Losing Labour MPs reflect on the business laws they failed to change

Sunday, 19 November 2023

Labour’s Ibrahim Omer’s attempt to hold thieving employers to the same standards as light-fingered workers looks, if not dead in the water, then in desperate peril of death.

Tuesday sent a reminder that unscrupulous people who own businesses can be every bit as dishonest as those who work in them, but with fewer consequences.

The Labour Inspectorate inspected 85 Auckland businesses, and found “high levels of non-compliance” with many underpaying their immigrant workers, not allowing them holidays, some even demanding their workers pay them.

None of the businesses were named. The intent of the Labour Inspectorate’s operation was to “educate” the business owners. It expected to issue some infringement notices. The businesses would not be named.

“It won’t change anything,” said Omer, who lost his seat in the general election.

What would change things, Omer believes, would be his private member’s Crime (Theft by Employer) bill making it into law.

It would add intentional wage theft by an employer to the Crimes Act, giving authorities the same teeth the law possesses when prosecuting a worker caught with their hand in the till.

Omer created the bill as a result of his experience in the early days of his life as an immigrant, when he was a victim of wage theft himself.

His bill remains on the order paper, so under Parliament’s rules, it will be debated, but as National and ACT MPs opposed it when it was first debated in August, Omer’s hopes now lie with NZ First deciding it will support the bill.

ACT’s Simon Court said business owners should be trusted to do the right thing by their employers, and if they didn’t, workers would leave to get jobs elsewhere.

National’s Paul Goldsmith thought there were already many options for workers to take employment disputes, and foresaw “unintended consequences” from Omer’s planned law.

On the way out of the debating chamber, Omer said one National MP told him: “I’m not sure we’re doing the right thing by voting against this bill.”

“I said, ‘Talk to your colleagues, and convince them’”.

“It’s not dead yet,” Omer said. “But if the three parties (National, ACT and NZ First) decide to vote against it, then it’s not going to pass.”

While National and ACT have made it clear they intend to repeal the Fair Pay Agreement Laws, and bring back 90-day work trials, there are a number of lower-profile money and work bills over which a questionmark now hangs.

Omer's bill is one of four bills relating to individual’s incomes and business lives, which now look under threat now Labour no longer holds the whip hand in Parliament.

Helen White survived a close-run election in the Labour stronghold seat of Mt Albert, but there is now a questionmark over the future of her attempt to bring fairness to non-compete clauses in employment contracts for hairdressers, kindergarten teachers, milk workers, seamstresses and baristas.

Her Employment Relations (Restraint of Trade) Amendment Bill would ban restraints of trade wherever an employee earned less than three times the minimum wage. Where restraints of trade were allowed, they could last no more than six months, and the employer would have to pay for the privilege.

White said as a union employment lawyer before she entered Parliament, she saw a parade of low-paid workers coming into my office who could not move jobs.

“They couldn't ask for a pay rise, because they wouldn't get one, because they couldn't move jobs, and they couldn't move to better work,” she said.

Businesses were effectively using it to suppress wages.

At the bill’s first reading in July, she said: “In America, some of the states actually ban these restraints. When they do so, they see an uptick in wages of 6% over five years.”

However, White was convinced they were also suppressing productivity growth, and Silicon Valley-style innovation, as they could hinder the freedom of employment of people with high-level digital skills.

Often, the restraints she saw were probably not enforceable, but workers faced high hurdles to challenge them, she said.

In the July debate, Goldsmith admitted: “Yes, there is an issue that Helen White has identified, but this bill … is a sledgehammer to break a nut.”

Three times the minimum wage, which is over $140,000, was just too high, he said. Businesses needed to be able to protect their IP from employees leaving to set up in competition with them.

ACT also voted against.

White said she had not given up hope though, seeing the anti-competitive aspects of restraint of trade as being something that would appeal to the instincts of the political right.

“If I was an ACT MP, I could argue for this bill, and I would do a good job of it,” she said.

She said she would be pleased to work with Goldsmith on it, including talking about dropping the cap.

Labour’s Sarah Pallett drafted a proposed law which has the support of the Institute of Directors, but will be automatically scrapped because it did not make it onto the order paper before the election.

Her Companies (Address Information) Amendment Bill would have allowed company directors to keep their home addresses private, if they made a statutory declaration that they were under threat.

Currently, directors had to go through a long and costly process of getting protection orders in order to get the Companies Office to remove their address from the public Companies Register.

The current rules were a barrier to directors protecting themselves from harrassment and stalking, and in extreme cases, the threat of violence.

“It was part of a bigger piece of work we were doing,” Pallett said.

That was reviewing stalking and harassment laws, which Pallett said were not fit for purpose.

“This is the thing about changing governments. An enormous amount of work just gets put to one side,” she said. “If it’s not a priority for the incoming government, then they won’t be picking it up.”

Pallett worries that Parliament has taken a bit of a male turn, and may no longer prioritise that work.

“We have gone from 50% women in Cabinet and 50% women in Parliament, to nothing like that,” she said.

However, Pallett’s sentiment is one that ACT has some sympathy for.

ACT’s Brooke van Velden drafted her own private members’ bill seeking to allow directors to keep their home addresses off the Companies Register as long as the Companies Office has them on record.

Labour’s Anahila Kanongata’a-Suisuiki​ lost her seat in the election, and fears that her District Court (Protecting Judgment Debtors on Main Benefit) Amendment bill will get voted down.

Her bill, which, like Omer’s, is also on the order paper, would prevent more than 5% of a main benefit being attached by a court to repay private debt to the likes of finance companies.

The law currently allows courts to issue attachment orders at the request of lenders and debt collectors to divert up to 60% of a debtor’s income to pay their debts, Kanongata’a-Suisuiki said. That undermined the very reason benefits existed – making sure people having enough to live on.

“I have asked Dr Duncan Webb, and he has agreed, to sponsor the bill,” he said.

She hoped the bill would be seen as apolitical, but said everything in Parliament became political.

When she spoke with right-leaning MPs, the messages she got back were not hopeful.

“It was more about the responsibility of the debt to pay their debts,” she says.

She believes when people borrowed, they did intend to pay it back, and often their struggles to repay are the result of changes in their circumstances.

When in Parliament, she succeeded in getting a law passed to prevent lenders from seizing mobility scooters to sell to recoup debts, and hoped MPs of all political persuasions would see that benefits were worth protecting.

“One can only hope,” she said.