Fair Pay Agreements

By Richard Wagstaff, President of the New Zealand Council of trade unions

The union movement has long campaigned for a fundamental change in our employment law, that enables genuine industry-wide collective bargaining. We lost this with the introduction of the Employment Contracts Act 1991, and despite the much-improved Employment Relations Act 2000, it was never restored.

We need industry wide bargaining, because we need to establish minimum standards and conditions for all workers in an industry, to stop the race to the bottom for wages when companies compete for business. There are many examples across industries where the major cost not fixed in contracts is the cost of labour, and so to come in with the lowest tender, companies cut wages.

Fair Pay Agreements (FPAs) will enable unions, on behalf of all workers, 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 FPA. 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 FPA. 

FPAs 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.

Employers know FPAs will involve stronger collective voice of workers and better wages. While some support FPAs so they can improve wages without being undercut by others in their industry, many employers are against them because they don’t want to pay better wages and conditions.

We have a wonderful opportunity with this Government right now to make FPAs a reality, but we will have to fight for them politically by campaigning hard. Winning good FPA law is the CTU’s top priority right now – please join us by engaging in the campaign.

Click here to read the current draft of the Fair Pay Agreements Bill