ZB

Government scores win in FPA battle

Publish Date
Mon, 13 Jun 2022, 4:27pm
Business NZ chief executive Kirk Hope (left) with Social Development and Employment Minister Carmel Sepuloni, Finance Minister Grant Robertson, Workplace Relations Minister Michael Wood and CTU President Richard Wagstaff. (Photo / Mark Mitchell)
Business NZ chief executive Kirk Hope (left) with Social Development and Employment Minister Carmel Sepuloni, Finance Minister Grant Robertson, Workplace Relations Minister Michael Wood and CTU President Richard Wagstaff. (Photo / Mark Mitchell)

Government scores win in FPA battle

Publish Date
Mon, 13 Jun 2022, 4:27pm

The International Labour Organisation (ILO) has opted not to urge the Government to review or change the legislation that will give effect to Fair Pay Agreements, its main labour market reforms.

BusinessNZ, a lobby group representing employers and businesses, had been hoping to have the ILO rebuke FPAs, and to recommend a review and amendment of FPA legislation.

A committee of the ILO, which included members from governments, the union movement, and employers' groups, declined to recommend such an action at a meeting in Geneva last week.

In its first term, a Government working group helped design Fair Pay Agreements, a new form of sector-based bargaining, which was a Labour manifesto commitment at the 2017 election.

The Government had hoped to get its two social partners, the union movement, and employers onside. However, BusinessNZ, representing employers, decided not to back FPAs and instead took a case to the ILO arguing they were incompatible with international employment standards for the way they force the negotiation of minimum conditions across a sector, which businesses must then adhere to.

The case was heard last week, and the committee urged all sides to continue to get along, saying both sides should look at the proposed legislation to "ensure compliance" with labour conventions. The legislation is currently before a select committee.

It said the employer's and workers' organisations should prepare a report with the Government to go to the "committee of experts".

The recommendation was a far cry from the slap-down Business NZ might have been hoping for, but ILO committees are divided between representatives of workers, employers and governments, making a please-all determination somewhat inevitable.

Business NZ said it was pleased with the determination that all sides should continue talking.

"That has always been our goal," said BusinessNZ chief executive Kirk Hope.

"This decision validates our legitimate claim that compelling people to bargain is not consistent with the NZ Government's obligations and commitments and we look forward to ensuring that NZ can meet those obligations," he said.

Workplace relations Minister Michael Wood, however, did not see the determination as a win for BusinessNZ.

He said the Committee's decision not to take more forthright action showed BusinessNZ's action had failed.

"Despite efforts by opponents to misrepresent the purpose of FPAs, the ILO's Committee on the Application of Standards has not found that FPAs are inconsistent with international conventions, setting the record straight once and for all," Wood said.

"The ILO has instead suggested the Government continue to consult social partners on the proposed legislation, and to report back on it as part of New Zealand's regular reporting on ILO conventions. This is scheduled for 2024," he said.

Wood sledged BusinessNZ's campaign against FPAs.

"The Government is happy to discuss the future design of the FPA system, but active misinformation campaigns and vexatious complaints to international bodies, do a disservice to the employers that actually want to make the change required to help New Zealand realise its economic potential," he said.

The New Zealand Council of Trade Unions said it was "heartened" by the support shown in Geneva.

"The ILO saw no reason to inhibit the passage of this important legislation, despite Business NZ imploring CAS to do so," said a statement from the CTU.

CTU President Richard Wagstaff said BusinessNZ's action at the ILO was "basically a publicity stunt that risked eroding NZ's reputation globally, in an attempt to mask the real problems with our wage fixing system that FPAs are designed to address".

"The lack of support for Business New Zealand in the CAS discussion highlighted how out of step their organisation is with other businesses, governments and workers in the international ILO community," he said.

FPAs will overhaul employment law in New Zealand, making it far easier for workers to collectively negotiate with employers, and creating sector-wide awards determining pay and conditions for workers.

Under the Government's proposal, unions can begin an FPA negotiation if they get support from 1000 workers who would be covered by the agreement, 10 per cent of a workforce, or meet a public interest test. People do not need to be union members to count towards those tests, and they do not need to join a union to be covered by an FPA.

Wood has noted the similarities between FPAs and the bargaining regime that exists in Australia.
The Australian Government's representative on the ILO Committee gave one of the strongest statements in support of FPAs.

The Australian Government representative said that "sectoral minimum standards, supplemented by collective bargaining, provides the right balance between a safety net on the one hand, and driving wage growth and productivity on the other".

"This can only deliver outcomes that are in the best interest of both workers and employers. We further support the intention of the proposed Fair Pay Agreement system to drive enduring, transformational system-wide change benefiting workers, particularly those in low-paid jobs, or in sectors where there is low or no effective representation or bargaining," they said.