Fairer future or recipe for disaster? Restaurant Association kicks up stink on fair pay agreement

The tyranny of the minority and a disaster in waiting, or a milestone in the fight for a fairer future?

It only passed into law yesterday, but the Government's Fair Pay Agreements Bill has already earned such epithets and accolades.

Business groups have blasted the bill, dubbing it cumbersome, pointless, and likely to let small worker groups hold everybody else to ransom.

But with unemployment low and workers hard to find, it's often a jobseeker's market.

And employers from airlines to hotels to the Defence Force are recruiting vigorously.

Some already offer minimum rates at the living wage or above - such as Auckland's Stamford Plaza hotel.

The Stamford this week promised free staff meals, uniform dry cleaning, and staff discounts for food and beverages too.

Chronic staff shortages in hospitality have sparked debate for months.

Employer groups have broadly argued the labour crisis was due to immigration policy failures, and worker advocates have broadly said poor wages and working conditions were to blame.

MBIE said the Fair Pay Agreement system would bring sector bosses and unions together to bargain for minimum terms and conditions for all employees in that industry or occupation.

But Restaurant Association chief executive Marisa Bidois said the entire fair pay concept was flawed.

"After all, who could be seen to be arguing against fair pay? But that is not what we are doing by any means."

She said restaurant operators had little room to manoeuvre, with inflation biting into costs and putting margins under pressure.

"Our sector is being pushed to the brink with compounding compliance costs, difficulty in finding staff, and restrictive immigration policy which has made it hard to bring workers in," Bidois said.

"If we're talking 'fair', this is about as far from it as you can get," she added.

"Yes, as in any industry, you will find examples of suboptimal employment relations if you go looking, but for the vast majority this just isn't the case."

National and Act opposed the bill but Labour said the bill was crucial to lifting people's incomes and working conditions.

Minister of Workplace Relations and Safety Michael Wood said since deregulation in the early 1990s, productivity had risen but wages had not kept up. Photo / Mark Mitchell

"We are ending New Zealand's 30-year failed experiment with a low-cost labour model," Workplace Relations and Safety Minister Michael Wood said.

"Over this period, many workers have suffered through a race to the bottom, but, equally, our rates of labour productivity have been amongst the worst in the world."

The Green Party and Te Pāti Māori supported the bill. The Greens said the agreements would ensure more workers in retail, cleaning, security and early childhood centres had good conditions and fair pay.

The Greens' workplace relations and safety spokeswoman Jan Logie said the principles should be extended to guaranteeing pay equity for nurses, teachers and firefighters.

"Peel back the layers of the cost of living crisis and what we actually have is an inequality crisis," Logie said.

But Business NZ chief executive Kirk Hope told Newstalk ZB the wage rate increase would be difficult for many businesses to adapt to.

"The way the Government has sold this is, they are going to drive up productivity by raising wage rates."

Hope said organising the new regime would be complicated for unions as well as employers.

"There is another hook in the legislation which I think employers really need to understand," he added.

"If they don't have a representative for their industry or their occupation, then the Employment Relations Authority comes in.

"That's pretty disastrous for businesses. There's nothing good about this legislation."

Hope told ZB the new structure would require a major education programme for bosses and probably for employees too.

"Bear in mind it might not even be 10 per cent of the employee population that triggers a fair pay agreement," he added.

"If unions can get a thousand people within a very large industry – for example retail workers where there are some 300,000, that's a very, very low threshold to trigger a fair pay agreement."

Hope said the new law was purely ideological, not practical, and wages had mostly kept up with productivity gains in New Zealand since 1990.

Retail NZ chief executive Greg Harford was also unimpressed.

"The bill is deeply flawed, will be administratively burdensome, add to the cost of living crisis, and ultimately lead to fewer and less flexible employment opportunities," Harford said.
 
"The bill aims to remove flexibility, and is badly thought through. It will have massive implications."

Retail NZ chief executive Greg Harford. Photo / Mark Mitchell

Harford said for the retail sector, the bill would allow less than half of one per cent of workers to start a process impacting "hundreds of thousands" of jobs.

Retail sector businesses aspired to be good employers, he said.

But in his view, the bill would take New Zealand back to 1970s-style industrial relations, and could lead retailers to increase prices.

And he said other employers would consider reducing store hours, or look at automation to replace jobs.