Lees-Galloway IainIAIN LEES-GALLOWAY (Labour—Palmerston North): I thank the chair of the Transport and Industrial Relations Committee Jonathan Young for his contribution although it troubles me a little bit that there is still a large degree of confusion from members opposite about what this bill does despite the lengthy consideration it was given by the select committee. So I want to clear up one piece of confusion. The select committee chairman Jonathan Young said that we should not require everyone to be paid only an hourly rate and we should allow other forms of remuneration such as piece-rates and other forms to exist. This legislation does not stop that. In fact one thing that I think has been completely overlooked is that employees—people who are in a classic employment relationship—can be paid a piece-rate but our employment legislation requires them to still be paid the minimum wage regardless of how they are being paid. So this is not a debate about whether or not we should allow people to continue to be paid a piece-rate. This is a piece of legislation that seeks to close the loophole that says that by having someone in a contracting relationship rather than an employment relationship that person is not entitled to the basic standards that they are entitled to in an employment relationship in particular the minimum wage. There are people who are in an employment relationship who are paid a piece-rate and under current employment law they still need to be paid the minimum wage whereas someone who is contracted but paid a piece-rate is not required to be paid the minimum wage. So I really want to make that point clear because I felt from Jonathan Young's contribution that there was still an element of confusion from the other side of the Chamber about that. I also want to address the issue of people who are self-employed. Again Jonathan Young referred to the ILO guidelines. This is around ensuring that we do not mask the true nature of the relationship by claiming that someone is self-employed. Someone who is in a contracting relationship where they are receiving most or all of their income from one source—from one principal contractor—cannot realistically be considered to be self-employed. In fact Supplementary Order Paper 203 which David Parker has put up seeks to clarify the nature of self-employment and to exclude those people who are genuinely self-employed but include those who people might wish to deem to be self-employed but who are in fact in a contractual relationship—in particular those who are in a dependent contractual relationship. As David Parker pointed out other jurisdictions have done this. Great Britain uses a method that is similar to the one that is proposed in this legislation. Canada has defined dependent contractors and afforded them the rights of employees. So this is not something that is unusual; it has been done in other jurisdictions and overseas. The sky has not fallen. Their economy has not collapsed because their Parliaments have decided to pass legislation that affords the normal rights of employment that everybody working in New Zealand ought to be able to rely on. I think it is important to note that we are not trying to rule out piece-rates or anything like that and that we are not trying to impinge on people who are genuinely self-employed—and in fact David Parker has sought to clarify that. I want to support the comments made by David Parker around the decreasing share of economic growth that is going to labour to workers no matter what the nature of their employment or contractual relationship and the increasing share that is going to the owners of capital. That has been driven through a range of different mechanisms but there is no doubt that substituting traditional employment relationships with contractual relationships in order to circumvent things like the minimum wage and the other minimum standards that are afforded to employees is one thing that is driving that decreasing share of the fruits of productivity going to the people who are providing their labour in businesses. We need to tidy that up. This legislation does that well and it does it even better with the amendments that David Parker is proposing in his Supplementary Order Papers 203 and 204. The larger of those two is the result of the submissions that we heard at the Transport and Industrial Relations Committee and there is an additional Supplementary Order Paper that seeks to address some of the issues that have come up since the bill has come back from the select committee. I applaud David Parker for working closely with the business community to try to address the concerns that it has raised but I must say that a number of the concerns that I have seen raised demonstrate more of a lack of understanding of the legislation rather than genuine issues that could arise if the legislation is passed. There was another matter that I wanted to raise but which has escaped my mind momentarily so in the meantime I will simply look at some of the other changes that David Parker is proposing to bring some clarity to this legislation. New section 6A is to make it clear that the rate of remuneration is not to be less than the minimum rate. As the legislation was originally drafted it required a minimum rate for contractors but it was not clear that the rate of remuneration was not to be less than the minimum rate for employees. That obviously was not the intention of the original legislation. And that reminds me of what I wanted to address which was one of the other points that Jonathan Young raised which was to say that even if you provide a rate of remuneration for contractors that is at the minimum rate they still have to pay ACC and various other costs—as do employees in fact. Employees who are on the minimum wage are taxed they pay their ACC levy and what they take home in their pocket is less than the hourly minimum wage rate. And it would be exactly the same for contractors. So if that is being used by members opposite as a reason to say that this bill does not meet its intended purpose then I think it fails. What it actually demonstrates is just another way in which this legislation gives those contractors the same rights as they would have if they were in a traditional employment relationship. I am keen to hear from members opposite what their response is to those matters. I am keen to hear from them that they are clear about what this legislation does. I urge members who have been using those arguments to oppose this legislation to reconsider their view because I do not think their fears are warranted. I think that the fears they have expressed have come from confusion about the legislation rather than what the legislation actually does and I urge them to reconsider their vote.