Hundreds of thousands of workers set to get right to training and development

Tuesday, 25 October 2022

Labour MP Marja Lubeck says Wellington's bus service shows why Fair Pay Agreements are needed.

Hundreds of thousands of workers look set to get a right to a minimum level of training and development from their employer as a by-product of the Fair Pay Bill, which is expected to complete its passage through Parliament on Wednesday.

However, there are concerns that right could prove to be something of a “lowest common denominator” or else might disadvantage smaller businesses.

The Fair Pay Bill was originally designed with the primary goal of setting a floor for pay, including overtime and penalty rates, in industries and occupations where Fair Pay Agreements are negotiated by unions or imposed by the Employment Relations Authority.

But amendments proposed by a select committee and subsequently accepted by the Government broadened the scope of the legislation to require Fair Pay Agreements also establish “the arrangements for training and development” of covered employees, and their leave entitlements.

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Auckland Business Chamber chief executive Simon Bridges said Fair Pay Agreements could be tougher on smaller employers than on larger ones, which were also not necessarily looking at the law change fondly but had more resources to cope.

“Mandatory training sounds great for employees, but small and medium-sized businesses are already feeling very stretched,” Bridges said.

Council of Trade Unions general secretary Richard Wagstaff countered that small businesses were often “let off the hook” when it came to standards.

There were “some great small employers” but others were the biggest source of problems in terms of health and safety and labour law breaches, he said.

The Ministry of Business, Innovation and Employment (MBIE) and the Employment Relations Authority have received funding on the basis that they are likely to approve about six Fair Pay Agreements each year.

Wagstaff said unions had been discussing the industries and occupations that they intended to prioritise for negotiations.

Bus drivers, security officers, supermarket workers, cleaners, workers in early childhood education, and the forestry industry had been “prominent in our thinking”, he said.

Bridges said he understood retail workers could potentially be the first to demand a Fair Pay Agreement.

Wagstaff said workplace training in New Zealand was generally “not what it should be” and was becoming more important due to new technologies and climate change.

The Council of Trade Unions says the bus industry is an example of an industry in which union members haven’t been given all the training opportunities they want.

Bus companies had told the CTU they did not believe workers wanted extra training, but drivers themselves were telling unions they wanted training to advise them how to deal with frustrated members of the public when services weren’t running on time, he said.

The Fair Pay Bill only allows the minimum pay, overtime and penalty rates specified in Fair Pay Agreements to vary between workers in an occupation or industry based on their job, region and seniority level, and not according to the size of their employer.

But MBIE official Nikki Sumner said that restriction did not apply to the training and development component of Fair Pay Agreements.

“Each industry’s or occupation’s training and development needs will be different and it will be up to the bargaining sides to settle on a practical training and development term that best fit the needs across the entire industry or occupation,” she said.

Wagstaff did not believe training obligations would necessarily put small firms at a disadvantage.

“Large organisations are more likely to have training resources, but you tend to have training organisations that small organisations can engage with,” he said.

Fair Pay Agreements would not set out rights and obligations that were impossible to achieve, he also said.

EY employment law expert Tori Sullivan said the other the minimum terms that needed to be included in Fair Pay Agreements, such as overtime and penalty rates, were quite easy to quantify, so it should be straightforward for employers to determine whether they had met those obligations.

But training and development obligations could be open to quite a bit of interpretation, she said.

“To me, that was always something that creates a bit more controversy.”

Sullivan questioned whether the Fair Pay Bill was the right vehicle to try to improve training opportunities.

“If you look at Australia, back in 2009 they stripped back all of their ‘awards’ to really just get back to the basic bare bones of what should be in the agreements.”

Given the legislation was vague about exactly what might be expected of employers, a Fair Pay Agreement could just specify that training and development should be provided on an “as required basis”, Sullivan said.

“Who knows? But all of that is very hard to enforce.”