Coddington Deborah: Holidays Bill — Second Reading 
Coddington Deborah: Holidays Bill — Second Reading 
[Volume:614;Page:10462] 
DEBORAH CODDINGTON (ACT) 
: 
 The ACT party did support the repeal of the Holidays Act of 1981 to provide holiday and leave entitlements that would be easier to understand and apply but this bill in the way it has been drafted and amended does the opposite so we will not be supporting it and we have a minority report in the commentary. 
The purpose of the bill is supposedly to address a work-life balance. We would say that it is not the proper role of Government to interfere with the work-life balance of individual people. That is up to people themselves to negotiate with their employers and for employers to negotiate with employees. In some cases employees might prefer to have extra money instead of another 5 days off. That might contribute to a better work-life balance for them than having 4 weeks’ holiday. They might like to cash in a week’s holiday and take 3 weeks’ holiday or take 2 weeks’ holiday and cash in the other 2 weeks’ holiday. 
We had submission after submission at the Transport and Industrial Relations Committee saying exactly this from employers who were very in touch with the people whom they employed and who said that a lot of their employees get into financial difficulty. They see their holiday pay sitting there like money in the bank. They constantly come to their employers and ask whether they can have it in cash instead of taking a holiday because they are so stressed. Their family life is affected because of financial difficulties they have got into but they are unable to trade a week or 2 weeks’ holiday for the cash. 
We see this as a patronising attitude that treats employees like children who are unable to decide for themselves and work a way into a work-life balance. We are particularly concerned at the way the 4 weeks’ minimum annual leave has been introduced. At a Business New Zealand conference during the winter of discontent the Prime Minister promised that 4 weeks’ annual leave was not on the Government’s agenda. Then the unions got agitated and Matt Robson’s bill was introduced. However that bill was considered in select committee alongside the Holidays Bill and not as a serious alternative. Many submitters either ignored it or did not treat it seriously because they heeded the Prime Minister’ promise that the 4 weeks’ minimum leave provision would not be passed by this Government. 
Then the Prime Minister promised the unions that the 4 weeks’ annual leave would in fact come in. She hedged her bets by saying it would be passed during this Parliament and not come into effect until April 2007. That is constitutionally unsound. How can this Government have something that binds a future Parliament? How can it have something sneaked through like that? It was never seriously discussed at select committee and at the very least it should have gone back to select committee after the Labour Party conference. Submitters should have been re-invited to put in their submissions and we should have considered and discussed those submissions. That has not happened and this 4 weeks’ annual leave is going through in a profoundly undemocratic way. 
The other thing we looked at is this “pay as you go” holiday pay. We have tidied up the bill a bit in that it is now casual staff who will if they agree be allowed to be paid “pay as you go” holiday pay; that is where it is built into their weekly or 2-weekly wages. 
However the ACT party argued that this should also be extended at the very least to permanent part-time workers who should be able to agree to “pay as you go” holiday pay too. Permanent part-timers such as people who work in restaurants and those sorts of places have terrible trouble trying to get their holiday pay from former employers. This is often not because the employers are deliberately trying to withhold it from them but because it is a huge compliance cost for those employers trying to keep up with multitudes of staff who shift from one place of work to another. 
In many instances it is better for permanent part-timers to have their holiday pay as “pay as you go” but this Government has denied them the opportunity even to ask for that. That is another example of how workers are being treated as children by this Government. 
There is another area where the Government has got it wrong. Special leave is separated out in this legislation—that is sick leave and bereavement leave. I will come to sick leave in a minute. Bereavement leave is now so permissively written in terms of the relevant factors that employers must consider when they decide whether to give someone bereavement leave that it will be hugely open to dispute. I predict that this will be a feast for employment lawyers and there will be more and more cases going before mediation. 
Among the issues that have to be taken into account when employers are deciding to give bereavement leave are cultural factors. Now what on earth does that mean? How on earth is an employer meant to work out what is meant by cultural factors? We had one submitter who gave a very interesting submission to us. She talked about again a factory with shift workers where an employer was approached by the whole shift—40 people—who wanted to go to the funeral of the father of one of the workers. The employer was able to say to them: “Those workers can go and those workers can go but if those workers go they won’t get paid because they don’t have any bereavement leave left.” He was able to do that with clarity and the employees who did not have any paid bereavement leave left did not take the day off. Under this legislation the employer would be wiser to give the whole shift the time off and close down the factory if those employees claimed they needed to go to the funeral for cultural reasons. Otherwise the uncertainty stakes are raised so high that the employer risks at worst being dragged into litigation. 
At least the sick leave provisions have been reduced from 5 days proof down to 3 days proof but we would argue that this is still open to abuse. There are employers who are desperately trying to manage absenteeism. They do not routinely ask for proof after 1 day’s absence or sometimes even after 3 days if it is a good employee who is absent but if they spot a pattern of abuse—for instance if they spot people taking Mondays and Fridays off regularly—under the present legislation employers are allowed to seek proof without waiting for 3 days. We argue that the 3-day requirement is something that will be open to abuse. 
There are significant costs for small businesses in this legislation. If one looks at public holidays where the relevant daily pay is a new concept and if one looks at salaried employees where the penal rates are already built into the employment contracts and salaries at the best those will last for only 1 year after this legislation comes into force. This bill overrides existing employment agreements that state that the salary or base wage is specifically included. 
This will cost the country up to $900 million if one counts the lost wage rises to workers. If there is any merit in the argument that it will increase productivity why do we not just increase annual leave to 48 weeks and have 4 weeks in work? Then productivity would go through the roof. That is the logical extension of that argument. 
Finally what does the Government say to the Auckland District Health Board which estimates that this bill will add another $2 million to its annual costs? Where will that come from—increased taxes or reduced services? 
PAUL ADAMS (United Future) 
: 
 United Future voted for this bill on its first reading because we could see the value in any attempt to clarify the confusion for employers and workers alike surrounding leave entitlements. The representation of Business New Zealand and the New Zealand Council of Trade Unions on the advisory group that was consulted over the bill reflected that common desire to tidy up the holidays legislation. But we also signalled that we could not support the bill through its latter stages if the Government continued to use this opportunity to tidy up the Holidays Act to award new entitlements to workers. This Government talks a lot about good faith and collective bargaining but this amounts to lip service when it tells employers and employees what the terms of that agreement will be. Where is the freedom to choose? Where is the freedom to negotiate? 
Brian Connell 
: There is none. 
PAUL ADAMS 
: The member is right—there is none. In life we go through seasons. A young worker who has just got married might prefer to negotiate with his or her employer to take only 2 weeks’ annual holiday and take an additional 2 weeks’ pay. But in this legislation I see there is no freedom to choose; there is just legalism which binds people. People in this nation are being instructed day after day to live by the law. The law will tell them everything they can do yet they no longer do what is right or often what is fair and that concerns me greatly. 
Work is not a bad thing; work is a good thing. Holidays have been mentioned a lot in this bill as being a great time to spend with the family. Matt Robson has said of United Future that it is the family-friendly party. Well we are and we understand there is a lot more to building a successful family than having 4 weeks’ holiday. If members actually look and work amongst many people as I do they will find that holidays can be a time of incredible stress heartache and many other challenges for families in New Zealand. I know that in February and March there is often a lot of counselling and work to do with people who have gone away because there are a lot of pressures on families these days. 
The new entitlements imposed by the bill include a minimum rate of time and a half for those working on public holidays in addition to an alternative day’s leave. Business New Zealand estimates that this will cost employers an additional 1 percent in wages and one can start to see how it will begin to add up. The Auckland District Health Board has calculated that the bill could cost it at least $1.25 million a year in extra pay for doctors on salaries and staff on casual contracts as these agreements do not include allowances for working on public holidays. The 6 percent loading paid to casual staff covers annual leave not public holidays. If employers roster fewer staff to work on those days that raises health and safety concerns for those left behind with more duties to perform. 
I argue that most employers of this type would regard the salaries they pay as high enough to include allowances for public holiday work but undoubtedly they will now face a new round of claims for an increase because of this bill. In fact clauses 47A and 47B specify that new and existing employment agreements must include provisions relating to time and a half payment. There is no longer the freedom to choose if people want to work on a public holiday for maybe a few extra dollars. No that freedom is taken away. It must now include provisions relating to the payment of time and a half. I am sure that it will mean that employers will have to pay more in salaries whether or not their employees work public holidays. 
 Then there are the changes to sickness and bereavement leave. I am very pleased to see that the select committee has changed a provision in the bill relating to the employer’s right to seek proof of sickness so that they now require evidence after 3 days of sick leave rather than 5. This was the biggest cause of concern expressed by 1500 employers at a series of 30 briefings conducted by the Employers and Manufacturers Association (Northern) during April and May. 
But the bill also stops an employer from seeking proof of illness from somebody who regularly takes a Monday or a Friday off and if we are honest we could all say that most of us here would know people who have done that. Some members may have been naughty and done it themselves—the old Friday off or Monday off trick to get a long weekend because that would be only 1 day of sick leave at a time. 
I still have concerns that the new entitlement for 3 days’ separate bereavement leave may be treated as a minimum as well as a maximum by employees and I note that employers are unable to require proof of entitlement. Some employers are predicting that the inclusion of cultural reasons as a justification for taking an additional day of bereavement leave could require some workplaces to shut down completely where a large proportion of the workers share a cultural or ethnic heritage. 
But the biggest change to this bill at the select committee was the inclusion of the 4 weeks’ annual leave to be introduced in 2007 rather than straight away as Matt Robson’s bill proposed. As a consequence the Robson bill was rejected by the select committee by majority. It would be difficult for anyone trying to find out why the committee made this decision. The select committee report that rejects the Robson bill is a barely a page long. Yet the section in the report on the Holidays Bill that incorporates the new provision for 4 weeks’ leave does not state the reasons this new entitlement should be included. 
The question this raises is whether the inclusion of 4 weeks’ leave was a decision made by the committee as a group or whether it was a case of Government members following orders. I will leave the listeners to figure out which it was but it is a bit of a worry that all those people who made submissions on this matter and the general public get no justification for this decision. 
The inclusion of 4 weeks’ leave in this bill has made United Future’s decision about whether to support it much more difficult. We voted against the Robson bill at its first reading primarily because it would have imposed a large and immediate cost on business of something like 2 percent or $1 billion nationwide to their wage bill. We voted for the first reading of the Holidays Bill but at that time we put the onus on the Government to convince United Future and this Parliament that the new entitlements it proposed would not adversely impact on business in this country. 
We do not think that the Government has adequately demonstrated how the other changes in the Holidays Bill will impact on employers but we do recognise that by introducing 4 weeks’ leave in 4 years’ time there may be sufficient time for business to adjust. It must be noted that according to the Employment Relations Service 24 percent of employees have more than 3 weeks’ leave so the size of this change cannot be underestimated. 
As the original family party we do think that having more time to spend with loved ones is a good thing but not if it is at the expense of the boss’s ability to spend time with his family because he or she has to cover the extra time that his employees have off. This would almost certainly be the case if 4 weeks’ leave were introduced straight away. We have to remember that the vast majority of employers in New Zealand run small operations with a handful of staff. So we are in the unusual position of voting against the second reading of this bill yet we are supportive of the phasing in of 4 weeks’ leave. However it must be noted that this may not be without difficulties as the economy may be in very different shape in 2007 and the implication of this bill would add considerable strain to the business climate.