Paul Mackay

Published: April 27, 2021

Issue for Business: The current government was elected in 2017 with a commitment to introduce Fair Pay Agreements (FPAs). Fair pay agreements are a set of terms and conditions of employment for an occupational group or sector. They will be agreed through bargaining between affected workers and employers, and will then become legal requirements in that sector. The Fair Pay Agreements Working Group (FPAWG) delivered its report to the Government in December 2018. This was followed in 2019 by a national consultation document that sought views on the Work Group’s recommendations. After discussions with Business NZ Zealand First indicated that the issues for business were significant, they did not support the development of FPAs and the process was stalled. Subsequent to the 2020 Election the majority Labour Government indicated that it would move ahead with implementing FPAs and is now working through the complex policy issues related to establishing what is in essence an old award system.

Action: In addition to discussions with New Zealand First, in July 2019, BusinessNZ expressed concerns to the International Labour Organisation (ILO) about the compulsory nature of the proposed FPAs, arguing that they breach the Right to Organise and Collective Bargaining Convention 1949 – conventions which the New Zealand Government has ratified. Therefore if the Government passed legislation compelling organisations to participate in FPAs it would be a breach of its international commitments. This would have signifcnat reputational implications for the Government, and subject it to deeper international scrutiny.

Outcome: The ILO has approached the government several times for comment. The Government has yet to respond.