One Question Quiz
(Image: Archi Banal)
(Image: Archi Banal)

KaiOctober 13, 2022

What would a fair pay agreement look like for hospitality workers?

(Image: Archi Banal)
(Image: Archi Banal)

Proposed fair pay agreement legislation could be one of the biggest shake-ups to our employment laws in the last thirty years. So what will it mean for those in the hospitality industry?

Xavier Walsh is passionate about working in hospitality. Having been employed in the industry for seven years, Walsh currently has a job at McDonalds as well as a casual role as a bartender. “I can think of nothing better than working in a bar forever,” they say, “but the current standards means that you can’t do it, it’s just not sustainable.”

Walsh believes their experience in hospo has been characterised by underpay and overwork, with little acknowledgment of the skills and commitment they bring to the job.

While it’s tradition within the industry to be provided with a free meal on shift, for example, at Walsh’s current job at McDonalds that’s not the case. Instead staff can pay for a meal at half price while on shift. Walsh sees that as symbolic of the way workers in the industry are treated. “We don’t get treated with respect and fairness, kindness and hospitality that they expect from us to give to other people”. 

Walsh is also co-president of Unite, a union that represents hospitality workers. Right now Unite is preparing for the passing and implementation of the Fair Pay Agreements Bill, which will allow workers to negotiate minimum pay and working conditions across industries.

Yesterday Unite union launched its Fair Pay Agreement 4 Hospo campaign at its annual conference. Union members from around the country, almost all employed in hospitality, were joined by NZCTU President Richard Wagstaff, senior hospitality and tourism lecturer at AUT David Williamson, Green MP Jan Logie and Labour MP Helen White to discuss their plans to create an industry-wide fair pay agreement. 

McDonalds worker and co-president at Unite Xavier Walsh. (Image: Charlotte Muru-Lanning)

Williamson, who has surveyed workers and employers across the industry, said his data painted a “disturbing picture” of the sector, with 20% of workers surveyed not being paid minimum wage and almost half experiencing workplace bullying. Fair pay agreements are part of the solution to such problems, Logie said, noting that “we are not going to fix a problem that big as individuals”. Fair pay agreements will create a base level of conditions and pay specific to everyone working across the industry.

Walsh agrees. “Fair pay agreements are a way forward,” they say, and a chance for the industry to “come up with worker- and employer-led solutions”. 

But what are fair pay agreements, and how can they help workers? Here are some answers to the most commonly asked questions.

What’s a fair pay agreement?

A bill currently making its way through parliament is set to introduce a new system of fair pay agreements, or FPAs, to New Zealand. If passed, it will create legally binding documents, agreed to by employees and employers,  setting out mandatory minimum pay and conditions across a sector. There’s a possibility that the majority of New Zealand workers will eventually be covered by an FPA.

Why do hospitality workers need an FPA?

“We know that hospitality is filled with minimum standards violations,” says Unite national secretary John Crocker. While a fair pay agreement won’t fix that by itself, he believes it could go some way in creating minimum standards in an industry that has been traditionally difficult to unionise because of the dispersed nature of employees.“We’re looking to change the industry,” he says. “It’s a chance to lift everything together.” 

Raise the Bar hospitality union founder Chloe Ann-King says the agreements are “a once in a lifetime chance to start rolling back some of the harm of the 1991 [Employment] Contracts Act”, which removed the system of “national awards” that gave whole industries baseline pay and conditions, in favour of the system we have now where employees are on individual contracts, or single-employer collective agreements.

What needs to happen to get this started?

The bill is yet to go through its second and third reading but it is hoped the bill will pass in the coming months. In the meantime, Unite aims to get the necessary 1000 signatures to begin the bargaining process for an FPA before the end of the year. As with FPAs in other industries, once an agreement is reached within the hospitality sector, it will become secondary legislation, similar to a regulation.

Yesterday Unite union launched its Fair Pay Agreement 4 Hospo campaign at its annual conference. (Image: Charlotte Muru-Lanning)

What’s the time frame for the hospo industry FPA?

Yesterday, Unite kicked off the process, with members signing forms to support the initiation of the hospo FPA. Once the final legislation is passed, the consultation and bargaining can begin. That is expected to continue through the end of this year and into early 2023.

Would the FPA apply to all hospitality workers?

Yep. According to Crocker, it could end up covering 85,000-100,000 workers, including employees in hotels, bars, restaurants, cafes, clubs, casinos, takeaways, recreation and tourism. Those workers are employed by 20-25,000 separate employers across the country.

Who gets included in the process?

All hospitality workers, employers and unions are able to participate. At the conference yesterday the Greens’ Jan Logie underscored the importance of ensuring workers from different groups (such as tangata whenua, and those who are disabled, Pacific, from a migrant background or women) have voices in the process. 

Do you have to be a union member to contribute a signature to get the FPA process started?

Nope. Hospitality workers can head to the fair pay agreement campaign website to get involved.

What kinds of conditions will be in the final agreement?

While the actual final claims to be negotiated will only be known after the formal consultation process has started, potential conditions include a living wage start rate (currently $23.65 per hour), pay increase pathways, secure hours, guaranteed breaks, processes for dealing with bullying and sexual harassment, health and safety reporting, resolution processes, safe staffing levels, penalty rates and meal allowances.

How will it be enforced?

A bunch of the issues identified for hospitality workers (such as being paid below minimum wage) are already prohibited by law, so Ann-King says there will be challenges around compliance. In a press release, Unite said its aim was to provide hospo workers and employers with clear guides on their obligations “and, crucially, tools to monitor and fix non-compliance when it happens”. On stage yesterday, Labour’s Helen White described the FPA as a “piece of the puzzle” but underscored the importance of strengthening unions to help enforce the new standards. Logie, meanwhile, highlighted a need for more labour inspectors to ensure conditions are abided by.

Is anyone not keen?

Business lobby group Hospitality NZ have described the proposed FPAs as “outdated” and “inflexible”. The Restaurant Association has also spoken out against them, saying it believes they will only “increase the costs and resources required of small business owners in the hospitality sector”. Unite has countered that better working standards will improve the industry overall while helping to attract workers. “The industry as a whole has a very poor reputation for employment and now is the exact time to transform it in the interests of both workers and employers,” Crocker wrote in a press release. He believes better conditions in the industry would resolve ongoing shortages in the sector. “While the usual and predictable resistance to any pay or working conditions improvements is on show, we know there are many hospo employers who see the bigger picture as well.”

Logie echoed this sentiment yesterday, noting that “good employers are having to compete in a market where they are being undercut,” and that an FPA in the industry will even the playing field for employers who treat and pay their workers fairly.

Employees, employers and unions will decide what the final agreement looks like. (Image: Getty Images)

What happens if employers decide not to engage?

If employers drag their heels or don’t show up to the negotiating table, it will be up to the Employment Authority to determine the terms of the fair pay agreement

What impact could a change in government have?

It would likely be under threat as the National Party has committed to repealing the bill if they are elected next year.

Does the FPA system  exist anywhere else in the world?

“Industry level bargaining is common overseas,” says Crocker. “A lot of people think I’ll go to Australia for higher wages,” he says, “Why is that? Well, one of the reasons is, they’ve got the reward system.”

We don’t even have to look overseas for inspiration. In the past, New Zealand had similar systems for employees in particular industries. At yesterday’s conference, David Williamson, the AUT lecturer, noted that more than 30 years ago, before the Employment Contracts Act, hospitality workers in New Zealand “had great pay and conditions”. 

“It hasn’t always been like this,” he said. “We’ve made decisions to get here and we can make decisions to get out of it”.

Keep going!