Ardern Jacinda: Employment Standards Legislation Bill — In CommitteeText is incorporated into the Bound VolumeArdern Jacinda: Employment Standards Legislation Bill — In Committee[Sitting date: 08 March 2016. Volume:711;Page:9480. Text is incorporated into the Bound Volume.]JACINDA ARDERN (Labour): I want to start in a similar vein to my colleague Grant Robertson. I remember watching some time ago a long form interview with Minister Michael Woodhouse around zero-hour contracts and I did at that time detect a genuine concern about what was happening in the labour market. But of course it was our role as the Opposition to make sure that any expressed concern was translated into very explicit legislation and that is where I join my colleagues in highlighting again the really important role that the Opposition and particularly Iain Lees-Galloway has played in making sure that we allow not one crack of light to be available for zero-hour contracts to remain in New Zealand legislation.On first blush that is exactly what this bill did initially allow. It allowed enough loopholes to remain so that zero-hour contracts as we know them would still exist in New Zealand but this of course was the vehicle we needed to use. If we had simply voted against the bill we would be leaving the situation to hang and that would mean that those contracts would still exist as they do now. So we were as constructive as we could be through this process and Iain has done a fantastic job of getting us to the point where with the support of the Minister we now have amendments on the Table that will bring these contracts to a close. So Iain that is fantastic work but obviously having the Minister come on board with that has been critical to this process as well and we acknowledge that.I want to come back to some of the really excellent points that have been made in the regulatory impact statement around the clauses in Part 2 particularly around new section 67C “Agreed hours of work” in clause 87. It is quite difficult to size the number of employees who will be directly affected by this clause but in the regulatory impact statement the officials have made an attempt to size the problem. We do know as has been touched upon that those workers most affected by new section 67C are likely to be those who are working in the service sectors—so the retail trade accommodation and food service sectors. There are 314000 people roughly working in those industries. We can drill down a little bit further than that though. The centre for labour employment and work found that 61 percent of the collective agreements in the food retailing sector did not state ordinary weekly hours of work—61 percent of collective contracts in that space. So that gives an indication of the scale of use in particular service sectors.The reason we should be doubly concerned by that of course is the level of vulnerability for people who are working in those sectors and the regulatory impact statement touches on that. But what baffles me is that although we are talking about retail trade and particularly food retailing there is a certain level of predictability around those sectors in terms of demand.I myself have worked in that sector. I was a checkout operator for a number of years. We knew when the busy times were and anyone in this Committee who has been to a supermarket in Auckland on a Sunday knows there is a certain level of predictability around trade in that sector. I would say the same for the food retailing business particularly fast food. Again I had the dubious honour of being a worker at KFC for about 6 months. Interestingly I was not employed directly as a KFC worker but I was a contractor who job-trained people with intellectual disabilities. So I was there at KFC to job-train a young man with autism. I was in that place long enough to know the predictability of trade in that sector as well. So you cannot tell me that it is impossible to give a certain degree of certainty for workers in those industries and that is obviously what this legislation will now require and that is absolutely reasonable but why is it that we are seeing that happening in these particular sectors?Why is new section 67C so necessary to weed this out in those particular sectors? Well I think what is interesting—and it is brought up in the regulatory statement—is the use of part-time employees over casuals as a way of securing employees. So it is a way of putting dibs on individuals and securing them for your business but then giving them really uncertain shifts and hours. All that does of course is shift the uncertainty from an employer who has the ability to make greater judgments about those ebbs and flows for their business and who is obviously in a more powerful situation than the employee—it shifts that risk from the employer to the employee who is the more vulnerable in those situations absolutely. Of course where there are extremely tight margins or where there is extremely tight competition in a sector that is where we are seeing these contracts being used and that is utterly unfair because that is where the power imbalance is so strong.So in the regulatory impact statement around the problem definition I believe the officials are absolutely right to say that the root cause of this problem is an inherent power imbalance but even having said that to claim that where there is a more powerful employee—that is such a subjective thing to determine whether an employee has the power to push back on an employer around guaranteed hours. It is very hard to distinguish when someone is in a situation where that is going to be an easier position to negotiate from. That is why regardless of the sector and regardless of the power relationship it needs to be removed because it is inherently unfair—it is inherently unfair.I think it is also useful though that the problem definition around why we have come to the point of having new section 67C is fleshed out even further in paragraph 18 of the regulatory impact statement. To anyone who has not read it I really recommend it. It talks about the fact that actually this becomes problematic for the labour market generally. A labour market is not able to function efficiently if employees and their extra capacity are locked into an arrangement with a singular employer who then is not giving guaranteed hours. That may—and I would be interested in this because I am not sure whether it is true. To what extent is our increasing figure of those who are under-employed courtesy of this kind of practice in the employment market?Of course the figure that we see for the underemployed which is growing is people who would like additional hours but who cannot find them in the market place. To what degree are those people unable to find those additional hours because their employment arrangement basically means that they are unable to go out and seek that additional work? They are locked into an arrangement that gives all of the power to an employer which deems them unable to fill the unknown quantity of work because they are essentially constantly on call without any compensation for that. So if we did not have new section 67C redrafted the way it is it would contribute ultimately to a labour market failure.But I do think it is also interesting to see that there has been some analysis to say that these unfair provisions have been used in place of proper due process where an employer has performance issues. So instead of sitting down and working through those performance issues and using the process that is set out in legislation employers were using these powers that essentially pushed people out of work without having to go through due process. Another reason—because it was never the intention of this Parliament that rather than have due process someone would simply be forced out in almost a pseudo-dismissal process.Another point that I think is really important to make is the impact that this will have currently on people who have an interface between their work hours and their income support from Work and Income and who have such uncertainty about their work. How do they get their income support from Work and Income if that is required to be topped up when they have that level of uncertainty?Many of us will have seen this in our offices. I have had an individual come to me at one point who had total uncertainty around their hours—absolute uncertainty. The hours for that individual were not guaranteed and they required a top-up from Work and Income. Work and Income told them to quit—it told them to quit. That is what that individual employee was eventually driven to do because they could not support themselves and Work and Income found it too difficult to work around the uncertainty of their contractual arrangement with their employer.That is the flow-on effect of legislation that we are amending today and why it is so important. Absolutely we support it.