Fair Pay Agreements: the good, the bad, and the ugly

By Martin Gregory

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Labour’s Iain Lees-Galloway with a revenant from the grave of Ruthenasia.

 

Out of all of Labour’s pre-election pledges the commitment to introduce Fair Pay Agreements sounded the most radical. Labour said FPAs would prevent a competitive ‘race to the bottom’ in pay and conditions – a laudable aim to be sure. FPAs would set basic terms and conditions across an industry. There would be nothing to stop local collective agreements improving upon the set floor. Labour said FPAs would be negotiated between businesses and unions within industries: it sounded like national collective bargaining. The pledge was vague on how an FPA would be initiated: the policy just said negotiations would begin once a sufficient percentage of employers or employees within an industry call for one. I can’t imagine employers calling for an end to the race to the bottom, therefore a critical matter would be the percentage of workers required to constitute a valid call.

There is a real need for national agreements. According to Statistics New Zealand, around 10 percent of workers do not even have written employment agreements, even though they are a legal requirement. Manual workers, disproportionally Māori and Pasifika, are the most likely not to have their terms and conditions in writing. The worst offending sector is agriculture, forestry and fishing. Statistics NZ found that of those who did have a written agreement 71 percent were on individual contracts. A 2016 report by Victoria University’s Centre for Labour, Employment and Work found that only 10 percent of workers in the private sector were in a union. Against this bleak background of non-negotiation on terms and conditions within the private sector, FPAs can only be a good thing, and an opportunity for unions to get stuck in and recruit.

 

At last the government has announced something on FPAs. But it is not unqualified good news. True to form with this administration, the whole question is being farmed out to a working group which will not be reporting back until the end of the year. If FPAs are to be put on a statutory footing, Lord knows when legislation will be passed. Worst still, the government has chosen Jim Bolger, the former National Party Prime Minister whose government brought in the hated anti-union Employment Contracts Act. Labour could hardly send a stronger signal that it intends to implement only a rightwing interpretation of its FPA policy. And even worse yet, Workplace Relations Minister Iain Lees-Galloway has broken with normal protocol to pre-empt the working group’s recommendations by announcing in advance that workers being represented in FPA negotiations will not have the right to strike. Typical bloody Labour! How, you may ask, will businesses be pressured into reaching “fair” agreements without the threat of industrial action in the background?

 

National MPs are condemning the FPA move as taking things back to the days of strikes in the 1970s. We can only wish they were right, but this is precisely what the Labour government wishes to avoid.

 

Despite the good proposed reforms of the Employment Relations Act, Labour is refusing to dismantle any part of the restrictions on industrial action that prevent New Zealand workers from defending themselves or advancing their interests. Now Labour plans to outlaw strikes completely in connection with FPAs. The right to strike is an issue that the left and trade unionist activists must take up. Pressure from below is needed to push the union leaderships into demanding our rights.

 

 

 

 

 

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