Employment Relations (Probationary Employment) Amendment Bill — First Reading 
Employment Relations (Probationary Employment) Amendment Bill — First Reading 
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Employment Relations (Probationary Employment) Amendment Bill 
First Reading 
LINDSAY TISCH (Senior Whip—National) 
: 
 I raise a point of order Mr Speaker. I give notice that National will be splitting this 10-minute call between Dr Mapp and Dr Brash. 
Mr DEPUTY SPEAKER 
: Thank you for giving notice of that Mr Tisch. That is the way we will proceed. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I move  
That the Employment Relations (Probationary Employment) Amendment Bill be now read a first time. 
 This bill is critical to the growth and productivity of New Zealand and surely that goal is shared by everyone in this Parliament. The real question that parties in this Parliament have to answer tonight is whether they are willing to do the things to make that happen as opposed to simply talking about it. 
Hon Member 
: We will! 
Dr WAYNE MAPP 
: Very good. The bill is quite straightforward. It provides for an automatic probation period of 90 days for new employees. During that period the expensive cumbersome and litigious personal grievance procedures in the Employment Relations Act will not apply automatically. I will be moving later this evening—hopefully—that this bill should be considered by the Transport and Industrial Relations Committee. 
At this point I say to Labour and Green members in particular that fundamental conditions of employment will be protected. So that there is absolutely no doubt about it the bill has a specific savings provision to protect access to the Human Rights Commission. Clearly we cannot have a situation where sexual harassment could be permitted. Wage claims will also be protected as will fundamental statutory conditions around holiday entitlements sick leave and so forth. They are in fact covered by a different statute in any event. 
So it is simply absurd to suggest as some have said in press releases today that National wants employment at will across the board. This bill is absolutely middle of the road. It brings New Zealand into line with not most of the OECD but all of the OECD. We are the outlier at the moment as a nation. For instance in the United Kingdom under the Blair Government which has now been in office for nearly 10 years— 
Chris Auchinvole 
: A Labour Government. 
Dr WAYNE MAPP 
:—and which is a Labour Government as everyone knows the probation period is 12 months. In Australia it is currently 3 months and is likely to be extended somewhat further. In Canada the period is 3 months; in Ireland—a country many of us admire—it is 12 months. Who could possibly suggest that any of those countries are hard on employee rights? Those countries have better living standards than New Zealand. The countries of Europe—and indeed Scandinavia which is often admired by our current Government—also have probation periods. 
What we are doing here is getting our employment law right to boost productivity so that we are competitive and can make the critical gains necessary. Even Treasury in its briefing to Government this year talked about the inflexibility of the current employment law. Business New Zealand which has been very careful to consult the Government on a whole range of things—and the Minister of Labour knows this well—has said it is the most important thing in employment law. 
Some people will say this legislation is really just another device to oppress workers. The answer is no and the facts speak for themselves. New Zealand’s youth unemployment rate is 12 percent and Maori youth unemployment is as high as 14 percent whereas general unemployment at 3 percent is substantially less. So young people are the group we are aiming at primarily. They need to get that first job. 
New Zealand is a country of small employers and many of them are concerned about costs. So they need to have the confidence and young people need to be able to say to employers: “Give me a chance to demonstrate my ability.” That is what this bill is about—boosting employment opportunities for the advantage of New Zealanders. 
It has been a pleasure to introduce the bill and I look forward to hearing the considered arguments of all the parties. 
Dr DON BRASH (Leader of the Opposition) 
: 
 I rise to support the Employment Relations (Probationary Employment) Amendment Bill because I believe that it is one of the most important pieces of legislation to come before the House this year. Why do I say that? Partly because if the bill becomes law it will do enormously positive things for businesses large and small in this country. The Government’s own Small Business Advisory Group has made that absolutely clear not once but twice. It describes probationary periods as “the single most important changes that could be made to the employment legislation”. The Small Business Advisory Group went on to state that such probationary periods “would lead directly and immediately to employment and business growth.” Essentially that would be sufficient reason to support the bill even if it had no other positive effects but in my view that is not the main reason for supporting the bill. 
Chris Auchinvole 
: What’s the main reason? 
Dr DON BRASH 
: The main reason to support the bill is that it would provide help to the most vulnerable people in our community. Dr Mapp made the point that despite the generally low unemployment rate the unemployment rate for youth—people aged between 15 and 19—is 12 percent. The bill would help immigrants who come into the country with relatively poor English language skills. It would help women who wanted to re-enter the workforce after a period of raising children. It would help people who had served a term in prison and then wanted to re-enter the workforce and it would help those who had been unemployed for a lengthy period. Unemployment rates among all those groups are very high indeed despite the buoyancy of the economy. 
Why is that? Because employers are reluctant—sensibly—to take a risk on those people. If the employment relationship does not work out employers have the very dickens of a job to end it. It is costly in terms of time and money to end the relationship. So employers say: “No thank you very much. We won’t take on the person who has been out of the workforce for some time or who hasn’t had a job before or who had a prison sentence 2 or 3 years ago.” They will not take the risk. 
The National Party does not want to play petty party politics with this issue. 
Hon David Carter 
: It’s too important an issue. 
Dr DON BRASH 
: It is too important an issue as my colleague David Carter says. I want to appeal to every member of the House to recognise that this bill is absolutely crucial to helping the people I have talked about: the people who are young and have not had a job the women who have been out of the workforce the people who have had a prison sentence the immigrants who have come into the country without good English language skills and the long-term unemployed—those are the people whom we are talking about tonight. I ask every member of this House when considering how to vote on this bill to reflect on those people. 
Let me particularly ask the members of the Maori Party to do that because the Maori community has unemployment rates that are unacceptably high. This bill would have a huge benefit to young Maori who have not been in work and who are coming out of provincial New Zealand into urban New Zealand. The bill would have a huge benefit to all those people. 
Hon RUTH DYSON (Minister of Labour) 
: 
 Labour will oppose the progress of the Employment Relations (Probationary Employment) Amendment Bill. It is unfair it is unnecessary it is bad for employers and it is bad for employees. The bill treats new staff members as tradable commodities and it is a disgrace in terms of respect in our workplace relations. 
Labour believes in positive workplace relationships and that has been the basis of our legislation over the last 6 years. We have worked hard to achieve positive workplace relationships and in my view we should continue on that path. This bill from the National member gives employers the power to sack people within the first 3 months for no reason. That is the purpose of the bill. It is certainly not conducive to a climate of positive workplace relations and it takes us back to the divisive confrontational times of the 1990s. The bill will further constrain the movement of skilled workers in an already very tight labour market and it will reduce movement and flexibility within the labour market. We have the lowest unemployment rate in the OECD. New Zealand needs to attract labour not to scare it away. 
It is really clear from Dr Mapp’s speech—and he shared this with his current leader—that he has no idea that the Employment Relations Act already allows probationary periods. That opportunity is already given within the existing Act. Dr Mapp also said that it would not matter if we took away employment relations rights with his bill because people could go to the Human Rights Commission. He clearly forgot that the PC eradicator has said we should also abolish the Human Rights Commission because it was PC gone mad. So Dr Mapp believes not only that we should have no employment relations rights under the existing Act but that we should get rid of the Human Rights Commission and that legislation as well. 
A World Bank report states that New Zealand is the best country in the world for doing business in. The National Party can say that the World Bank is wrong. I ask Dr Brash whether the World Bank is wrong. It obviously has not listened to his advice; it was right when it sacked him—that was probably the best move it made. But the World Bank says we are the best country in the world to do business in and I prefer to listen to its advice than that of Dr Brash or Dr Mapp. 
Hundreds of thousands of new employees every year under Dr Mapp’s legislation would have no employment rights for 3 months. It would affect the people who are at the most vulnerable point in their employment relationship. From day one what they should be getting is support and encouragement to ensure that they are good employees and that their employer is a good employer. Most workers in New Zealand have on average six jobs in their lifetime. So that is six times in the life of an average New Zealander when for 3 months he or she would have no employment rights at all. 
The key issue for New Zealand in relation to the labour market should be how to attract workers with skills not how to sack them and how to take away their employment rights. We are competing hard in a global economy. Why would any worker want to take on the challenge of a new job when he or she would have no employment rights for the first 3 months? 
Hon Members 
: Read the bill! 
Hon RUTH DYSON 
: I have read the bill I know what the bill states and that is exactly the point the purpose and the detail of the bill. I know what is in the bill. For the first 90 days—the first 3 months—there would be no employment rights at all. 
So to set up a probationary period is not only unnecessary—such a period is already an option under the Act—but would literally take away all employment rights. Every year 200000 New Zealanders would have none of those existing rights. This legislation would remove their right of appeal for unjustified dismissal in the first 3 months in addition to removing their rights in terms of any unfair discrimination. So they could be discriminated against because they were too old—as the leader of the National Party may be assumed to be by some unfair employer—or because they were too brown too white too male or too female. If there was any discrimination at all—someone may be considered to be too young as the leader of the National Party may be considered to be by another employer—the employee would have no right of redress under Dr Mapp’s bill. 
Protection from any unfair discrimination would go under this legislation and any people who were sacked because they were Maori Pacific Island or women would have no legal redress at all under the Act. Why would we want to do that? Why would we as a Parliament want to say that someone should have no employment rights or legislative cover to take an unfair dismissal case? If we wanted to see the Human Rights Commission with a big long queue of people outside it that would be fine but the way of the Employment Relations Service is a sensible way of resolving those disputes without going through the employment relations disputes procedure. 
In my view this bill attempts to fix a problem that does not exist. It offers the solution of a probationary period that is already available under the law and takes away rights that are quite fundamental to a new employee. The basic employment rights of New Zealanders should be protected from day one. [ 
Interruption 
] Read the bill and you will find out you are wrong—I cannot remember the member’s name. I am sorry Mr Deputy Speaker I did not mean you but I could not recall that member’s name. That is the first contribution I have heard the member make to the House. Under section 67 of the Act there is provision for a probationary period so all the concerns that Dr Mapp and Dr Brash raised already have that opportunity to be addressed under the existing legislation. But the Act does not take away people’s right to go for mediation or arbitration if they consider they have been unfairly dismissed or if they want the right to fairly negotiate their wage. 
In my view what Dr Mapp’s bill would do would be totally ignored by the overwhelming majority of good employers in New Zealand because they will continue to go through a fair process with their employees but it would give the bad employers a legal out to treat their workers badly. It would incentivise sloppy management. It would give bad employers a legal protection against the unfair dismissal of their staff. The lawmakers need to recognise that supporting employers and employees by creating a legislative environment where there are healthy and productive workplace environments and where all employees and employers can treat each other with respect and fairness is the best contribution to productivity that New Zealand can make. Why would New Zealand want to go back to the division of the 1990s when our most vulnerable employees—people who are Maori or Pacific or young or old—while they are in the first 3 months of their job and are trying to do a good job can be sacked for no reason and have no legal protections? 
This bill is one of the biggest steps back that New Zealand could make in terms of looking at the challenges that the global market poses to New Zealand. We need to attract skilled workers and we need to offer them security of employment. As a very fundamental basis of that we need to offer them fair employment rights and fair employment conditions. This bill in both its title and its specificity takes away the employment rights of the most vulnerable New Zealanders. I urge all members of the House to consider that there is an existing probationary period within the legislation. All that this bill does is to take away for 3 months additional employment rights that New Zealand workers have for no added benefit. 
I am very proud to oppose this bill. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 The Minister of Labour made some passionate claims. I think she is wrong; indeed I hope she is wrong. I hope there are not an abundance of employers who will behave in the way that the Minister outlined. I do not think there are. New Zealand is a country made up of fair-minded people. They like to give people a go. New Zealand First will give them a go by supporting this bill going to a select committee. We are absolutely consistent in that approach. New Zealanders wanted the minimum wage problem to be addressed and we supported that bill—we are firm advocates for raising the minimum wage I might add. But we believe that New Zealanders must be heard on these sorts of issues. We know that a number of small businesses are concerned about the current industrial legislation and would like to see this sort of legislation enacted. 
But let me warn the National Party. We know that many people in this country are employed on a casual unfair basis. I am not talking about the man or woman employed in a restaurant to fill in for a holiday period to cover for sickness or just to increase his or her income by working on Friday nights. I am talking about the people who are employed on a regular basis for close to 40 hours a week on a casual base contract. That is totally unfair and we will be looking to address that issue in this bill. I have spoken to Wayne Mapp and he knows New Zealand First’s concerns on it and has given me the distinct impression that he is prepared to accommodate our suggestion. 
It is more than a suggestion; it is a request—or dare I say a demand. I do not believe that this bill will go any further without New Zealand First’s support and we will not support it if we do not address the casual problem. I can tell National members now that my colleagues are hot about that issue. 
Judith Collins 
: Absolutely. 
PETER BROWN 
: I look forward to the member keeping the promise. We raised this issue when Max Bradford was Minister of Labour. We got nowhere with him and we know that a number of New Zealanders suffered for a long time after. We will be making strong submissions to the select committee to look at that issue and we look forward to the National Party supporting our cause in terms of our concerns around casualisation. 
The Minister says that there is a probationary provision—section 67—in the current legislation. That does not fit well with small or even large employers. Quite a number of employers tell me that that section is not adequate. Many of them did not know it existed and they say they need something a little fairer. I believe this bill has the potential to do that although I think some provisions need to be pulled back a bit. Dare I say it to Dr Mapp but I think it might be a little too far to the right. But at this point in time I can say with certainty that New Zealand First will support this bill going to a select committee. We will make strong demands to address the problems of casual people in the workforce and hopefully a number of people will make submissions to the select committee to indicate whether this bill should go any further on its merits. We have some doubts about that; we believe that it might need tidying up. 
I know from employers’ representations as I said a few moments ago that they welcome this bill coming before the select committee. New Zealand First is not prepared to deny them that opportunity to have their say. We know that the unions will make strong representations against this bill. We look forward to receiving their submissions on it because we must first and foremost talk about this issue and the select committee is the ideal forum in which to do that. 
But I emphasise again to my National Party colleagues that New Zealand First support will not go any further than the select committee if we do not address the problems surrounding casualised work. I am getting nods from quite a number of those members so they are awake. I think they have taken the message on board and even Dr Brash looks as though he has taken the message on board. Wayne Mapp will make reference I am certain in his reply and acknowledge New Zealand First’s concern. 
SUE BRADFORD (Green) 
: 
 The Green Party opposes the introduction of this bill. This mean-spirited anti-worker legislation has no place in a modern and innovative economy. It has no place in a country whose people take pride in supporting human rights. It has no place in a country that wants to protect those who are the most vulnerable in society—a country whose people believe in the great Kiwi concept of giving everyone a fair go. I think it is a disgrace to hear people like the member of New Zealand First Peter Brown who has stood up for casual workers supporting this bill. I have heard him for the last 6 years in this Parliament— 
Peter Brown 
: Nine. 
SUE BRADFORD 
: —it is 6 years that I have been here—talking about how important the rights of casual workers are yet this bill is the very thing that will disenfranchise those workers of all their rights in the first 3 months of their employment. Mr Brown does not understand what the vote is that he is taking today. 
Does the Maori Party understand what this bill will mean for Maori workers who are some of the most vulnerable workers in this country? For the first 3 months of their employment they will have no rights at all. Under this legislation they can be sacked at will. It is a disgrace. 
Has the National Party spokesman for the elimination of political correctness so run out of work that he has the time to put before this House such an ill-considered and unnecessary bill? The explanatory note talks about the need to have probationary periods in this country but the member is wrong when he says that we do not have a probationary period for new employees. The probation period already exists in the Employment Relations Act. It is open-ended and it is up to the parties to the employment agreement to determine whether they want such a probationary or trial period. 
In addition as a result of recent amendments to the Employment Relations Act there is now a new test for the justifiability of dismissal in section 103A of the Act. This section requires an objective test of what a fair and reasonable employer would have done in all the circumstances at the time the dismissal or action occurred. That means I say to the National members that if an employee is on a trial or probationary period it is a relevant circumstance that can be taken into account in assessing the justifiability or otherwise of a dismissal. 
We already have provision for this matter in the Employment Relations Act in a test that can take such a period into account so why on earth is Dr Wayne Mapp wasting our time with this bill? I think the answer is clear. The bill is not really about probationary periods; it is about stripping the most vulnerable of our workers of their already modest protections against unfair dismissal and unfair treatment for the first 90 days of their employment. This bill should not be called the Employment Relations (Probationary Employment) Amendment Bill; it should be called the “Employment Relations (Kick Vulnerable Workers in the Head) Amendment Bill”. 
Why do I say vulnerable workers and not all workers? The reason is that this bill would allow the parties to agree to a lesser period of probation so that if there was a strong union in a workplace there would be no such probationary period. It would mean that if a trade is in short supply it is unlikely that there would be a probationary period. It would certainly mean that the highly paid executive class would continue to negotiate employment agreements that see them paid tens of thousands of dollars if they have unsatisfactory performance issues and are dismissed. But what about those at the bottom? Who would have their employment rights stripped away by this pernicious legislation? It would be vulnerable workers—the workers whom Dr Mapp mischievously claims he is helping: young workers unemployed workers migrant workers and Maori workers. He should have also added women workers but perhaps he is too politically incorrect for that. 
Starting a new job is a vulnerable time for any worker. Some of the most sensible comments on this bill came from Andrew Little from the New Zealand Amalgamated Engineering Printing and Manufacturing Union yesterday. He pointed out quite clearly that this bill would increase the risk for employees changing jobs and that it would in fact add rigidities to the labour market. Employers tell us at the moment that they hate rigidities and that they want a flexible labour market yet this bill will have the opposite impact. 
Worse than that—and I am not sure whether it is an intended or an unintended consequence of this bill—is that not only could workers be dismissed at will during that first period but also they would potentially face a mandatory unemployment benefit stand-down period of 13 weeks. The Green Party has always campaigned against the stand-down. We saw dreadful situations arising in the early 1990s when it was used in a widespread way. Do people remember the chap who had to live in a hole in the ground? I know that there were lots of people in Auckland sleeping out living under trees and surviving in the most terrible circumstances because of what was then the 26-week stand-down. If we go back to a system like that we will see a lot more of that happening. People would not only be sacked at will; they would then have to survive somehow for up to 13 weeks without any income at all. The consequences of that situation are not something we want to see in this country again. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 This House has heard before of how the world of Maori has a special work ethic a proud history of industry and a genealogy of hard work. Our songs and chants abound with lyrical allusion to blistered hands to sweat on the brow and to the work of the collective. We stand here today extolling the right to work. That is why we will support the bill going forward to the next stage because we are absolutely passionate about the debate. The debate must ensure we can create dramatic change for our employment options. The debate must increase Maori access to employment as well as ensure their advancement through employment. We want to widen the options available so that our people have the chance to get their foot in the door to achieve the fullest possible range of employment opportunities. 
In case this House has not noticed the door is still slammed far too shut for some Maori. Closed doors mean the average weekly income for Maori now is only $471 compared with $598 for non-Maori—a difference of a whole $127. Mr Deputy Speaker even though you and I hate hearing these negative statistics when we discuss issues such as this bill they become totally relevant. The right to work should be a right enjoyed universally by all citizens yet currently around 30000 Maori are jobless. 
The Maori share of total New Zealand unemployment is disproportionately high. In 2005 it was 22 percent—far higher than the Maori share of the working-age population which is 10 percent. Long-term unemployment for Maori is particularly rife. Roughly 27 percent of all unemployed Maori are experiencing long-term unemployment. Why is that? The Department of Labour tells us that it is because Maori are more likely to become unemployed due to a number of factors. Maori are strongly represented in volatile industries such as exports. There are also high numbers of Maori in low-skilled occupations and in casual work. Numbers of Maori do not have sufficient levels of literacy or the qualifications to secure and retain work and all too often Maori with the same tertiary qualifications as non-Maori are not selected for employment. 
So what is behind those disparities? Many years ago a ground-breaking report to the Department of Social Welfare  
Puao-te-ata-tu 
 identified a bias in our social and administrative institutions that automatically benefits the predominant race or culture while penalising minority and subordinate groups. And so we learnt about institutional racism. If one is outside one sees it as the system; if one is cocooned within it one sees it as normal conditions of existence. These are strong words and we must apply strength to the actions we take in dismantling the cocoon opening the door to diversity. 
I come to this House today desperately aware of the need of people in my constituency in my electorate—particularly in South Auckland—to be able to walk through the door to a job. However we are also committed to protecting workers’ rights so that workers’ rights are not impinged on are not abused and do not suffer from exploitation. Those are heavy issues and our caucus has grappled with the challenge inherent in them. What takes precedence: the right to work or the workers’ rights? We are not happy that workers’ rights may be affected by the fact that the employee would not have recourse to any of the remedies under the Employment Relations Act but we will not kill the debate at the first step. We want to allow people to have a say to hear the views of others and to open the doors for wider discussion. 
 The impact of the systemic bias of institutional racism and the plight of the jobless are still issues of significance for this nation. We must have the courage and strength to consider options. We therefore will vote on principle wanting there to be room for discussion but also always aware of the juggling act to protect workers’ rights alongside the right to work. 
GORDON COPELAND (United Future) 
: 
 First of all I offer my congratulations to Dr Wayne Mapp on the good fortune of having the Employment Relations (Probationary Employment) Amendment Bill drawn from the ballot. All of us again tomorrow when there is a new ballot will be waiting anxiously to see whether we get our bills out. 
I am delighted to see this bill come into Parliament. The bill is actually very much in line with United Future policy. In fact in our policy at the last election we suggested a probationary period of up to 6 months so the 90 days suggested in the bill by Dr Wayne Mapp is well within the scope of our policy and therefore I can signal immediately that United Future will be voting in favour of the bill. We have come to that conclusion—as most parties do when they formulate policy—on the basis that in our analysis we need to have more rather than less flexibility in the New Zealand labour market. We know that that is always a difficult balance to achieve but anything that moves towards flexibility will in our view in the long term lead to greater productivity to greater job opportunities for people and to greater prosperity for New Zealanders. In other words inflexible labour markets can be the death knell of an economy and we probably have an example of that right now in West Germany. So as Dr Pita Sharples has said we always have to weigh up those two competing things. 
There is also a pragmatic element to that approach that is reliant upon the actual experience that has been fed back to us by employers in respect of employing staff for the first time. In particular I mention two groups that are very important. The first group of course is youth. Youth unemployment rates are higher than the general unemployment rate in our society and we need to understand what brings that into existence. From the point of view of the employer not employing a young person is a risk-averse approach. In other words in taking on a young person the employer has less assurance—because the person has no CV no references and no employment history—as to whether that person will work out. That is a risk. People are prepared to take that risk if they know they can bring the employment relation to an end if it does not work out. Therefore on balance the bill will actually increase participation in the workforce by young people. It will mean that young people are trained by employers in a way that does not happen at the moment because they are not actually taken on in the first place. In a sense the bill is almost a balance to Sue Bradford’s bill on shifting the youth rates up to the minimum wage and that has to be a very very good thing—and by the way we supported Sue Bradford’s bill going to a select committee after its first reading. 
Listening to the speech from Ruth Dyson brought back to me an experience I had fairly soon after I entered this Parliament. An employment relations bill was being debated and I listened carefully to the speeches on it from various members of the Labour Party—particularly I have to say from those with a strong union background. I was subsequently at a business dinner and somebody said to me: “What have you noticed Gordon?”. I said that one of the things I had noticed was that there seemed to be an assumption at least by some members of the Labour Party—what I call the left-wing of the Labour Party—that on the one hand all employers are inherently evil and want to deprive people of opportunities in life and on the other hand that all employees are immaculately conceived. That is not reality. The reality is that people are people and on both sides whether one is an employer or an employee there are good people people who are indifferent and people who really should be excluded from the process. We will find corruption and all those things on both sides of the argument. 
The other issue I would like to mention briefly is that of new immigrants. Again there is a risk in taking on a new immigrant in terms of perhaps language or a whole range of other things. The lack of a probation period actually acts against that. We sometimes say that immigrants encounter racism. I do not know that it is a question of race—I do not think most New Zealanders are racist. New Zealanders are simply saying: “The risk of taking this person on is greater than the risk of taking on a person who has English as his or her first language and understands our culture and our customs.” 
So I think the bill overall will be very positive for those two vulnerable groups of people and therefore I am pleased again to signal United Future’s support. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 I rise to speak in the first reading debate on this bill and I am delighted to say that ACT New Zealand will be supporting it. I congratulate Dr Wayne on his initiative and on having the bill drawn out of the ballot. 
I like Mr Gordon Copeland sat here listening to Ruth Dyson’s speech. I have to say I sat here thinking it must be terrible to live in that sort of a world. It must be very very sad to live in a world where all employers are absolutely evil people and all employees are the best thing since sliced bread and cannot do a thing wrong. I sat here thinking: “I wonder how many people she has employed.” I have been an employer and I know what it is like to employ people. I think that many people on this side of the House probably find themselves in the same position that I do. We have an advantage in that we know what it is like to employ people. We know what it is like to take the risk and put one’s own money on the line in one’s own business. Sadly that is something that I am afraid seems to have escaped this Labour Government. 
I agree with Dr Wayne Mapp when he says that this bill is critical to the growth and productivity of New Zealand. He is absolutely right. Another reason that ACT is delighted to support this bill is that for many months before the last election Dr Muriel Newman’s bill—the Employment Relations (Probationary Period) Amendment Bill—was in the ballot and we are delighted that although Muriel is not here with us the bill is going ahead none the less. We would have actually gone with a probationary period of 6 months which is as Mr Gordon Copeland said United Future policy. We would be more than happy to see the 3-month period extended to 6 months but certainly we will support the 3 months in the absence of absolutely no probationary period at all. 
The benefits of this bill it seems to me are absolutely overwhelming and many speakers have risen to talk about the fact that youth probably will be the biggest beneficiaries of this bill. In fact 12 percent of youth are unemployed versus 3 percent in terms of general unemployment at the moment. When we look at the bill we have to ask ourselves what will actually make employers take someone on. They need if there is no probationary period to be absolutely certain in their minds that this is the right person for the job. It is not always easy to tell. How can they tell when they have somebody in front of them whom they do not know? The person might have references but an employer may not be sure how sound those references are. An employer has no experience of the person—the employer does not know him or her. It is a very difficult position for employers to put themselves in. This bill actually gives employers the opportunity to take somebody on and it gives the young person—if indeed it is a young person—the opportunity too of an easy out if that person decides at the end of the day that the job is not for him or her. 
The thing I like most about this bill is that it offers employers the opportunity to give somebody a chance. It gives a chance to somebody who might not have worked before or who has not had the opportunity to spend any length of time in the workforce. It might give that chance to somebody who is disabled and has been prevented from working previously because of that disability. Perhaps no one was willing to take that person on. The bill gives an employer an opportunity to take a risk with that person to take a chance take a long shot and an employer might find that that person is the best person he or she could have found for the job in the first place. Would that not be a great thing? This Labour Government talks at length about how we must have more people like that employed and this bill gives employers the opportunity to do that. 
Something that I do not think is widely known or perhaps remembered is that prior to 1998 all new public servants were required to serve a period of probation of not less than 6 months and not more than 2 years. Well would that not be a good thing? I say to Dr Mapp that I wish he had put that provision in his bill. That would be a wonderful thing for the public service. Imagine what troubles might have been avoided in the interim. Think of all those golden handshakes that might have been avoided. I think that perhaps the Transport and Industrial Relations Committee should be considering an amendment of that type when it gets to look at the bill. 
I will finish with the fact that many countries do use probation periods. In fact New Zealand appears to be the only OECD country that does not have a probation period. Again this Government lauds itself on doing so well in the OECD and wanting to do better. So what a golden opportunity this is for it too. ACT New Zealand proudly supports the bill and looks forward to its return to the House. 
PAULA BENNETT (National) 
: 
 First I acknowledge my colleague Dr Wayne Mapp and I am privileged to have the opportunity to speak to this bill. The bill supports people who want to work. I completely agreed with Dr Sharples when he said that everyone had the right to work. 
Probation is a process of close supervision monitoring and assessment of new appointees’ work performance during their first 3 months of employment. When we start a job many of us cry out for a bit more feedback and more opportunity to see how our performance and our fit with the company is going. This bill will promote that. The general consensus is that with the skills shortages we have we need to tap into those people who are not currently working or who are in jobs where they are not upskilling. They may be new to the workforce lack qualifications and/or experience and have a poor work history or they may even have been in some sort of trouble. They may be new to New Zealand. 
They need a break. They need someone to take a chance. We all deserve another go. I know I got one once. After many attempts I managed to persuade someone to take a chance on me. I was a classic example: I was young I was a solo mother I was Maori and I had a very poor work history. But I was damned if I was going to be another statistic. I knew that to turn my life around I needed meaningful employment. I knocked on doors I got interviews but I did not get the jobs. Most people told me—it was about 18 years ago as my daughter is now 19—it was because I had a young baby and they did not know if I would actually turn up again the next week if she was not well. They also told me that it was because I was young and because I did not have a great employment history. There was actually nothing in my work history that said I would be a great employee. But damn I wanted that go and I wanted to turn my life around. After a lot of knock-backs I finally convinced a guy to give me a job and I said I would work for 2 weeks without pay. That was illegal and it is certainly not something I would advocate but I was willing to do anything I could to get a foot in that door. He took me on. I worked the 2 weeks he paid me for them and 2½ years later I left knowing that I had contributed not only to the firm’s growth and productivity but to my own growth as well. My own inner sense of self-worth had grown tremendously. This bill will help people who find themselves in a similar situation. 
Prior to coming here I worked in employment in a recruitment consultancy I managed. But I always liked to call myself a recruitment consultant because it was the consultancy part of the job I loved. It was my job to match companies’ vacancies with the right people. We were constantly explaining to organisations that they would not get exactly the right person for the job and that with our skills shortages there was no person with exactly the same skill match they were looking for as well as the right qualifications and experience. We would say to them that what they needed to be employing on was attitude and aptitude. So if the people they took on had the right attitude and the right aptitude those people would get up to speed quickly and would benefit their businesses. But that was risky. Businesses were lean. They had cut back. They did not have the fat in them they used to have. They would say that they could not take the risk. 
I find myself agreeing a little with Peter Brown. There is no doubt that there is a casual workforce out there. We had situations where people were going into casual jobs so that they could get a foot in the door and actually have those opportunities. That made them more vulnerable. That is not what we want to see. We want to see a bill like this that gives people the opportunity with the right attitudes and the right aptitudes to say: “Give me a go.” 
On the employees’ side this bill works for so many reasons. It is about people who are unsure about their match with the company they are going into. They want to get in there for that first 3 months and see if it works for them. The bill opens up communication between employer and employee. If I am going for a job and I am not sure if I am going to quite make it I can say: “How about we give it a 3-month probation period? Either one of us can say no to the deal at any time and walk away all the better off.” I commend the bill and I think that it has a great future for New Zealand and for workers in this country. 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 I find it extraordinary that Dr Mapp’s answer to New Zealand’s economic future is to be able to sack people more easily. That does not exactly strike me as being a wonderful policy or vision. We need to work through this carefully because there have been some interesting arguments—ones that I hope some members on the other side might be interested in hearing. 
One argument is that the incentive for the people who are the most hard to employ in this country is the threat of getting the sack for no reason. I have worked with people all my life in the employment situation who are at the bottom of the heap—the people who clean and cook do the grottiest dirtiest jobs and get paid very poor wages. Many of them are casual workers I say to Peter Brown. In essence the bill makes all people casuals for the first 90 days of their employment in a new job because they have no right to stay in that job. They can be sacked at will in the first 90 days. If New Zealand First members believe that that is an improvement for people who are not casual workers then they need to think more carefully about it. 
I hope that the Maori Party members come to the select committee and hear the evidence because it will be incredibly important that they do so. Young Pacific and Maori people who are unemployed in this country will not be excited about going for a job if in fact that job can be taken from them at a moment’s notice. The successful employment programmes in this country have been those that have mentored those people I say to Dr Mapp. They are the long-term unemployed whom he says he is concerned about. He should go and look at the successful programmes. They do not work by threat; they actually work by encouragement. The people out there who work with those people day in and day out will get up at 6 o’clock in the morning if that worker has not got out of bed and will be late to work. They will pick the worker up from home and take him or her to work. That is the sort of encouragement that gets the young Maori and Pacific workers into employment permanently. 
This bill puts people into employment for 90 days at a time if they are lucky—like those who were employed on the waterfront traditionally in our evil past. I do not think that employers are bad. I have worked with employers and unions for many years and I have worked with employers who have made bad decisions. I have worked with the odd bad employer but most I have worked with as an advocate for workers had made bad decisions. Most of those bad decisions get sorted out amicably in this country. 
When the select committee heard the last lot of submissions on the Employment Relations Bill employer after employer came in and said that we should not change the legislation any more because it was working wonderfully and they did not want it disturbed. Yet when the Employment Relations Act was first brought in by this Government back in 2000 the whole world was going to come to an end. So how come things have changed? They have not changed. 
The reality is that successful programmes getting people back to work are not based on a big stick. The kids that we are talking about have had the big stick waved at them and whacked on their backs most of their lives. They do not respond to that. So who is the bill supposed to be aimed at? Because it will not work with them. The Maori Party knows better than anybody that that does not work in terms of getting young Maori and Pacific people back to work—but it will affect every other New Zealand worker. 
In terms of changing jobs the average in this country now is not what it was when I first started work—maybe a job or two for life—it is six jobs. The average now is six different forms of employment in a lifetime and for a period of six times 3 months a person would have no rights—no rights at all. Dr Wayne Mapp will say: “Oh yes you can have the Human Rights Commission looking after you.”—yeah right! We know that the most vulnerable people ain’t going to go there. 
I would like to hear Dr Wayne Mapp’s response to this question: under his bill if a person is sacked for joining a union what happens? 
Dr Wayne Mapp 
: That would be discrimination. 
Hon MARK GOSCHE 
: Oh no no—I want Dr Mapp to answer that question in his speech and tell me where it is in the law; he needs to do that. 
My final point concerns the term I have heard tonight—right to work. I will tell members where right-to-work laws exist in this world. It is in the southern states of America and I advise them to go and look at the situation there. I went there and saw a most appalling lack of workers’ rights. 
Dr Wayne Mapp 
: In Britain Canada Ireland. 
Hon MARK GOSCHE 
: No no. Dr Mapp will get his chance in a minute. He should go and have a look. Those right-to-work laws in the southern states are about no rights for workers. I want some people who are supporting this bill to think on that because it is an interesting label. This bill is about taking away the rights of workers for 90 days and if anyone thinks that will solve our unemployment rate in this country that person is dreaming. 
MARK BLUMSKY (National) 
: 
 There are over 325000 businesses in New Zealand and 280000 of them employ five or fewer people. It is now time for this Parliament to send to the tens of thousands of people who own those businesses a message of support. Too often the Labour-led Government has introduced legislation that inhibits that costs and that hurts those hard-working New Zealanders. It is now time to introduce legislation that makes a positive difference. 
The 280000 small businesses are important to New Zealand. They are the glue that holds New Zealand together. I will give the Government some credit. It understood the importance of small business so it set up a Small Business Advisory Group. But when that advisory group representing those 280000 businesses said they needed to have a probationary employment period did the Government listen? No it did not. This bill is our chance to send a message to small businesses saying: “We will listen and we will talk with you about that issue in the select committee.” This bill is very important. 
In the last 3 years before embarking on my career as a politician I was the founder and chief executive of a Government-funded incubator taking early stage start-up businesses and growing them into global companies. There were 40 young entrepreneurial 20-year-old - plus people who were working 28 hours a day 8 days a week and they were inspirational. It was both an exciting and a very nervous time for those people. It was exciting but they were worried about whether anyone would buy their product and it was a nervous time when people did buy their product and they needed some help and they realised they had to employ some staff. 
We can imagine what it is like to be a 20-year-old employing one’s very first staff member and paying that person. But do members know what happened in those incubators when those young people had to pay their staff members for their first week? They had to get their wallets out. They literally had to get their wallets out and pay some very hard-earned very newly earned dollars to people they had just met and employed. I can tell members that when people have to take out their wallets and give their money to someone else—and it is not a 20-buck loan to a mate to buy a beer—then that becomes a slightly different proposition. 
What was the result with regard to those incubator companies and those young business leaders? They waited before employing staff. They made excuses they procrastinated and they consequently overworked themselves overstretched themselves and burnt themselves out. Why? They were just too scared of getting it wrong. They were too scared to employ staff when all they had was a pile of CVs to pick from. I do not know about other members but to this day I have never seen a bad CV. Those small businesses like many many other small businesses just did not have an HR department. Small businesses do not have a training department so when they get it wrong it hurts. 
This bill will give the confidence to small business to take the risk of employing someone. Parliament needs to show that we are happy to listen to those small-business heroes. Let us hear what they have to say. I recently sent a letter to 5000 small businesses in Wellington and asked what issues were affecting their day-to-day operation. I have had quite a number of responses and I will quote from three of them. 
The first response states: “The major issue we face as a small business is the risk of hiring staff. My wife and I are the only two people in the business and we have deliberately chosen to run it this way because we simply don’t want to run the risk of hiring someone.” The second states: “I am very much in support of the concept of a probation. In fact 3 months would be wonderful. Wage is my biggest cost and I’m very keen to have the right employee in the right job; otherwise we are wasting our time.” And the third states: “We are a small company that creates planning software for sale both here and in New Zealand. Business is going well for us at the moment and I think we will be hiring one or two new people this coming year. You can appreciate the degree of risk entailed in hiring a new person in a company as small as ours. We can’t afford to make a mistake and get it wrong.” 
I think I am like many small-business owners who feel that if the Government will not take the advice of its own Small Business Advisory Group then that is very very sad. I hope that the House will support the bill going to the select committee. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I would like to thank everyone who has contributed to the debate and I would like in particular to thank those parties that have had the confidence to refer the bill to the select committee. I deliberately use the word “confidence” because I think this is very much one of those occasions when we can look at the world and ask whether the glass is half full or half empty. Do we always look for problems that might emerge or do we look for solutions that are possible? 
I believe that the figures speak for themselves: 12 percent youth unemployment compared with 3 percent for the general population. That is a situation that needs a solution. And we are not talking about the southern states of the USA; we are talking about Britain Canada Ireland and Australia all of which have probation periods. 
Some particular concerns have been raised and I want to address them. New Zealand First’s Mr Peter Brown raised the issue of casualisation. I know that that has been an issue for him for a number of years. Without forecasting solutions I note that the Netherlands has essentially split the law. So for short-term contracts defined in the Netherlands as those contracts of less than 2 years the probation period is 1 month and for those contracts that are intended to be longer than for 2 years or indeed that are without a fixed term it is 3 months. Solutions to those issues are possible. The select committee is where we get to explore the solutions. 
Concerns were raised by the Maori Party particularly about vulnerable workers who do not have access to full rights. Those are legitimate concerns. Clearly issues around the Human Rights Commission and the effectiveness of its procedures to deal with issues of discrimination would need to be looked at. So there are issues that need to be considered there. But that is the whole point of the select committee process is it not? 
No one reasonably expects particularly for a member’s bill—or for that matter a Government bill—that it is perfect at the time of its introduction. That is precisely why we have the select committee process—to hear not from us in this Chamber but from New Zealanders whether they be employers or employees. Sometimes I think that some employers are perhaps a little bit too diffident about employing people. Nevertheless those fears exist and therefore are real so we are neglecting our responsibility to New Zealanders to those hundreds of thousands of mum and dad businesses if we do not say we hear their concerns and tell them we can address them. This bill is about bringing New Zealand into the mainstream not taking us back to some extreme position. 
I do want to assure members and indeed all New Zealanders that it is not the National Party’s intent to take us back to the Employment Contracts Act of 1990. Things do move on. That is the reality of the situation and that is something we have heard over the last few years. So in truth we learn from experience. We can have improved employment law that builds on the experience of the range of law over the last 20 years. The changes were necessary in 1990 but this is the 21st century. We are in different circumstances and our law needs to reflect this. 
When the OECD says to New Zealand and when the Treasury briefing says to the Government: “Produce more flexibility into the law.” one would think that this country—this Government—would have the wit and will to listen. I have to thank those parties in particular that did—and I stress this—have the confidence to enable New Zealanders to have their say. This is the duty of Parliament—to give New Zealanders the ability to have these discussions. What is the point of an MMP Parliament if we do not do that? So I tell Labour Party members to think again and to go to that select committee with open minds because this is an issue through which as a nation we could do a great deal for the productivity and the future of young New Zealanders who deserve a go. 
A party vote was called for on the question  
That the Employment Relations (Probationary Employment) Amendment Bill be now read a first time. 
Ayes 63 
New Zealand National 48; New Zealand First 7; Maori Party 3; United Future 3; ACT New Zealand 2. 
Noes 58 
New Zealand Labour 50; Green Party 6; Maori Party 1; Progressive 1. 
Bill read a first time. 
Bill referred to the Transport and Industrial Relations Committee.referred to Transport and Industrial Relations Committee