Fair Pay Agreement gets global approval

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Workplace Safety Minister Michael Wood explains Fair Pay Agreements Bill (YouTube)

Staff Reporter
Auckland, June 10, 2022

The government has welcomed the outcome of the International Labour Organisation’s consideration of New Zealand’s Fair Pay Agreements (FPA) system, following a complaint filed by BusinessNZ.

Workplace Relations & Safety Minister Michael Wood said that the ILO’s Committee on the Application of Standards has not found that FPAs are inconsistent with international conventions, “despite efforts by opponents to misrepresent the purpose of FPAs.”

“This sets the record straight, once and for all,” he said.

Mr Wood said that the ILO has instead suggested that the government should continue to consult social partners on the proposed legislation, and to report back as part of New Zealand’s regular reporting on ILO conventions.

This is scheduled for 2024.

BusinessNZ in isolation

“It was pleasing to have support from the Australian Government, alongside worker representatives from Australia, Samoa, Chile, Italy (who represented a number of European unions), the International Transport Federation and Public Service International. Each saw Fair Pay Agreements as a positive step for New Zealand workers. By contrast, no employer organisation spoke in support of the case of BusinessNZ other than themselves and the employer spokesperson for their group.

Mr Wood said that the government will be happy to discuss the future design of the FPA system, but active misinformation campaigns and vexatious complaints to international bodies, do a dis-service to the employers that actually want to make the change required to help New Zealand realise its economic potential.

Raising productivity

“After the ILO conclusion it is time for BusinessNZ to come back to the table and work with us to introduce a system that allows industries to set minimum pay and working conditions to stop a race to the bottom. Sector-based minimum standards are common place across the OECD, including Australia and most of Europe. It is time to leave the hyperbole at home and engage in rolling out an employment relations system that is fairly common place around the world,” Mr Wood said.

“Our 30-year experiment with a low-cost labour model has not worked. Many workers have suffered, but, equally, our rates of labour productivity have been amongst the worst in the world under that regime. The government will consider the recommendations made by the ILO as part of the legislative process,” he said.

The Fair Pay Agreements Bill is currently before the Education and Workforce Select Committee of Parliament.

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