Fair Pay Agreements

Fair Pay Agreements will be the best change for workers in decades. They will set minimum standards across whole industries so we can win decent work – better pay, hours of work, health and safety, training, and worker input in decision making.

The Fair Pay Agreements Bill – in brief

The purpose of the Fair Pay Agreements Bill is best explained in the explanatory note at the beginning of the bill:

The objective is to improve labour market outcomes in New Zealand by enabling employers and employees to collectively bargain industry-wide or occupation-wide minimum employment terms. The Bill builds on the analysis and recommendations of the Fair Pay Agreement Working Group in December 2018.

While New Zealand’s labour market has some strengths, it also has systemic weaknesses. These include a significant prevalence of jobs with inadequate working conditions, low wages, and low labour productivity. For example, Māori, Pacific peoples, young people, and people with disabilities are over-represented in jobs where low pay, job security, health and safety, and upskilling are significant issues. Barriers to good labour market outcomes are particularly prevalent for people who fall within more than 1 of those groups. The Bill will help address these issues.

Fair Pay Agreements will enable workers and their unions to negotiate a set of core minimum conditions for a whole industry. Nobody will be able to be employed in that industry on anything less, stopping a ‘race to the bottom’. Unions will still be able to negotiate collective agreements for their members over and above these minimum standards.

Once union and employer advocates have sat down at the bargaining table and come to a proposed settlement, they will take these back to the people they represent. For unions, that means taking a proposed settlement to the whole workforce – including non-members – and taking a vote where at least a simple majority of people will be required to settle a new Fair Pay Agreement. Employers will have their own voting process.

If negotiations break down, instead of industrial action, a process of compulsory arbitration will take place, whereby an independent person considers the claims and arguments of both union and employer advocates and makes a binding decision on a new Fair Pay Agreement. 

Fair Pay Agreements will be ground-breaking. They will bring collective bargaining to many workers who currently have no access to it. They will be crucial to building a high wage, high skill economy, where we can lift employment conditions without being undermined by the race to the bottom.

What’s next?

We need to collect 1,000 signatures for workers in an industry (or 10% of all workers – whichever is smaller) to initiate a Fair Pay Agreement. E tū is focused on doing this in security and cleaning to start with. But all members of E tū can start thinking about whether a Fair Pay Agreement would be great for your industry, too!

Links:

The Fair Pay Agreements Bill

“Why New Zealand needs Fair Pay Agreements” – article by E tū Assistant National Secretary Annie Newman

Fair Pay Agreements Working Group final report

Fair Pay Agreement Cabinet Paper – E tū summary

BERL report commissioned by the Council of Trade Unions about sector-wide bargaining