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BusinessNZ refuses partnership role in Fair Pay Agreements policy

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BusinessNZ has refused to be a formal partner in the government’s showcase industrial policy, Fair Pay Agreements (FPAs).

Business NZ CEO Kirk Hope

BusinessNZ chief executive Kirk Hope says compulsory FPAs are unlawful.
Photo: RNZ/ Dan Cook

The group said it had rejected the government’s offer to be a default bargaining agent for employer and industry groups, and the $250,000 grant for expenses.

BusinessNZ chief executive Kirk Hope said it had made clear to the government from day one that FPAs were not needed.

“Compulsory FPAs are unlawful under both current domestic and international employment laws and are totally out of step with how we need to work in 2021.”

“They aren’t needed, they remove the flexibility and autonomy of modern workplaces and won’t improve pay and conditions for hardworking Kiwis,” Hope said.

The FPA process could be started if backed by 10 percent of a given occupation or sector, or 1000 workers, whichever is less, and any agreement would set binding minimum terms and conditions for all employees in an industry or occupation.

They have been pitched as a means of lifting pay and conditions for poorly paid and widely dispersed industries, with the government suggesting there would not be many FPAs.

The Council of Trade Unions (CTU) has backed FPAs and has been offered a default role for employees.

Hope said individual business sector groups would probably be expected to be employer advocates, and BusinessNZ might consider being the bargaining agent for particular industries.

He said the government should follow the advice of its own officials and target action and improvements for industries most in need.

“Tightening up the industrial law framework around those industries and make sure they were clearly identified and that the issues within them were clearly identified and then addressed, but fair pay agreements aren’t going to do any of those things.”

Legislation to set up the new arrangements has been delayed and is still being drafted. Hope said BusinessNZ would participate in the process with submissions, but would not be a formal part of the FPA structure.

Workplace Relations Minister Michael Wood said he was not surprised by the BusinessNZ withdrawal given their long standing opposition, and it would not disrupt FPAs.

“The specific part of the system that Business NZ have said that they will not engage with is a fairly small aspect of the framework and will not have a major impact.”

He said it had been envisaged employer groups in each sector would do the bargaining, and Business NZ and the CTU have been seen as ‘backstops’.

Wood said FPAs were about low paid workers such as bus drivers, supermarket workers and cleaners getting a fairer deal.

First Union, which organises in some sectors that could be subject to FPAs, called BusinessNZ’s move “embarrassing”.

“It seems BusinessNZ have given up on good faith negotiations on behalf of tens of thousands of workers and business owners and decided to go into spin mode to protect the status quo of easy exploitation and low wages,” general secretary Dennis Maga said.

He said forestry, supermarkets and the bus industry were three sectors it covered where FPAs could meaningfully address systemic problems caused by and made worse by the economic restructures of the past three decades.

“When Business NZ raises concerns that FPAs will remove flexibility from business owners, they must mean the flexibility to pay unlivable wages, pit people against one another in the workplace and chip away at existing working conditions in a race to the bottom.”

Meanwhile, Federated Farmers supported BusinessNZ.

“We support them and for the same reasons they outline we will also refuse to be a negotiating partner for agricultural employers,” employment spokesperson and national board member Chris Lewis said.

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