Bennett Paula: Employment Relations Amendment Bill — Second Reading 
Bennett Paula: Employment Relations Amendment Bill — Second Reading 
[Volume:633;Page:5016] 
PAULA BENNETT (National) 
: 
 The Employment Relations Amendment Bill is simply not necessary. It is largely motivated by the practice of some district health boards successively tendering out their cleaning operations. Frequently the new contractor would take on the existing workforce but on reduced conditions. We heard evidence in the Transport and Industrial Relations Committee that some cleaners in a single hospital had had as many as six contractors in succession. We are not without sympathy for those vulnerable workers who saw themselves being moved from contract to contract—not at all. The Government has simply chosen a blunt instrument to fix this particular and relatively narrow issue. 
Large companies providing vulnerable services are likely to be the least affected as many are covered by multi-employer agreements in their respective sectors. When work done by such a company is contracted to a company that is covered by the same agreement the affected employees will receive the kinds of provisions envisaged in the proposed changes. No law change would be necessary. This amendment bill is not necessary and could in fact have dire consequences for the very workers whom Labour is supposedly trying to protect. 
I was appalled to hear the Minister say that the bill would not affect small businesses and that it was the vulnerable employees working for those small businesses who deserved to be protected. Without a doubt it is the very vulnerable workers who will be most at risk under those sorts of changes. One needs to think just of the family-owned business that contracts for services and wins a contract. That family-owned business may have two or three employees whom they have had for some time have been looking after and have been giving the kinds of benefits they know they deserve. When that business contracts for and wins a tender it will not be able to employ those people in that very job; they will under these law changes have to take on the employees who are already working in the job. That is simply not right not correct and not fair to those very vulnerable workers whom Labour is purporting to help through this bill. 
Members need to think about the example of a contractor who is doing a poor job—there are ones who are not doing a good job. We are constantly hearing from Labour that what can happen is that one can dismiss workers or be sure to tell them they are doing a poor job. But the reality is that it is really difficult to get rid of a contract one is under. If contractors were quite clever and thought they would be losing that contract it is quite simple as to what they would do. If contractors really were reaching that conniving level and had a contract they knew they would lose to one of their competitors when it came up for tender they would simply—because the conditions of that employment would go on to the next employer as the Minister stated—put those conditions of employment at such a high level that the next employer would have to take them on so that it would not be beneficial to run the business. 
If those contractors knew the contract would be lost had been told things were not working well and knew that the company they were contracted to was not happy they would simply double the employment conditions of their employees. The employees would be happy; they would be getting twice the money and all of a sudden they would be on 6 weeks’ annual leave. They would be happy because the contractor had put in extended sick leave provisions and provided other conditions. The contractor would lose that contract and another contractor would get it. That contractor would have to take on the same employment conditions that those employees were under. All of a sudden the contractor’s expenses would more than double and all of a sudden the business would be unable to work effectively. The business would go under and those vulnerable employees would go under. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
PAULA BENNETT 
: This bill is in effect interfering with contractual rights. Decisions to contract out work are made for good business reasons and yes employers have an expectation that the work will be done to a level that meets their needs. 
Let us talk for a little bit about the case that brought this amendment to Parliament the Dunedin Kindergarten Association because it is a classic case. The contract had finished. It was not a contract that was being rolled over; nor was it one that was being terminated. The contract had finished. The association then went out to tender because it felt the job that had been done to date had not been satisfactory. It went out to tender because it was not pleased with what had been happening in that kindergarten. In fact even though it had spoken to the cleaners many times about the level of their work it was the belief of the parents and the teachers that the kindergarten was actually being left in an unsanitary and unsuitable state for children to learn in. That was simply not good enough. So the association did what any other good employer would do in terms of business sense even though it was a State-sector employer. It simply went out to tender to see whether it could get contractors that would meet the needs of its business and actually do the work to a level that was satisfactory. It is simply unthinkable that the very people who were not doing their job satisfactorily who were leaving the kindergarten in an unsanitary state would then be working for the next company that won the contract. 
So believe it or not I say to the Labour Government it is not always about money. Sometimes it is about the service and sometimes it is about having an expectation in relation to the quality of work that will be done—standards that everyone actually has a right to be working to. The workers cleaning the kindergarten were not providing a service that was good enough and under this amendment they would be back at work the following week even though the kindergarten had gone out and negotiated a new contract. Our children deserve better. This simply is nonsensical and it is the main reason for us voting against the bill. 
I want to talk a little bit about the National Party’s minority view in the commentary on the bill. I think it is really important to put it on the record as well. We say that the bill is “an unreasonable restriction on the freedom of businesses to manage their operations. It will affect all business whether large or small.” We really believe it will be those small businesses that will suffer most under this amendment and it is those vulnerable employees who are working for those small businesses who will find themselves worse off. If the employer they are currently working for loses a contract and if they wish to continue their employment with the employer then they could certainly find themselves in a position of being redundant and of actually being worse off. 
A classic example is family members who are working in a family business that then take over the contract of another family business and that family is expected to take on the workers of the previous contract. Again it simply is not sensible. The bill will also make it harder for new contractors to improve the quality of the work it does to reorganise the way that work is done and to generally improve its productivity. This Government is constantly talking about productivity but time and time again the employment law it is passing is not fulfilling that main goal that it says it has. Ultimately under this amendment everyone will suffer—the new contracting company the entity that wants to change the contracts and the employees who will be stuck in a declining section of the economy unable to improve that productivity. 
The bill’s provisions will replace the present Part 6A provisions of the Act. The object of preserving the jobs of existing employees in contracting situations is undoubtedly well intended. As I stated earlier it is about the district health boards and about those vulnerable workers who work for those boards. They were seeing themselves being turned over and actually ending up—in my understanding of the submissions and the advisers we heard from—with worse employment conditions than the ones they had when working for the same body. I do not think that anyone who sat on the Transport and Industrial Relations Committee did not see that as an issue and did not want to see it fixed. It is the way we are fixing it that the National Party vehemently opposes. It is yet another case of Big Sister coming in laying down the big hammer and actually taking over when instead smaller amendments and small changes could have been made to contract legislation. This bill will affect small business and we will most certainly not be supporting it for that reason. 
The likely consequences are not quite as clear-cut as may initially have been thought. An immediate effect will be the preservation of existing employees’ jobs at the expense of potential employees who might otherwise have gained employment to say nothing of the possible preservation of the employment of employees whose performance may have actually caused the loss of their employer’s contract. 
The National Party will not be supporting this amendment. Ultimately we believe that everybody will suffer—the new contracting company the entity that wants to change the contract and the employees. If we are serious about protecting vulnerable workers we need to open up the market place more and give those in the larger contracts which we believe are already protected under the law what they need.