BusinessNZ has rejected an offer to be a nominated partner in the Government’s implementation of Fair Pay Agreements (FPAs).
The FPAs were part of the Government’s pre-election promise and will set minimum standards for all employees and employers in an industry or occupation around wages and working conditions.
BusinessNZ had been selected to be the default bargaining party for employers in the scheme but it says the policy is nothing but “unlawful compulsory national pay agreements”.
It leaves the Council of Trade Unions which will remain to act for employees under the proposed scheme.
BusinessNZ chief executive Kirk Hope says the organisation is not prepared to be part of a policy it considers unfair and out of touch with modern ways of working.
“Compulsory FPAs are unlawful under both current domestic and international employment laws and are totally out of step with how we need to work in 2021.
“They aren’t needed, they remove the flexibility and autonomy of modern workplaces and won’t improve pay and conditions for hardworking Kiwis,” Hope says.
“We’ve told the Government from day one that FPAs are fundamentally flawed but they haven’t listened. MBIE officials sent us a letter during lockdown formally requesting we become the default bargaining party for businesses.
“That followed a Cabinet paper in May that wrote us into the proposed system without our agreement.
“After thoroughly reviewing the latest proposal, we’ve formally refused the Government’s offer. It’s wrong for us to be part of a scheme that will do more harm than good to businesses and employees.
“That also means we have turned down $250,000 in Government funding. The Government will fund the [Council of Trade Unions] the same amount to act for employees, but that also shuts out all non-affiliated unions, currently bargaining for their members, from the process, giving the CTU a monopoly on bargaining for all employees in New Zealand.”
BusinessNZ directly and indirectly represents over 70,000 businesses across the country employing nearly 80% of New Zealand’s workforce.
“Our role is to ensure policies are in place to deliver modern, smart, and flexible workplaces. FPAs don’t do that.
“The workplace environment has changed dramatically in the last 18 months and more so in the past five years since FPAs were first tabled by this Government. We could not have responded to the Covid crisis in the workplace the way we have if this inflexible scheme had been in place.
“It’s completely tone deaf for the Government to push through an employment relations system that is inflexible and unnecessary.
“How does it make sense to bring in FPAs, when they will make it much harder for businesses to accommodate the flexibility demanded by their employees?
“It’s another example of this Government trying to centralise control in Wellington when one of the biggest problems for employers is the lack of understanding of business and inflexibility in Wellington’s ministries and bureaucracies. Just ask teachers, police officers, and nurses how good it is to be under a centralised, bargaining system,” Hope says.
BusinessNZ reckons the time is right to “re-set the current system” for economic recovery after the pandemic but the FPAs are not the solution.
It’s calling for Government to scrap the scheme and instead strengthen the current system to achieve better workplace relations which has been recommended by officials. Legislation for FPAs is currently being drafted.
“MBIE said the focus should be on strengthening the existing system where it will make a real difference to protect those who need it – not push through a flawed model that takes away everyone’s right to flexibility,” Hope says.
“The Government’s initial proposal targeted just a few occupations, but has now shifted and widened to include any workplace.
“FPAs are bad for business but worse for employees. If you want flexibility in your workplace to manage your lifestyle, you won’t be able to work that out with your employer anymore. You’ll need to ask someone in Wellington who knows nothing about your workplace or your needs.
“Entrepreneurial start-ups will be forced to pay the same rates as our largest, most successful businesses, flexibility for studies and exams could be lost and if you’re a small retailer in Kaitaia or Bluff you’ll have to meet the same pay and conditions as our largest retailers in Wellington and Auckland,” he says.
Legislation is currently being drafted to bring in the compulsory agreements.
“We would hope the Government will pause and reflect over the summer break, and urge them to work with us in 2022 on a solution that is smarter and fairer for all Kiwis,” concluded Mr Hope.
CTU rejects monopoly claims
NZ Council of Trade Unions president Richard Wagstaff says the organisation will continue to support the delivery and implementation of the Fair Pay Agreements.
“The draft Fair Pay Agreement system will allow any registered union to initiate bargaining for an FPA.
“They don’t need to be a union affiliated to the CTU, and the CTU does not have any monopoly on the process as has been suggested incorrectly,” Wagstaff says.
“Fundamentally, FPAs are about putting in a minimum floor for wages and conditions. They prevent unscrupulous employers from forcing the costs of competition onto workers and their families.
“Just as we have a minimum wage in New Zealand, Fair Pay Agreements will provide a statutory minimum.
“There will also be an ability to vary agreements regionally, to reflect local economic conditions. All firms will still be required to negotiate individual or collective agreements with their staff and in the process be free to negotiate with their employees for anything above this baseline. An FPA simply provides a minimum floor on core conditions to prevent the race to the bottom we currently experience,” he says.
FPAs ‘stop race to the bottom’
Workplace relations and safety minister Michael Wood says the FPAs “will improve wages and conditions for employees, encourage businesses to invest in training, as well as level the playing field so that good employers don’t get undercut and disadvantaged”.
“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. Fair Pay Agreements are about turning that around and ensuring that working kiwis get a fair go again.
“Fair Pay Agreements will help good employers by stopping the race to the bottom we’ve seen in various industries and encourage competition that isn’t based on low wages, but on better products, services, and innovation,” Wood says.
The Government is now drafting the legislation which is expected to pass in 2022.
