Cross-Examination: Bill vs Bill – Bill English Kills Six Months Paid Parental Leave

Content Contributor, Jade Du Preez

Finance Minister Bill English’s recent veto of the Parental Leave and Employment Protection (Six Months’ Paid Leave and Work Contact Hours) Amendment Bill has sparked debate over the democratic process. The following article provides an overview of the bill itself, the nature of the financial veto, and political and public responses.

Sue Moroney claimed the support of “the ballot goddess” when her private member’s bill was once again drawn after being narrowly voted down in 2015. With backing from the Greens, New Zealand First, the Maori Party and United Future, the balance of power in support of the bill shifted after the National-held Northland seat was taken by Winston Peters. Essentially, the proposed amendment involved incrementally changing paid parental leave to a period of six months. The current legislation provides for 4.5 months. The stated intentions of the change were:

  • To bring New Zealand in line with the World Health Organisation’s (WHO) recommendation to provide exclusive breastfeeding up to 6 months of age.
  • To support families in providing nurturing environments, and to support the wellbeing of children.
  • To create jobs for those filling the roles of parents while on leave.[1]

History of the Legislation

The relevant legislation currently in place is the Parental Leave and Employment Protection Act 1987 which provides for minimum entitlements with respect to parental leave funded through general taxation. Supporters of the amendment have raised entitlements available in New Zealand as compared to OECD averages. Over the past 30 years there has been a trend in playing catch-up.

While paid parental leave was only effective from 2002, the original Act provided for job protection and was motivated by international legal standards including:

  • The Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW);
  • The International Labour Organisation (ILO) Convention No 111 Discrimination in respect of Employment and Occupation 1958; and
  • The Convention on the Rights of the Child (UNCROC).[2]

The most recent change under the National government was an increase in paid leave from 16 to 18 weeks from April of this year, bringing NZ just above the 17.7 week OECD average for paid maternal leave of 2015, but considerably lower than the average total paid leave available to mothers of 54.1 weeks [3]. Further, recent changes have involved increased coverage of the workers to whom payments apply, including those who have recently changed jobs, and seasonal and casual workers with more than one employer.

Leave entitlement included is: maternity leave for female employees, paternity leave for male employees, and extended leave for both. Paid parental leave is primarily conferred to female employees who have been in employment for a minimum of 10 hours per week for the six month period preceding the expected delivery date. The mother may transfer that payment to her spouse (including married and de facto couples, of opposite or same-sex) should they be entitled under the Act[4], though it is found that leave is infrequently transferred.

As well as coverage of payment, there is a strong presumption that an employer will keep open the employee’s position. Section 41 of the Act states:

  1. Where an employee takes a period of parental leave … the employer shall be presumed …to be able to keep open for the employee, until the end of the employee’s parental leave, the employee’s position in the employment of the employer unless the employer proves that the employee’s position cannot be kept open—
    1. because a temporary replacement is not reasonably practicable due to the key position occupied within the employer’s enterprise by the employee; or
    2. because of the occurrence of a redundancy situation.

In terms of the recently proposed change to legislation, motivations were strongly related to the health of the child. For infants, breastfeeding has been connected to protection against cot-death, as well as benefits in cognitive development and immunological health. For mothers, studies have indicated breast feeding provides increased protection against ovarian and pre-menopausal breast cancer and osteoporosis.[5]

Over 3,000 submissions were made during the reading of the Bill. Those in favor of change were concerned with support for families, the overall economic benefits, improved health outcomes and alignment with WHO standards. Additionally, gender equity and improved choices for women when returning to work were considered important. Those submissions in opposition, which made up less than 1%, raised concern over the cost to government and difficulties for employers finding replacement staff. The flip side of the argument from employers was that a longer leave period made for an easier contract to fill; one that would be more desirable to potential candidates.

Given widespread public support and increased political backing, the tenor of parliamentary debates including voices from the opposition were supportive in principle, however the financial implications were considered unworkable from National’s perspective.

The use of veto

Consistent with his stated intention, Bill English exercised his right as Finance Minister to veto the bill at the stage of its third reading in June. This effectively cancelled the vote that would ordinarily follow the debate, despite there being support in the house for it to pass in a 61 – 60 vote. The use of veto, as provided for in the Standing Orders, has been used in the past but only to strike down elements of legislation, not a bill in its entirety.

The process of issuing of a certificate indicating an intention to veto is covered as follows:

326   Financial veto

  • The House will not pass a bill, amendment, or motion that the Government certifies it does not concur in because, in its view, the bill, amendment, or motion would have more than a minor impact on the Government’s fiscal aggregates if it became law.[6]

The content of the veto certificate must include the predicted financial impact of the motion in some detail, and the reasons why the government is not in support. Though a challenge was raised in terms of the absence of particularity, the certificate was found to be valid.

Money Matters

Criticism has been brought regarding calculation errors. Sue Moroney challenged Bill English on citing $280 million a year on extended paid parental leave to 26 weeks, contrary to the figures used in the veto certificate. English conceded this error, having confused the $280 million over four years with $280 million in a single year[7].

In her calculations, Moroney estimated an additional cost of $107 million a year, with savings of $28 million a year in childcare subsidies, reduced unemployment benefits, reduced health costs and higher taxes.[8] Parliamentary debates became heated with comparisons drawn to the expenditure on the flag referendum and the ability of the government to “magic $20 billion up for war toys”.

Public Responses – an absence of democracy?

A petition launched on the Action Station website sought signatures to repeal the financial veto stating “We request that Standing Orders 326 – 329, governing the crown financial veto, be repealed”.

“The crown financial veto is an archaic provision in Parliament’s Standing Orders which allows the government to veto spending it does not agree with. This week, it was used to veto a bill extending paid parental leave which had the majority support of Parliament. The government could not vote the bill down, so they prevented a vote from even being taken on it.”

A sample of reasons provided by those signing the petition included statements such as: “Why should any democratic decision be able to be overturned by a single politician.”, “MMP was supposed to curb the dictators” and “Parliament is supposed to be sovereign, not the government. If you have the guts, make it a confidence vote, or stand by and let Parliament make the law like it’s supposed to.”[9] The petition seeks 400 signatures to be delivered to the House of Representatives.

Following the veto, which she told Parliament was an extreme measure,[10] Moroney addressed the media accusing the Government of ignoring democracy and putting politics ahead of people.[11] This related to her expectation that National would adapt the surrounding policy in future, but sought its own stamp on the legislation. This may prove true with English’s response that “there’s plenty of people advocating for it so I’m sure it will remain part of the political discussion”.[12]

In terms of a lack of democracy, English responded: “It’s the will of Parliament that there’s a financial veto, that’s legislation, the point of that is to make sure you get an oversight of the Budget.”

Change in the Future?

The National government has not dismissed extending paid parental leave, when affordable and with consideration other alternatives structures. Moroney has decided against returning the bill into the ballot for a third time, stating that the only way to achieve progress would be through a change in government, and that it was up to voters to indicate their desire for change in the next election.

Amanda Malu of Plunket admitted disappointment with the veto, but considered all was not lost.

“We remain pretty committed to encouraging the Government to continue in the direction of incremental increases to paid parental leave, which to a certain extent they’ve already begun doing, so we would just like to encourage the continuation of that.”[13]

There is also room to consider additional policy options. These may include non-transferable leave for fathers (or spouses) and the consideration of universal right to access payment, rather than it being determined by an employment arrangement[14].

The rights to paid paternal leave can be connected to breaking down gender-based discrimination in the workplace and elevating the importance of a domestic domain. A movement in Europe, PLENT, presently proposes an EU directive providing for parental leave that is non-transferable, equal for both parents, and 100% paid. The intention behind this is to address inequality perpetuated through legislation supporting gender-differentiated roles[15]. Nordic countries have been particularly invested in incentivising fathers to take leave, with Iceland, Sweden and Norway providing for 3 months paid parental leave. Perhaps this may be considered in future in the New Zealand context.

Regarding a universal income for parents, independent of employment status, the relevance of this is highlighted with the increase in participation in contingent employment; workers are increasingly splitting employment, working under contract and moving away from the standard single long-term employer. Failing to meet standards regarding the timing and duration of work may effectively exclude a large proportion of new parents, placing families under financial stress. By way of example, workers such as contract cleaners will be more vulnerable to exclusion from payment provisions in a manner that may increase inequality[16].

Concluding thoughts

Given the interest in New Zealand’s standings within the OECD and considerable public and parliamentary support, it seems likely that some degree of change on the horizon. Depending on the constitution of future governments we may see an increase in paid parental leave and some variation in the persons to whom it is extended. As these concerns are being raised it may be important to look internationally for the ways in which future developments could impact on gender and income-based equality.

The views expressed in the posts and comments of this blog do not necessarily reflect those of the Equal Justice Project. They should be understood as the personal opinions of the author. No information on this blog will be understood as official. The Equal Justice Project makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The Equal Justice Project will not be liable for any errors or omissions in this information nor for the availability of this information.

[1] Mazengarb’s Employment Law (online looseleaf ed, LexisNexis)

[2] Lorraine Skiffington (ed) Mazengarb’s Employment Law (online looseleaf ed, LexisNexis)

[3] “Key characteristics of parental leave systems” (28 February 2016) OECD Family Database <www.oecd.org>

[4] Anthony F Drake (ed) New Zealand Forms and Precedents (online looseleaf ed, LexisNexis).

[5] Judith Galtry “Breastfeeding at work, a missing piece of the paid parental leave debate” (2001) 1 Tirohia = Focus : newsletter of the Human Rights Commission, Komihana Tikanga Tangata 10.

[6] Standing Orders of the House of Representatives 2014, SO326.

[7] Chris Bramwell “English admits maths error in bill veto defence” Radio New Zealand (online ed, New Zealand, 29 June 2016).

[8] Isaac Davison “English expected to veto bill” The New Zealand Herald (online ed. Auckland, 13 June 2016).

[9] “Repeal the financial veto” Our Action Station <our.actionstation.org.nz>

[10] “Govt again vetoes paid parental leave bill” Radio New Zealand (online ed, New Zealand, 29 June 2016).

[11] “Govt vetoes paid parental leave extension” Newstalk ZB (online ed, New Zealand, 16 June 2016).

[12] Jo Moir “Government has used the financial veto to stop an extension to paid parental leave” Stuff (online ed, New Zealand, 16 June 2016).

[13] “Paid parental leave veto a ‘slap in the face’” Newstalk ZB (online ed, New Zealand, 17 June 2016).

[14] Paul Callister and Judith Galtry “Paid Parental Leave in New Zealand: A Short History and Future Policy Options” (2006) 2(1) Policy Quarterly 1.

[15] PLENT – International Platform for Equal, Non-Transferable and 100% paid PARENTAL LEAVE <equalandnontransferable.org>

[16] Callister, above n 14.