Employment Relations Law Reform Bill — In Committee 
Employment Relations Law Reform Bill — In Committee 
[Volume:620;Page:16064] 
Employment Relations Law Reform Bill 
In Committee 
Part 1 Employment Relations Act 2000 
Dr WAYNE MAPP (National—North Shore) 
: 
 I raise a point of order Mr Chairperson. I wish to draw your attention and members’ attention to the structure of this bill and compare it to the last bill. In the last Committee stage debate we spent 4¼ hours debating the Holidays Amendment Bill which has a total of 13 clauses. If we think of the ratio of time per clause we note that it is nearly a quarter of an hour per clause. 
The CHAIRPERSON (H V Ross Robertson) 
: So what is the point of order? 
Dr WAYNE MAPP 
: In this bill the current bill there are 117 clauses in Part 1. One reason why there are 117 clauses is that some of the clauses adopt up to 10 or more provisions. They cover a huge range of issues. On top of that there are three Supplementary Order Papers from the Minister plus numerous other Supplementary Order Papers and amendments. My point Mr Chairperson is that we in Opposition expect yourself and subsequent Chairpersons to provide a fair and reasonable opportunity to discuss the range and breadth of issues contained in this important legislation. The Government referred to the previous legislation as unintended consequences. In contrast this is a major piece legislation and we expect a full hearing on it. 
The CHAIRPERSON (H V Ross Robertson) 
: Yes the member has made his point. I inform the member that Chairpersons take into account a number of issues when considering debate. In fact we are guided by Standing Order 102. I take on board what the member has said and every consideration will be given. I now seek the call. 
Dr WAYNE MAPP (National—North Shore) 
: 
 My first contribution on Part 1— 
Simon Power 
: Out of four. 
Dr WAYNE MAPP 
:—out of four—will cover the broad range of issues essentially by reference because I expect to develop many of the issues in detail. National has characterised this bill as being a compulsory unionism bill. Members should look at the Minister in the chair Paul Swain. That Minister proclaims himself and allows himself to be proclaimed as friendly to business. In fact he is presiding over legislation that will dramatically reduce choice in the workplace. It will dramatically reduce the freedom of New Zealand businesses and workers. This bill cannot possibly be construed as even remotely— 
Hon Richard Prebble 
: I raise a point of order Mr Chairperson. I apologise for interrupting the honourable member. I was going to wait until the end of the speech but I see that you are about to vacate the Chair. I listened to you very carefully and I thought you said you would decide on how long the calls would be under Standing Order 102. I looked up Standing Order 102 to see what it states and it relates to factors to be taken into account when calling members. It has nothing to do with the length of the debate. So I sincerely hope that you will not determine the length of the debate by whom you call and I hope the points that have been made by Dr Mapp are taken into account. We are seeing a very disturbing trend and we are relying on the Chair to uphold the rights of this Chamber and of backbenchers. What we are seeing is the Government putting legislation into larger and larger parts thereby cutting down the rights of this House. You will be aware—it was certainly the case when I first came to this House—that at one time we would have debated such legislation clause by clause. This is a bill that the Committee would easily have spent a week on. I have a horrible feeling that this part will probably be all over by about 10 o’clock. 
The CHAIRPERSON (H V Ross Robertson) 
: The member makes a very good point and as the Chair I have taken on board what he said. I know that the Chairperson who will follow me has also taken it on board. Perhaps the member might also like to look at Speaker’s ruling 70/1—it should have been read in conjunction with the Standing Order—which concerns the Committee of the whole House. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I am appreciative of the fact that the Chairman has acknowledged the importance of the points of order made by both myself and the Hon Richard Prebble. This is a very very large part. I will not be able to canvass in the space of 5 minutes the full range of issues. 
The very first pernicious feature of this bill is that it dramatically expands the scope of good faith. Bargaining is a robust process. People put up maximum positions in the process of bargaining and expect a robust bargaining process. This bill makes any breach of good faith potentially subject to a penal sanction. It will not be just an issue that might be called before the Employment Relations Authority. It will be subject to a penal sanction and a fine. That will have a chilling effect on the way both businesses and employees will be able to conduct their negotiations. It is an intrusive and heavy-handed approach of the State in what is essentially a private contractual arrangement. 
Secondly the Government has said that whenever an employer offers terms and conditions of a collective contract to a person on an individual contract which has the intention and effect of undermining that collective that will be a breach of good faith and will lead to a fine. What is more the Minister in his second reading speech boasted of the fact that if in the process of negotiation there was simply the effect of undermining the collective contract that also would be a breach of good faith which would again lead to the punitive penal sanction of a $10000 fine. 
Thirdly breaches of good faith not only attract a penal sanction but they allow the Employment Relations Authority to determine the terms of a contract. Freedom of agreement between an employer and an employee is lost because we once again have judges or authority members deciding employment contracts. How on earth can people negotiate fairly and reasonably in such a climate when the legislation is intended to have the chilling effect of destroying the ability of people to reach agreements? 
My fourth point is that the Government via a Supplementary Order Paper will introduce a bargaining fee. That is tantamount to compulsory unionism. The reason is that every union in its collective contract will demand that the collective contract includes the ability for a bargaining fee. Employers will have no real choice. They will agree to that. If there is a ballot of the workers and the majority say yes it means that every single person in the workplace pays a union fee. That is compulsory unionism. That is wrong. 
Hon RICHARD PREBBLE (ACT) 
:  
I will take up that last point first. This is worse than compulsory unionism. Under compulsory unionism at least everybody who was in the union was represented. This is the sort of trade union paradise in which the trade unions get paid by everyone but do not have to represent them. Under this bill there can be 100 workers and only 10 belong to the union. That is quite a good analogy to make because only 10 percent of all workers belong to the union. The union comes along and says that it will negotiate on behalf of the 10 people and therefore the other 90 ought to pay. That is what the Government is proposing. It is called a bargaining fee. 
Lianne Dalziel 
: What percentage has to agree? 
Hon RICHARD PREBBLE 
: What percentage? Does the member think that having a ballot makes it right? I would ask that member where the provisions are to ensure that the bargaining fee bears any relationship to the work that the union does Where is the provision to ensure that none of the bargaining fee is used to finance that member’s election expenses? 
Dr Wayne Mapp 
: No provisions at all! 
Hon RICHARD PREBBLE 
: There are no provisions at all. This is an American proposal. It exists in America. [ 
Interruption 
] The member from the Green Party I know hates America and therefore probably does not even know that this happens. But yes it does. That is where the Government got it from. In the United States the union movement not only claims to have bargained for people who did not ask it to bargain but then spends the money supporting various causes. That is an outrage. 
Another outrage in the bill is that the concept of good faith has been extended beyond its common law meaning which is mutual trust and confidence. The new meanings are so confusing that they will actually be whatever the Employment Court says they will be. Does that matter? Yes it does. Because if someone is found to be in breach of good faith then the Employment Court—that is the State—can then start to fix the terms of employment. So a small business will think that it is employing people with agreements that were made between employer and employees but is then told that it has not met the good-faith test. That could be just because an employer has said no to an unreasonable demand. Then the State will decide how much and on what terms the business is employing people. There is a word for that and it is communism. 
We have another concept in the bill of “vulnerable” employees. No one has come along to explain what this concept means or whether it is needed. It is another huge extension of State power. I warn the Parliament that these are the provisions that the Government tried to introduce when it first introduced the Employment Relations Bill. Thanks to the efforts of my party the National Party and employers up and down the country we managed to have those clauses taken out. Then the Government said what a great bill the Employment Relations Act is when it is only as a result of the amendments made. Here we have the Government taking a huge step backwards towards compulsory trade unionism. I think it is worse than compulsory trade unionism. Trade unionists will get paid for doing nothing. That is an outrage. It will not help prosperity. It will not help employees in New Zealand. It will certainly not help employers and it will not help to improve industrial relations. This is a bad bill and it goes in the opposite direction to that which the Government was boasting about. 
Today I heard the Government boasting that New Zealand was a good place to start a business. This bill goes in the opposite direction and the Government cannot have it both ways. The consequences of this bill will not mean a collapse of the economy tomorrow but will mean that it will be harder for one New Zealander to offer a job to another. It will mean that people will have to pay money to a trade union that they did not join that they did not ask to bargain for them and that they did not ask to provide services. They do so because the Labour Party is abusing the power of the State to take that money from workers. This is a bad bill. It is some of the worst legislation that I have seen in this Chamber and I have been here for 27 years. This is very bad legislation and we ought to vote it down. 
Hon PAUL SWAIN (Minister of Labour) 
: 
 I want to make a couple of comments in response to the member but I personally want to congratulate the Commerce Committee because I think it did a good job on making a number of improvements and clarifications to the bill as it went before the select committee. I was highly disappointed with that member’s speech. Often he makes reasonably incisive speeches and on the odd occasions Ministers get to change bits of legislation on the basis of them. But I listened to that speech. It was the same old tired rhetoric that was given in the year 2000. What did he and people like him say in the year 2000? That the Employment Relations Bill was going to lead to a slacking off of growth! It was going to lead to rising unemployment and strikes were going to skyrocket. I remember that. It was doom and gloom in the National Party and the ACT party backed up by a number of people commentating in the private sector. What have we found? Let us just look at the reality. Growth on average now is about 3.5 percent. That is not bad actually relative to the OECD. Unemployment is now 4 percent and we know relative to the OECD that that is amongst the top performers of the OECD and of course strikes are virtually non-existent and certainly down even from the days of the Employment Contracts Act. 
So what we have heard from that member are all the crocodile tears that were shed at the time the Employments Relations Bill went through. But I do want to take up the point about bargaining fees because this is really the substance of one of the Supplementary Order Papers that have been introduced at the invitation I should say of the select committee. 
Dr Wayne Mapp 
: No the majority. 
Hon PAUL SWAIN 
: At the invitation of the select committee. 
Dr Wayne Mapp 
: The majority. 
Hon PAUL SWAIN 
: It was at the invitation of the select committee that I introduced this Supplementary Order Paper. The committee invited me to and I did. So the bargaining fee arrangements are quite clear if one reads the bill. It says that a bargaining fee arrangement can be entered into with three conditions attached. Firstly the employer and the union have to agree that such an arrangement should occur. Secondly there has to be a ballot of all the people likely to be covered. Thirdly any member—any worker—who does not like the idea simply opts out. Now to hear the outrage about that from that member and the National Party that this somehow is a return to compulsory unionism is just plain garbage—absolute garbage. They have tried to run the line. It has got absolutely no traction because anybody with a cursory understanding of what the bill says will know that that in fact is simply not the case. 
There has been some discussion because I have read this in a couple of places in the media and I have had a discussion with Peter Brown of New Zealand First asking whether the employer has to agree—there is possibly some confusion around this. I have gone back had a look and said that it is reasonably clear to me. But for the avoidance of doubt I have introduced another clarifying Supplementary Order Paper to say that the employer and the union have to agree as part of a collective agreement. I cannot make it I think any more clear than that. The Supplementary Order Paper also states as I say that there has to be a ballot; and finally any employee who wants to opt out can—there need be no reasons he or she can just opt out. Therefore somehow this being seen as the big outrage in returning to compulsory unionism is just absolute nonsense as has been pointed out by a number of people leading up to that proposition being put forward. 
So this is actually quite sensible reasonable legislation that has been reported back. It addresses a matter that employees and unions were saying was a problem which is basically what is called freeloading; that is people not paying their taxes and wanting free health-care. The unions and a lot of the delegates have said that what happens is that they pay their fees they negotiate they bargain and automatically the things get passed on as of right. They were outraged at that and they had a fair point to be frank. Freeloading is not acceptable. 
Hon Richard Prebble 
: Oh rubbish! 
Hon PAUL SWAIN 
: It is not acceptable. On the other hand the employers were saying that they wanted to make sure actually that they could pay employees in the work-site whether they were unionised or not the same. So we have gone out of our way to spell that out as clearly as we can. Employers can pay whether people are on a collective or an individual contract the same or similar. We cannot be any plainer than that. 
So I return to where I started. We heard the crocodile tears in 2000. This was going to be the death knell of capitalism. I remember people making speeches such as that. This was going to be the end of New Zealand. “No one would employ one more person.” I heard someone say; the same kind of thing that Richard Prebble just said before. Unemployment is now 4 percent. We have not been in that situation for nearly three decades. I think the facts have spoken for themselves. This is an entirely reasonable bill. The reality is that 80 percent of the workforce in New Zealand is not covered by collectives—they are not unionised. In fact this particular piece of legislation will have very little impact on them as it had very little impact on those who were not involved in collectives anyway. So I think that it is important to note that the select committee has done good work on this. It has put work into it and has come back with some sensible recommendations and I recommend it to the Committee. 
Hon ROGER SOWRY (National) 
: 
 I rise to back the National Party’s total opposition to this legislation. The Minister paints it using rose-tinted glasses and he knows it. 
Hon Member 
: Gilded the lily! 
Hon ROGER SOWRY 
: Well he has more than gilded the lily. I want to take up a couple of points. The Minister started off with great virtue saying that a bargaining fee has to be agreed to only at the invitation of the select committee—that why he said first of all that he brought the Supplementary Order Paper to the Table. Actually I did not invite the Minister to do that. No one from National did. No one from ACT did. Actually I say to the Minister his own members did. The Labour Party did. So why is the Minister so terrified to stand up and say: “Labour decided to do this.”? Why does he not say that in the Committee? Why does he try to hide behind the select committee? 
The next thing the Minister said was that no one should be scared of the bargaining fee because of the rules—both sides have to agree with it. Anyone who does not want to pay the bargaining fee does not have to. I ask the Minister whether that is right. Are those good rules? 
Hon Paul Swain 
: They’re sensible rules. 
Hon ROGER SOWRY 
: The Minister says they are sensible rules. Why do we not have the same rules for multi-employment collective agreements? Why do we not say that if people do not agree to enter into a multi-employment collective agreement they do not have to? Why do we say that it is all right for bargaining fees—we have to agree they are good sensible rules—but for a multi-employment collective agreement we will compel people? Why do we do that? Why do we not have the same rules for bargaining? 
It is no good the Minister standing up here in the Chamber and saying: “It’s terrible to have freeloading.” I say to the Minster that workers would not have to freeload if they were allowed to negotiate collectives outside of the union. Why do we not allow that? Why do we have a bill that the Minister has passed that forces as my colleague Bill English said members to freeload and then have the Minister get up and say: “It is outrageous that they are freeloading. We’re going to force them to pay a union fee. But it is not compulsory unionism.” Oh no that is not compulsory unionism! Of course it is. Everybody knows it. The trade unions know it which is why they are here tonight shepherding the bill through from the gallery. They know what is going on and they are here to make sure that the Minister delivers because this bill is all about the Minister getting through legislation that will compel people into unions. The union will click the ticket and the Minister will pick up the small change for the Labour Party’s re-election fund. 
 That is what this is all about. This is not about productivity increases. This is not about growing the economy. This is not about becoming more competitive and this is not about the Minister trying to paint himself as business friendly. The Minister has long ago given up on that. The Minister “Swainy and the boys” got rolled and I bet we do not see Mr Tamihere down here. I bet he is not driving at speed back here tonight to give a speech on this bill although this is where he should be because he is Minister for Small Business and they are all going to pay the price for this particularly shoddy legislation. 
It is an indictment on this Government that not one business group supported this bill. Even the Labour Party’s friends such as the new mayor of Auckland were party to the submission made by Business Council for Sustainable Development which totally opposed the bill. The Warehouse—the company the Minister usually cuddles up to in private to be fair did not front up like a lot of other companies on its own. It used an umbrella group because it did not want to be seen to be criticising the Prime Minister in person. The Warehouse used the Business Council for Sustainable Development so it could at least say to its business mates: “Well we did oppose it.” It opposed the bill through another organisation though. 
Hon PETER DUNNE (Leader—United Future) 
: 
 This Employment Relations Law Reform Bill goes too far. When the Employment Relations Act was passed early in the life of this Government many people were prepared to give it a chance. They saw that the one thing that has to be avoided which this bill ensures will now occur—namely industrial relations becoming a game of ping-pong that changes every time the Government changes—was something that we should put a stop to. This bill by actually taking these measures a step further simply places industrial relations law back on the political agenda and that is no good for any of the businesses in New Zealand—exporters manufacturers and producers—because they will now live with uncertainty knowing that the only certainty is that a future Government will change the law and set the whole spiral off once again. 
I want to speak to Supplementary Order Paper 276 which stands in my name and which inserts new clause 9A “Issue of certificate of exemption”. The Committee will be aware that sections 23 and 24 of the principal Act deal with the issue of union access to workplace sites being denied on grounds of conscience particularly on religious grounds provided that certain certificates of exemption are in place. The amendment I am proposing by way of this Supplementary Order Paper clarifies that provision in respect of members of the Brethren Church in so far as their educational and business organisations are concerned. What the amendment does is to carry through a principle that has been long recognised in industrial relations law from the time of the Labour Relations Act of the late 1980s right through the Employment Contracts Act days and through to the Employment Relations Act regarding the right of conscientious objection. The amendment simply deals with the situation that now occurs as a result of moves by in this case members of the Brethren Church into the education field. 
The amendment very particularly circumscribes the group to whom it applies. I want to quote from the amendment and I will explain it a little further in a moment. The operative part of the amendment is that individuals trustees or directors are being exempted where an individual is a practising member or all the trustees of the registered trust concerned are practising members or all the directors and shareholders of a private company are practising members of a religious society or order whose doctrines or beliefs preclude membership of any organisation or body other than the religious society or order of which the employer is a member. There is only one group in that category in New Zealand. It is a group that has long been respected in industrial relations law and it is the Brethren Church. Its members some of whom are here in the gallery this evening to support this amendment have long had an assurance from successive Governments that their rights of conscientious objection given their particular beliefs would be respected. 
The reality is that unless this amendment is passed we will be removing in particular in respect of education but also in respect of some of the business operations the Brethren Church is involved in a significant portion of that right of individual conscientious exemption on religious grounds. That is a backward step and it cuts right across assurances that the Minister the Prime Minister and others have given from time to time that those rights will be upheld. Whatever one’s view about the particular organisation that is not the point. The reality is that a long-held principle of industrial relations law is being tampered with and is going to be put in a position whereby those individual matters of conscience will now have to be dealt with in a different way. That will create hardship for that organisation—in particular in respect of its educational activities. The Brethren Church is now involved in establishing schools up and down the country where it employs teachers who meet all the standard registration procedures and those schools meet New Zealand Qualifications Authority standards and other standards etc. Those operations which I understand educate around about a thousand children will be put under some risk as a result of this bill being passed without this amendment being adopted. 
So I say to the Committee and to the Minister that if this amendment fails then what we are doing is sending a signal that the industrial relations law is being changed in a way that is not only detrimental but is also discriminatory. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I would like to acknowledge the contribution made by the member who has just resumed his seat and to tell him that New Zealand First will be supporting Supplementary Order Paper No 276 in his name. The Brethren Church has been in touch with us. I know that several of my colleagues have been spoken to and when the Hon Peter Dunne sent me his amendment we received it with pleasure and are only too pleased to support it. 
I am not sure whether this is the right part in which to be talking about the bargaining fee but as everybody else has— 
Hon Paul Swain 
: Yes you can. It is in Part 1. 
PETER BROWN 
: I do not think the bargaining fee is as sinister as some of my colleagues are making it out to be. 
Opposition Members 
: It’s compulsory. 
PETER BROWN 
: That is a joke. It is not. Let me give members a viewpoint—[ 
Interruption 
] It is very difficult to do so with the rabble behind me making a lot of noise. 
Dr Wayne Mapp 
: We will sit in front. 
PETER BROWN 
: I like to see whom I am aiming at. 
Simon Power 
: You’re not missing anything. 
PETER BROWN 
: No I am not. I want to give the Committee the benefit of my experience as an employer. The worst thing that can happen in an employment situation is to have a divided workforce. There can be disharmony in the workforce with some people in the union wanting one thing and non-union people wanting something else—they do not get on. I can recall when I was the manager of a stevedoring company—this goes back some while—having watersiders come to the Port of Tauranga who had been involved in the 1951 strike and they did not talk to each other. We had men in the same gang who would not talk to one another. That was exceedingly difficult obviously for the men in the gang because half of them knew from the foreman what the employer wanted and the other half did not unless we went and spoke to them individually. It was a very tense situation and it was never really overcome until people retired. I just point out that that situation should be avoided at all costs in my view. An employer wants to have a harmonious working environment. 
I think I can claim to be one of the members on the Transport and Industrial Relations Committee who wanted to have a close look at the bargaining fee arrangement. I was intrigued when a Dairy Foods worker came before the select committee and outlined his concern. He was a very moderate man it appeared to me. I thought that what he put to the select committee was worth looking at. The Minister’s Supplementary Order Paper No 263 plus the new Supplementary Order Paper No 275 which he has come up with—since I suggest he listened to my contribution in the Chamber the other day—has just about got matters right. He could not have got them better than he has. The provision means that before a bargaining fee arrangement takes place the employer has to be consulted and has to agree with it. 
I tell my National Party colleagues that the employers I know are not spineless wimps. They are pretty tough cookies. They do not get pushed into a corner every day of the week by a union official who says: “This is what we want. Hands up.” and members agree with it. That is a long way from being the situation. 
Lianne Dalziel 
: That’s right. 
PETER BROWN 
: The former Minister agrees with me. Our employers in this country are as tough and as fair-minded by and large as we could get anywhere. If a union comes along and says it wants a bargaining fee arrangement the employer will not simply roll over and say: “Yes sir how much do you want to pay?”. The employers I know will not do that. They will ask what the advantages are—what it will cost their people and what advantages there are. 
Lianne Dalziel 
: You’re improving! 
PETER BROWN 
: I am improving. There was a time when I would not have picked that up. Assuming the employer agrees then the arrangement can progress. I do not know whether terribly many employers would agree to a bargaining fee arrangement if they were not happy with the fee structure. I think they would ask what it will cost the individual first and foremost. I would be disappointed if they did not ask that. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 If this was not such a serious piece of legislation I could almost feel sorry for the Minister in the chair the Hon Paul Swain because he got the hospital pass. Helen Clark had to get rid of Margaret Wilson out of this role because whenever she turned up the blood pressure of every managing director went up a few notches. So the Minister in the chair got the hospital pass. He does not believe in this stuff. 
Dr Wayne Mapp 
: Yes he does; that’s the problem. 
Dr the Hon LOCKWOOD SMITH 
: I do not think he does for 1 minute. He does not believe in it. He and the right faction in Labour do not believe in all this junk. But he got rolled. I know he went to Cabinet to try to get some of this changed. 
John Key 
: “Swainy and the boys”! 
Dr the Hon LOCKWOOD SMITH 
: Yes “Swainy and the boys”. They rolled him. As there are members of the Exclusive Brethren here in the gallery tonight I want to make it clear that National likewise respects their conscientious objection to some of the provisions in this legislation and will also support the amendment to provide for that deeply held belief. 
I want to focus on clause 30 in particular—the bit about the continuity of employment if an employer’s business is restructured. We have just heard the Minister in the chair say that in 2000 when the Employment Relations Bill was first in front of this Parliament there was a hue and cry and outrage about how it was going to be the end of the world. However he did not tell the Committee just now that one of the reasons the outrage died a little was that one of the most controversial clauses in the Employment Relations Bill—clause 66 on the transfer of employment on the restructuring of businesses was dropped by the Government under extremely controversial circumstances. It damn near brought the Labour Government down. 
I was at the select committee when that clause was abandoned. Willie Jackson had to be nobbled and a deal was done with Sue Bradford to shut her up. We know what went on then. I can even tell the Committee what day it was: 6 July 2000. It was 4.30 in the afternoon when Willie Jackson was nobbled when a deal had to be done with Sue Bradford and when the Government backed down on the continuity of employment issue. Now the Government’s union mates have come back and said: “Hang on this isn’t good enough. We want our pound of flesh on this issue.” Labour has rolled over and kowtowed to the union movement and now clause 30 of this bill is inserting new part 6A into the Employment Relations Act. 
I ask the Minister this: how many employers who are not huge employers have full-time legal experts to handle their employment relations? How many employers will be able to conduct their businesses without specialist advice on this law? I do not believe that modest employers in New Zealand will be able to sort out the detail of this bill on their own. There is no way that they can and they will have to seek specialist advice so often. That will add compliance costs to the running of businesses—big-time compliance costs. I know from employers in my electorate that at the moment they struggle to comply with the Employment Relations Act. Most do not comply with it. This legislation adds huge complexity to it. I would like the Minister to say whether he seriously believes that small to medium sized employers will be able to conduct their businesses without specialist advice and without having to pay for specialist advice on these employment law matters. They are hugely complex. If people want to sell their businesses what will they have to do to make sure they comply with this law? First they will have to seek specialist advice on all the steps employers have to take under New Part 6A—that is sections 69(A) 69(B) 69(C) 69(D) 69(E) 69(F) and so on. 
On this continuity of employment provision that the union movement has insisted Labour brings back into the legislation—a provision that Labour once had the good sense to dump because it knew it was bad law—I ask the Minister what studies the Government has done on the estimates of compliance costs. It is wrong to impose this huge additional law on our employers without some estimate of what complying with it will cost businesses. I am a registered employer and I cannot comply with it. How can I expect other ordinary employers to comply with it? 
SUE BRADFORD (Green) 
: 
 I feel honour-bound to speak to the amendment put up by the Hon Peter Dunne tonight which seeks to provide that union access to workplaces may be denied on religious grounds not only when an employer is an individual but also when an employer is for example a family company or a charitable trust running a school where all the people involved are members of that religious order. 
In 2000 when the Employment Relations Bill was before the House the Green Party supported changing the original bill to allow for this kind of religious exemption where an employer is a practising member of a religious society or order whose beliefs genuinely preclude them from membership of any other organisation at all in our society. This exemption of course as other members have mentioned tonight particularly applies to the Exclusive Brethren who I was aware of in our local communities in Rodney and in Northland and who I felt legitimately met this test. The Green Party backed this change at the time firstly on the basis of respecting genuinely held religious beliefs and secondly on the basis that as a huge number of workers were no longer in unions as a result of the Employment Contracts Act it seemed strange that unions would see a need to focus their efforts on Brethren work-sites in particular whereas something like 80 percent or more of the New Zealand workforce were not in a union. 
What appears to have happened is that when the Employment Relations Act was passed it was interpreted in such a way that Brethren employers with fewer than 20 staff were granted the religious exemption. However some time later it seems that the Department of Labour became more precise in its interpretation and withdrew the exemptions in situations where the employer was more than one individual even though they were still all Brethren. Mr Dunne’s amendment aims at reclaiming the ground that the Brethren feel they have lost since 2000. 
The Green Party has considered this matter seriously and we have had to weigh up the balance between our desire to recognise sincere and long-held religious beliefs and beside that our underpinning support for the rights of workers to join a union and collectively bargain to improve wages and conditions. We have decided that in this case we will not be able to support the proposed amendment. Firstly we have taken note of the Brethren claim that they now have a large number of companies—some 800—around New Zealand that make they say a large contribution to GDP—and we say good on them. However they appear to employ a rather larger number of workers than the Green Party had first realised and many of those workers and teachers are not in fact Brethren so we feel we should not do anything more to close off access to work-sites. 
Secondly the well-known case of the employer in Auckland who sent out a memo banning his staff from using languages other than English in the workplace and this was in a very multicultural workplace has I am afraid not helped the Brethren cause. Although my colleagues and I are aware and do acknowledge that the Human Rights Commission stepped in and that a good resolution was reached to the satisfaction of the employer the staff and the commission the incident has left a taint of prejudice and the sense of an employer massively overstepping the mark and it is hard to dispel that feeling. 
Thirdly while we have no problem supporting the rights of individuals to follow their conscience in choosing whether to join a trade union or any other organisation for that matter we say it is another story to in any way widen or strengthen the exemption given that our fundamental kaupapa is to support the right of workers to organise. 
I turn to some of the amendments the Green Party would like to see inserted in the bill. We are very pleased to see that in clause 30 the Government is finally upholding the intentions of clause 66 of the original Employment Relations Bill. I listened with interest to what the previous speaker the Hon Dr Lockwood Smith said. He claimed that a deal had been done with me or with the Green Party in 2000. I am very curious as to what that deal was. There was no deal; we kept fighting the Labour Government on clause 66 of the original bill right to the last moment as anyone in the House at the time will remember. 
Another of our amendments seeks to insert the words “caregiving services” in paragraph (c) of schedule 1A in respect of residential care facilities so that those workers can benefit from the new protections being offered to some groups of particularly vulnerable workers. The Green Party supports the call of the Service Workers and Food Union that caregivers in rest homes should be included too. 
JOHN KEY (National—Helensville) 
: 
 We should start by calling a spade a spade. The Employment Relations Law Reform Bill is simply a State— 
Hon Maurice Williamson 
: A dog. 
JOHN KEY 
: It is a dog but it is a State-sanctioned union recruitment drive up and down the country. I draw members’ attention to an editorial in the  
New Zealand Herald: 
 “Labour Minister Margaret Wilson says she is as much concerned with the 80 percent of workers not covered by collective contracts as those who are.” She is worried all right. She is worried that they are not part of a union and she wants them in there so that she can have their union dues she can have them pumping up the Labour Party and pumping out advertisements around the country. The  
New Zealand Herald 
 got it right when it stated: “The more you look at the wording of the Employment Law Reform Bill the more worrying it gets. Seemingly innocent clauses from one section when combined equally with mild-looking clauses in another suddenly acquire the potential to produce extremely disturbing consequences.” It goes on and on. 
Dr Wayne Mapp 
: You have to read them together. 
JOHN KEY 
: That is right. One has to read them together and they go on and on. For days the  
New Zealand Herald 
 looked at this legislation and it could not find a decent thing to say about it. The paper that supported Dick Hubbard could not find a decent thing to say about the Employment Relations Law Reform Bill. It stated further: “Few employers would agree with the Government’s claim that the bill’s provisions support innovation productivity and work-skill development. The reasons for this is not apparent when one discerns the major themes that characterise the proposed changes—increased intervention by the State and labour relations a more prescriptive approach to employment law moves towards more centralised labour systems including the possibility of third-party determination of employment terms and conditions increased union powers and influence and a desire to collectivise the workforce.” 
This bill represents a move back in time for New Zealand. It is not a move that will give higher growth levels to the people of New Zealand. When the Minister took a call he said that he was sick of the tired old rhetoric. He was sick of the National Party coming out with comments and employers telling him it would be bad news because that is what they told him in the year 2000 and it did not work out that way; and that actually everything had worked out all right. That raises quite a few interesting points. The first point is why it did not have the impact. The reason was that the original Employment Relations Bill introduced in 2000 was gutted. All the things we see in the Employment Relations Law Reform Bill were taken out of the original bill and parked for another day because it was brought into the House in the “winter of discontent” back in 2000 and the Government was terrified that it was about to go down the toilet so it ripped that stuff out and parked it for another day. Since then Ross Wilson has been chomping at the bit to get those provisions back into the Parliament. This is just— 
Hon Maurice Williamson 
: The empire striking back. 
JOHN KEY 
: Step by step incrementally this bill will take New Zealand back to a less-flexible labour market. Quite interestingly the OECD actually saw this stuff coming. [ 
Interruption 
] I hear Lianne Dalziel chirping away there like some sort of canary that is stuck in its cage. The OECD saw it coming in its New Zealand country report. It stated: “Labour market flexibility should be preserved. Recent years have seen a clear trend towards greater rigidities and higher labour costs. Further such changes are in the pipeline.” The OECD could see it coming. 
The Minister told the Committee of the whole House not to worry about it because everything has been great we have been going at 3.5 percent and not to worry about the changes to the flexibility in the labour market. Well I have news for Paul Swain. Maybe he does not understand economics. I can understand that because Michael Cullen does not know that one plus two equals three. He does not understand that and if he does not understand basic arithmetic it is no wonder the Labour caucus is having some problems with growth in the New Zealand economy. I shall tell Mr Swain why the New Zealand economy has been growing. It has been growing because the exchange rate was highly competitive for a period in 2000 and 2001. It has nothing to do with this Government. It cannot control it and in fact Michael Cullen wants to control it because he has introduced aspects to now influence the exchange rate but he is too scared to wheel them out because he knows that will not work. Secondly the New Zealand economy grew because of very strong commodity prices. 
DEBORAH CODDINGTON (ACT) 
: 
 I stand on behalf of the ACT party to oppose this bill. The Minister of Labour said before that the ACT party and the National Party had stated that when the Employment Relations Act was introduced it would lead to bigger compliance costs and a downturn in employment. We did say that. The reason that did not happen as the Minister knows very well is that the National Party and the ACT party fixed that bill as it went through the House. Now we see all those draconian clauses that were taken out of the legislation being brought back in this legislation. 
This is patronising legislation. It tells people that they cannot bargain as a collective if they are not in a union. The State is telling people that they are not capable of forming a voluntary collective to bargain for wages and conditions—they have to belong to a union. 
It is also outrageous that this bill is a Trojan Horse for censorship. When we look at the legislation we see that the stating of a simple truth—for instance that a multi-employer collective agreement holds no benefit for employment—by an employer as a matter of opinion or as a matter of fact to an employee is a breach of this bill. It forces employees to conclude a collective agreement and it ensures as I said that employers can be fined for expressing an opinion. That is absolutely outrageous. We cannot let this form of censorship go through the House under the guise of employment law. 
The Minister talked about how this legislation will contribute. When this bill was brought in Margaret Wilson told a meeting that it would contribute to economic growth and that employment legislation had to follow the New Zealand labour market which was increasingly dynamic and under-regulated. Under-regulated! If this is under-regulation if this is the light hand of regulation then I would hate to see what this Government thinks is heavy regulation. Employers can be subject to fines for breaching the duty of good faith—which itself is a term that has gone so far as to be ill-defined nebulous and subjective; in fact it can mean whatever the judges decide it should mean. Also the court can impose a contract on them. So employers who might have been bargaining to pay $10 an hour might end up paying $1000 an hour or whatever amount the court decides to impose on them. It is impossible for employers to win. 
The Minister of Labour made much noise about freeloading. The issue of freeloading is an absolute nonsense. If anything it is the other way round. The Transport and Industrial Relations Committee heard submissions from employers stating that it is the employers who frequently suggest and propose better terms and conditions and that the unions freeload off those. So it is the other way round. If we are to talk about freeloading let us get it right. Freeloading in the way this Government means it is simply a way of introducing compulsory unionism. 
I refer now to clause 30 which ensures that those people whom the Minister from time to time decides are vulnerable employees—we really do not know what that means—will be treated as chattels. They are to be treated as chattels. We are passing legislation that will treat human beings as the chattels of a business. So when a business is sold—[ 
Interruption 
] That is what it is; it is Margaret Wilson’s slavery clause. 
Jill Pettis 
: Ha ha! 
DEBORAH CODDINGTON 
: The chief Labour whip thinks it is funny that people are treated as slaves. When a business is sold the person who sells the business makes a list of all the chattels. Now the employees will be chattels. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 In some ways this legislation shows the weakness of the union movement rather than its strength. If there was one thing that I and other MPs underestimated after the last changes to employment relations law it was the number of New Zealand workers in the private sector who would simply refuse to take part in collective bargaining. That has been the huge disappointment to the Council of Trade Unions and to this Government. When the Government passed the Employment Relations Act the idea was that the workers down in Winton would line up to have the delegate from Dunedin come and negotiate their agreement but they did not; they told him to get stuffed and get lost so that they could get on with the job. That is why that legislation did not do all the economic damage that it could have done. It was welcomed in the public sector but not in the private sector. 
There was a day when the union movement in New Zealand could organise and when it could induce faith among working people that their union would do something in their interests. But those days are gone. That is why we have this squirrelly pathetic warmed-up pink-tie unionism legislation. We have debated this stuff for a number of years under Labour. It used to be the diesel-stained hands. It used to be the dirty overalls. Now it is the pink tie. That is why it is not working. 
We have lost perspective. Listen to this provision: “even though the union and employer have come to a standstill or reached a deadlock about a matter they must continue to bargain (including doing the thing specified in paragraphs (b) and (c)) about any other matters on which they have not reached agreement;” We are passing a law—this will be the legislation of the country—that says to people that if they disagree about one matter they have to negotiate and keep talking about the other one. How pathetic is that! If that is what the Council of Trade Unions says it needs this Parliament to do so that it can get some members it has had it—it has absolutely had it. 
The legislation says that “The duty of good faith” requires parties “to conclude a collective agreement unless there is a genuine reason … not to.” and that the genuine reason cannot include the fact that one is opposed to a collective agreement. How pathetic is that! How persuasive is the concept of union power and solidarity and enhanced productivity in the workplace if one has to say to the bargainers: “You must agree to a collective agreement and if you are against one that is not a good enough reason not to agree.”! The union movement under the sponsorship of the Minister of Labour is on its knees. It has increased its membership in the public sector only and it has been able to do that only because it has had a compliant employer. Who is that compliant employer? That Minister. 
I will make this claim tonight: there is no economic case for this measure. What is in this for the workers? Nothing! Economic restructuring has delivered skill shortages which is the best news for working people in New Zealand for 30 years. They are now in a sellers’ market and their wages are going up. Businesses need workers and have to improve pay and conditions to get them. There is no economic case for this bill. The Government has never made a case for this bill. It is simply the Council of Trade Unions worming its way back into office trying to increase its revenue-gathering capacity with ridiculous ideas like the bargaining fee. 
I think the Minister even in his less lucid moments would know that freeloading has been legislated for in New Zealand. If he does not understand that I will explain it to him slowly. In New Zealand one cannot be in a collective agreement unless one is a member of a union. Only a union can negotiate a collective agreement. Then in typical left-wing fashion the Government having legislated one piece of nonsense has to legislate another to fix it. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I want to pick up on a point that Mr English made—that is the whole idea that the union power now resides in the Government. When the Government has the opportunity to bargain it actually pays special incentives to people who are members of the Public Service Association—$500 in one case a one-off payment; $700 in another case; and $600 in yet another case. These payments are authorised by this Government so we have essentially a bribe sanctioned by the Government to get people into the Public Service Association. 
It has had some effect as we might expect. A bribe has meant that some more people have joined the Public Service Association. The Public Service Association is the only union in New Zealand where membership is growing. No rational private sector employer would agree to such an absurdity. Those employers would not provide bribes in their collective agreements for people to join unions even given the special powers that the Government is imposing on them. A rational private sector employer would not allow for a bribe and would not agree to it. 
 But the craven ministries under the direction of this Government are more than willing to do it. That is how they are boosting the membership of the New Zealand Public Service Association and the New Zealand Educational Institute which of course is now the centrepiece and the power base of the New Zealand Council of Trade Unions. So when Mr English refers to the pink ties the pink ties he is referring to are all those State employee negotiators—members of the Public Service Association. That party on the other side of the Chamber is littered with former members of that association. 
Some people have said that the Minister does not believe in this legislation; I say that the Minister absolutely believes in it. He is a former unionist and union organiser. He might go around to boardrooms and say that the Government is listening to them and is there to help them but his heart is with the unions. If the unions say that they need those provisions he says yes. In fact he made a claim in his second reading speech to provide draconian legislation so that even if there were just an effect of perhaps some undermining during negotiations that would be a breach of good faith. A breach of good faith means penal provisions and that means a fine. 
In my Supplementary Order Paper I provide an opportunity for that so-called gang of “Swainy” and his boys to fight for something they say they want—that is a 90-day probation period for workers. It was carefully gone through and he has had plenty of notice about it. Now he and his cohorts—Mr Tamihere in particular—have been going up and down the country talking to businesses and saying yes that they will provide those probation clauses. The Minister himself actually said in his second reading speech that he would do that. I tell him that I am giving him that opportunity. He can vote for it in this Committee stage. The probationary period is limited to 90 days; it is limited to first-time employees; and it does not remove all protections. The usual human rights protections are all there. But it does give a trial period. It is the sort of thing that would give young people—that additional 4 percent unemployed—a real opportunity to get more jobs. 
Now we know that that 4 percent unemployed are the people who find it more difficult to get jobs. They are the people who have the tattoos. They are the people whom many employers might blanch at when they first see them. So we are saying: “OK. We are giving the opportunity to you to take a chance.” That chance is not wanted by just the employers; it is wanted by those young and not so young people. The Minister tomorrow when we reach the votes could vote for precisely the very thing he has been talking about. That would be proof that he is listening to business. That would be the real test. It would be the only bright spot in this legislation. 
Hon RICHARD PREBBLE (ACT) 
: 
 I want to draw the attention of the Committee to another matter contained in the bill which is the decision to overturn the Oram decision. The Oram decision was a litigated piece of law between the  
New Zealand Herald 
 and Mr Oram that went all the way to the Court of Appeal. The trade unions lost that case and the law has now been established. Having lost the case they came to the Transport and Industrial Relations Committee and asked for the law to be changed. 
I say to the Minister that he should have established why that case should be overturned because after the judges had listened to the matter very carefully their view was that providing the employer thought the action was reasonable it should be able to stand. Now the test is not what the employer thought was reasonable but basically what this Government thinks is reasonable. 
Lianne Dalziel 
: If it’s a reasonable employer. 
Hon RICHARD PREBBLE 
: Well I say to the member that that invites litigation. I think it is a very bad principle when we have a section in a law that says we are overturning a particular court case. 
 I make the point to the Government that those members must have noticed and have heard the criticism that there are far too many cases where people— 
Hon David Carter 
: I raise a point of order Mr Chairperson. I raise this at the earliest opportunity as I did not get the last call. I want you to give some consideration to access to the lobby area and particularly to the main meeting room that is normally available for members of Parliament and the officials. I want you to consider the appropriateness of Ross Wilson president of the Council of Trade Unions being in that lobby room and then proceeding into the Chamber. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank the member for raising that. It will be considered but at this point I must report progress. We will raise it with the Speaker tomorrow. 
Progress reported.