Fair Pay Agreements “would set minimum standards to lift wages and conditions across an industry or occupation”, but could be initiated by a small minority of workers – just 10%, or less (1,000 workers). Is that fair? A minority in, say Auckland, could effectively end up imposing ‘fair pay’ across an industry across the country.
This is what the Fair Pay Agreement Working Group has recommended. The Government will now consider what they do – this may not be straight forward, with Labour and Greens requiring the support of another minority, NZ First.
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Business is collectively losing its mind over the working group’s recommendations. It’s calling it a return to the national awards of the 1970s.
Business hates that the negotiations can be triggered by as little 10 per cent of the industry’s workforce. Business hates that the contract agreements would be compulsory for all employers in that industry. Business hates paying employees more than it has to.
Business has a few fair points. We can’t expect the cafe owner in Balclutha to pay staff exactly the same wage as the Auckland cafe owner making a killing thanks to the money and foot traffic a city delivers. There should be concessions to regional variance.
These recommendations probably won’t all be accepted by the Government. Labour’s coalition partner New Zealand First might challenge many of them, if not all. Winston Peters’ party has already temporarily pulled its support on Labour’s employment law once before.
So it is far from a done deal at this stage.
But, the motivation behind these recommendations is on the money. Kiwis are underpaid.
That’s debatable. In the private sector we are generally paid what companies can afford to pay and stay in business.
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The same goes for the fair pay agreements outlined in the Jim Bolger report delivered to the Government this week.
But given New Zealand First’s track record in diluting union-backed legislation, it is hard to imagine the party agreeing to a trigger as low as 10 per cent for workers to force employers to the table for compulsory sector-wide bargaining.
The trouble is that the higher the trigger goes, the less happy the unions will be. A true compromise may result in deeply unhappy unions and employers.
Dominion Post editorial: Why back to the future on pay might not work
Many of this country’s lowest paid and most vulnerable workers have every right to look back in anger at the steady, inexorable fall in the value of their wages, the undermining of working conditions and the perceived out-of-proportion rewards for their employers and many others in the business community.
Bolger’s group was assembled to address such inequities, and its report released this week suggests we go back to the future.
It recommends the creation of fair-pay agreements, a new version of the old collective bargaining that critics have labelled as “compulsory unionism by stealth”.
There is some sympathy for that argument because the proposal, if adopted, would mean that an entire industry would have to negotiate new minimum pay and working conditions if just 10 per cent or 1000 workers in that industry, whichever is fewer, asked for it.
That creates the potential for major upheaval in businesses that have long moved on from the days of compulsory unionism and the environment that went with it.
The reforms are targeted at the country’s low-paid and most exploited workers.
But there is still the potential for major uncertainty, confusion and disruption for everyone within the complicated ecosystem that is our national economy.
For many, the amount they are paid remains the main measure of their perceived value, from the employer and within society. Work conditions are important, but pay is so often the principal point of anger and agitation.
If employers followed a number of local bodies and now Westpac bank in taking on a living wage for their employees, it would go a long way towards quelling that anger, and possibly even lift productivity.
But local bodies can just put up rates to pay for bigger wage bills. Ratepayers have to pay. If companies put up prices customers can choose not to pay.
This too, of course, is a blunt tool, and would not come without cost. But in conjunction with sensible legislation to protect workers’ rights and conditions, as happened when zero-hour contracts were deemed illegal, it could address many concerns without creating widespread disruption and a threat to the economy.
This working group is right to address inequities on behalf of the country’s workers, but it should be careful not to throw out the businesses with the bathwater.
A minority in Government, NZ First, look to be the deciding factor in whether a minority of workers could enable (or force) ‘fair pay’ on a whole industry, which could put a larger number of workers and their jobs at risk.
Another point – Labour may think it was a master stroke recruiting ex-National MP Jim Bolger to head the Working Group, but why an ageing retired politician? One who is a long way from knowing what ordinary workers feel and experience. Surely there are younger people around who may have a better appreciation of work in the modern world.
Government blurb on the Working Group report:
