Fenton Darien: Employment Relations Amendment Bill — First Reading 
Fenton Darien: Employment Relations Amendment Bill — First Reading 
[Volume:629;Page:1485] 
DARIEN FENTON (Labour) 
: 
 I have much pleasure in speaking in support of this important bill and I congratulate Minister Dyson on bringing it to the House so promptly. It is a very complex area and it is very clear that some members of the Opposition do not understand it. I hope I will have the opportunity at the select committee to explain to those members exactly how some of these things work but I will try to make it clear tonight if I have the chance. 
It is very evident that they do not understand the real world of working as a cleaner as a food service worker as an orderly in our hospitals in our schools in our office buildings—in any sort of business where employers and contractors compete in the competitive tendering process on the basis of lower labour costs through reduced wages cutting hours or reducing staff numbers. So although my colleague over there might pay above the minimum wage in this situation I am sure she does not understand that what can happen is that staff hours are reduced. 
The purpose of the Employment Relations Amendment Bill is to implement the Government’s intention to provide protection for vulnerable workers in situations where workers are contracted out or a business is restructured. As people have said the amendments are necessary because of the decision of the Employment Court in  
Gibbs and others 
 v  
Crest Commercial Cleaning Ltd 
. The law does not provide specified workers with the protection the Government intended in situations of subsequent contracting. 
The bill was originally introduced in response to the devastating effects of more than a decade of competitive tendering and repetitive contracting-out of the thousands of low-paid workers. Over the last couple of decades a repetitive process of competitive tendering has become the norm as businesses seek ongoing cost reductions particularly in easily outsourced work such as cleaning food services and orderly and laundry services. Contractors compete on the basis of lower labour costs in a race to the bottom through reducing wages reducing staff numbers or reducing hours. 
The effect on those workers has been catastrophic. Workers lose their jobs often at short notice in a process that can be repeated up to four times a year. Contractors seek to win contracts by reducing hours of employment pay and conditions so even where workers continue to be employed by the incoming contractor they face “take it or leave it” situations in jobs with less pay and more often than not reduced hours of work. Those whose jobs are terminated often have no redundancy compensation protection and no other jobs to go to. 
The proposed bill is not a new idea and it has been carefully considered over many years by this Government; nor is it an idea that is unique to New Zealand. The UK has had a protection called the transfer of undertakings since the early 1970s and it is currently in the process of strengthening that legislation. Australia has similar protections for the transmission of business and it has had them for years. Having listened to Peter Brown I think he does not understand that the horse has bolted. Part of the legislation will continue to apply but what will not apply is the situation of subsequent contracting for those vulnerable workers described in the legislation—cleaners laundry workers food service workers and others—where they are already contracted out. Tens of thousands of those workers work in our schools polytechnics airports commercial buildings Parliament and aged-care facilities. The Crest Commercial Cleaning decision means that succession-to-contract situations are now explicitly excluded from subpart 2 of Part 6A of the current Act so the terrible irony is that the most vulnerable workers who were intended to be covered by this Act are now left to the vagaries of the market. I accept that there is a balancing act in weighing up protections for workers and the requirements of business but there is also a requirement to balance the relative powerlessness of workers who have little bargaining power and are more vulnerable. 
I will now address some of the things that have been raised. I think Wayne Mapp does not understand the nature of competitive tendering. One cannot just sack a contractor because one does not like the cleaners; it does not work like that. Peter Brown raised the point that this legislation could lead to the acceptance of incompetence and the protection of incompetence. Well performance is a management issue and our current labour laws give employers the right to deal with performance issues right now. The other thing that people do not understand is that this protection applies only at the point of transfer. It applies to the workers so that they have the right to transfer. After that the incoming employer or contractor has the right to restructure the business subject to current employment laws. 
It is really important for the workers whom we are talking about that this legislative protection proceeds through the House because it will make a huge difference to tens of thousands of workers many of whom are women Maori Pacific Island and new migrants. It will mean that they do not have to come to work each day not knowing whether by the end of the day they will have to go home and tell their families that they no longer have jobs. I also want to make the point that this is not about preventing contracting-out or undermining competitive tendering. 
Debate interrupted.