Government set to repeal Fair Pay Agreement legislation

Promises move before 'negative impacts are felt by the labour market'

BY Abigail Adriatico 13 Dec 2023

The New Zealand government is planning to go through with its intention of repealing the Fair Pay Agreement legislation by Christmas.

“We are moving quickly to remove this legislation before any fair pay agreements are finalised and the negative impacts are felt by the labour market,” said Brooke Van Velden, the minister of internal affairs and for workplace relations and safety.

“We are focused on boosting productivity, becoming more competitive, and creating a healthy economy. That’s why we’re preventing more bureaucracy from being piled onto businesses and backing them to grow,” she said further.

Fair pay agreements allowed unions and employer associations to bargain for employment terms and conditions for all employees that are covered in an industry or occupation. According to van Velden, such agreements undermined the flexible labour market which has been important in the country’s economic success for the last three decades.

“They do not help employees. Instead, they make life harder for business so they’re more hesitant to employ people,” said van Velden.

Fair Pay Agreements ‘a blunt tool’

The minister further noted how the National and ACT political parties had opposed the legislation upon its first introduction as they felt that it would be reducing flexibility, choice, and agility in workplaces.

She stated that an improvement in productivity and a competitive environment will increase the wages of workers and ensure lower prices for consumers. She also mentioned that agile and flexible workplaces where employers and employees can come into an agreement with terms fit for their situations will be able to further drive productivity and economic growth.

“These agreements were a blunt tool that could be initiated by a union and a small number of employees, yet they applied to every employee and every employer within coverage,” said van Velden.