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Highlights
- Fair Pay Agreements Bill seeks to address low incomes and insufficient working conditions
- It will give enable sector or industry wise bargaining for wages and work conditions
- Workers unions have welcomed it but business bodies not happy
The long-awaited Fair Pay Agreements Bill was introduced in NZ Parliament. The Bill seeks to address inadequate working conditions, low wage conditions and low labour productivity. Even though the Bill has been debated upon for long, now the debate is on what it means in practice.
While the Bill is meant for some occupations like cleaners and security workers that are being paid low wages, in effect it is going to impact all industries and occupations whether they are low paid or not.
What does it mean
It is a simple concept at the first glance. Any workers’ union can initiate bargaining for a Fair Pay Agreement if it represents at least 1000 employees or 10 % of the employees are in agreement for a wage increase. Once initiated by the Workers Union, an employer’s side can be represented by an association on behalf of the members. An individual employee cannot sit on a bargaining table.
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If an agreement is reached between the two sides, it will become the minimum standard for that particular sector or company. It will apply to all employees regardless of whether they were a part of the union, on the bargaining side or not.
If both sides are unable to reach an agreement, then an Employment Relations Authority can set the terms of the Fair Pay Agreement.
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Difference of opinion
The Bill has got strong support from the industry unions but has been criticized by the business groups.
Michael Wood, the Minister for Commerce said that over the course of COVID, the most essential workers like cleaners, drivers and retail workers are most under-valued in the labour market. He said this new law if into force will provide a level-playing field to the workers and employers
He also said that NZ can become a more productive economy if it shifts its focus from competing on the basis of low wages to competing on the basis of better products and services.
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According to National Party’s Paul Goldsmith, the Fair Pay Agreement will make not make the economy strong as stated by the minister.
In fact, it will drive up prices more for employers which would have to be passed on to the consumers. This will put greater inflationary pressure on the economy.
Workers Unions VS Business NZ
For low-paid workers this is a welcome step. It will give them an opportunity to negotiate higher wages. Many industry unions have hailed the Fair Pay Agreement as “the best change for workers in decades”.
Business NZ has called the system to be unlawful. It has said that it breaches international norms.
However, there are many questions that have arisen and beg answers like:
How will workers who perform mixed roles be treated under the arrangement.
If there is no viable employers’ association to talk on employers behalf, bow will negotiations go on.
Bottom Line: NZ has had a minimum wage act for its workers that applies across the board, but if Fair Pay Agreements Bill is passed it will allow sector bargaining for higher wages and better working conditions.
