A working group led by former prime minister Jim Bolger yesterday delivered 46 recommendations on fair pay agreements (FPAs), which look to set minimum standards to lift wages and conditions across an industry or occupation.
The crux of the matter is whether the FPAs should be compulsory or voluntary for employers to adopt, a decision the Government will make after the recommendations go out for consultation.
Workplace Relations Minister Iain Lees-Galloway said the recommendation to make FPAs compulsory was on the table, RNZ reported.
Otago Southland Employers' Association chief executive Virginia Nicholls said she had several "significant concerns" about FPAs, including that they would adversely affect smaller regional businesses.
"Fair pay agreements will in most cases be negotiated outside our region, and they will not always be able to take into account local business requirements," Mrs Nicholls said.
Smaller employers might not be able to pay the wage levels imposed by a fair pay agreement, Mrs Nicholls said.
"This takes us back to the 1970s and 1980s ... [when] under the national award system during that time strikes were common," she said.
Implementing national FPAs would have a destabilising effect on the economy as industrial unrest spread across multiple enterprises, she said.
"If fair pay agreements cover all employers in an industry, this will remove their right to decide how to run their individual business."
FPAs would restrict the ability of individual employers and their employees to negotiate to suit their own circumstances, reducing flexibility for both parties, including flexible hours for family and other commitments, she said.
The Otago Southland Employers' Association and business advocacy body BusinessNZ would continue to strongly advocate against the proposed changes, she said.
The Council of Trade Unions, E tu, the country's largest private sector union, the Meat Workers Union and First Union have embraced the recommendations.
CTU president Richard Wagstaff said FPAs would set minimum standards across an industry or occupation.
"Working Kiwis are a step closer to having fairness at work with today's announced recommendations from the working party on FPAs," he said.
"New Zealanders deserve jobs that pay enough to live on, with working hours and conditions that allow them to spend time with their families and doing the things outside of paid work that they love," Mr Wagstaff said.
E tu was pleased with the recommendations, including strong arguments to change the system to be fairer for workers.
"It explains how similar industry-wide bargaining systems have been crucial for lifting living standards around the world," the union said.
BusinessNZ chief executive Kirk Hope said the compulsory nature of FPAs and the risk of industrial action and productivity loss were key concerns.
"Being covered by a fair pay agreement would be compulsory for everyone in an industry or sector.
"We disagree with this and think the decision to enter any employment agreement should be voluntary," Mr Hope said.
He said employers would want to see significant changes to the proposals to address the likely risks to business, jobs and growth.
Mr Lees-Galloway said the Government would take time to consider the working group's recommendations.
The Government was committed to expanding the economy and improving incomes and working conditions for New Zealanders, focusing first on the wages and conditions of those who earned the least, RNZ reported Mr Lees-Galloway as saying.
"New Zealand is out of step with the OECD both in terms of income inequality and productivity, with Kiwis working longer hours but producing less per hour.
"What we want businesses competing on is innovation, the quality of their product, the quality of their service and being more productive. The question of compulsion has to be considered in that context," he said.
He said the next phase would be detailed policy consideration and consultation.
National workplace relations and safety spokesman Scott Simpson said the FPA recommendations "confirmed our worst fears" as national awards would allow a minority of workers to force industry-wide pay talks.
"The idea that one in 10 employees, or 1000 across an industry, can trigger mandatory nationwide employment negotiations is democratically offensive," Mr Simpson said.
"That means both small and large businesses across New Zealand will be coerced into more restrictive, costly employment agreements. That is a step towards compulsory unionism."
Mr Wagstaff, who was part of the working group, told RNZ that if employers had the option to opt out, then they would always use it.
Related Stories
Comments
New Zealand has low unemployment, yet rather than offering higher than the minimum wage or better than regulated minimum conditions, industries are crying out for immigrant workers from overseas. To add insult to injury, we read news articles regularly about exploited immigrant workers in those very same industries. Why not offer higher than the minimum wage or better conditions to compete properly for kiwi labour? Surely that's how a healthy labour market works. Get wage rates and exploitation sorted, then perhaps you could discuss immigrant workers with the government.
Forty percent of wage earners in New Zealand are earning the minimum wage. The majority of which are getting a top up from tax payers in order to survive because, compared to the cost of living, wages haven't kept up for years. At this scale, we can call it business welfare, not social welfare, surely.
With low unemployment, in a well functioning labour market, wages and conditions should be rising, but they're not. The labour market is broken and it's getting worse. Compulsory Fair Pay Agreements are a great way to help combat growing inequality, the rise of the precariat and child poverty.