Hipkins Chris: Health and Safety Reform Bill — In CommitteeText is incorporated into the Bound VolumeHipkins Chris: Health and Safety Reform Bill — In Committee[Sitting date: 20 August 2015. Volume:707;Page:6034. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka): I appreciate this opportunity to take a call on Part 3 of the Health and Safety Reform Bill. I want to very briefly respond to a question that the Minister in the chair Michael Woodhouse posed in his contribution on this bill last night when we were last debating this clause before moving on to some further questions that I would like him to give some consideration to.The question that the Minister raised was whether having elected health and safety representatives was the only way or the best way of achieving the objectives of this legislation. He raised as an example tool box meetings and whether tool box meetings could be legitimate alternatives. I can say to him that I worked in the oil and gas industry before coming to work here at Parliament and tool box meetings were a regular part of working in that industry. They worked at least in part because there was a designated person within each team responsible for health and safety matters. So it was not an either/or; in fact the two things went hand in hand.The health and safety person was usually someone different from the manager who was running the tool box meetings because it was the person who actually if anything went out of their way to identify the safety risks and bring them to the attention of the rest of the team. They were more able to do so than the manager of the team because they did not have all the other pressures on them that the manager in the team had. You know the manager in the team is weighing up time constraints and all those other things that a manager of staff is going to have to consider. The health and safety person was focused on the health and safety of the team and those two things went hand in hand. So I think that when the Minister asked whether having elected health and safety representatives was the best way or whether there were there alternatives my answer to him is that it should not be an either/or but in fact all of these things are linked and they go together.The specific area of questioning that I want to raise with the Minister is around clause 65(3)(a) and (b) which is around this definition of a smaller employer with 20 or fewer workers. The question that I have got is this. What can the Government do and what will the Government do to avoid a situation where large firms can get out of their health and safety obligations under this bill by creating a series of smaller firms to undertake particular contracts? Let us take the hypothetical example that I have been using of say an engineering firm. An engineering firm is out there tendering for a variety contracts—Jonathan Young: They have an obligation no matter the size.CHRIS HIPKINS: Jonathan Young says they will have an obligation. I would like to have that reassurance from the Minister because there is nowhere in the bill that actually guarantees that. So what companies do—we now have the Minister of Commerce in the chair so he will be familiar with this practice. Companies can use the practice of creating smaller companies in order to control some of the other commercial liabilities that they may have which I am sure he could get into in great detail. But I am particularly interested in their health and safety obligations in this particular instance.Let us say that a firm—let us call it ABC Engineering—is bidding for a variety of contracts. It sets up a subsidiary company for each of the contracts it gets and it hires a separate workforce for each of the contracts. One of reasons it does that is that it does not then create ongoing employment obligations so it is one way it gets around some employment obligations it may otherwise have.Alastair Scott: It is one PCBU.CHRIS HIPKINS: Yes it is one person conducting a business or undertaking (PCBU) but it is creating separate PCBUs. It may not be the person; it may be an entity that is conducting this. So I want to have an absolute assurance. The Minister may well give us this reassurance—that there will be a way that the Government can legally stop this from happening—but I have read these parts of the bill very carefully and my reading of it is that there is not a way under this bill to stop a firm setting up a variety of subsidiary companies in order to get around the obligations that it has in this part of the bill.I continue with my example. This is not going to be one PCBU; in fact they can be multiple—and companies structure themselves this way all the time for a variety of other legal obligations. They try to structure their affairs to get around things and sometimes with good reason—it is not an illegitimate practice. Sometimes there are very good legitimate reasons why they may do this. If somebody is employed by a subsidiary company for a particular project and only for that project and they then move to another subsidiary company within the same umbrella organisation and that subsidiary has fewer than 20 employees I want to be sure that they are still going to be covered by this legislation.I have been reading the bill very carefully and I have been getting some further advice and I cannot see anything in the bill that actually guarantees that that is what is going to happen. Some reassurance from the Minister on this issue I think is very important because it is not a trivial matter. If in fact this loophole can be exploited then the rest of the provisions of the bill become almost completely redundant because almost any firm at that point can find a way of getting out of it including a large firm in a high-risk industry. So that was the first question that I have for the Minister.The second question for the Minister is around subcontracting arrangements. This is different. This is not a question about the principal firm involved. It is a question about when it divides up its business and subcontracts that out. Will the obligations continue to apply to separate subcontractors? Again there are ways to get around this. Let us say a firm wins a large contract—again we will use that as the example—and it may subcontract a whole part of that contract to a completely separate firm that has fewer than 20 employers. This is very common in a whole range of industries like the construction industry and so on. Will they be covered even if it is the large firm that has the principal contract and it is subcontracting the totality of the work for one particular contract to another firm with fewer than 20 employees? Will that be covered? I am just seeking some reassurance from the Government that in fact that will be the case because if there is not a guarantee that that is going to happen many of the other provisions in this bill become redundant. So some reassurance from the Government on that is really important.Finally I want to turn to clause 110 which deals with the issue of adverse conduct. These are things that a person conducting business cannot do in order to effectively discourage a worker from making complaints about their health and safety. The point that I would make about this is that these are all things at the extreme end—things like sacking somebody or not employing them and so on. We are talking about effecting a culture change here. In fact the Minister mentioned the culture change but culture can be a lot more subtle than that. I do not disagree with any of the things that are in here—I think that they are all good and they are all vitally important—but we are going to have to think. I would like to have I guess some further thinking from the official end about what the Government might do about this to effect the culture change around these things.Anybody in a workplace will know that there are things that an employer a boss or a manager can do that are much more subtle than the more extreme measures. One of the meanings of adverse conduct in clause 110 is dismissing or terminating contracts—well that is at the extreme end—but there are others and some will be quite hard. Clause 110(1)(a)(v) says: “subjects the worker to any detriment in circumstances in which other workers employed or engaged by the person on work of that description are not or would not be subjected to such detriment;”.“Detriment” in that case would I think be quite hard to define so let us go back to the tool box meetings concept that I was talking about with the manager at the tool box meeting. People will be doing a variety of different tasks within that team and we all know that some tasks are more exciting and more enjoyable than others. The allocation of tasks for example may not fit the nature of detriment but could be one of those subtle signs in the culture within that workplace around workplace health and safety. What we have got to be sure that what we are doing in defining these things is making sure that we are going to actually achieve the culture change that the Minister has talked about because there is absolutely no doubt that you can set a whole series of rules but if the culture of a workplace is not right then you are still going to have problems.Like I said at the beginning I have worked in the oil and gas industry which is a high-risk industry where there was—and in some areas still is—a sort of a “cut the corners” culture and mentality. I have got to say that in the oil and gas industry companies that I worked for in New Zealand—and there were several of them and all in Mr Young’s area—the culture was in my view that they went out of their way to create a safe culture starting from the minute you arrived at the gate where they have “LTI” indicator boards—that is lost time injuries. They were recording them and the longer they go without them the better the staff feel and also the more encouragement and incentives there are for the staff around that. That is great. That is the sort of practice that we want to be encouraging so that firms are taking this seriously. They take it so seriously that they put it right up there at the front gate. When you arrive you see a board that notes lost time injuries. That is the culture we want to encourage.