Workplace Relations Minister Michael Wood ahead of a debate on labour market reforms. Photo / Mark Mitchell
Workplace Relations Minister Michael Wood ahead of a debate on labour market reforms. Photo / Mark Mitchell
The Government's tentpole labour market reform passed its first reading on Tuesday afternoon in a fractious sitting, in which Labour alleged the Opposition had been spreading "misinformation" about the bill, and National countered that the Government was delivering a legislative kickback to union backers.
Fair Pay Agreements (FPA) will overhaul employment law in New Zealand, making it far easier for workers to collectively negotiate with employers, and creating sector-wide awards determining pay and conditions for workers.
Under the Government's proposal, unions can begin an FPA negotiation if they get support from 1000 workers who would be covered by the agreement, 10 per cent of a workforce, or meet a public interest test. People do not need to be union members to count towards those tests, and they do not need to join a union to be covered by an FPA.
Wood said the agreements would create "a new, modern, sector-based bargaining system that supports fair, safe and productive workplaces".
Speaking on the bill, Workplace Relations Minister Michael Wood implicitly accused the opposition of debating the agreements with "misinformation and scaremongering".
He drew attention to two incorrect claims that had been circulating around FPAs.
Wood said there was "no compulsory union membership under FPAs" and there was "no recourse to industrial action by employees or employers during FPA negotiations - any claim to the contrary is factually false and is designed to scare rather than inform".
National's workplace relations spokesman Paul Goldsmith said the agreements would impose "mandatory union deals on Kiwi workplaces" - "let's not make any bones about it, there are no choices about it, either for workers or businesses".
Goldsmith's National caucus colleague Scott Simpson said FPAs were "nothing more than an ideologically-driven piece of payback for the trade union movement".
Simpson was pulled up by Wood, who appealed to Assistant Speaker Jenny Salesa that it was against Parliament's standing orders to suggest MPs were in the pocket of outside interests. Simpson was allowed to continue his speech.
National workplace relations spokesman Paul Goldsmith. Photo / Mark Mitchell
Labour and National feuded over the legacy of 1990's labour market deregulation.
Wood, brandishing a copy of Hansard from the time the Fourth National Government deregulated labour markets with the Employment Contracts Act in the early 1990s, said hoped-for gains had not been delivered.
"We were told in the debate on the Employment Contracts Act that a highly regulated labour market and the end of sector-based bargaining would improve New Zealand's labour productivity - it did not; we were told that the wealth would trickle down - it did not; were told workers would not see their living standards reduce, but for many they did," Wood said.
"Our 30-year experiment with a low cost labour model has not worked."
Wood said the pay and conditions "floor" established by FPAs would mean "competition based on low labour costs" would be "disincentivised".
Goldsmith disputed Wood's characterisation of the Kiwi labour market, saying that a deregulated Labour market was part of the "success" New Zealand had enjoyed since the 1970s.
"This will make our workplaces less agile, less flexible - at the very time they need to be," Goldsmith said.
Goldsmith quoted Treasury advice saying that there had been "minimal identification of empirical evidence for the problem" the agreements were meant to solve.
The design of FPAs is similar to the way awards are negotiated in Australia. Wood drew this comparison in the House, saying that Australia's workforce had grown its productivity over the last 30 years, while New Zealand's productivity has stagnated. Wood argued this was because New Zealand's labour market was excessively deregulated.
"Sector-based bargaining is not an extreme approach to these issues.
"Australia has had a sector-based bargaining system in place for over 40 years, contributing to higher wages and contributing to an economy where average annual labour productivity growth has been 46 per cent higher than New Zealand's since 1991 when we abolished sector-based bargaining - the argument that FPAs and sector-based bargaining are contrary to productivity growth are false," Wood said.
Act's Chris Baillie said the legislation amounted to "unionism by stealth" and will "simply make it tougher for businesses who have struggled to keep trading through a one-in-100-year pandemic, and who continue to struggle with the never-ending costs imposed on them by this Government".
Baillie joined National in shooting back at Wood's memory of the 1990s reforms.
"The fact is that after declining through the 1980s, employees' pay and conditions have improved substantially since the introduction of the employment contracts agreement in 1991," Baillie said.
"We're going to constantly hear from Minister Wood about how fantastic these agreements are in Australia, but everyone, especially hard-working employees, should be very sceptical," he said.
The Greens' Jan Logie said the Greens enthusiastically backed the bill, but would be watching to make sure that it did not create an incentive for businesses to reclassify workers as contractors, pushing them into precarious work.
Logie said the Greens also wanted to explore the "denial of the right to strike", which is curtailed during FPA negotiations.
"The Greens are very proud to continue to support the importance of the right to strike," Logie said.
"It's a bloody good day and we're very happy to support this," Logie said. National and Act both opposed the first reading. The Greens and Te Pāti Māori backed the bill, which passed 77-43.
