Sitting date: 9 Apr 2025

EMPLOYMENT RELATIONS (TERMINATION OF EMPLOYMENT BY AGREEMENT) AMENDMENT BILL

First Reading

Debate resumed from 12 March.

DEPUTY SPEAKER: When the debate was interrupted, we were on call No. 2, which is the National Party.

KATIE NIMON (National—Napier): Thank you very much, Madam Speaker. Look, it's a pleasure to talk to the House and to those watching on this member's bill in the name of Laura McClure. Sometimes it's the way these debates fall, but, unfortunately, Laura spoke to this bill at the last members' day, so I will sort of, I guess, reintroduce it and give people a little bit of an overview and just explain our position on this bill and where we hope this goes through select committee and what we hear.

So, look, the member's bill in Laura's name is seeking to amend existing provisions under the Employment Relations Act (ERA) to enable termination of employment through mutual agreement between employer and employee. It allows for protected negotiations—discussions shielded from use in personal grievances—between employers and employees to end their employment relationship. The purpose of it is to help employers and employees avoid costly unfair dismissal or personal grievance processes and claims, reduce legal costs, and more quickly come to a mutually agreed outcome for both parties.

So, look, for National, and for a National-led Government, of course, we are very much on the side of self-responsibility, individual rights, competitive enterprise—you name it. For us, it's very important that a workplace has the efficiency and freedom to operate, and prioritising the relationship between the employer and the employee.

To make some points here, I think the thing that is most interesting to me here is the increased flexibility for employers and employees as described above. Something that we hear often from Opposition in certain areas where we debate certain issues is the ability to have an efficient workforce or an efficient labour market. I believe this would add to that. That allows people to be able to move from roles that are not suitable, that they're not necessarily happy in, for either reason from both parties, rather than going through a difficult process.

Something just to add from a context point of view, I think it's very important to acknowledge that we have around about 97 percent of our businesses in New Zealand that are small businesses. Small businesses don't have the resources to have an HR department to go through these, to go through them thoroughly, to go through them properly. The amount of times that people come unstuck because they go through what they think is a normal or a natural process, say what they think needs to be said, and then people walk away and find that there's an opportunity to take a case through the lack of process being followed, and then it uncovers itself into months, if not years, if not very costly situations for both employer and employee.

So, look, I think it's very important to note that while we support this bill, we really do want to go through a thorough select committee process. We agree to support it to select committee. There are a number of things that we'd be very keen to investigate further and really get some good insight into. I think the importance for us is to understand what the process would look like—timing, the pressure on both parties to go through the process, and what that would look like.

Of course, comparative to international situations—just to mention, of course, the United Kingdom's protected conversations model, which has demonstrated efficacy in supporting the balanced consensual terminations. It would be very interesting to see this around the rest of the world and, of course, what the international precedent would look like.

Just going back to some other points within existing ERA requirements, currently the ERA—or Employment Relations Act, for those that don't like acronyms—requires employers to demonstrate a substantive justification, a redundancy misconduct, and comply with strict procedural standards to lawfully terminate employment. There are many businesses that have gone through it. There are many businesses that take other actions to avoid doing that, employees that take other actions to avoid going through those processes, and for many people it ends in more distress, more financial implication, timing implication. Things can get messier and messier.

So I do appreciate the foresight or the thought of the member to bring this to the House, given that while this particular bill is not a coalition agreement, the coalition does have a view that what we want to do is simplify personal grievance procedures, and, of course, this leads to that. This is certainly an aspect of that as well.

Look, something else to add to it, of course, and why we're really keen to hear from people—because, naturally, when we go through the select committee process, we're hearing from businesses, we're hearing from employees, we'll always hear from people that have gone through difficult situations. We always hear from people that have wished or hoped that something like this would've been available when they'd gone through a process. But, of course, we also hear from legal areas, associations, business associations, and it adds significant context. Of course, naturally, the member's bill process, while not Government bills, you know, we tend to hope that the select committee process irons out a number of kinks and works out the workability which we would hope that this process will determine for us.

Like I mentioned earlier, quite keen to see how the workability of the relationship between the employer and the employee in the process goes through this to avoid any implication of pressure on that process or the relationship, and what this would do to streamline and smooth out that process as well.

So just to say that, you know, certainly in support of small business, the ability to do what, in this particular case, mutually agreed process would have us come to that conclusion and give people a far more simple approach. I tell you, some employers, especially in the case of trades, the trade industry—often, the case is that a builder has come up through an apprenticeship, worked for somebody else, created relationships, gone on their own, decided to start a business, gets into a position where they go well enough to employ someone else. They never went through business school; they went through, you know, the Building and Construction Industry Training Organisation, let's just say—got their apprenticeship, earned their stripes, but never studied employment law. Actually, you just about need a PhD thesis to understand the Holidays Act, for one part, and, of course, the rest of the Employment Relations Act—said by Dr Carlos Cheung.

Look, those people are the backbone of our economy, and this is something that we believe, with the right measures in place and making sure that the workability is certainly there and that can be gone through that process, is there to support those people in business that don't have large HR departments and the funding for legal advice and the ability to work through all this stuff and follow those tick boxes, that have mutual agreement.

I think it's really important to reinforce that this is not about giving one person more power over the other; it is about supporting and facilitating a mutually agreed process where neither party know where each other stands unless they go through a very complicated and expensive process.

So, look, with that, as I mentioned earlier, we support this bill to select committee, really look forward to hearing the submissions. To anybody watching online or thinking about those that they know in business that are watching at home on TV, please get involved in the select committee submission process, because it is very important that we have a wide range of views, experiences, and expertise that are part of that because it does genuinely allow us to see all sides of the coin and what we can do to make sure that we make all of our legislation the best possible. So, with that, I commend this bill to the House.

Hon JAN TINETTI (Labour): Thank you, Mr Speaker. While it's normal, and I do congratulate the member Laura McClure for having her bill drawn, it is not something—and I'll say it straight away—that we, on this side of the House, the Labour Party, will be supporting.

I listened very carefully during the first speech that the member made and I've also gone back and read it in Hansard and there is nothing in there that convinces me that this is in the best interest of employees and, in fact, employers. I listened very carefully to the member and her arguments around this. She talked about how this doesn't impact on that power imbalance between employers and employees, and I cannot disagree more with that member. There is an absolute inherent power imbalance between employees and employers in an employment situation.

The bill undermines and erodes the fundamental rights of workers, which we are strongly in opposition to. It creates a monumental risk for employees. It is something that there are no parameters on, when an employer can negotiate an employee's exit. In fact, it takes that power imbalance and makes it stronger to the employer.

Now, I understand that the member spoke in her first reading speech about small businesses and how this is very much wanted, but the bill itself does not put a parameter around size. It doesn't talk about this being specifically for small businesses. It is not two sided; it is very much putting that emphasis back onto the employer. The member talked about there maybe being a way that negotiations could happen around exit payments. There's nothing that talks about minimum exit payments, nothing that talks about representation, and nothing that talks about urgent access to mediation services. And as I say, it doesn't talk about being there for our smallest businesses.

I see this as being a huge, huge risk to employees. We see it as being a huge risk that really emphasises an equal power dynamic that exists in the employment situation; therefore, the Labour Party will not be supporting this bill.

FRANCISCO HERNANDEZ (Green): Thank you, Mr Speaker. I rise, as with the previous member, the Hon Jan Tinetti, sadly to oppose this bill on behalf of the Green Party—congratulating, of course, the member Laura McClure for getting her bill drawn. It's really great to have your bill drawn as a member of Parliament, especially for someone who—

Laura McClure: First-time MP.

FRANCISCO HERNANDEZ: First term, exactly.

We're opposing this because, like a lot of ideas this coalition Government has, it has a good idea at the heart of it but they actually seem to fail on the execution front. For example, this Government had adopted the mantra of growing the economy, but they've just succeeded in having record levels of unemployment and also having lower growth than we did last year. If that's what they're calling growth, I mean, they've embraced the de-growth philosophy.

This Government has this whole rhetoric around law and order, but, as my colleague Tamatha Paul has already articulated, they've actually defunded the Police by $55 million just in their first Budget as Government. Maybe they'll double defunding the Police in this Budget. Maybe it'll be cuts of $110 million this time for the next Budget. [Interruption] Well, finance Minister Nicola Willis said she's not ruling anything in and out of the Budget, so maybe she'll make billion-dollar cuts out of the Police. Who knows. We won't see until the Budget—we won't see until the Budget.

Look, I'll get to the crux of this bill. As I said, I think the core at the heart of it is allowing mutual terminations. I mean, that's not something that anyone's opposed to. But as people here realise, some things are more or less mutual than others. You know, sometimes you have a breakup and then you call it "mutual" but you've actually been dumped because there's power imbalances across any kind of relationships. [Interruption] It's like that, you know. I've had that as well.

We've had the Council of Trade Unions (CTU) provide commentary on this bill. I think I'm very convinced by the argument they make.

Laura McClure: AI?

Mark Cameron: ChatGPT right there.

FRANCISCO HERNANDEZ: Yeah. No, no, it's just old-fashioned notes from my researchers.

There is always a process for employers to engage in mediation with staff. This bill's not needed to ensure that without prejudice conversations can occur. These occur frequently and play a part in resolving practically all employment issues.

Another employment law specialist, Lane Neave, agrees with the CTU analysis. They state: "There is no apparent limit on when an employer may try to negotiate an employee's exit and a risk that [the] employee will have limited bargaining power to meaningfully negotiate. Further, by making any evidence of the pre-termination negotiations inadmissible, there is a risk of offers being made that support unjustified conduct that … give rise to a personal grievance save for the protections granted by the Bill."

While we congratulate the member—and I'm sure all the coalition parties will vote for it anyway, so it will go through anyway—regretfully, we cannot support this legislation. Thank you.

TANYA UNKOVICH (NZ First): Thank you, Mr Speaker. I stand on behalf of New Zealand First to speak to the Employment Relations (Termination of Employment by Agreement) Amendment Bill in the name of our colleague Laura McClure. I just need to make sure that it's not a Budget debate that I'm talking about here, Mr Speaker, and that we are in fact speaking to this bill. I will do my best to stick to the bill.

New Zealand First will support this bill through to the select committee. We will do that in this first reading. We do want to also say that there are some issues that we really want to look at thoroughly in the bill. I note that the explanatory note of the bill says that it's a mutual termination of employment. It says that it will be mutual and even, but we do have a little bit of a concern there that there will be a bit of a power imbalance, and that is why we feel that it's very important that this is really thoroughly looked at during the select committee process.

Another thing we want to investigate is to ensure that this provision doesn't already exist—that there isn't already a means and some way for there to be a mutual agreement in order to end an employment. So we just wanted to really traverse those ideas to ensure that such a provision doesn't already exist.

The bill does mention that it could be the business owner that is the initiator. So this is where there is a little bit of a concern that it isn't mutual—it's a bit like, "I'm not that into you.", and then, all of a sudden, the other party gets a surprise. So imagine what that's like in an employment situation.

Tim Costley: Ask Fran.

TANYA UNKOVICH: Ask who?

Tim Costley: Fran.

TANYA UNKOVICH: Oh, right.

If that does arise, where an employee is really surprised that the employer wants to go ahead and do something like this, it will make it uncomfortable for the employee to continue on in some way. So there's one example. We just want to make sure.

Also, in the event that this does go ahead and there is a mutual agreement, it could be that the employee then maybe takes a little bit of time to find new employment if they feel that they were in some way pressured. We also want to ensure that if by chance the employer had that little bit of extra power in the relationship, the employee wasn't coerced.

These are areas that, I know, might be rare but we really do want to ensure that the employee is protected. We want to ensure there is fairness for the employee. We want to advocate for workers, so that is why we really do have a few concerns here. New Zealand First will support the bill to select committee, but we want to encourage not only businesses to make submissions but employees as well—the workers out there—and whilst they may not be able to come in person and give an oral submission, they can do it via Zoom. It's only five minutes. We really want to hear from people who have felt in some way coerced. We want to hear personal experiences, so that is one thing I would encourage.

Again, congratulations, Laura—very lucky. I had a bit of "FOMO" when I saw this bill get pulled from the ballot. Very nice—and we commend this bill.

TAKUTAI TARSH KEMP (Te Pāti Māori—Tāmaki Makaurau):

[Authorised reo Māori text to be inserted by the Hansard Office.]

[Authorised translation to be inserted by the Hansard Office.]

I rise on behalf of Te Pāti Māori and the many Māori, Pasifika, and migrant workers across Aotearoa to say we oppose the Employment Relations (Termination of Employment by Agreement) Amendment Bill. This bill would allow employers to make cash offers to employees in exchange for silence, silencing the right to raise a personal grievance, to speak their truth, and to hold abusive employers to account.

Let's be clear: this is a bill that helps bosses harm workers. Believe me; I know. I've actually been in this situation. I've been a CEO that's actually used this process, and we think it's good, but it is actually an imbalance of power, of behaviour, of access to get rid of kaimahi. We think that it's a great way, but, to be honest, it's not great for workers, because one minute they're here and then one minute they can be gone. This is a tool for quiet dismissal. It creates a new legal pathway where an employer can approach a worker and say, "Here's an offer, here's some money, leave quietly, and don't ever speak of this again." If that worker agrees, under pressure and fear or out of desperation, the law will not allow those negotiations to be used in court.

Who will this harm the most? Well, not the boardroom, not the CEO, not the middle manager; it will be Māori workers, wāhine Māori, rangatahi Māori, and low-wage whānau who will be most affected; those in cleaning jobs, call centres, hospo, and security; the ones without lawyers; the ones living paycheque to paycheque. This is who it harms the most. And we know, from generations of experience, when the law gives discretion to the powerful, the powerless get burned. This bill erodes fundamental rights, and we've heard from our Labour colleagues about those fundamental rights. It guts the rights to fear recourse, the right to speak out if you are treated badly or unfairly. It undermines the purpose of the Employment Relations Act.

Where is the Treaty in this? Nowhere. This bill was written without Māori, for the employers, by a system that still refuses to see us as decision-makers. There is no acknowledgment of mana Māori, of tikanga, or of the collective approach we take to resolving workplace harm. There is no protection for the kaupapa Māori providers, the rangatahi workers, the wāhine leaders who might be pushed out of their mahi with no voice, no support, or no justice. This bill is a quiet legislative lay-off tool.

I ask this House: who benefits when a worker is silenced? Who loses when a mother of three living in emergency housing gets pressured into signing a mutual termination just to get her final pay? What happens to the trust in employment law when justice is made optional? Te Pāti Māori will not support this bill. We cannot support a law that widens the gap between employer and employee. We will not back a policy that opens the door to more Māori losing their jobs in silence with no path to redress. If we are to honour te Tiriti and uplift the mana of every worker, we will put this bill to the side, where it belongs. Nō reira, tēnā koutou katoa.

RACHEL BOYACK (Labour—Nelson): Thank you, Mr Speaker. It's a pleasure to take a call on this bill. I do congratulate the member Laura McClure for having her member's bill pulled from the ballot; it's always an exciting opportunity for a member. Labour won't be supporting this bill, and I'm going to talk a little bit about some of the experiences I've had supporting workers through processes like this, just to explain why I think this is a bill that is not needed. It will cause immense problems for workers and employers, in my view, and it's a solution looking for a problem. So I'm just going to talk through some of those experiences.

One of the common themes when I was working as a union organiser was members ringing me and telling me that they'd been called into a meeting and told they couldn't tell anybody about it. They'd been told: "I need you to come and have a quiet word to HR, but don't tell anybody. You can't bring anyone. You can't tell anyone."

One of the things that the Employment Relations Act explicitly talks about—and I would suggest member on the other side actually look at the Act itself because this bill, in my view, is inconsistent with the Act—the inherent inequality in power in the employment relationship between employer and employee. It is inherent. It's similar to the power and balance you have between a parent and a child; between a landlord and a tenant. These power imbalances are inherent. So—

Mark Cameron: Well, you're going to have that relationship when someone's paying wages and someone's receiving wages.

RACHEL BOYACK: Take a call, Mr Cameron.

One of the things I've seen in the employment relationship is employees called into meetings, told they can't tell anyone, discouraged from bringing a support person or a representative—

Laura McClure: But that's illegal under this, too.

RACHEL BOYACK: It is illegal, and you want to make it legal. That's the point—That's kind of the point. It is illegal. It happens all the time, and the member wants to stop it from being illegal and make it legal to have a secret little conversation and get someone to sign away their rights to any kind of process. It's kind of crazy. That's my point. You just made my point for me.

One of the things that's so important about these processes—and, look, I've negotiated exit packages, so I have sat around the table and negotiated for people to be able to leave their employment with dignity—is that until you actually get to the point of signing, the conversations are what's called "without prejudice", and that's what the member wants to take away: the "without prejudice" conversation. So they don't actually mean that you're getting to a final outcome until such point as you've signed on the dotted line. So you never take away that opportunity for the person to take a grievance or, on the other side, for the employer to actually go through with a dismissal.

I had one case where the person who had been sought for a meeting deserved to be dismissed—absolutely, outright deserved to be dismissed. The member sought my support to have his threat of dismissal turn into a resignation. The employer had to think long and hard about whether they wanted to do that, actually. While it was my job to represent that person, looking at it now objectively, from without that situation, given the conduct, I can completely understand why the employer would have wanted to not go through with a secretive-type conversation and actually make sure that this person had a dismissal on their record. So if you've entered into a secretive conversation where you can't, then, continue through what is a good process that protects everybody through that process, it actually has the ability for that employer to not be able to go through with a dismissal.

This is a bill that is, as I've said, a solution looking for a problem. It will definitely harm workers. In my view, it takes away good process in a time of high unemployment where we do sometimes see people being put on the scrap heap for whatever reason, and it's easy to discard people without thinking about it. That is a real concern for us on this side of the House. If people want to move people on from their jobs, they need to do it with transparency, following a proper process. I do not commend this bill to the House.

Dr VANESSA WEENINK (National—Banks Peninsula): Thank you, Mr Speaker. I rise to speak in support of the Employment Relations (Termination of Employment by Agreement) Amendment Bill in the name of Laura McClure and congratulate her. She's one of the list MPs based in Banks Peninsular so it's great to be able to support this discussion.

So the previous speaker spoke about this bill as a solution looking for a problem. Well, actually, just last week I joined with Minister Penk as we visited a large manufacturer in my electorate. They've been growing their business, changing their process, really upping the ante on the productivity that they've been developing through their business. Really impressive ways that they've adapted their business.

When we sat down and had a chat about how things are going, what we could do as a Government to make things better for businesses, the chair of the board gave an impassioned plea to do something about the industry that has grown up around grievances. Personal grievances and the processes around them have become a minor industry for the legal profession. It's not surprising to hear employment lawyers speaking passionately against this because by making this process a very quiet, mutually agreeable way that we can get things done and avoid the excess costs of going through and having lawyers involved—that's what we're trying to avoid. So of course, all of the unionists and the employment lawyers from the Opposition will speak very passionately about the requirement for employment lawyers to be involved in this.

This is the kind of thing where we can actually sit around and have a reasonable discussion between people who know that this place doesn't really fit them anymore. They really want to be able to move on, but they want to have some dignity in it. I've been an employer and I've been involved with having to go through the entirely painful process of performance managing people out, the going through the various times of review and then something will happen—they behave themselves for six months and then they play up again. It's painful. It's utterly painful. And everybody who's an employer in this place knows that the going rate for a personal grievance is about 10 to 15 grand. And most of the time they're sitting there thinking, "How much can I—are we weighing up?" I would rather just pay them the money; I would pay them to get rid of them. Because the impact of having an employee in a place where they don't belong, where they are bringing down the morale of other people around them is utterly destructive in a workplace.

This is one thing that actually is truly holding back growth in our businesses. This is something where there is the inability to expand the talent pool because they're stuck with people that don't necessarily fit. They can't go out and get new people that would fit better because they're stuck in an employment relationship that is not working. They're stuck working within the rules that they have, and they can't get beyond that. So this bill is a sensible change.

We do have some reservations from the National Party. We don't think it's perfect. There are some things that we're concerned that would need to be brought in through amendments to make sure that there are no places for coercion, because we don't see that as being fair. We don't want this to be an unfair situation, but we do believe that the processes that exist currently are upsetting the balances. It's meaning that employers and businesses are not able to move on and grow and develop in the ways that they want.

So the National Party believes in freedom of choice and personal responsibility. So this is one of the ways in which we are showing and sticking by our values. This is definitely in line with our party values and I'm very happy to commend this bill to the House.

CAMILLA BELICH (Labour): Thank you, Mr Speaker. It's very interesting to hear that this bill is aligned with the National Party's values. I think that we should get back to basics here and talk about some of the common goals that we share in this House and some of the common values that we share. One of those, I believe, and I don't think I'll hear a lot of debate from the other side on this, is fairness. I think that as New Zealanders we believe that we should have a fair society. So when I take that lens and I look at this bill, I am struck by the inherent unfairness and way that this bill will try and change the way that employment happens in New Zealand.

Just to respond to a couple of comments from the members opposite: the grievance industry that that person was complaining to you about is not about the fact that there are personal grievances. It's about the fact that there is no regulation on who can take a personal grievance. There are lots of people who are unlicensed, untrained, not lawyers, who take personal grievances on behalf of other people. That is the grievance industry and I am fully in support and in agreement that there should be some regulation around the people who take those claims; people should not be taking valueless claims. But the people that they're talking about are not trade unions and they're not lawyers. They're people who don't have expertise and who take claims. So that is a separate matter, I believe.

In terms of having someone who is employed by you and it's hard to performance manage them, I agree, it is sometimes hard to go through a performance management process. But do you know what is harder? Not you, Mr Speaker—does the House know what is even harder than going through a performance management process? Losing your job for no reason at all. Losing your livelihood and the way you make money for absolutely no reason. And this is exactly what this bill allows. The process in this bill is essentially that you can, without any agreement, call or offer someone some money to leave their job. This bill means that if you do that, that can never be brought up again in any employment proceedings at all.

There is a provision that, in that, you need to seek legal advice. The problem with that is the word, there—"seek". It does not mean "obtain legal advice", it just means "seek". We have other laws in New Zealand, like relationship property settlements, which require legal advice before they're entered into, and I think that would be a much more prudent protective measure to have in a bill like this. So there's no guarantee that they'll get any advice; what my colleague Jan Tinetti said is absolutely true.

The second point is if the employee is not interested in that process, then none of that information can be used at all if they are then unfairly dismissed. So you have, essentially, the employer making an offer on one hand and then the employee not agreeing to it, and then on the other hand, the employer then needs to go through an entire process. The whole fundamental basis of that process in New Zealand employment law is the fact that that is not predetermined. If it's a performance issue, they have to give the employee an opportunity to improve. If it's a conduct issue, they have to go into the hearing without preconceived ideas. What a farce this bill would make for the very fabric of employment law in New Zealand.

And another very good point that my colleague from New Zealand first, Tanya Unkovich, made on this bill, and I do commend them for their thoughtful comments on this bill, and I think the Education and Workforce Committee would do well to consider them and perhaps they can look at that based on the evidence, which I'm sure will come out of select committee. The very thoughtful comment that they made is that this may lead to coercion for people who are employees. This is a really, really important factor in this bill and it could mean that people are in a situation where they feel that they've got no choice but to leave.

We live in a country that we're proud of; we don't have no-fault dismissals unlike other countries, like in America, where for whatever reason you can be sacked. We proudly do not have laws like this in this country. I just say to the National Party, to the New Zealand First Party, please listen to reason at select committee. Do not vote for this bill. Do not change the fundamental basis of our employment law and allow people—your children, people you know—to be invited into a room and for no reason be told—no performance reason, that's what it says here; there's not a requirement that there is any performance related reason to be sacked. This will be a negative—negative—thing for New Zealand. It will destroy people's confidence, it will destroy families, it will get rid of livelihoods. It's not needed. You can have protected—You can have without prejudice conversations already. As my colleague said, please vote it down.

CARL BATES (National—Whanganui): Thank you, Mr Speaker, and thank you for the opportunity to take the final call as we commend this bill to the House this afternoon. Unlike my colleagues on the other side of the House, we are willing to take something to select committee that has a foundation for consideration and that is a bill that's worth seeing if we can make it work in the context of employment law in New Zealand, and to listen to reasonable feedback. The difference on this side of the House, though, is that when we listen to reasonable feedback, we don't consider that we already know the answer.

All I've heard this afternoon from the time that I've been in the House listening to the colleagues on the other side is that they've already made their minds up. They've already decided that this isn't possible—they've already decided that this isn't going to help productivity for business in New Zealand.

What we need in this country is more productivity. We need the ability to earn the taxes to pay for the things that the Government should provide: First World healthcare, First World education, and restoring law and order, including funding the police. In order to do that, we need to be prepared to review our employment laws. This, while not in the coalition agreement and while not a policy position that has already been decided, is something that aligns with something that is referenced in the coalition agreement, and that is looking at how we can simplify a personal grievance. As part of simplifying that, we think that there is potential for this bill to do exactly that. However, we don't come here with an ideological bent, possibly because of our unionist background; we come with a view that is open to the consideration of the underlying reality that not all employment relationships are the same. Not all businesses are the same, and nor are they of the same size.

So there are some concerns—I have shared them with my colleagues on this side of the House—and there are some areas that we are going to be asking some questions about as we take this bill through the select committee process, and maybe the well-working, well-functioning, well-chaired Education and Workforce Committee will address these and help just strengthen them. I just want to put on record what a couple of those areas are so that the House can look to these in the second reading and see what we have done to address them.

Firstly, where are the boundaries for an off-the-record conversation? When does an off-the-record conversation start, because I think that's important in the relationship and in the decisions that both employer and employee make. It's been spoken about this afternoon as though you walk in, someone says that it's time for one of these chats, and then you're gone, and it's a one-sided conversation. Well, this is by mutual agreement, and maybe we need some back-to-basics literacy in the House for some of my colleagues about what "mutual agreement" means. I'm sure that we could take some of our colleagues that aren't necessarily electorate MPs into some schools and show them what we're doing to ensure an hour of reading, writing, and arithmetic, as part of ensuring that they understand the concept of mutual agreement. That's both parties agreeing—both parties being in agreement to end the employment relationship—but we want to understand, as the National Party, where the boundaries for that off-the-record conversation starts.

The second issue that we will be exploring as part of the select committee process is what a reasonable time frame is for both parties to go away and consider what the offer is. Now, that might have two parts to it. That might be both what is a minimum and maybe what is a maximum, because you can't get an offer and sit on the offer for a week or two, or a month maybe, while the relationship continues to break down. So there's going to be a discussion about where that relationship and that time for consideration should land, and I think that anyone who is listening to this debate in the House this afternoon who is looking to submit on this bill could look to give their views on that particular question.

Thirdly, we will be looking at safety rails. What are the safeguards—what are the safety rails—that go around this bill, should it become legislation? We think that it is something that could support business in this country to focus on what we need for all, including higher-paying jobs, and that is productivity. I commend this bill to the House.

ASSISTANT SPEAKER (Teanau Tuiono): A five-minute call in reply—I call Laura McClure.

LAURA McCLURE (ACT): Thank you, Mr Speaker. I'm pretty excited to take the remaining five-minute call on this member's bill, the Employment Relations (Termination of Employment by Agreement) Amendment Bill, and I want to thank, firstly, my coalition partners for their support in taking this to a select committee. It's excellent, and I think this is going to make a real difference to New Zealand businesses and employees.

Firstly, it's not a surprise that the Opposition is opposing this bill. I mean, it's no surprise to all New Zealanders. I don't think they have actually been out in the community talking to businesses and talking to employees. Hell, I don't even know if they've actually talked to their unions about this bill, because nowhere in this bill does it say that it's a "fire at will" bill. Nowhere in this bill does it say that tomorrow I can offer you a sum of money and you'll be coerced to take it. This bill is about having those mutual conversations that we know two parties are grown up enough to be able to sit down and have. The fact that it's mutual in the first place means that, even if an employer offers this out to an employee, to have this conversation, they can say, "No, I don't want to talk about that." There is absolutely no way an employee can be coerced into even having this conversation in the first place.

To target some of the points that I heard from the previous members, is there a power imbalance? Inherently, when you are paying somebody to do a job, there will always be some kind of power imbalance. But do you know what is a complete power imbalance right now? It's employees pushing the boundary to employers and actually breaking the rules just enough that maybe they may get fired, maybe they may not, and the employers going through the process, if you're a small business, and maybe you don't follow something to a T—maybe you do follow it to a T—and then you have these no-win, no-fee guys out there come along and they say to a business, "Hey, we believe there might be a case for a personal grievance. This person here wants $20,000." And you've got these businesses saying, "Are you serious? This employee has given me grief for the last year." But do you know what? They pay them to go away. They actually pay them because they're afraid of what the process might be next. They're absolutely terrified of what that process might be. And, on this side of the House, we live in the real world, so we know that this is a problem. No good employer would get rid of a good employee. There is absolutely no incentive to do that.

Do I agree that there are some potential concerns with this bill? A hundred percent, I do, and I want to acknowledge those concerns, and I'm pretty positive about what we could see we could have at the select committee. There could be some timings suggested. We don't want any pressure, and we want to make sure that these things are addressed. So I agree that there are some little weak points within this piece of legislation. But it's a member's bill—it's a member's bill—and it's around the idea that we need to make it easier to do business in this country.

I was hearing quite a few different things coming from the Opposition, around eroding workers' rights and all these convoluted things that employers might do to employees, but do you know what erodes an employee's rights? Having to go through a performance review when you know that, actually, there's a relationship breakdown between yourself and your manager. You know they're trying to get rid of you, and you have to go through those steps anyway. What happens when you know that your company is restructuring you out, yet you've got to show up to work? And we know that we've got things in place for this. It's called going against your employer for a personal grievance (PG). But employers are using these mechanisms to move people on, because they're unable to just have an adult conversation, a conversation about what it may mean for them to move on.

We're not saying, "Hey, we want your job—see you later." We're actually saying, "Hey, we acknowledge that it's hard out there. We acknowledge you may need to go through some steps to get other employment. We're going to compensate you for that." That is the right way to do it. And, do you know, the amount of conversations I've had with employees about this bill. Nearly all of them—I would say 98 percent of the employees who had been through a PG, been through restructure processes, been through performance management reviews—all said to me that had their employer approached them at the start and said, "These are the problems we're having. This is an offer I'd make for you to leave your employment", they would have taken that, because their reputation would be intact, their dignity would be intact, and they'd have something to actually walk away with.

That side of the House seems to think that low- and middle-income employees are going to be completely destroyed by this. Low- and middle-income employees in New Zealand often don't even have redundancy packages or clauses in their agreements anymore. How about they can actually walk away with some coin in the hand and some dignity, and actually move on? I look forward to the select committee working on this bill, and I commend the bill to the House. Thank you.

A party vote was called for on the question, That the Employment Relations (Termination of Employment by Agreement) Amendment Bill be now read a first time.

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Motion agreed to.

Bill read a first time.

ASSISTANT SPEAKER (Teanau Tuiono): The question is, That the Employment Relations (Termination of Employment by Agreement) Amendment Bill be considered by the Education and Workforce Committee.

Motion agreed to.

Bill referred to the Education and Workforce Committee.

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