Hipkins Chris: Employment Relations Amendment Bill — In CommitteeText is incorporated into the Bound VolumeHipkins Chris: Employment Relations Amendment Bill — In Committee[Sitting date: 22 October 2014. Volume:701;Page:185. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka):I want to speak specifically about a provision in the bill but before I do that I want to acknowledge two things. I want first of all to acknowledge the fact that we are debating this in the lead-up to Labour Weekend and the irony of doing so and I want to respond to a comment that the Minister made in his opening remarks which I was listening carefully to when he talked about the types of people who perhaps did not need to have rest breaks and meal breaks during their working day. He mentioned particularly the plight of a sole-charge air traffic controller. I want to say to the Minister that as a member of the travelling public and someone who does take flights regularly I want to make sure that if my plane is being guided into land by a sole-charge air traffic controller they are on top of their game and that they are not busting to go to the toilet and trying to find ways to short-cut the process a little bit. I want to know that my plane is going to land nice and safely. I want to make sure that they get the protections to ensure that they do that and I am sure that the travelling public do too.I also say to the members on the other side of the Chamber that as somebody who frequently dines out in what could be otherwise described as a fast-food establishment I want to know that the workers who are serving me my food are actually being given decent employment conditions including the ability to have a meal break and a rest break when they need it and that they are not being exploited.Contrary to what members on the other side of the Chamber will say this is not actually about union members. Most union members will be covered by a collective employment agreement that guarantees them. What we are talking about are the first-time employees the teenagers who get their first job and the people who are not members of the union who are not covered by a significant collective employment agreement. They are the types of people whom we are talking about in this legislation. They are the types of people whom the National Government is riding roughshod over.I turn specifically to the clause in the bill that I want to talk about which inserts new section 69CA which is the definition of an exempt employer for the purposes of Part 6A of the Act. What is Part 6A first of all? Part 6A is the protection for vulnerable workers in a contracting-out environment. This is very important for New Zealand for two reasons. One is that we are a small-business economy and second this Government’s agenda has been to turn New Zealand into a service industry economy rather than a value-added economy. What is the major competing cost factor in a service industry economy? It is wages. Therefore if we are going to compete in service industries and in service industries alone employers are going to be looking for ways to drive down the cost of wages.Clause 30 in the bill inserts new section 69CA which is the meaning of an exempt employer. It states that an exempt employer is one who “employs 19 or fewer employees;”. Well let us just think about that for a moment. We have this National Government talking all the time about how New Zealand is a small-business economy. I know New Zealand is a small-business economy. I have got countless small businesses in my own electorate. That is a given; that is a reality. In many of the service industries where subcontracting and subcontracting from subcontractors is an increasing trend what we are going to see with vulnerable workers who are in these subcontracting subcontracting arrangements is that employers will find a way to make sure they have fewer than 19 employees. If that means they set up five small subsidiary companies that can subcontract from the main contractor in order to work their way round the law that is what they will do. What we see under this Government is this mentality that we have to drive down labour costs in order to compete in service industries because it has no plan to add value-added jobs to the New Zealand economy.So this exemption creates an enormous loophole that once again will see vulnerable workers not being covered by the protections that they should be covered by. We are talking about cleaners and caretakers. We are talking about people who work in the hospitality industry where contracting out is a continual mentality. People in the food trade—not necessarily the people who are the chefs; we are talking about the people who clean the pots and the pans who are employed by some of the large employers that we have at the moment. To give an example many large employers might tender for a contract to provide catering services to a large employer like for example this one—like Parliament. Rather than delivering that through one main company they will set up separate companies for each of the sites that they deliver the service to. Thus in many cases they will get around the law by having 19 or fewer employees at each of those subsidiary companies that they use in these contracting arrangements.This subcontracting mentality is the thing that is going to result in a lot of vulnerable workers whom the Employment Relations Act was designed to protect losing the protection that they should get under the law and that is simply wrong. To restate in many cases it is not going to be union members.