BusinessNZ turns down key role in Fair Pay Agreements system

Thursday, 9 December 2021

“It’s completely tone-deaf for the Government to push through an employment relations system that is inflexible and unnecessary,” BusinessNZ chief executive Kirk Hope said.

BusinessNZ has turned down a key role in the Government's Fair Pay Agreements scheme, labelling the move tone-deaf.

But Workplace Relations and Safety Minister Michael Wood says it will not have a major impact on the scheme.

The Government plans to implement a Fair Pay Agreement (FPA) system, a new mechanism for bargaining to set binding minimum terms and conditions across an occupation or industry.

The proposed system will include support for bargaining parties to help them navigate the negotiation process and reach an outcome, as well as processes to ensure compliance.

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Business NZ chief executive Kirk Hope said his organisation had formally rejected the Government’s offer to be the default bargaining party for employers.

“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,' he said.

“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.

“It’s completely tone deaf for the Government to push through an employment relations system that is inflexible and unnecessary.”

Hope said it wasn’t needed, and it removes the flexibility and autonomy of modern workplaces and won’t improve pay and conditions.

By refusing to be a part of the scheme, BusinessNZ had also turned down $250,000 in Government funding.

The Government will fund the NZ Council of Trade Unions (CTU) the same amount to act for employees, but it will shut 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, he said.

Hope said BusinessNZ represented 70,000 businesses across the country employing nearly 80 per cent of New Zealand’s workforce, but that still didn’t give the organisation a mandate to represent all businesses.

There was now a chance to re-set the current system to help business move forward and recover, but that was not by going backwards and introducing FPAs, Hope said.

Michael Wood says the move comes as no surprise, and will not have a major impact on the scheme.

Legislation is currently being drafted to bring in the compulsory agreements, and the Fair Pay Agreements Bill is expected to be introduced in early 2022.

People will have an opportunity to comment on the bill during the Select Committee process.

“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,” Hope said.

Wood said FPAs were intended to make sure that many low-paid workers, such as supermarket workers, bus drivers and cleaners, got a fairer deal.

BusinessNZ had made it clear that it opposed FPAs from early on in the process, he said.

In the vast majority of cases, Wood expects that employer groups in each sector will bargain themselves and had proposed that BusinessNZ and CTU, could be “backstops” in the event that a sector was unable to form a bargaining unit.

“If this does not happen and there is no backstop we had always proposed that the FPA would then go to determination at the Employment Relations Authority.

“This is unlikely to result in any substantial delays, and in some cases may actually speed up the process.”

Annie Newman, assistant national secretary for E Tū Union, also wasn’t surprised BusinessNZ was boycotting the scheme.

But the union was confident there was still a “great deal” of support for the FPA in the workforce.

“Unions and many in the community are getting in behind this as a way of reducing inequality and poverty and low standards in the workforce,” she said.