Lees-Galloway IainMINIMUM WAGE (CONTRACTOR REMUNERATION) AMENDMENT BILLSecond ReadingIAIN LEES-GALLOWAY (Labour—Palmerston North) on behalf of the Hon David Parker (Labour): I move That the Minimum Wage (Contractor Remuneration) Amendment Bill be now read a second time. The purpose of this bill is quite straightforward: it is to ensure that everybody working in New Zealand has the right to receive the minimum wage. Everybody in New Zealand who is an employee has that right along with various other employment rights that are secured for them in the Employment Relations Act.However a large number of people who are working in New Zealand do not enjoy the benefits of the rights conferred upon them under that legislation because they are engaged as contractors not as employees. We are seeing an increasing use of contracting relationships and an increasing number of people who fall into the category of dependent contractor—that being someone who is for all intents and purposes by law a contractor but who actually receives the bulk of their income from one principal. In other words they are more or less in an employment relationship; however for the purposes of the law they are in a contractual relationship. Those people are not entitled to a minimum wage. Despite the fact that they may be working 5 days a week or in a regular pattern of work and receiving all of their income from one employer they are not entitled to the minimum wage. A large number of people particularly in more precarious forms of work such as the delivery of flyers and newspapers in particular actually find themselves receiving remuneration that works out at considerably lower than the minimum wage—particularly after their costs are accounted for. This bill seeks to confer on those workers the same rights as people who are employed in employment agreements that are regulated by the Employment Relations Act. As the Labour Party's minority view outlines there are two options for how to proceed here. One is to legislate protections for a subset of contractors called dependent contractors including as to minimum remuneration; and the second is to legislate to apply minimum remuneration to contracted workers not just to employees. This bill takes the second approach.We heard a range of submissions. A number of submitters were in support of our approach a number of submitters were in support of the concept but urged us to take another approach and then there were submitters who were simply opposed to the approach altogether. As a result of that the member in charge of this bill the Hon David Parker and Opposition members on the Transport and Industrial Relations Committee did ask for a number of amendments to be drafted which they were. Unfortunately the committee chose not to adopt those amendments because the committee was voting the bill down. Often committees will decide to improve a bill—regardless of whether they are going to recommend that the bill proceed or not. Unfortunately in this case the committee chose to vote those amendments down.So we propose to bring those amendments by Supplementary Order Paper should this bill proceed to the Committee stage. I say to members who are contemplating how they are going to vote at this second reading that I know that for some who supported the bill to select committee that was as far as their commitment went and that they are reconsidering their vote after the select committee stage. I say to those members that because we were not able to bring the amended legislation back to the House please send this bill on to the Committee of the whole House so that we can have a debate with the whole Parliament about those amendments and consider your vote then—at the Committee stage—and potentially at the third reading stage. If you are still not sure where you want to land on this please send the bill to the Committee of the whole House because there is more work to do.I would like to quickly go through some of the amendments that we proposed. First of all we would like to clarify to whom the bill would apply. A new clause 6 would insert definitions in section 2 of the principal Act. We would recommend some amendments to make the definitions clearer. We would recommend amending the term specified person" to "specified contractor" throughout the bill. We believe this would make it clearer as to whom the bill applies to and would help the public in understanding this legislation.This bill is intended to apply to companies only where the company consists of a single person as a shareholder and director who personally provides the specified service. For clarity we would recommend amending the definition to specify that the bill would apply only where such a person provides the service exclusively—that is not simply in a managerial capacity alongside employees. We believe that this intention is not fully clear in the bill as it was introduced.There are some technical changes we would like to make around numbering. We would like to add some guidance on the actual rate of remuneration not being necessary. Clause 7 proposes to insert new section 4B containing guidance for the courts to use in establishing the actual rate at which the contractor has been paid. We do not consider it necessary to give this level of guidance and would recommend that new section 4B be deleted.The relationship with the adult minimum wage—in the bill as introduced there is no mechanism for ensuring that a minimum rate of remuneration for contractors is consistent with the adult minimum wage. That certainly was not the intention—the whole point of this bill is to ensure that the minimum rate for contractors is the same as the adult minimum wage. So for clarity it would be desirable to make an explicit link to the adult minimum wage set under the primary legislation. We would recommend amending clause 7 new section 4C(2) to make it explicit that if a minimum rate of remuneration is set it must not be less than the minimum adult wage rate. We would also recommend technical changes to clause 8 amending section 5 to ensure that a minimum rate of remuneration be reviewed annually.We would also like to make amendments to clause 10 inserting new section 6A to provide that contractors working for more than one principal at the same time such as a truck driver delivering goods for more than one principal at the same time would not be entitled to receive the minimum rate of remuneration from each principal. This was one of the issues that was raised by submitters—that often people are working on multiple contracts at the same time. The truck driver is a good example: you might have multiple contracts' worth of goods in the back of the truck at the same time and it would not be appropriate for each of those contracts to deliver a minimum wage rate. What the bill would therefore require is that the combination of those contracts adds up to a rate that at least delivers the adult minimum wage.We would also like to make some changes around the retention of remuneration records. Obviously it is important that remuneration records are retained if we are to establish whether or not a person on a contract is actually receiving a rate that is comparable to the adult minimum wage. I appreciate that there were some concerns raised by submitters around costs especially for some industries—that this is going to increase costs for certain industries. Well to a degree I have to say that if your industry only survives by paying people less than the minimum wage then you are effectively being subsidised by the State. Lots of industries have to pay people the minimum wage. There is no escaping that—and if they are not able to survive paying people the minimum wage then they are not able to survive. That is the nature of capitalism. Unfortunately some industries are using this as a way to circumvent those rules and pay people less than the minimum wage. The minimum wage works for most industries—why not for those that rely on this system? There were some technical issues that were raised by people about the complexity of this bill. Again the amendments that we propose seek to address this.Ultimately this legislation comes down to a fundamental belief on this side of the House that if you are working in New Zealand you should be entitled to income that is at the very least equivalent to the adult minimum wage. Some people are not afforded that right. That is wrong. We should change that. This bill is the way to change that and I urge members particularly those considering their vote this afternoon to support this bill through to the next stage."