Fair Pay Agreements

E tū members in Auckland gearing up for our Fair Pay Agreements campaign

The campaign for Fair Pay Agreements (FPAs) aims to set fair, basic employment conditions across an industry based on the employment standards that apply in that industry.

Fair Pay Agreements are a new form of collective bargaining that E tū campaigned for at the last election. After the election the new Government set up a working group to design this law for industry or occupation-wide bargaining.

The FPA takes collective agreements beyond a single employer or multiple employers, to a whole industry (either regionally or nationally). Workers will be able to negotiate for one agreement – one set of minimum industry-wide pay and conditions that can be improved on through single-employer or multi-employer collective agreements. If industry employers and unions cannot reach agreement on these minimums, there will be an independent arbitration body that will make a final and binding decision on these matters.

It’s about more than pay packets

Different workplaces have different needs, from adequate training, to job security, to health and safety. These needs can be addressed in FPAs so workers secure fairness and equity for the work they do.

One good example is the practice of welfare checks in the security industry. While some major security employers periodically check to ensure their security guards are safe (a condition usually negotiated by unions), many smaller firms do not. A safety requirement in a Fair Pay Agreement will ensure a level playing field where all guards are kept safe in their potentially high-risk roles.

Advantages for working people

Fair pay and conditions for the workers make a huge difference in the lives of workers, their families, and whole communities. Having an industry-wide bargaining process gives vulnerable workers better access to fair negotiating processes.

Instead of individuals or groups of workers negotiating with a single employer, often delivering poverty wages, workers in an industry will be able to address sector-wide issues. This impacts on the future of work for all New Zealanders.

Advantages for businesses

Many businesses report that they would like to pay higher wages, but they cannot afford to because other companies will undercut them on wages and provide cheaper goods and services as a result. This can be described as a ‘race to the bottom’ – an incentive to pay the lowest wages possible. Reducing poverty and inequality in New Zealand depends on regulation that prevents this.

Minimum industry-wide standards delivered through Fair Pay Agreements take competition around wages for the lowest paid, out of the equation. It means that decent employers who want to do right by their staff are not undercut by exploitative employers. It means that business competition can be based on the best delivery of services, quality performance, or the best products, instead of the lowest possible wages.

Common misconceptions

“This is just a return to the 1970s industrial relations Awards system”

The world has changed dramatically since the Awards system was dismantled in 1991. The Award system was underpinned by the work and strength of social institutions, like employer associations and unions and set wages and conditions for over half the workers in the private sector. With the collapse of the Awards system, these institutions shrunk dramatically, and enterprise bargaining emerged leaving many workers isolated and vulnerable. Our low waged economy was the result.

Fair Pay Agreements are a new bargaining tool designed to re-establish collective power beyond a single employer, so there is a better balance of power in the negotiations and a better chance of workers earning enough money to live a decent life.

“Regional employers won’t be able to afford what big city companies can pay”

Regional variations can be considered in Fair Pay Agreements just as occupational differences are recognised in agreements. One benefit of Fair Pay Agreements is that it ensures regional economies do not suffer from lower wages that result in poorer communities.

“Whole industries will be going on strike!”

This will not happen. The Government says the law will not allow for industrial action, such as going on strike.

What’s next?

We are waiting for the Government response to the Working Party report on Fair Pay Agreements. What we know:

  • Inequality is endemic in our society and must be addressed.
  • Low wages and exploitative work conditions are a contributor to inequality.
  • Workers have better wages and conditions when they are in unions and have collective agreements.
  • Most workers in low wage industries are not in unions or on collective agreements.
  • Industry-wide bargaining will improve wages and conditions for low paid workers.
  • Industry-wide bargaining will create an even playing field for employers taking wages out of competition.
  • Fair Pay Agreements are the best opportunity to transform New Zealand’s low paid economy and the lives of workers, families and communities currently suffering from inequality and deprivation.

E tū supports and advocates for Fair Pay Agreements as one significant step to prosperity for workers and their communities.

Email [email protected] to get involved with our Fair Pay Agreements campaign

Click here to read a report commissioned by the Council of Trade Unions about sector-wide bargaining