Employment Relations Amendment Bill — First Reading 
Employment Relations Amendment Bill — First Reading 
[Volume:629;Page:1610] 
Employment Relations Amendment Bill 
First Reading 
Debate resumed from 23 February. 
DARIEN FENTON (Labour) 
: 
 This bill is not about preventing contracting-out or undermining competitive tendering. It is about ensuring that workers have the right to transfer while at the same time the new employer has the right to make business decisions in relation to the workforce once the transfer is complete. So let us not get into overstating or hyping up what is a simple protection that takes New Zealand workers only one small long-overdue step towards the kinds of protections workers overseas have had for many years. 
 I emphasise again that this bill is about fixing a problem that occurred because of the Crest Commercial Cleaning decision. It is about ensuring that the original intent of the Government and this Parliament is met. If we do nothing the only workers in New Zealand who are left without any kind of protection will be those workers whom the original Act specifically sought to protect—that is cleaners food service workers caretakers laundry workers and so on who have already been contracted out. 
The bill does not encourage poor performance and acceptance of incompetence as some have claimed. Those are management issues that can be dealt with at any stage of a restructuring process either before or after. The bill does not give jobs for life. It provides protections for workers only at the point of transfer. After that the employer is free to carry out normal business operations subject of course to existing employment law. 
Let us be honest even before the enactment of the Employment Relations Amendment Act (No 2) 2004 many employers had carried out the requirements of the law in relation to transfer and even with the Crest Commercial Cleaning decision those employers had made a decision to continue to apply the requirements as intended by Part 6A of the Employment Relations Act. Has the world fallen apart? It does not look like it. 
Cleaning catering orderly and laundry workers have waited a long time for this protection in legislation. Unfortunately they have had to wait a little bit longer because of the Crest Commercial Cleaning decision. This is a complex area of law and I know that Opposition members do not understand it but the workers who are affected by it do. They have had to live and breathe the unfairness of this situation for years and years. I look forward to sharing experiences at the select committee as to how this legislation can work positively for both business and employers and to the protections that were originally envisaged by this Government being enacted speedily. 
PAULA BENNETT (National) 
: 
 First of all I would like to address the vulnerable workers. The premise I heard last week from members on the other side of the House was that National did not support those workers. What a myth that is. No one supports people in work more than the National Party and no one actually acknowledges the job workers are doing more than the National Party. In fact the National Party would like to see more money being put back into workers’ pockets. In many respects I personally feel that the people to whom the bill refers—our cleaners our food service workers etc.—are doing perhaps the hardest job in our community and in our society. Those people deserve to be respected for that and they certainly deserve to have more money in their pockets. 
I also want to talk a little about skills shortages because if we listened to the Government we would be under the impression that skills shortages are about the shortage of engineers machine workers and those sorts of people included in the Immigration Service list. As a matter of fact we have a skills shortage across the board. We have as much of a skills shortage within the area of cleaners as we do anywhere else. There is a shortage in that area; as a matter of fact it is not difficult to get a job in that area—and rightly so. A good cleaner will get a job in just about any town in New Zealand because he or she is available. It is as simple as that. The Employment Relations Amendment Bill is not necessary. 
I want to pick up on what Darien Fenton was saying which was that cleaners who do an unsatisfactory job will not be taken on because that is a performance issue. In the Dunedin Kindergarten Association situation the contract had finished. It is not that the contract was being rolled over. The contract had been terminated. The association then looked around because it felt that the job that had been done had not been done to a satisfactory level. In fact in the opinion of many parents and teachers the kindergartens were unsanitary and not suitable for children. So it is nuts to think that the very people who were not cleaning to a satisfactory level would then be passed on to the next cleaning company. Is this what we really want as parents for our kids—that we no longer have the right to say that an unsatisfactory job is being done and we do not wish to continue with that company and to employ another one because if we do we will find that we are working with the same people? It just does not make sense. 
If we are really serious about supporting our most vulnerable people or about supporting those who really need to be given a go and protected the best thing we can do with them under employment relations in this country right now is to offer a 90-day probation period. The reality is that people want to prove themselves. They want to stand up they want to be counted and they want to be given a go. A 90-day trial period will work best for the most vulnerable in our society. It will work for the immigrants who are new to New Zealand and are saying: “Let me stand up and prove my worth. Give me a foot in the door. Let me show you what I can do. Let me prove that my experience from overseas will actually stand up against anyone else’s. Let me in that door.” The 90-day period will equally stand up for people who have a criminal record or who perhaps have not had the most favourable employment history up to that date. Those people will be able to stand up and say “Give me a go.” and a 90-day trial period is the way to do so. 
From my experience within the employment sector more employees bowed out of the employment arrangement in the first 3 months than were asked to leave or were performance-managed. It actually works to the employees’ favour that they too can trial the employment arrangement and give it a go. We do not know the fit. We do not always know whether a company will work for us. By having a 90-day trial period we get to step in and give it a go and we can walk away with no penalties and no stigma involved. If we are serious about protecting those workers who need a go in our society then a 90-day trial period is seriously the way to do it. 
I want to talk a bit about a couple of scenarios that could happen under the bill. They are ones that cause me immense concern. Let us presume I own a relatively small business with a couple of cleaning contracts. One of them I lose and on the other one I am just making ends meet—I am struggling. I am struggling to keep my business alive and I am struggling to continue to employ the people who are working for me. I have immense respect for the people who are working for me. I am giving them every opportunity and I am paying them above the minimum wage—I am doing everything I can. But I am barely holding on. I see a contract come up. I think I am going to get this contract and I am going to compete for it to the nth because I want to keep these employees going and I wish to have a successful company. I cut my margins. I do everything I can to get that contract. I put in a very competitive tender and lo and behold I win. That is a win-win situation. I get to keep the employees I have had for such a long time—well no actually I do not get to keep those employees. I will have to put them off because I have to take the other employees from the company that lost the tender. So I am going to have to make redundant those guys who are working for me and whom I have had a long-term loyal arrangement with because I cannot keep on both them and the new employees that under this amendment bill I would have to keep. So it is goodbye to those employees because I would have to make them redundant at the end of the day. They are then without a job but I have taken on others who have come from the previous contract. 
Let us also think about a small to medium sized business that perhaps is not quite as ethical or astute and is not running its business quite as smartly. 
David Bennett 
: It could be a Labour Party member’s. 
PAULA BENNETT 
: It could be a Labour Party member’s business. 
The owners of the business are working away. Their cleaning contract is coming up for renewal in 6 months and there is a good chance that they might lose it.. They have had a few complaints from the company that they have the contract with. They know the company is not overly pleased with the service they are giving and there is a good chance that they will actually lose the contract. But they have an idea about what they might do to get rid of the competition—they might double the salary of the people who are currently working for them. They want to do it; it works in their favour and the employees are absolutely rapt because they are getting double the money. The owners know that when they lose that contract and it goes to their competition the competition will have to pay its employees the doubled salary. The competition will have to stand up and address all of this because the bill does state in new section 69A inserted by clause 4 that employees have the right: “(a) to elect to transfer to the other person as employees on the same terms and conditions of employment;”. The owners could quite easily do that if they knew that they were going to lose a contract if they wanted to affect their competition and if they wanted to see the competition’s business go under. At the end of the day those employees would be without jobs—those very vulnerable workers whom Labour is trying to support. They would not have a job because that company would not be there any more. Their original employees could make their conditions so good and so top of the range that their competitors could not possibly run a competitive business while paying their employees that much. 
There are many scenarios in which the amendments in the bill would not work. I think we have to identify the fact that companies have the right to decide who they will contract their cleaning and their services to. They have a right to decide what is best for their business and in the case of the Dunedin Kindergarten Association what indeed is best for their children. This amendment bill is utter nonsense. It does not support our workers who need the best protection. The best way to get people out there to have opportunities and to step up is to introduce a 90-day trial period and that is certainly what the National Party stands for. 
A party vote was called for on the question  
That the Employment Relations Amendment Bill be now read a first time. 
Ayes 61 
New Zealand Labour 50; Green Party 6; Maori Party 4; Progressive 1. 
Noes 60 
New Zealand National 48; New Zealand First 7; United Future 3; ACT New Zealand 2. 
Motion agreed to. 
Bill read a first time. 
Hon MITA RIRINUI (Minister of State) 
: 
 I move  
That the Employment Relations Amendment Bill be referred to the Transport and Industrial Relations Committee. 
referred to Transport and Industrial Relations Committee. 
Motion agreed to.