Submissions on Fair Pay Agreements

Fair Pay Agreements are a way of deciding what’s a fair way to do business - pay, hours, leave and other terms and conditions of work. They’ll set a minimum level for an entire sector. That means nobody in a sector can be paid less than the Fair Pay rate.

It’s like the minimum wage, but for a specific sector and negotiated by unions and employers in that sector on behalf of all people who work in the sector whether they are union members or not.

Other countries, including Australia, have ‘sector bargaining’ where working people, represented by their unions, set minimum industry standards negotiated with employers, like Fair Pay Agreements.

Nothing will change for collective bargaining between smaller groups of working people and employers - there will just be a new minimum floor that employers can’t undercut.

Sometimes, if employers and unions can’t come to an agreement, there will be an arbitrator appointed to decide what’s fair.

Over the last thirty years the income we make as a country has grown a lot. But the share of that income that goes to working people has shrunk by up to $11,000 per person.

It’s not fair that working people get less of the profit they helped make in their pay packets, while the cost of living keeps going up. Part of the problem is that a small number of bad employers compete with other businesses by driving down wages. This makes it hard for good employers to stay in business.

Across whole sectors the rate people are getting paid is effectively being determined by a minority of bad employers. That’s wrong.

When we create a level playing field, nobody can undercut by paying unacceptable wages or forcing unfair conditions of work. Fair Pay Agreements will reign in the cowboys and encourage employers to compete on quality and innovation. They will set the rules for what’s acceptable practice in New Zealand industries and stop the race to the bottom.

We are seeing young people leave regional communities because the only available work is low wage with long hours. Fair Pay Agreements will help raise those wages and improve working conditions. They will make living in and supporting your hometown more viable for young people and their families, rather than industries competing for the cheapest possible labour.

A collective agreement is negotiated between union members and employers. You have to be a union member to be covered by a collective agreement and the more of you there are in the union the better the deal you get.

A Fair Pay Agreement will cover everyone in a particular industry or occupation, whether they are in a union or not.

Under collective agreements working people have a legally protected right to take industrial action, including going on strike, while the agreement is being negotiated. Employers have the right to stop them working with a lockout.

Strikes and lockouts will not be a part of negotiating Fair Pay Agreements.

Employees covered by a Fair Pay Agreement can and should still join a union and negotiate for collective agreements too, because Fair Pay Agreements will just create a base rate – not a top rate.

The Government has recently brought the legislation to parliament for consideration. Fair Pay Agreements will come into force soon after the law has passed. 

When we have a Fair Pay Agreement law, there will be a process to follow to negotiate an agreement.

There will be minimum thresholds that groups of working people and their unions or employers will have to meet to start negotiations.

If negotiators aren’t able to agree on an outcome together, there will be an independent third party that will decide on the terms of the Fair Pay Agreement.

If a Fair Pay Agreement is initiated, a Fair Pay Agreement will be reached – employers can’t refuse to negotiate one.

You can take action to support Fair Pay Agreements on the website: https://www.makeworkfair.nz