Lees-Galloway IainEMPLOYMENT RELATIONS AMENDMENT BILLFirst ReadingHon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): I move That the Employment Relations Amendment Bill be now read a first time. I nominate the Education and Workforce Committee to consider the bill.This bill amends the Employment Relations Act 2000 to implement the Government's 100-day commitments on workplace relations. The proposals are designed to provide greater protection to workers especially vulnerable workers and to strengthen the role of collective bargaining in the workplace to ensure fair wages and conditions.For too long the employment relations system has been failing too many people in New Zealand. Low wages limited pay increases and a steady erosion of conditions became prevalent under the previous Government. Recent economic growth while welcomed is worryingly supported by increasing volumes of low-paid work rather than through building the skills innovation and productivity that drive a high-wage economy.The reforms set out in this bill begin to give effect to this Government's vision for a highly skilled and innovative economy that delivers good jobs decent conditions and fair wages for a fair day's work. An effective employment relations framework balances the need for employers to have flexibility in how they run their businesses while providing safeguards and rights to employees. This bill rolls back a number of the previous Government's amendments that weakened employees' rights at work and tipped the balance too far away from the principles of basic fairness.This bill contains 14 amendments to the Employment Relations Act. They can be grouped into two main categories: the provision of a set of minimum protections for the workforce as a whole and strengthening the role of collective bargaining and unions in industrial relations. Minimum standards are key to ensuring vulnerable workers are not taken advantage of. We want to ensure that all employers treat workers with decency and respect.I first want to address the issue of trial periods. It's fair to say that there are differing views about trial periods which is why we have worked closely and collaboratively with our partners in Government to reach a position that limits 90-day trial periods to employers with fewer than 20 employees. I'd like to thank the New Zealand First Party and the Green Party for a constructive discussion on these issues. Research from the Motu Economic and Public Policy Research Trust has indicated that small businesses are the most likely to use trial periods and we hear from business organisations that employers can be encouraged to hire workers if trial periods are available. However the same research from Motu suggests that the evidence isn't strong. What is clear is the need for more research on the impact both positive and negative of 90-day trial periods to complement the Motu research.I note with some degree of disappointment that the previous Government essentially failed to canvass the views of workers on this issue although frankly I'm hardly surprised. As we account for the benefits of 90-day trials to employers we must also account for their costs to New Zealand workers. They can lead to uncertainty and anxiety for new employees. When employers do dismiss people on trial periods this may cause significant distress exacerbated when workers are not provided reasons and where they believe the dismissal is unfair. The lack of a process for workers to challenge the dismissal may worsen their experience. It may mean that some employees face difficulty in finding subsequent employment if they are dismissed under a trial position without knowing the reason. In future they may have to account for that dismissal which may harm their future employment prospects.Employees may also become risk-averse about moving jobs if it means moving from a job in which they have protections against unjustified dismissal into one where they can be summarily dismissed. That may make the overall labour market less flexible and may also harm employers who have a less engaged and less productive workforce. The position we've reached will mean that trials will be limited to employers who appear to be gaining the most relative benefit out of them while limiting their scope to ensure that as many workers as possible are protected by the standard provisions around unjustified dismissal.Small businesses employ approximately 29 percent of employees in New Zealand. The remaining 71 percent of employees will have access to personal grievances for unjustified dismissal from day one. Larger employers usually have more sophisticated hiring systems in place they are better placed to manage the risks involved in hiring new employees and the harm of an underperforming employee is considerably less than that for a small firm.We do need to learn more about the effects of trial periods. I plan to undertake further research on the scale and use of 90-day trials the number of dismissals and its impact on employees and the economy to ensure that trial periods are working appropriately.Elsewhere to enhance minimum standards the bill restores an employee's right to a minimum number and duration of set rest and meal breaks. The previous Government took away this right nickel-and-diming Kiwi workers. We are restoring it. This will give employees enough time to rest refresh and eat during working hours and be able to continue to work safely. I recognise that there are limited circumstances where for safety reasons it will not be possible to provide breaks in this way. The bill includes a narrow exception for those businesses that provide an essential service where the continuity of the service is critical to the public interest and the cost of replacing the employee with a person sufficient to cover the break is unreasonable.We are also bringing back an employee's right to request to return to their position as the primary remedy in unjustified dismissal cases where practical and reasonable. While this is rarely used it is important to move the starting point for resolving disputes away from payouts so that the real possibility of a return to work is considered as the first option. If the relationship can be saved this is better for workers and employers. Part 6A of the Employment Relations Act contains an important set of protections for workers in industries with a history of driving down their conditions to rock bottom where contracts change hands frequently. The rules provide critical protection for vulnerable workers such as cleaners and caterers by allowing them to transfer their employment with the same terms and conditions and entitlements to an incoming employer when a contract that affects the work they are doing changes hands.The previous Government introduced an exemption to the Act that meant small to medium sized employers (SMEs) did not have to offer a transfer to existing employees on the same terms and conditions or at all. This bill proposes to repeal the SME exemption to restore the right for employees to transfer on the same terms and conditions. Together these proposals will make New Zealand workplaces fairer and safer.The second set of reforms relates to collective bargaining and union rights. We want to put in place a fairer framework for workers to bargain for better terms and conditions. Collective bargaining and union relations are critical elements of success for some of our most successful companies. The previous Government weakened the collective bargaining and union recognition framework. This has led to worse working conditions for many New Zealanders and a more unequal society. The bill proposes to remove the ability of employers to opt out of multi-employer collective bargaining at the outset of bargaining. The current opt-out undermines the object of the Act to promote collective bargaining and has been seen as inconsistent with New Zealand's obligations under ILO Convention 98 on the Right to Organise and Bargain Collectively. Employers could still conclude a single-employer agreement after multi-employer bargaining but the change will mean that they at least have to come to the table and discuss the merits of a possible multi-employer collective agreement.Changes by the previous National Government allowed employers to deduct wages for partial strikes. In some instances this has resulted in employees losing pay for low-level action such as wearing a T-shirt instead of wearing their uniform. Pay deductions for partial strikes is an unfair restriction on collective action. This bill proposes to repeal pay deductions as a response to partial strikes. We also propose that collective agreements must include pay rates. This amendment follows recent case law that held that refusing to include pay rates in a collective agreement did not equate to a genuine reason not to conclude bargaining. Pay is a key term of employment and the ability to exclude pay from collective bargaining runs contrary to the very purpose of the Act. This has been a challenging drafting exercise and I encourage members of the select committee to listen carefully to submitters on this aspect.This legislation restores minimum rights for all working people and it improves workers' bargaining positions in the workplace. To lift wages we must not only grow our economy; we need to ensure that we have an industrial relations framework that shares the growth amongst the people who earn that growth. I commend this bill to the House.