Wagner Nicky: Employment Relations Amendment Bill — In Committee 
Wagner Nicky: Employment Relations Amendment Bill — In Committee 
[Volume:633;Page:5095] 
NICKY WAGNER (National) 
: 
 I understand that the purpose of the Employment Relations Amendment Bill is to protect vulnerable workers who are employed when a company is restructured and who are concerned about the security of their jobs. I sympathise with their position but it is a position that is very common in small companies which tend to come and go. In those companies the feeling of insecurity when a contract changes hands is similar for employees the self-employed and small owner-operators. I want to consider for a moment what this bill will do for very small companies and for the self-employed. 
I come from a small-business background and I know just how important that sector is to our economy. But I also know just how tough it is for someone who is running a small business to make a living. As Mr Tisch and Mr Blumsky have told us New Zealand is a country of small business. Over 300000 people are self-employed or owner-operators 80 percent of our businesses have fewer than five employees and 97 percent of our businesses have fewer than 20 employees. Those people work enormously long hours often in substandard conditions and they cannot claim overtime or redundancy or holiday pay. Their jobs and their incomes are totally exposed to local and global economic shifts and their risks and responsibilities continue regardless of ill health or misfortune. 
The group of small-business people includes men and women of all ages and races. Many of them are new immigrants or women with children or people who have been made redundant. Many are naturally entrepreneurial but have low levels of education and all worry from day to day about their future and the future of those who depend on them. They absolutely qualify for the definition of “vulnerable workers” and they are just as frightened of changes in the workplace as are those whom this bill protects. They tend to have a heads down bums up style of operating and most of their businesses stay small and vulnerable. Often they are family companies and their real strength is their ability to work hard to be flexible and to make the most of opportunities. The real weakness of small businesses is their size. It is almost impossible to make a decent living without some economy of scale. One of the main reasons that New Zealanders work longer and harder for their money than people in almost any other developed country in the world is that our economy is so dominated by such small businesses. 
Most small businesses have pretty low aspirations. If small-business people can earn enough to buy a house and a car—and maybe a boat—and get a decent holiday at Christmas that is enough. The main reason that they do not grow their businesses bigger than that is that it is too hard to do so under this Government. They buckle under the compliance costs and the huge number of rules. Now this Government in the name of protecting the vulnerable is making it even harder for them to grow their businesses. 
Small businesses tend to have limited resources and they tend to have small teams of very hard-working and focused employees—often the owner’s own family. They have to be smart to survive and one of the best ways to grow is to take on a new contract. But the only way small businesses can have any security in that arrangement is to be able to deliver the service more efficiently and more effectively than the contractor who went before them. Otherwise the new contractor will be out the door too. It may be that a new contractor can use some or even all of the existing staff and do something differently from the previous contractor to produce a better service but it is much more likely that the original contract was terminated because of a flaw in the existing system. 
So the requirement of this bill that new contractors take over the existing staff is a real problem. We all know that one cannot get a different result if one keeps on doing the same thing. What is more the main reason that many small businesses believe they can deliver on a new contract is that they know their capabilities and their workers. But this bill demands that sole traders or small owner-operators dump their own loyal employees and pick up those from the previous failed contractor.