March 21 2002

Speech Notes

Second Reading of the Parental Leave and Employment Protection (Paid Parental Leave) Amendment Bill

I move that the Parental Leave and Employment Protection (Paid Parental Leave) Amendment Bill be now read a second time. I wish to thank the Chair of the Committee, Taito Phillip Field, and other members, committee staff and officials, for working within a very tight timeframe. I also want to acknowledge submitters.

The Bill is a good start. It acknowledges that the workforce for whom most workplace protections were designed – blokes with wives at home looking after children – has changed dramatically. Women are in the paid workforce in record numbers. Women have babies. And having babies means having to take time off work.

The amendments proposed by the committee are minimal and clarify the two first principles guiding this bill.

The first principle is that the Bill provides an employment right.

Parental leave payments, and parental leave generally, are available to employees taking leave from their employment.

The second important principle is that the right to paid leave builds on the provisions of the principal Act.

This means that the eligibility criteria are the same (with one exception) and the general leave provisions are also retained. To be eligible for parental leave under the principal Act, employees must have worked for their employer for at least 12 months for at least 10 hours a week. The exception is that the Bill amends the 10-hour threshold to an average 10 hours a week. This will enable people to qualify if they work varying hours, for example in on-call, rostered or shift work. These people often those who earn little and tend to miss out on their employment rights.

A significant number of submitters raised concerns about the fact that eligibility is restricted to those who are eligible for parental leave under the principal Act. The Bill needs to be seen, however, as a first step in providing for paid time off paid work after the birth of a baby.

We have already announced a review of the scheme a year after the amended Act takes effect. This will consider extending the scheme and to more women and providing more to those who qualify.

The submissions made to the select committee will inform this process. I note, for instance, that many submitters indicated that they thought an early priority for the extension of the scheme should be to include employees with less than one year’s tenure with the same employer.

I agree and will continue to work towards extending the scheme. So that more mothers qualify. So that the length of leave is increased to the new ILO standard of 14 weeks at the very least. And so that the amount we pay is at least as much as we pay to those recovering from rugby accidents and car crashes.

The Bill provides payment for the first 12 weeks of parental leave taken. The primary entitlement to payment is for mothers.

However, the Bill also recognises the more flexible patterns in family life these days, and enables the mother to transfer her entitlement to payment to her spouse, in full or in part.

The definition of “spouse” is extended to include a same sex partner, consistent with government policy generally. Because adoptive mothers do not have the same physical needs for recovery, adoptive parents will be able to nominate which of them is to be the primary recipient of parental leave payments. They still have the right to transfer some or all of the entitlement to the other partner.

The payment will replace the earnings of employees from any job in which they are eligible for parental leave, up to a cap of $325 a week. If they have more than one such job, the payment will replace the total earnings from all those jobs, up to the $325 cap. Leave can be taken from more than one job, in recognition of the fact that many women work several part-time jobs to make ends meet.

The payment is treated as income for the purposes of PAYE tax deductions, student loan repayments and child support deductions, and family assistance entitlements. This is consistent with the treatment of the income it replaces.

The maximum payment will be adjusted each year in line with any upward movement of average weekly earnings as measured by the Quarterly Employment Survey. Discretionary increases can also be made so that the maximum payment can also be increased in real terms.

The payment is funded from taxation.

Employers will be required to complete their part of the application form for payment, certifying that their employee is eligible and specifying the dates on which leave will be taken.

The amendments to the Bill have addressed some employer concerns regarding this process by specifying how calculations of entitlement and average earnings are to be made. Average earnings calculations are not new, as they will be done in the same way as calculations for the purposes of holiday pay. The Department of Labour is also preparing a detailed information campaign aimed at ensuring that all parties understand their rights and obligations in relation to parental leave, including payments.

Employers have benefited in recent years from the increased flexibility of the labour market and the participation of many more women who are now filling the casual, part-time and marginal jobs resulting from this flexibility. An employment right to paid parental leave is a necessary condition for women and their families juggling work and family life in these circumstances, just as holidays and sick leave are.

The employment-related nature of paid parental leave also means that the employee can receive the payment only during a period of parental leave. So if the employee returns to work, reaches the end of a fixed term agreement, or resigns from his or her job, the payment will stop. The payment continues as long as the employee is still on parental leave, up to the maximum 12 weeks, even if the employee does not return to work, or the baby dies or is given for adoption, or the mother herself dies.

The Government also recognises the non-employment needs of mothers and babies, and families generally. For this reason the Bill retains the Parental Tax Credit for low-income working families with new babies. Employees eligible for both paid parental leave and the parental tax credit can choose whichever is more beneficial to them. The amended Bill provides that they cannot change that decision, once made. The Inland Revenue Department is setting up a process for advising people affected by this choice of the relative benefits of each option.

The most significant amendment is intended to clarify the enforcement role of the Labour Inspectors. The Bill brings the principal Act into line with other legislation on employment rights by providing for the Labour Inspectors to enforce rights and benefits in respect of parental leave and parental leave payments under the Act. This will include the power to assist with disputes, for example over eligibility. The amendment spells out these powers in more detail.

Many of the submissions in support of the Bill noted that it would move New Zealand further towards full compliance with conventions on the Elimination of Discrimination against Women, and Economic, Social and Cultural Rights. Other submitters made reference to the provisions of ILO Convention 183 on Maternity Protection.

This Bill is a significant step towards meeting accepted international standards, and will provide the basis for future improvements. I encourage those who have taken an interest so far to turn their attention to the priorities for future development.

We have come this far because we have had high expectations. Let’s keep it that way.

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