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Ardern’s Fair Pay Agreement frustrates industry bodies

The New Zealand Government last week unveiled a radical overhaul of the country’s labour laws, dubbed the ‘Fair Pay Agreement’, which is designed to allow unions to negotiate on an industry-wide basis.

The idea is to improve wages and conditions across all members of an industry or occupation, as well as encourage businesses to invest in trading and ensure ‘good’ employers aren’t being undercut.

“For too long New Zealanders working in critical roles like cleaners, supermarket workers, and bus drivers whose work was essential to keep our country going during the pandemic, have been undervalued by our workplace relations system,” said workplace minister Michael Wood.

“Fair Pay Agreements are about turning that around and ensuring that working kiwis get a fair go again.”

And with the announcement of the “biggest change to workplace laws in several decades”, the future looks much brighter beyond the announcement according Council of Trade Unions president Richard Wagstaff.

“Wages have been driven down simply to improve profit margins,” said Wagstaff.

“This is what working people in union have been campaigning for; a more balanced employment relationship between working people and employers – putting people back at the centre of employment.”

However, other industry representatives were less enthused. Retail NZ chief executive Greg Harford called the system “hugely complicated”, and would lead to reduced employment opportunities and drive significant costs for business.

“While the so-called Fair Pay agreements might lead to higher wage rates for some, it will come at the cost of reduced hours for employees, or reduced numbers of employees across the sector, as well as higher pricing for consumers,” Harford said.

“Retail NZ absolutely agrees that it’s desirable to improve New Zealand’ overall standard of living and to increase wages – but this needs to be driven by increased productivity, not a return to 1970s style industrial negotiations.”

BusinessNZ took this line further, calling for the plan to be terminated immediately due to “significant problems [that] have not been addressed”.

BusinessNZ chief executive Kirk Hope said employers are not interested in compulsory, nation-wide pay agreements, and that the fact these agreements could seemingly force employers in an industry to pay at a certain rate violates international law, which says collective agreements should be negotiated voluntarily.

“There would be nothing “fair” about Fair Pay Agreements,” Hope said.

“Any pay deals reached wouldn’t be fair because the process is essentially compulsory – employers would be required to agree to what unions wanted, with compulsory arbitration if they didn’t.

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