Retailers welcome demise of ‘unnecessary’ Fair Pay Agreements legislation

Retailers say Fair Pay Agreements complicated existing employment law and that protections are already in place for workers.

They are among employer and business groups celebrating the government’s move to roll back Fair Pay Agreements which the government has promised to repeal by Christmas.

The Labour government had introduced the law that would have set up a framework for collective bargaining across occupations, often for those working in lower paid jobs, such as cleaners, supermarket workers and security guards.

Workplace Relations Minister Brooke van Velden has told RNZ the repeal will benefit businesses and employees.

“I always hear from businesses when I’m out in the community saying they would love to pay their staff more but every added regulation by this government makes it harder and harder.

“So yes we want higher wages but it’s just how we get there that’s different from the previous government.”

However, trade unions are among those who have reacted angrily to the government’s move.

Around 150 protesters from different unions targeted David Seymour’s office in Auckland on Monday, with one saying the country was losing a a once-in-a-generation opportunity to give workers a fair go.

Retail NZ chief executive Carolyn Young told Morning Report the FPAs were not fit for purpose.

“In our view the Fair Pay Agreements were just an added level of legislation that was unnecessary. Employment law is already super complicated and there’s lots of ways in which employees are protected through the current legislation.”

These included the work done by unions to advocate for workers.

If employers pushed the boundaries in terms of wages and conditions current laws could be used to rein them in, she said.

Another criticism of the FPAs was that “not everybody’s job fits neatly into a box” with some jobs covering two or three sectors, depending on their complexity.

“Employers are telling us that they feel they are confident they’ve been working in this space for a long time and they can manage their relationships with their employees and the terms and conditions around which they work.

“They’re delighted they’re going to be able to continue to do that as they have in the past.”

Young has not met any retailers who had been interested in having a Fair Pay Agreement and the universal feedback had been it added another layer of legislation and complicated negotiations with employees.

“It’s not that the unions aren’t going to have the opportunity to negotiate on behalf of their members [under the status quo].”

On the subject of vulnerable workers such as those just starting out in a career in retail, Young said employers invested heavily in training and development of staff with the ultimate goal of providing good customer service.

“The key thing that businesses want to do is they do want to reward their staff well. This isn’t about paying lower than the minimum wage or not meeting requirements in the legislation.

“Employers want to do that, they want to have a good workforce, they want to have a good environment that people want to come and work for them. It’s a really competitive employment environment out there at the moment.”

It was in an employer’s interest to have “a happy well trained work environment”.

Fair Pay Agreements have been in place in Australia for many years, however, Young said it was a much different economy to New Zealand’s.

In this country businesses needed to be agile, adapt quickly and negotiate with employees around taking on different duties or perhaps moving to another site within a city.

FPAs reduce flexibility – Willis

Finance Minister Nicola Willis said there were no Fair Pay Agreements in place, none had been agreed to or negotiated.

“So no-one is having anything that currently exists taken away from them.

“Our government has opposed the creation of those because they would have been compulsory union-driven mandatory sector-wide employment deals which we thought would take a lot of flexibility away from individual employers and employees to strike…”

It was preferable to have arrangements in place that suited individual workplaces, she told First Up.

In order to achieve the programme the government had set out for its first 100 days some of the regulatory requirements around legislation such as the regulatory impact statement had been curtailed.

The repeal of the Fair Pay Agreements legislation fell into this category; a cost benefit analysis would be carried out and a commitment to an implementation review would be made once the new policy was in place.

Willis said the government continued to respect the role unions played in the economy, however, with the FPAs it was unacceptable that as few as 10 percent of the employees in an industry could ask for one and all the employees would be included, regardless of their wishes.

She disagreed scrapping FPAs would be a win for employers and lessen employee rights, citing minimum wage rates and the competition for good employees leading to higher wages as factors in favour of workers.