BusinessNZ ramps up campaign against Fair Pay Agreements

Business NZ chief executive Kirk Hope. Photo / Mark Mitchell

Pro-business lobby group BusinessNZ is today launching a campain to stop the Government implementing its Fair Pay Agreements (FPAs).

BusinessNZ published an open letter in the Herald to Minister for Workplace Relations and Safety Michael Wood, calling on people to join the campaign against the agreements.

BusinessNZ CEO Kirk Hope said the campaign was "urging the Government to start listening to the genuine concerns of employers and employees across the country about the negative effects FPAs will have on the way we work".

"At their heart FPAs are about compulsion and mean New Zealand employees and their employers lose control over the way they work and their right to negotiate their own employment conditions. That's not fair," Hope said.

An FPA is a sector-wide award that sets minimum employment standards, including wages and conditions.

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.

The Government disputes the idea that the agreements are compulsory for workers because employees are not required to join a union to have their conditions covered by an agreement. However, the agreements are compulsory for employers, who will have to abide by the minimum standards they create.

"FPAs will take away control from Kiwi workers and give it to faceless officials in Wellington who will decide how you work, when you work and how much you will get paid – without any idea who you are and without your consent," Hope said.

"This campaign is about standing up for Kiwi workers', and their employers' right to choose how they work.

"We don't think it's okay for your right to negotiate your working conditions with your employer to be stripped away because a small percentage of workers in your industry think it's the right thing to do."

Legislation that will provide for the agreements has had a rocky road. Labour tried to get the agreements over the line in the previous Parliament but was stymied by NZ First.

Wood managed to produce a bill this year, introducing it to Parliament last month.

It is now in select committee.

Introducing the bill, Wood said FPAs were similar to a system that already exists in Australia. He said this system had helped to lift Australian wages.

"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.

Hope said the Government should look for a different solution to lifting wages.

"A far better option is to identify sectors that are facing wage challenges and develop a targeted solution to fix the problems in those few sectors. We don't need a one-size-fits-all, bureaucratic, sledgehammer solution across all sectors," Hope said.

"Our request to the Government is simple: listen to employers and employees, scrap compulsory FPA legislation and do what your own officials have recommended - improve and strengthen the current system," he said.