The bill aims to make pay secrecy clauses unenforceable, promoting transparency and addressing the gender pay gap. Photo / Getty Images
By Giles Dexter of RNZ
Members’ Bills from Opposition MPs are more often than not doomed to fail, but there have been exceptions to the rule this term.
Tracey McLellan’s Evidence (Giving Evidence of Family Violence) Amendment Bill received unanimous support at its second reading, with all six parties in Parliament voting in favour.
Deborah Russell’s Companies (Address Information) Amendment Bill is being supported by National and Act, but not by New Zealand First.
Others, such as Camilla Belich’s Crimes (Theft by Employer) Amendment Bill, have passed thanks to the support of one of the smaller coalition parties (in this case, New Zealand First).
But only one Opposition bill has had the support of National, and only National, from the other side of the House this term – and it is another from Belich.
On Wednesday night, her Employment Relations (Employee Remuneration Disclosure) Amendment Bill passed its second reading, thanks to National voting alongside the three Opposition parties.
The bill would ensure that pay secrecy clauses, which prevent employees from discussing their salaries with colleagues, would no longer be enforceable, meaning employers could not take legal action if an employee talked about pay.
There will be cases where pay differences were justifiable (such as different skillsets or qualifications), but the bill’s intention is to shed light on situations where they were unjustifiable.
Australia, the UK, the EU and some US states have either banned pay secrecy clauses or made them unenforceable.
Belich said people already talk about their pay with colleagues, but stopping businesses from taking action against them for it would keep New Zealand up with the times.
“It takes away the right for them to take action and discipline their employees when they talk about their pay. We know this happens already at the moment. So there’s definitely a common sense, pragmatic element to this bill,” she told RNZ.
“It’s making sure that usual human behaviour and workplace discussions are not something that people are disciplined for.”
Six National MPs took calls on the bill at its second reading.
Every one of them referenced the gender pay gap and were hopeful the bill would be a mechanism to reduce it.
Banks Peninsula MP Vanessa Weenink, who gave National’s first contribution to the bill, told RNZ the party supported the bill because it had a “proud history” of driving down the gender pay gap.
“We know that pay transparency is a key factor for driving down the gender pay gap. International studies have shown that when that legislation has been brought in, that it’s measurable in the amount of reduction in the pay gap. So we really want to see that continue to fall down.”
Belich said it was great to see continued support for the bill.
“I was heartened by the comments made in the house, where the National Party members said they would support this right through. I hope that’s what they do,” she said.
“I think given the current context, where we’ve had significant changes to our pay equity regime, where women have had the ability to take pay equity claims severely curtailed, these types of bills, which make small changes to make a more transparent workforce, are increasingly important.”
Weenink said the “optics” around pay equity had nothing to do with National’s support for the bill, as the party had also supported the bill at its first reading, well before the pay equity changes were announced.
“It’s just our ongoing commitment to doing what we can to make the workplace fair and improve productivity. How I see it is that if you can see you’re being paid less than someone else who’s working right beside you, doing the same job, then that’s going to massively reduce your motivation, isn’t it?”
She did not see it as National handing Labour a win, but rather an opportunity to put party politics aside and improve things for New Zealanders.
The bill passed its first reading in November.
Sometimes, a bill is given cautious support at its first reading, in order to send it to select committee to see if the kinks are ironed out.
The Education and Workforce Committee received 225 submissions on the bill, the majority in support.
Belich said a number of changes were made to the bill through the select committee process, including making it clear there would be no requirement to make a disclosure.
“It’s still something that can be a private matter. It’s only if you wish to that you shouldn’t be disciplined for the desire to actually discuss that. So that was probably the major change through select committee.”
She said there were some definitional tidy-ups, including making it clear what the definitions of remuneration and detriment were, as well as ensuring the bill would not be retrospective.
Some privileged or commercially sensitive information, for example, owner benefits for a business owner who also receives an employee salary, would also be excluded.
Despite the changes, Act and New Zealand First continued to oppose the bill.
Act said it would allow people to breach agreements they had signed up to, for which there should be consequences.
“Once you’ve signed something, you are supposed to oblige [sic] to the conditions that you have signed for. If you do not agree to something in the agreement that you have signed, then there is an opportunity for you to go back and renegotiate the terms and conditions that you don’t agree to,” Parmjeet Parmar told the House.
“But you don’t just breach the agreement and say that there should be no consequences for that.”
New Zealand First’s Mark Patterson said it “runs smack into the brick wall” of the party’s belief in the “sanctity” of contract law.
“While this bill doesn’t prevent pay secrecy and that’s still able to be incorporated within a contract, it does limit an employer’s ability to enforce it, and that goes against what a contract should be,” Patterson said.
Belich said she found the arguments against the bill “interesting,” as it was specifically designed so businesses would not need to spend money to change their contracts.
“If we’d said you cannot have a pay secrecy clause in your contract, or pay secrecy clauses are now illegal to have even in an employment document, there’d be thousands of employment agreements throughout the country that would need to be changed, that would cost money, that would take legal advice. It would be a burden on business.”
The bill still needs to go through the Committee of the Whole House stage for any further tidy-ups, and then a third reading, though Weenink did not foresee any major changes.
“It took a long time to bash some of these things out, and I think we’ve got it to a really good place.”
Acknowledging National is a “broad church” and there had been strong discussions about the bill amongst the caucus, she did not expect any changes to the party’s position at the third reading.
– RNZ