The government says the bill has the potential to improve the lives of working New Zealanders. (Image RNZ/123F)
The government says the bill has the potential to improve the lives of working New Zealanders. (Image RNZ/123F)

The BulletinApril 7, 2022

A radical overhaul of labour laws

The government says the bill has the potential to improve the lives of working New Zealanders. (Image RNZ/123F)
The government says the bill has the potential to improve the lives of working New Zealanders. (Image RNZ/123F)

The government says its fair pay agreements will stop a 30 year race to the bottom for workers, Justin Giovannetti writes in The Bulletin.

The biggest change to workplaces in a generation.

Nearly a year ago the government unveiled its plan for fair pay agreements. As I wrote at the time, it’s an economy-shaking move that could raise wages, empower trade unions and end precarious work. The agreements will create mandatory, sector-wide collective bargaining. They will likely be one of the most significant and lasting changes by the Ardern government. A bill is now sailing through the Labour-controlled parliament to make the agreements law. With the final shape of what’s to come set, Stuff looks at whether the agreements are fundamentally a good idea.

The impacts of fair pay agreements will be widely felt.

We won’t know what impact the agreements will have on workers, but it’s possible most New Zealanders will eventually be covered by one. There’s nothing in the law that limits it to cleaners, security guards and others in precarious occupations. Once 10% of employees in a proposed sector sign up, an agreement setting minimum pay and conditions becomes mandatory. If employers and unions can’t agree on a deal, the Employment Relations Authority will impose one. Newshub sets up the debate, with some workers enthusiastic for the change, while employers are worried. The Employment and Manufacturers Association has warned it could lead to the return of meal breaks and triple time, both “problematic” perks dropped in the 1990s, it said.

The arguments for and against the agreements.

Business NZ represents over 70,000 businesses across the country. It refused the government’s offer to be the representative for businesses during negotiations in the future. Business NZ’s Kirk Hope told RNZ that he views the agreements as “fundamentally flawed”. The main argument against the agreements is that they are inflexible and a throwback to the last century. Business NZ is also arguing to the International Labour Organization, a UN agency, that the mandatory nature of the agreements makes them unlawful. An alternative system, the group argues, would be setting new minimum standards in jobs with well-documented labour problems. The government’s argument is that the last 30 years of light regulations has been bad for many workers and Labour campaigned vigorously in the last election to introduce the agreements.

Support could be all a question of timing.

It’s difficult in my mind to disentangle fair pay agreements from the government’s other significant labour change, the proposed income insurance scheme. There was a Bulletin about it in February. The two are vastly different ideas, but the players are the same and the point is to make work fairer. Both also suffer from a similar problem: the timing couldn’t be worse. Both will increase costs on employers at a time when inflation is running rampant and consumers can’t handle more expensive shops. The House reported earlier this week that businesses are on edge, with all of that in front of parliament, as well as the Matariki public holiday bill. There’s little support across the aisle for the government’s business agenda. Newshub reports that Act has promised to cancel all of it, while National isn’t too keen.

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Mad Chapman, Editor
Aotearoa continues to adapt to a new reality and The Spinoff is right there, sorting fact from fiction to bring you the latest updates and biggest stories. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

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