With the demise of FPAs, Australia’s better-paid, more egalitarian workplaces are looking increasingly attractive to New Zealanders, warns union leader Dennis Maga.

The passage of the Fair Pay Agreement Act in 2022 represented New Zealand catching up with the rest of the world and starting to rebuild low-wage industries like bus transport, supermarkets, cleaning and security. Workers in these industries and many others are presently better off heading to Australia in search of robust jobs that are more secure, safer, offer better career progression and pay a living wage.

Most workers at Pak’n’Save or New World supermarkets – especially in the South Island – are likely to start on minimum wage ($22.70) regardless of their age or experience, with little room for wage progression and no overtime rates or allowances for weekends. Some people will approach retirement on minimum wage after decades of continuous work in the same supermarket.

In Australia, under the ‘modern awards’ system (which includes National Employment Standards for many target industries), a person over the age of 21 will, at a minimum, and no matter which grocery store they work for or where in the country they live, earn a minimum starting rate of AU$24.73, with generous ‘penalties’ for overtime, weekends and holidays. It’s a targeted and concerted effort to raise the standard of Australia’s low-wage industries, and it’s working.

Combine that with the passing last week of significant parts of the Closing Loopholes Bill, which removes labour-hire loopholes, criminalises wage theft and provides stronger rights for workplace delegates (among other things), and it’s easy to see why our employment standards are increasingly falling behind Australia’s – and why the repeal of fair pay agreements (FPAs) will exacerbate this growing gap.

The new government knows this, and knows what working people stand to lose. The new workplace relations minister’s leaked cabinet documents show that she is acting against official advice to disadvantage the women, young people, Māori and Pasifika who would have “disproportionally” benefited from FPAs. It’s hypocritical in the extreme for the politician trusted with employee wellbeing and safety to preside over what will be an enormous transfer of income from some of our lowest-wage workers to some of the richest people in Aotearoa.

But explaining the tragedy of losing FPAs requires an explanation of why they were so hard to achieve in the first place. For unions, that begins with the admission that we were not exactly thrilled with the proposed framework in the early stages and, at certain points, discussions were held about withdrawing our support for the project altogether.

Massive concessions were made by unions to accommodate spooked employers who were being whipped into a paranoid frenzy by lobby groups like the Employers and Manufacturers Association (EMA), BusinessNZ and the Taxpayers ‘Union’. Apocalyptic, alarmist rhetoric dominated early discussions, and employers’ voices were heard loud and clear: FPAs would “cripple the economy” and return us “to the dinosaur age”.

Workers recognised the need for further compromise to keep progress alive. Despite decades of fighting for the right to strike at the International Labour Organisation (ILO), unions conceded that right in FPA negotiations. Compare this with the approach of BusinessNZ, who were involved in the development of the scheme but withdraw participation in 2021. They were undeterred by the failure of their attempt to condemn the law through an ILO complaint, and have continued to organise opposition, even amongst businesses that would benefit from a more level playing field. Negotiations have not been entirely harmonious at all times, but until the election result, there was a real sense among participants that a good outcome was possible, and it would benefit both workers and employers.

Fast forward to the present day, and what’s incredibly telling about employers’ reassessment of the landscape following the election is what has been happening in the background. Even before this week’s repeal of the FPA legislation, some employers were already puffing up for a fight about the next steps.

Their immediate issue appears to be the data held by unions about the quarter of a million workers who would have been covered by an FPA, and about the requirement under law that we delete all contact information for these workers from our databases and email lists if we are not actively able to negotiate an FPA for them.

The quite boring and obvious part is that yes, of course unions will comply with the law and delete all non-member contact information if the law is repealed and active negotiations are shut down. The more interesting part is the desperation and immediacy with which employers have made their real fear so clear: that of workers’ solidarity and their right under law to organise in their workplaces.

Many workers don’t know they can join a union, but all employers know that unions mean higher wages and higher standards at work. Good employers see the chance to work collaboratively with their staff to create and maintain jobs that people don’t want to leave; bad employers try to block union access, intimidate staff, engage lobbyists and lawyers, and immiserate their workers to pad generous bottom lines. The latter have the loudest voices, and they have the government’s ear.

Despite this week’s moves in parliament, workers covered by FPA applications who are in negotiations – bus drivers, supermarket workers, security workers and cleaners – will continue to negotiate and plan future action until they are conclusively stopped from doing so. There is no reason for governmental intervention to cancel out existing negotiations.

Options remain on the table for alternatives. FPAs do not represent the only model for industry-level bargaining, and multi-employer collective agreements (MECAs) are already the standard in other sectors like healthcare. However MECAs rely on employers to consent to bargaining, which can often requires significant industrial hostility. Repealing FPAs is a threat to industrial peace and productivity, and will widen the gap between New Zealand and Australia.

Going forward, FIRST and other unions will continue to engage with business over fixes and potential alternatives. It’s our duty to our members to seek progress wherever we can, but the loss of Fair Pay Agreements will mean a huge step backwards for the quarter of a million New Zealanders and their communities in the short-term, and weaker and more precarious industries in the long-term. For some, Australia will be looking better and better.

Dennis Maga is general secretary of FIRST Union.