Mapp Wayne: Minimum Wage and Remuneration Amendment Bill — Second Reading 
Mapp Wayne: Minimum Wage and Remuneration Amendment Bill — Second Reading 
[Volume:647;Page:16174] 
Dr WAYNE MAPP (National—North Shore) 
: 
 When the Minimum Wage and Remuneration Amendment Bill was originally introduced National was very clear that it considered the bill to be fundamentally flawed. The reason we did so is that we considered that Labour and in particular the member promoting the bill was trying to turn people who are self-employed into employees essentially against their will. By and large it is a matter of choice as to which status one has—whether one is self-employed or whether one is an employee. Over a long number of years both the Employment Court and the income tax legislation tribunals have set up a series of tests so that for instance employers cannot just say of their employees that they are independent contractors and assume that is the end of the matter. The independent tests rest on whether a person has a level of independence in how he or she conducts the work when it is conducted and under what conditions it is conducted. It is known as the control test. 
I suggest that many of the cases referred to by Darien Fenton would not pass the level of control that would make them truly independent contractors. I would be very interested to know if some of those people have taken cases to the various tribunals whether the Employment Relations Authority determined the true status and similarly whether the Inland Revenue Department determined it. As I say it is not something that is determined just by people saying they are something even if the objective reality says that they are not. I think that the test would not be satisfied in many of the cases the member referred to. It is a pretty tall ask to suggest that children delivering pamphlets are anything other than employees in truth. How many children can determine the nature of their work the way in which they do it and so on and so forth? These things do have an element of objectivity. 
Along with most New Zealanders I am sure I was shocked and surprised at what has occurred in relation to the delivery of pamphlets and it is a genuine concern. However the question is whether this bill is the way to resolve those kinds of problems. National members concluded at the time of the introduction of the bill as did those of our members who were on the Transport and Industrial Relations Committee that the answer was no and that the bill was altogether far too sweeping in that it effectively turned people who were self-employed into employees and gave them all the protections of the Employment Relations Act as if they were employees. The truth is that most people who are self-employed have made that a deliberate choice. They want more flexibility. They want different working hours. They want less accountability to the employer—to their boss so to speak. In short they want a separation between themselves and the employer so that they have a certain level of control over their lives and the law has always recognised that free choice by people. 
As I have said there is a series of independent tests to see whether the threshold is achieved. So for instance if people become self-employed they end up having to register for GST they are responsible for accident compensation levies and they have to provide a business tax return as well. Those are the responsibilities of being in business. In short the self-employed take risks that employees do not. The principle risk that is taken is the business risk and the business risk is that one’s income is not guaranteed. But conversely there is the prospect of much greater income if one was to measure it on an hourly basis than otherwise would be the case. That is effectively the distinction between those people who are self-employed and those who are employees. 
The bill as drafted was flawed at the most fundamental level. The select committee sought to rectify those problems. It is clear from reading the select committee’s report that they were unable to be rectified because of as much as anything I guess some fundamental drafting problems. However I also note that many of the submitters did not think this bill was capable of satisfactory rectification. That was certainly the conclusion of the National Party because ultimately the bill would cut across the choice people have made. It cut across their choice to stay away from the Employment Relations Act precisely because they wanted more flexibility. In short those people wanted to be business people and that has the status of being self-employed. 
Labour will always have us believe—and I have heard this from Green Party members also—that there is a third category that is not a legal term but rather a term of art and it is the dependent employee. It is someone in some sort of middle status who is not self-employed or an employee but who is a dependent contractor. Along with my colleagues I will be very interested to see the nature of the Supplementary Order Papers that Darien Fenton proposes to introduce. Certainly it was clear that she was unable to satisfy the National members on the select committee that those amendments would be suitable and practical. 
My colleagues who have worked right at the forefront of industrial and employment relations know the challenges. Paula Bennett in particular has a very clear understanding of those issues because she has worked in the area of human resources. So more than most people in this House she has a very clear understanding of the impracticability of the issues that were raised by the member—that is the way in which law is not always a satisfactory solution to those issues. 
National will be voting against the report back in the second reading. We are not satisfied with the way things initially turned out with the bill as introduced. I spoke in the first reading debate and said that this bill was perhaps one of the most ill-conceived measures that I had seen in my time in Parliament. This bill is just a blatant crossing over of long-established legal distinctions between the self-employed—that is business people—and employees as if the two could be just easily and smoothly meshed. It is clear the select committee was unable to resolve that particular dilemma. I suspect the reason was that the bill as introduced has fundamental flaws. Can those be fixed during the Committee stage? Frankly based on the advice of my colleagues the answer would have to be no. But this is an issue that one has to keep under advisement.