Business opposed the first reading of the bill, but the committee made few recommendations to change the framework
Kiwi unions are celebrating after the Labour government delivered on a 2017 promise for a major reform to NZs employment law, legislating for an industry-wide collective bargaining system called the Fair Pay Agreement (FPA). Once it passes Governor General’s Assent, the legislation will set a legal framework for collective bargaining for minimum pay and conditions across entire industries and occupations. Under the law, unions could begin a negotiation if they got support from 1,000 workers who would be covered by the agreement, or 10% of a workforce.
New Zealand Council of Trade Unions president Richard Wagstaff said FPAs were the beginning of a new chapter in New Zealand’s employment history.
“This is a truly momentous occasion,” he said. “Working people across the motu will now be able to have greater say in the terms and conditions they receive.”
Read more: Fair Pay Agreements Bill passes third reading
The business community, however, has slammed the move, with employer associations saying the bill will add extra complexity, cost, disruption, and reduced flexibility. Business NZ distanced itself early on, calling FPAs “unlawful, harmful to business and employees, fundamentally flawed, and totally out of touch with modern ways of working”.
New Zealand Initiative chair Roger Partridge told Newstalk ZB that the bill was “highly undemocratic.” He said that when 10% of workers can dictate basic terms for all employees, it removes staff freedom to negotiate their own personal terms. Executive director Oliver Hartwich called the bill a step backwards and agreed that it undermines the individual circumstances of any given workplace.
During a Bell Gully webinar on the new legislation, Business NZs manager of employment policy, Paul Mackay, predicted that there was unlikely to be a result in a single industry- or occupation-wide deal before next year’s election – and if National wins next year’s election it will be “gone by breakfast time”. Mackay made no secret of his hope that the fair pay regime would be cut short by a change of government and advised employers not to panic and to be thorough in their consideration of how to respond.
Read more: Minister Wood: New Zealand to see Fair Pay Agreements bill passed ‘this week’
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Prime Minister Jacinda Ardern claimed she invited NZ business to be part of the discussion, but employers and business organisations made submissions during the committee stage that overwhelmingly opposed the first reading of the bill and the committee made very few recommendations to change any of the original framework.
The bill did not pass without contention; National and Act emphatically opposed FPAs, drawing out the debate – which included heated argument on both sides – for 13 hours.
National said the Fair Pay Agreements Bill was an “ideological overreach that will harm our economy” and called the agreements a throwback to 1970s industrial relations. MP Simon Watts thought the bill would “rip the heart out of our hard-working business community.”
Both Act and National vowed to repeal the bill if they are elected next year.