Brown SimeonSIMEON BROWN (National—Pakuranga): Thank you Mr Chair for an opportunity to talk on Part 2 of the Employment Relations Amendment Bill. As we progress this bill through the House I think it's important to note that this bill is going to make an enormous difference on employment relations—an enormous negative difference on employment relations—in New Zealand. When it comes to Part 2 specifically I'd like to discuss clause 29 which deals with the employment agreements which contain provisions for trial periods for 90 days or less. What this provision seeks to do is to reduce the number of employers who will be able to use these provisions in their contracts to those employers who employ fewer than 20 employees at the beginning of the day on which the employment agreement is entered into".So when we were debating this in the Education and Workforce Committee this issue was raised by a number of submitters around how do you calculate 20 and when do you calculate it by? So—Hon Andrew Little: The number that comes after 19.SIMEON BROWN: Mr Andrew Little says that it's the number which comes after the number 19 but that's about the extent of his understanding of employment relations and the impact that numbers like this actually have on employment relations. Does that mean 19 part-time employees or could that be 10 full-time employees and nine part-time or could that be 10 full-time and nine part-time? So this is the complexity of the employment law that we have in New Zealand and the types of businesses which employ a whole wide variety of different types of people.I'd like to highlight in particular the work done by Hospitality New Zealand who represent a huge number of employers up and down our country who work with a range of different types of employers and who have a huge amount of seasonality in their type of business and in their type of work. At different points in the year they may have five people working for them and at other points they may need over a hundred people working for them and so the ability for them to be able to plan and the ability for them to be able to know what types of contracts they're able to enter into at times of the year with different employers is dramatically impacted by a piece of legislation which says an employer who employs "fewer than 20 employees at the beginning of the day on which the employment agreement is entered into". This—CHAIRPERSON (Adrian Rurawhe): Sorry to interrupt the member but it's come time for me to leave the Chair for the dinner break.SIMEON BROWN: We'll be back.Sitting suspended from 6 p.m. to 7.30 p.m.CHAIRPERSON (Hon Anne Tolley): Kia ora tātou everyone. When we rose for the dinner break we were considering Part 2 of the Employment Relations Amendment Bill. Simeon Brown had the call and he has two minutes and 26 seconds remaining should he so wish.SIMEON BROWN: I do so wish. Thank you Madam Chair.As I was speaking prior to the dinner break I was discussing the provision which is clause 29 in this bill which relates to the trial periods for 90 days or less and that this restricts the current trial period provisions to those employers who have less than 20 employees. I was bringing to this House some of the concerns which have been raised with me as a constituency MP as the MP in Pakuranga and also some of the submissions which were raised during the select committee process and the issues there. One of the key issues that I did raise was around the fact that a large number of businesses will be impacted by this hard and fast 20 employee rule which means that as they fluctuate in size sometimes quite dramatically—at the moment we're at the beginning of the summer peak tourism season and a lot of businesses who operate in the tourism sector have to hire a lot of people very quickly but only for a short period of time and that restricts their ability to be able to use these provisions. The impact of that is that they will choose not to employ younger people those who may have a work history or a range of other things which they would otherwise overlook. Those people are the ones who will lose the opportunities to be able to take up jobs in those sectors.Also I think of a cafe up in Howick in my electorate which again hires young people which it would otherwise have a second guess over in favour of someone more experienced. They use these provisions. They have just over 20 staff and will be restricted by this provision which is currently being put through this bill.We have a number of questions. I guess the other question is why is it not raised as being a full-time equivalent or 20 employees? Why is it not 20 full-time equivalents because a range of businesses will have a range of different mixtures of employees? I'd like the Minister to address the question of why he chose 20 employees rather than 20 full-time equivalents because I think that was raised by a number of the submitters who did talk about the mixture and the flexible arrangements that they try to provide for their staff. Sometimes part-time staff are younger people and so their full-time equivalent might only be 19 but they may hire 30 to 35 individuals. Currently within the provisions of this clause they won't be able to use this trial period once they hit 20 employees. So my question to the Minister is to explain why he used the word "employees" rather than "full-time equivalents" to ensure that those businesses which do have more flexible arrangements are able to do that.So that was one of the comments which were raised by Business New Zealand and also by Hospitality New Zealand in their submissions. Their argument was actually "Look let's raise the bar from 20 employees to 50 employees because that will cater for a wider variety of small to medium employers." I notice that the language in the provision is for small to medium sized employers (SMEs). They do make up the vast majority of employers in the country but there are a range of other businesses which might not be large—might be just over 20 might be 30—but they don't have a very large HR department like a large corporate might. They came to us and they said "Well we're not exactly large but we're not considered under this definition of small to medium but we rely on being able to use the 90-day trial periods to be able to take on people who we might think 'Yep they'll do a good job let's give them a go. Let's try them out and see how they go' with the hope to then give them a full-time permanent position in the firm." They're not big firms. They don't have massive HR departments who can go through and do huge reference checks do the psychometric testing and all the other things that the other big corporates are very fond of doing these days through their HR practices. But they aren't small to medium either under the provisions in this bill. So they sit within that gap essentially. So they were asking "Well let's increase the number to 50." which then allows for there to be some more flexibility a sort of more realistic number which reflects the makeup of the New Zealand business environment and the type of businesses that we operate here in New Zealand.I think it's important to reflect on the type of businesses we do have in New Zealand. We do have a lot of smaller medium businesses trying to get ahead working hard. They're often exporting and they do their best. They're the ones who are making New Zealand the money; that bring their money into the country. They're the ones who provide the jobs they're the ones who keep the economy running and they're the ones who ultimately pay tax to ensure that the Government can provide all of the services that it does for society. So the question they're saying is "Look we're doing everything we can. We've got enormous compliance in place already. Give us some flexibility here so that we can continue to provide employment opportunities. We can take young people on. We can give people opportunities to get their first job then to succeed and then to be able to move forward."So the question is why did he choose 20? Why is it not full-time equivalents rather than employees? And how does he think this is going to work in the complexity of the labour market out there in a wide variety of different industries noting particularly the concerns from the hospitality and tourism sectors who go through huge—and horticulture I think they would also be very big on that as well—fluctuations throughout the year in their industries. They have to take on a lot of people all of a sudden and they have a lot of concerns. I'd like the Minister to address some of those now. Thank you."