The Government has outlined its plans to establish Fair Pay Agreements (FPA) in another planned shake-up to New Zealand’s labour laws.
Workplace Relations Minister Iain Lees-Galloway says it is the most “significant change that a Government has proposed to the industrial relations framework for many years.”
A working group that will help implement the changes is to be chaired by Jim Bolger the long-time former National MP, Minister of Labour, and Prime Minister. The terms of reference are available here.
The group will report back by the end of the year. Cabinet will then consider the recommendations, before introducing a bill into Parliament.
Once the laws are in place, it will be up to unions and employers to create FPAs in their industry or occupation.
Under the FPAs, unions and employers will agree upon and set minimum terms and conditions of employment for all workers across entire industries or occupations, without the need to bargain with every employer individually.
Lees-Galloway says the aim of FPAs “is to prevent a race to the bottom, where some employers are undercut by others who reduce costs through low wages and poor conditions of employment.”
Unlike existing collective bargaining, industrial action – including strikes and lockouts – will not be permitted in negotiations for an FPA.
Speaking to media on Tuesday, Bolger called it a “very important and bipartisan group.”
One of the catalysts for accepting the Minister’s invitation to lead the group was the idea of getting New Zealand ready for the future and making that future a fairer place.
“I believe there are so many tensions out there in the world, some of them are here in New Zealand, that we have to address some of the causes of that tension.
“One is clear to anyone who reads or analysis, and that is a sense that the world is no longer fair – some have made obscene wealth, and some are missing out just about altogether.”
Asked why Bolger was selected, Lees-Galloway said it was because of his “astonishing record in Government and Parliament.”
“He has demonstrated, through his collaboration with other Labour Governments, that he is very keen to get his teeth into meaty issues and has delivered good results for various governments over the years.”
Lees-Galloway says the working group will work closely with businesses.
The move comes as part of Labour’s workplace relations package, introduced as a policy before the election.
The package included changes to the minimum wage, implementing changes to the Equal Pay Act, replaying the 90-day trial law as well as establishing an FPA.
Industry reaction
National has slammed the Government’s moves, with Workplace Relations Spokesman Scott Simpson saying FPA will undercut workers’ rights to tailor employment contracts to suit themselves.
“The Government fails to explain why these changes are needed. In an environment of record job growth, they make no sense for the New Zealand economy, employers, or the 82 per cent of workers who do not belong to a union,” he says.
“This appears to be a simple payoff for Labour’s union supporters at the expense of everyone else.
But Council of Trade Unions President Richard Wagstaff says the benefits of the FPA will extend to businesses as well.
“Genuine Kiwi businesses want to do right by their staff but have been squeezed by undercutting from unethical operators. The logic of the current market-driven system pushes down wages by allowing the worst operators to set conditions for the rest of us.”
He says in Australia, honourable minimums have been protected and businesses can focus on quality and innovation while still paying healthy wages.
Although BusinessNZ Chief Executive of Central Business John Milford says its members do have some concerns with PFA, such as ensuring business flexibility and costs, the group wants to “look to the future.”
“We’re going in with some concerns, having said that, we’re pleased to be part of the solution and pleased to be around the table,” he says.
“If we don’t voice our concerns there, then we can’t stand out the outside and lob hand grenades in.”
Members of the Fair Pay Agreement team:
Rt Hon Jim Bolger – 35th Prime Minister of New Zealand, former Minister of Labour
Dr Stephen Blumenfeld – Director, Centre for Labour, Employment and Work at Victoria University
Steph Dyhrberg – Partner, Dyhrberg Drayton Employment Law
Anthony Hargood – Chief Executive, Wairarapa-Bush Rugby Union
Kirk Hope – Chief Executive, BusinessNZ
Vicki Lee – Chief Executive, Hospitality NZ
Caroline Mareko – Senior Manager, Communities and Participation, He Whānau Manaaki o Tararua Free Kindergarten Association
John Ryall – Assistant National Secretary, E tū
Dr Isabelle Sin – Fellow, Motu Economic and Public Policy Research, and Adjunct Senior Lecturer at Victoria University of Wellington
Richard Wagstaff – President, New Zealand Council of Trade Unions
42 Comments
The makeup of the Working group:
- Non-tradeables:
- Two academics (Blumenfeld and Sin)
- One lightweight (Mareko)
- Two unionista (Wagstaff, Ryall)
- One indescribable (Hargood)
Tradeables
- Two business types (Hope, Lee)
- One lawyer (Dhyrberg)
- One cat-herder (Bolger)
Chances of Sense of out of this lot?
Run a sweep on whether Bolger comes out of it speaking Union?
Well he was I think that minister in Muldoon’s government. Those were combative and disruptive times indeed. Unseated by Shipley and found a better friend in Helen Clark. Not one of our most inspiring leaders by a long shot. This looks like the sort of committee, to use an old one, that sets out to design a horse and ends up with a camel, or perhaps half a horse. And to quote one of our more inspiring leaders, David Lange, it won’t take much to guess which end of the horse.
I recall Jim Bolger expressing regret about his time as prime Minister and his deregulating of the Labour mkt.
Hes' had a complete change in what might be called .."Neo liberal views".
In the interview I heard, Bolger sounded thoughtful and intelligent.... when talking about his mistakes.
here is hoping he brings it to this working group.
Agreed Roelof, To Foxglove above, I have looked at most of our supposed "inspiring leaders" as you described them and found them to be largely psychopathic bullies, and liars who actually achieved very little except voice the collective (usually) opinion of their caucus. Some however it seems overrode their caucus and imposed their own opinion. Lange for example took a tea break, halfway through a radical reform and was ultimately responsible for a lot of economic harm, Muldoon screwed the economy through misguided think big projects, and Helen - well she just lied to us over and over, and look what the results of her mental health system reform has done for us. Their qualifications for knighthoods I guess!
The real ideas usually come from thinkers in the background, often ones who never get acknowledged. Bolger at least is prepared to own his mistakes and is clearly a considered, thoughtful and intelligent person. That was probably why he got rolled by Shipley - not psychopathic enough.
Says it all http://nzh.tw/12065007
Benedict Bolger is now an irrelevant political figure, who in no way represents National thinking of this millennium. He should stop embarrassing himself and losing whatever non descript legacy he had. He had his chance as PM to do things. He evidently didn’t. The only saving grace is that Taxinda’s legacy will be just as forgotten in a few years.
You didn't answer the question.
National party thinking of this millennium can be summed up with the four words "f*ck you, got mine". It's not really an intellectual movement to put up on a pedestal, though I will admit stringing four words together is a big achievement for some of their supporters.
Awww what did "Taxinda" do this time. Make you pay a few cents extra for petrol for the betterment of transportation in our city? You big shot inner-city property owners must all be paupers now.
Burn her at the stake!
It was interesting in its own way. If Muldoon had not savaged Jim McLay for firstly standing up to him post election defeat and secondly replacing him as leader, he may have survived long enough to be quite a progressive modern PM. Bolger arrived as PM courtesy of Lange’s government self destructing for want of a better description. He and Birch paddled their way through some quite stable times, cannot think of anything at all they achieved out of the ordinary once they shelved Ruth Richardson. Less than ordinary to my mind in fact. Interestingly as well, Bridges and Bolger appear to share an ability to be somewhat inarticulate, which is not to be expected and a bit disconcerting.
Good question in the herald today.
Why most profitable industries pay miserable wages? Dose not realy answer it but good question.
I liked this bit.
"The radio interviewer asked the kiwifruit spokesman why they don't just pay higher wages to attract more local workers. He replied that this would reduce the number of workers available to other kiwifruit growers in the area. They would end up competing with each other for workers. They would all end up having to pay higher wages."
Most of the examples they gave were industries that require very low skilled employees like supermarkets, or where there is a large supply of people prepared to do the job for next to nothing like rest homes. In a capitalist society every employer is going to pay the minimum possible, there is no such thing as a fair wage, your wage is completely based on how much someone else is prepared to do it for.
Kiwifruit and the like where they import cheap labour instead of paying a rate that is attractive to locals makes my blood boil though.
In my experience, every sector in NZ has lower wages than Australia and other Western countries despite higher cost of living. No surprises why we aren't the first choice for premium overseas talent who see us at the bottom of their migration wishlist. Lower pay coupled with limited career choices is also a reason skilled Kiwis leave for greener pastures in the prime years of their career.
For goodness sake, hadn’t we kinda moved beyond this? Yes to minimum wage protection and collective bargaining where so required by employees. But if a new entrant to an industry wants to pay wages less than its competitors, why shouldn’t it be able to do so? It’s an issue for that new business whether it’s able to succeed or not on that basis. These “fair pay agreements” are really an attempt to nobble competitors who might want to compete on the basis of their cost base, which is surely the principal basis on which a new entrant might wish to compete? A major step backwards
It is a concern. In general, more regulation is good for existing business as it helps creates barriers against those nasty disruptive new businesses with their darned smartphone apps. It seems to me that much of the new businesses are based on getting around existing regulations that create a nice cartel for the incumbents. Think Uber, Airbnb, Tripadvisor, Webjet, etc etc.
It's ridiculous. If you don't like your pay then ask for more, and if you judge you can get more elsewhere then change employer. Replacing staff costs business a lot, so they will pay what is economic for them - a fair wage, unions or govt attempts to force them to pay more than they can afford will just lead to business closures and reduced employment. We have near full employment at the moment, so no shortage of other jobs to go to, the labour market works.
Union controlled Labour are attempting to paper over the harm they will do to NZ's economy with massively regressive employment law changes by employment of one or two 'useful idiots' like 83yr old Jim '30 pieces of silver' Bolger as rubber stamps for the union agenda, but when you look around the world the best performing economies with high employment and incomes are the ones with the most flexible labour markets, more union biased regulation just leads to more unemployment and more youngsters never getting the chance to develop commercially valuable skills. (France, Spain, Italy, Greece.... ) an extremely socially destructive road to travel down.
Personally I see it as a partial reversal of the 30years of the neo-liberalism road we have travelled down with little if any appreciable benefit for many NZers.
NB did Australia follow us? no they did not. Are they worse off or better off than us?
Well this comparison is interesting,
https://countryeconomy.com/countries/compare/australia/new-zealand?sect…
Apples and Oranges
Australia is a minerals exploitation based economy. Like the oil-rich nations of the middle east and norway they can get away with being inefficient and useless at pretty much everything because they dig up the money needed to subsidise all their bad labour and economic policies out of the ground. Without that money they would be far behind us economically. In these relatively buoyant times they are running deficits of 1-2%, so imagine how bad it will get during the next GFC.
NZ by comparison has to survive by being fiercely and globally competitive in the agricultural commodities industry.
Western Australia is rated number 5 in the world as a mining investable area. NZ is rated 55, behind DRC. Finland is rated number one. Mining is an essential part of our society and pays well (or people would get easier jobs). We need more mining if we want to electrify the vehicle fleet.
https://wordpress.com/post/rogerwitherspoon.wordpress.com/93 for summary table
Full report here:
https://www.fraserinstitute.org/sites/default/files/survey-of-mining-co…
Generally speaking mining investment prefers areas with better, more stable, regulation, such as Finland, Saskatchewan, Eire, Nevada, Western Australia, Quebec, Ontario, Chile, Arizona, Alaska. These are places that have developed environmental regulation and labour laws. Since mine development is a long term and capital intensive process, political stability is highly desirable.
If the developed world drives mining investment to less civilised countries, such as DRC, we enable the most horrific, authoritarian and violent regimes on earth, who have no regard for human life, let alone the environment. Yet this is the result of the silly anti mining policies that NZ has adopted.
The below table shows the murder rate in DRC is 13.36 murders a year per 100,000 population; in NZ it is 0.91:
https://en.wikipedia.org/wiki/List_of_countries_by_intentional_homicide…
And, of course, good luck applying this to IT, where (depending on network speed) we can export our businesses to any of the offshore branches at something approaching the speed of light....
Interest, perhaps you should run a lottery as to which Lucky Sector comes out of the hat first?
I can see this from both sides, on the one hand we do have a situation where the power to negotiate is virtually non-existent in many industries (hence the popularity of cartel like behaviour such as salary banding) which has perpetuated socioeconomic issues but that's heavily influenced by two decades of increasing economic stagnation and the dis-inflationary effects of globalisation. The labour market does need reform but there still needs to be some allowance for dynamic labour repricing when there is a recession or market crash.
An excess of demand over supply will cause wages to increases. The bloated salaries in the construction industry are a prime example. No one is stopping labour organising and negotiating collectively. If labour even organised collectively had little leverage to obtain wage increases I couldn’t care less. If labour wants to get more pie they should concentrate on increasing productivity and making a bigger pie. But govt should not be putting its stamp on terms and conditions which operate as a floor. If people want to compete on price, let them, subject to minimum wage requirements
as someone working in healthcare - i have first hand experience of managing aspects of the home care settlement - including having over 1/3 of my staff not covered
The implementation was horrendous - and a year later is still done on an interim payment basis - has not actually covered the full costs we incurred - including various leave cost - made no allowance for equity issues for our qualified staff, admin or support staff ( cooks cleaners etc)
It also saw new staff with a level 4 qual get the same rate as staff who had the qualification and 10 years experience - and given there was no extra money - no scope to reward our loyal and high quality staff
it penalize the good employers like my company who were already paying good rates for the role $20 - $23 - as we got least additional money - but the big national organisations who were paying $17 nd $18 an hour got $5 an hour top ups == encouraging the poorest performers and employers -
If we had the same $5 an hour top up - we could have pushed our best staff up to $27 or $28 an hour - so effectively they have been held back
And guess what - most companies in the industry are no longer hiring - in fact jobs have gone and employers are now better off to employ unqualified and inexperienced staff and taking their time to train them to avoid compulsory rises - and thats a well now fact in the industry - so less jobs poorer training options -
No though No Plan No Idea - its just communism 101 - pay crap staff the same as good staff - no incentive for people to do a better job , or upskill or even look for promotion
For comparison - a brand new home care worker who has just completed their one year Level 4 training will be on $51,000 a year for a 40 hour week on 1st July 2018 - or $1500 more than a newly qualified 3 year Level 7 Nurse or teacher -
Good to see Bolger is trying to make amends for Ruth Richardson running amok in the early 90s. He has a conscience to clear. Something has to change to give kiwi workers a better deal. Otherwise as I've said before you'll face the pitchforks eventually. The smart capitalist gives a little to avoid popular uprisings.
I don't think the Government have thought this through. Just taking Government employees Corrections custodial or probation staff for example spend their working life working with NZs worst citizens. Fair pay for them would be compared to who? Police? Police just spend two or three hours with a crim, but prison staff work with them 24/7, and have a continuous threat of being assaulted. Current starting wage for a Corrections officer is in the vicinity of $50k, for a cop $70 +. This move will have a huge expense for the Govt.
$1000 bucks a Day to supplement his over indulged pension....If Bolger had been any good, we would not have the problems we have got now.....Talking does not fix things....money wise...never did.
Teaching an old dog new tricks and over paying for it.....Repeat after me....repeatedly...
Classic Tui.
Creating a New Team to do it......Insanity.
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