Brash Don: Employment Relations Law Reform Bill — Second Reading 
Brash Don: Employment Relations Law Reform Bill — Second Reading 
[Volume:620;Page:15822] 
Dr DON BRASH (Leader of the Opposition) 
: 
 I rise to oppose this bill and I oppose it very strongly. Sometimes in this House I rise to speak on a bill that is a bit like the curate’s egg—good in some parts and bad in others—but this bill is unqualifiedly bad in every respect. What will this bill actually achieve? Will it achieve faster growth for New Zealand? Not a dog’s chance! Will it achieve higher productivity? Not a dog’s chance! Will it narrow the gap in living standards between New Zealand and Australia? Of course not! Will it lower unemployment? No. Every economist in the world accepts that if we want to lower unemployment on a consistent basis over time and over the cycle we need to have a less inflexible labour market not a more inflexible labour market. 
This bill will achieve one thing and one thing only. It will help the Labour Party’s friends and funders in the trade union movement. Almost 80 percent of all employees in this country choose not to belong to a union. Almost 90 percent of all employees in the private sector choose not to belong to a union. So what does this Government do? Well this Government as some of my colleagues have been pointing out is basically made up of people who were previously members and office holders in unions: Rick Barker David Benson-Pope David Cunliffe Lianne Dalziel Helen Duncan Paul Swain and so on we go. It is a long list of names: Phil Goff Mark Gosche George Hawkins Darren Hughes Winnie Laban and on and on. All of them are former union representatives so surely it is not a surprise to us that they introduced a bill that will have the primary purpose of boosting union membership. 
The Government designed a bill to assist unions increase their membership by making it a breach of good faith for an employer to do anything with the intention of undermining the union or that might have the effect of undermining the union. So it is clear that it would be a breach of good faith for an employer to pay a non-union employee the same as he or she has agreed to pay a union member. I strongly suggest that it would be a breach of good faith under this law to pay a non-union employee more than union members even if the employer judged that a non-union employee was likely to be more productive more flexible and therefore more beneficial to the employer than a union member would be. 
The bill requires that all individual contracts must be negotiated individually. So the bill places huge pressure on employers especially large employers to abandon individual contracts. In case non-union employees still do not get it the bill will provide as the Minister himself has just indicated that a majority of all employees union and non-union can impose a bargaining fee on all employees—payable of course to the union. This bill is all part of the Government’s plan to push people into unions disregarding the effect on growth disregarding the effect on productivity and disregarding the effect on employment. Let us look for a moment at what the Government has done elsewhere in this area. It has been paying lump-sum payments to members of the New Zealand Public Service Association—$5 million last year. This year the Government has made lump-sum payments to staff in the Ministry of Social Development the Inland Revenue Department and several other departments provided they were members of the union. The Government said that it is more convenient for the employer to deal in a general way with members of the union. I suspect that some employers would like to say that it is more productive to have employees who are not members of the union but I also suspect that if employers were to say that they would very quickly find themselves in breach of the legislation. 
As my colleagues have pointed out in recent press statements members of both the Post Primary Teachers Association and the New Zealand Educational Institute have recently been again awarded lump-sum payments by this union. We are on the way back to de facto compulsory unionism. Let me say it again: we are on our way back to de facto compulsory unionism. 
Darren Hughes 
: Say it one more time! 
Dr DON BRASH 
: I thank the member. We are on the way back to de facto compulsory unionism. I am delighted to hear that Mr Hughes accepts that. As the Minister pointed out the bill makes it relatively easy to force an employer into a multi-employer collective agreement. That will be disastrous for small employers and it will be disastrous for employers in those parts of the country where the cost of living is a bit lower and therefore wages are a bit lower. We are on our way back to national awards and again that will be a disaster for smaller employers and employers in parts of the country outside metropolitan New Zealand. 
The bill also threatens to destroy much of the goodwill built up in small businesses when those businesses are sold. The Minister did not spend much time talking about that. The bill contains a clause that allows employees to simply choose not to transfer to the new employer with potentially disastrous effect on the goodwill involved in that business. That faces the vendor with the possibility of large redundancy payments when the employees all decide to opt out and the buyer could face the prospect of taking over a business with no staff at all. This bill could be a disaster for the people who have spent their lives building up a small business with 5 10 15 or 20 employees. So it is hugely damaging legislation and one that the National Party is committed to repealing. 
Government Member 
: You said that about the Employment Relations Act. 
Dr DON BRASH 
: Since the member has raised the question of the Employment Relations Act let me say that there are some features about it that we have no problem with. 
Darren Hughes 
: What’s National got against it? 
Dr DON BRASH 
: I say to Mr Hughes there are three areas in particular that we have a great deal of problem with. First of all the Employment Relations Act makes it almost impossible to dismiss even recently hired staff. It gives unions a monopoly of bargaining and it makes it very difficult indeed to hire staff on fixed-term contracts. Those factors are all disastrous and damaging to our productivity growth. 
The majority report on the bill explains why references to pay equity have been dropped. That is because it points out that equal pay for work of equal value is under “significant examination” in preparation for another bill. This is a warning that there is yet more damaging legislation on the way. 
The bill also provides that an employer would be in breach of good faith if a collective agreement in the health sector did not observe the principles of the Treaty of Waitangi. We have surely had enough of references to the principles of the treaty without indication of what that might mean and yet again here we have a new bill writing the principles of the treaty back into more legislation. This legislation is seriously bad and the National Party not only will repeal it when in Government but will oppose it now with every means at its disposal.