Mapp Wayne: Holidays Amendment Bill — First Reading 
Mapp Wayne: Holidays Amendment Bill — First Reading 
[Volume:620;Page:15388] 
Dr WAYNE MAPP (National—North Shore) 
: 
 This bill represents a lost opportunity. How many chances do members think the Labour-Progressive coalition Government gets to fix the deep flaws in the Holidays Act? I tell the House that it will have one chance and it will be this one. A comprehensive review of the Act was required. This bill fails that test. It provides for only minimal changes and in some respects it actually makes the situation more difficult. Frankly that is not good enough and it is the reason National will vote against the bill. 
The Government’s efforts are a failure. Proof of that comes from one of the Government’s own companies—one of the largest that it owns directly—Air New Zealand. Air New Zealand in its 2004 annual report states that the 2003 Holidays Act has cost it $17 million with no increase in productivity. More recently it has envisaged that the Holidays Act could add as much as 5 percent to its wage bill. None of that even takes into account the proposed 4 weeks’ annual leave. That is the cumulative effect of the changes brought about by this Government in the Holidays Act. I ask members to think about it. One of New Zealand’s largest companies thinks this issue is so important that it has to mention it in its annual report. It knows that at the very least it is likely to get a shake of the head from a Minister but it feels it has to bring to the attention of the public how seriously flawed the Holidays Act is. 
The problem is that the Holidays Act represents a past era but I guess that is to be expected from a Government that is locked into the past. It is the sort of thing one would have expected to occur in the era when New Zealand closed down for the weekends and had compulsory unionism and compulsory arbitration—an era when everything was compulsory. The modern business world has moved on but in some areas Labour whenever it sees the opportunity tries to slip in those old-fashioned approaches. It is doing so with the Employment Relations Law Reform Bill as well. That is the kind of approach Labour has. We know that this bill is a pay-off to its union friends. All the entertainment businesses travel and airline industries rest homes and hospitality industries work on a 24/7 cycle and they negotiate agreements with their employees to take that into account. The Minister knows the reality of that because he gets submissions on it on a regular basis. 
All the problems the Holidays Act would bring were clearly brought to the attention of the Government last year when it brought the legislation in. This bill attempts to deal with some of those problems and some of those attempts represent a completely botched jobs. This legislation is in essence a backwards step. In the modern era when businesses operate 24/7 it is inherent that people work on public holidays and take other days off. That is negotiated and reflected in the agreements. The second speaker for National the Hon Maurice Williamson knows the direct reality of that because he worked in precisely one of those kinds of businesses. He knows the sorts of the agreements that were negotiated with his employer whereby both parties received satisfaction. 
It is worth recalling what the case was when the Government’s reforms were brought about. All that the Government said it would do was that it would modernise the Act—nothing more than that; just modernise the Act and bring it up to date. The huge changes that occurred in the Holidays Act in 2003 were not expected and I note that the Government has said it is picking up the unintended consequences. I ask the Government about the intended consequences: why does it not fix up those as well? Then Air New Zealand would not be saying that as much as 5 percent could be added to its wage bill. That would be a direct loss of profitability a direct loss of competitive advantage and the sort of thing that holds that company back from achieving its full potential. Members know that legislation is in trouble when companies like Air New Zealand make those kinds of submissions. 
It is extraordinary is it not that this legislation alone could cause a potential 5 percent increase in costs before even taking into account the extra 1 weeks’ annual leave. I challenge Government members to do the mathematics. To have 4 weeks’ leave—one week extra—would add 2 percent to businesses’ wage bills. The legislation and all the provisions around sickness public holidays and the like could cost as much as 5 percent and we know that when that happens they have got it wrong. 
Even with this bill there are serious problems. For instance the whole issue is based on a concept known as “relevant daily pay”. In 24/7 - type businesses that pay is calculated on the basis of including all relevant allowances: holiday pay sickness allowances and the like. They are averaged over the course of the entire year. So time and a half is then built on top of that. That is fundamentally wrong because the agreement itself already takes that into account. The Minister says he is fixing it up but as I read the relevant clause he is not fixing it at all. What he envisages is the “relevant daily pay” plus time and a half. He is saying that workers should not get a further time-and-a-half payment on top on that. The submissions will make it clear how erroneous that is. 
More serious are the provisions relating to sickness leave. The Government has painted this bill as being some kind of great success. Employers can now ask for a sickness certificate to be provided after an employee has been absent for 1 day. I ask members to think of the thresholds. Firstly one has to have reasonable cause to actually request a certificate. That is a pretty high burden. It is the sort of thing one knows straight away—that as soon as one uses the word “reasonable” it will end up in a court. The court will interpret it and it will probably interpret it adversely. Second the employer is required to pay for the certificate. I ask members to consider the likely cost. It will be something like $50 or $60 at least. That in itself is a huge deterrent so really the Government knows that it is giving something in a mirage only. It is taking the reality away. It knows that employers will not be able to ask for the certificate. The same old rorts that already take place will continue to take place and that is likely to affect smaller employers in particular. 
I want to conclude on this point. The Government has said it will pass this bill by Labour weekend. It is doing that of course to stop the select committee process and to narrow the focus of submissions. I would like to ask the Minister and the chair of the select committee whether they will guarantee that there will be an open submissions process so that every person who is affected can make a submission to point out the deep flaws in this bill. This bill does not fix up the fundamental flaws in the Holidays Act. It does not deal with the intended and adverse consequences. Because of that fact National will be voting against this bill. It is bad for industrial relations.