Fair pay recommendations split business community

SumoSalad-store-interior-workerThe New Zealand Government has received recommendations from the Fair Pay Agreement Working Group, which is seeking to improve incomes and working conditions of New Zealanders with an initial focus on “those who earn the least.”

Fair pay agreements would set minimum standards to lift wages and conditions across an industry or occupation in an attempt to stop the “race of the bottom” mentality that is damaging people’s prospects and holding industries back.

“That’s why I directed the Fair Pay Agreement Working Group to recommend the scope and design of s system of bargaining that sets minimum terms and conditions of employment across industries or occupations,” Workplace relations and safety minister Iain Lees-Galloway said.

“New Zealand is out of step with the OECD both in terms of income inequality, and productivity, with Kiwis working longer hours but producing less per hour worked than those in most OECD countries.”

Recommendations include the capacity for 10 per cent of a particular industry or 1000 people – whichever figure is fewer – to trigger negotiations for an industry-wide FPA, and that some industries may be required by law to negotiate an agreement “where there are harmful labour market conditions”.

The Public Service Association (PSA) said that the recommendations would deliver a sound pathway for improved employment relations in New Zealand.

PSA national secretary Glenn Barclay said the recommendations will help to underpin a stronger economy.

“This is simply about ensuring no workers are left behind in sharing the benefits of a more productive economy that isn’t characterised by a ‘race of the bottom’ in terms of wages and conditions,” Barclay said.

However, not everyone agrees with the recommendations laid out, with BusinessNZ chief executive Kirk Hope pointing out the compulsory nature of these fair pay agreements ran counter to modern industry.

“Being covered by a fair pair agreement would be compulsory for everyone in an industry or sector. We disagree with this and think the decision to enter any employment agreement should be voluntary,” Hope said.

“Fair pay agreements would limit business flexibility, as a collective covering every business wouldn’t be able to meet the needs of individual firms.”

Business Central chief executive John Milford agreed, noting the recommendations do nothing to advance the goal of increasing productivity.

“Forcing the same pay and employment conditions on all companies in a sector deprives them of the ability to innovate and outperform their competitors,” Milford said.

“The working group’s recommendations are bad for workers, bad for employers, and will negatively affect New Zealand’s productivity growth. For these reasons, we will continue to advocate strongly against these charges being passed into law.”

Canterbury Employers’ Chamber of Commerce chief executive Leeann Watson said that she didn’t think the report addressed the fundamental concerns of the business community, and don’t align with the reality of the modern business environment.

One of the key issues Watson raised with the report were industry-wide stop-works, where employees would have to attend paid stop-work meetings to agree on the terms of FPAs – which could seriously impact employers and productivity.

“We disagree with key recommendations of the report; however we are very aware that this is the start of the process.”

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