely surprised to hear some of the derogatory speeches from the Opposition side of the House. 
I wish to commend this bill and say that it is long overdue—its issues have been around for some time. I am really pleased that the bill is now at its third reading stage and I commend it to the House. 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak on the Employment Relations Amendment Bill. Helen Clark’s achievement will be measured by a number of things in her career. Once the dust has settled on the current mêlée over the pledge card and the immigration rorts the Prime Minister’s achievement will be measured against the achievements of her Government and its stated goals. 
Hon Clayton Cosgrove 
: Oh bring it on. Against your achievements in the 1990s! Nil! 
CHRIS TREMAIN 
: Bring it on! I point out for the benefit of Mr Cosgrove that in 1995 Helen Clark said in an address at the New Zealand Trade Centre: “In my lifetime our living standards have slipped from the third highest in the world to 25th today. We are in danger of slipping into the next range of nations like Estonia and Latvia in the sub-OECD grouping which have never reached European living standards.” That is what the Prime Minister said in 1995 and today what are we doing? We are bringing in the 15th amendment to the Employment Relations Act. That is what we are doing. 
She went on to say in that speech: “We’ve had those living standards but we are losing them and we will continue to unless we can keep our talent at home and create the conditions for rapid growth of new industries.” I want to repeat that because the key point lies at the heart of the goals of this Government. Helen Clark said: “We’ve had those living standards but we are losing them and we will continue to unless we can keep our talent at home and create the conditions for rapid growth of new industries.” 
Six years later echoing this point Michael Cullen made a statement in the 2001 Budget Speech. Dr Cullen said: “We need to set ourselves a goal of being back in the top half of the developed world in terms of per capita GDP—a position we have not occupied since 1970.” Dr Cullen figured—quite correctly I would say—that economic growth was the key to raising the living standards for every man woman and child in this country and that includes the vulnerable workers we are talking about in this debate tonight. 
The problem is that economic growth comes from creating an economic framework a framework that encourages entrepreneurs and risktakers to start grow and continue to grow businesses. Guess what! It is those entrepreneurs those risktakers in this country who actually create jobs and keep people in employment. They actually deliver wages to vulnerable workers. Creating economic growth improving everybody’s lot is not helped by putting roadblocks in the way of successful and profitable businesses. It is definitely not helped by putting roadblocks in the way of businesses that are struggling to be successful and that are not profitable. [ 
Interruption 
] I would have thought that Mr Peter Brown who has been an owner of small businesses would understand and would understand correctly. 
So when we look at the goal of getting to the top half of the OECD what can we say? Well after 6 long years we are no closer. This country has not achieved the goals set out by Dr Cullen in that Budget speech early in 2001. If anything we are worse off. Growth is in decline. In the last year we have seen quarters with growth of 0.1 of a percent and negative 0.1 of a percent. How will that help vulnerable workers get their wages up? It will not. 
Interest rates are on the rise. We have seen five interest rate rises in the last few years. The difference between the New Zealand and Australian rates has increased by 7 percent over the last 6 years. 
Hon Clayton Cosgrove 
: Let’s talk about unemployment. Oh you don’t want to do that do you? 
CHRIS TREMAIN 
: Inflation is above the Reserve Bank target range and I say to Mr Cosgrove that I cannot see how inflation of 4 percent is going to help vulnerable workers right now. Our balance of payments deficit is the worst in decades. More and more hard-working Kiwis are choosing overseas as an alternative place to work. 
Hon Clayton Cosgrove 
: Tell me about unemployment. 
CHRIS TREMAIN 
: This bill is not about unemployment. Unemployment right now is at an excellent level thanks to jobs created by employers. The gentleman across the floor has the cheek to think that the employment position is created by Governments. Let me tell members that the rise in employment in this country is created by small-business people who go out day after day put their money on the line take mortgages on their property invest money in their businesses and create jobs. That is what they do. Employment is not created by Governments and the member should understand that. 
After 6 long years the Government has dampened down its dreams for this nation. As for New Zealand being in the top half of the OECD that dream has gone out the window. The goal of being in the top half of the OECD is not even talked about now. The message now is “economic transformation”. The problem I have is this: what does economic transformation mean? Is it about going forward? Is it about growth? No it is not about getting to a growth position because the Government has given up on that. I am concerned that economic transformation is actually taking us backwards. 
There is a problem: if the Government does not have a goal and if the Government has stopped trying to get us into the top half of the OECD where are we going? If we aim at nothing—guess what—we will be successful every damn time. Here is a quote from last year’s Speech from the Throne: “My government’s overall objective for the next three years is to continue New Zealand’s transformation to a dynamic knowledge-based economy and society … In the last six years my government has sought to lay the foundations for this transformation.” My problem is this: the Prime Minister wishes to continue transformation of the economy but the goal of transformation to the top half of the OECD has gone out the window. Transformation to a Third World backwater is the direction we are closing in on. 
This bill the Employment Relations Amendment Bill typifies the policy framework at the crux of this Government. This new bill is the type of legislation designed to transform our economy but I suggest that its particular policy will not add one iota of growth to this economy. How will this bill make it easier for employers to employ more employees? How will it encourage entrepreneurs to merge and sell businesses? Sometimes those entrepreneurs’ businesses do not actually work and they get into a position where they have to look at alternatives like merging businesses and taking on other companies. I can tell members that legislation like this will make it extremely difficult for those businesses to go forward. In fact what could happen is that we could get situations where businesses are in trouble and they just end up closing down because things are too hard. They will not even look at merging with other businesses. I ask how this legislation will encourage risktakers and I certainly ask how it will add growth to our economy. It will do neither of those. 
This bill is designed to protect the rights of certain categories of employees in restructuring situations. But it goes far wider: Subpart 2—which originally included section 69P—relates to other employees. Speaking on the National side of the House I have some sympathy for vulnerable workers. If the bill kept its original aim and focused on where it started—on cleaners and catering staff—I would be happy with that. But I had a major problem with the way the bill encompassed the entire workforce in Subpart 2. Section 69P had stated: “The object of this subpart is to provide protection to employees to whom subpart 1 does not apply if as a result of a restructuring their work is to be performed by or on behalf of another person and to this end to require their employment agreements to contain employee protection provisions relating to negotiations between the employer and the other person about the transfer of affected employees to the other person.” 
In a nutshell the bill places severe restrictions on any business looking to buy other businesses to merge businesses or to combine operations. It creates a situation where rather than protect employees it could in fact mean that combinations do not occur businesses close and employees lose their jobs. 
That is why the National Party will not be supporting this bill. Rather we support business in this country; we support opportunities to create a policy platform to take this country forward to push us forward and to help vulnerable workers by growing the country. 
COLIN KING (National—Kaikoura) 
: 
 I must take my hat off to the wisdom of my three National Party colleagues who spoke on the Employment Relations Amendment Bill. They were very aptly able to grasp the nettle and identify the problems that the bill has. Wayne Mapp was very very good and Paula Bennett spoke from the heart on behalf of small business. 
When members look at the bill before us for its third reading—a bill that National is opposed to—they can feel sorry for people who are exploited and there are those people out there. However when we look into the devil in the detail of this bill we see that it also severely beats up a number of those 300000 small businesses. Those businesses which are family-operated and mainly owner-operated do not have the huge capability that is perceived in the minds of members on the other side of the House to throw unwanted discarded people on to the scrap heap. There are also first-time business entrepreneurs who wish to start out to buy a plant and to go in for a contract. They will be turned off by this legislation. I am afraid that in the intent of trying to sort out an issue that does exist this legislation has unfortunately gone to the extreme and is a total disincentive and beats up on small business. 
Paula Bennett 
: How can small businesses survive? 
COLIN KING 
: It will be remarkably difficult. I do not know how they will survive. In an area that I am probably more familiar with—the shearing industry—the legislation just totally defies logic. In fact it cast my mind back to what happened across the Ditch in 1985. The unions were trying to justify their existence and they took to court an issue over the wide comb versus narrow comb affair. The situation was very similar to what we are seeing in the House at the moment where the unions are asking to be paid back for the favours they have given to the Labour Party. They have called in a due on the basis of getting their favours back—“You support us and we will support you.” So the Employment Relations Amendment Bill is really the “Employment and Relationship between the Labour Party and the Unions Amendment Bill”—a bill that does nothing to promote enterprise and productivity in this country. 
It is with great pride that members on the Opposition side of the House speak up on behalf of businesses medium and small— 
Paula Bennett 
: And workers. 
COLIN KING 
: —and workers for that matter. One thing we want to make very clear is that on this side of the House we have a vision. We want to see this country go forward prosper and grow enterprise. I am a great believer in that. I want my children to succeed and I want my grandchildren to succeed. I want to see the people I pick up at 6 or 7 o’clock in the morning when I go shearing be empowered as well. I do not see that this legislation sends the right message—in actual fact it does the absolute opposite. We have a generation of young people out there— 
Peter Brown 
: It would help if you read it. 
COLIN KING 
: —I say to New Zealand First—who are having difficulty making a decision to commit to employment. I was reading a publication stating that Generation Y today needs leadership. If the Government does not carry on beating up on small business it will get a bit of leadership. Members on the Government side need to pull their heads out of their laps and start to think about what will take this country forward. [ 
Interruption 
] The only vulnerable workers we have in this country at this time are those people who are prepared to get off their backsides work hard pay taxes and improve themselves. 
Paula Bennett 
: What do they do with taxpayers’ money? 
COLIN KING 
: They keep spending it. I ask members to think about the wide comb versus narrow comb affair. The unions argued that narrow combs should be used because wide combs gave an advantage to stronger men. What a lot of nonsense that was. 
This bill is a lot of nonsense. It goes far too far. It has been 15 ways to screw a nation. The employment relations legislation was set over here originally but it has been systematically moved to a stage where it has become totally clear that we will regulate regulate and suffocate this nation’s economy. 
But National has a vision. It will take this nation forward and inspire its younger generation to cultivate those wonderful qualities of industriousness and entrepreneurship that we have heard about from speakers on the Opposition side of the House. We will be very proud of the nation. We all want a nation that people who have left already will want to come back to to enjoy the beautiful standard of living— 
Hon Clayton Cosgrove 
: Where is your policy? 
COLIN KING 
: It is a vision at the moment. This bill is a problem and a very bitter pill we have to swallow. It is so unpalatable and is totally unjustified. One of the things that sticks in my throat is that although the bill claimed originally to look after what the Government calls “workers who could be abused” in effect the bill beats up on those 300000 small businesses. 
If one stifles enterprise one stifles vision. National has a vision of where we want this nation to go but it is certainly not built around this ridiculous Employment Relations Amendment Bill which is just hand holding between the unions—paying back deals for elections. I have just about run out of words to describe to members opposite just how pathetic they are. I articulate that National has great satisfaction in speaking up for small business family business first-time business operators and owner-operators. I would hope that after the next election when National is in Government we can provide inspiration and a vision for the young people of this country. 
LINDSAY TISCH (National—Piako) 
: 
 The Employment Relations Amendment Bill is very important legislation. As my colleague Paula Bennett said in her address this bill is the 15th amendment to this legislation. When the House debated the previous amendment to the legislation we asked the Government why it could not get it right. Yet here we are again debating a bill that hits those people who make investments in our community—the business people. They are the risk takers. They put their money at stake to provide the jobs that communities thrive on. But this bill takes that away from them; it means if people take over a contract be it in catering or cleaning for example they will have to take on existing staff. 
One of the very important issues about employment and people being prepared to invest to grow the economy is that it is a win-win situation. But that will not happen if the environment is rife with employment law Resource Management Act issues Accident Compensation Corporation levies and all those matters that affect small business—and we are a nation of small business with 85 percent of all businesses employing fewer than 10 people. Small business employs 360000-odd people yet this bill will stifle that initiative. There will be absolutely no incentive for small business to grow because a lot of firms will retrench. They will say: “This is too hard for me.” and will downsize. 
I note an issue about contingent liability that did not come up in the Committee stage but is important to identify. If people want to sell their business there is a contractual arrangement between the purchaser and the vendor to do whatever. But with these contracts there is a contingent liability to take on the existing staff. No business will want to do that. If we value a business we will find there is absolutely no goodwill in it because of the contingent liability that a potential purchaser will have to undertake to abide by the legislation. 
Colin King 
: Who would take the risk? 
LINDSAY TISCH 
: My colleague Colin King asks: “Who would take the risk?”. He has been in business. He knows what it is like to be an employer of staff. If we want a growing vibrant economy in which there is investment opportunities for small business to grow and to invest in the community—to make it all work—this sort of repressive legislation does not do anything to facilitate that. Who misses out? At the end of the day it is the employees who miss out. The real people whom one would expect legislation would try to protect are the ones who miss out. 
This bill is very short-sighted. I note as someone who has been involved in employment for many many years that this is the sort of legislation that stifles initiative and makes things more difficult for those people whom we should be trying to help to nurture so that we get a win-win situation in a business environment. Then everybody can prosper with it. But as soon as restrictions are put on and things are made difficult for employers they will ask why they should bother. They will take their money and shoot through or put it into other investments that will not create jobs. They will be passive investments. They will probably put their money into real estate which has seen a boom. In the area where I come from median prices have gone up. There is a lot of capital gain to be made so businesses will decide not to bother about the risks of employing staff. They will move away from that environment and put their money where they know they have a safe return and do not have to worry about facing the employment challenges caused by the Government continually changing the rules and moving the goalposts. 
This legislation makes things very very restrictive for business and does not help the vulnerable workers whom the bill purports to try to help. It does not help them at all. Those people who do the employing those who make the investment want a return on it. We know there have been sharks out there but they have been sorted out. This bill will not allow people who want to build goodwill to do so. This is the 15th attempt at making changes. 
Economies with growth and productivity are economies where employers and employees can nurture the value of that investment. Be it capital on the one side or labour on the other it becomes a win-win situation. Legislation like this which stifles initiative will not work. Employers will be looking very closely at this; I can tell members that. They will not be taking on those sorts of contracts where vulnerable workers are likely to be working and we will find that there is a huge shortfall in those areas. 
This bill is not good law. It will not help the people it is designed to help. Employers as those who make the investment will be very disappointed with this legislation. It is short-sighted and it is very one-sided and that is why National is voting against it. 
GEORGINA BEYER (Labour) 
: 
 I am pleased to take a brief call on the third reading of the Employment Relations Amendment Bill. I think it is pertinent to remind members of at least one aspect of the bill that is important which is the fact that it will protect specified vulnerable employees such as cleaners and food and catering service workers. The terms and conditions of employment of those specified employees have successively been undermined where that work—and they do work—is contracted out or passed on to another business the contract is sold or transferred or the work is brought back in-house. 
Some of the speeches we have heard here this evening from members of the Opposition betray any talk of their caring for those members of the workforce or any other workers for that matter with crocodile tears— 
Gerry Brownlee 
: Stop making it up! 
GEORGINA BEYER 
: —and the kinds of throw-off comments that the deputy leader of the National Party chooses to make by interjection. Those members do not give a stuff about the workers of this country—they never have! What have their speeches consisted of? They want to think about the business people alone. What about the people who clean the office of that member opposite? In fact those workers look after us all here in Parliament. This is the kind of achievement a bill like this put forward by this Government can make for the real workers in this country. Thank you Madam Assistant Speaker. 
DAVE HEREORA (Labour) 
: 
 I too would like to take a short call in support of the Employment Relations Amendment Bill and really get back to its intention in terms of offering protections to vulnerable workers. What does that really mean? It means that vulnerable workers such as cleaners and those who work in food services will be allowed to continue to receive their terms and conditions of employment on transfer. 
It is important that they continue to receive their terms and conditions of employment on the transfer of their employment because so often in the past we have witnessed the employers of those workers—many of whom have worked in excess of 15 to 30 years—go into a liquidation situation and those workers have lost their service-related entitlements overnight. There would be no redundancy and no reason at all for doing that other than that the contractor has gone broke. So this bill represents a huge change in ensuring that those protections are in place. I commend the bill to the House. 
A party vote was called for on the question  
That the Employment Relations Amendment Bill be now read a third time. 
Ayes 68 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1. 
Noes 51 
New Zealand National 48; United Future 3. 
Bill read a third time.