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Onya Michael

Written By: - Date published: 8:47 am, May 8th, 2021 - 34 comments
Categories: business, capitalism, Economy, employment, Living Wage, michael wood, national, same old national, Unions, wages, workers' rights - Tags:

It has been an interesting week for Labour.  On Wednesday they announced a wage freeze for public servants earning over $60,000 unless, for those on lower salary levels, there were exceptional circumstances.  The left did not take this well.

Then yesterday Michael Wood, the twenty first century version of Micky Savage, led the announcement of a policy that conceivably could do more to address the decline in workers wages and conditions over the past 40 years than anything else tried recently.

Radio New Zealand said this:

The government has released details around employers and unions setting minimum standards to implement the Fair Pay Agreements

It brings into action the system proposed by a working group led by former prime minister Jim Bolger in 2019.

In a statement, Workplace Relations and Safety Minister Michael Wood said Fair Pay Agreements (FPAs) would improve wages and conditions for employees, encourage businesses to invest in training, and level the playing field.

Wood said FPAs were about ensuring working Kiwis got a fair go.

“For too long New Zealanders working in critical roles like cleaners, supermarket workers, and bus drivers whose work was essential to keep our country going during the pandemic, have been undervalued by our workplace relations system,” he said.

“We’re taking a balanced approach and have designed Fair Pay Agreements to be negotiated between business and unions who are familiar with the particular sector or occupational group being negotiated for. Industrial action cannot occur during Fair Pay Agreement negotiations.

“Fair Pay Agreements will help good employers by stopping the race to the bottom we’ve seen in various industries and encourage competition that isn’t based on low wages, but on better products, services, and innovation.”

The government would also provide support for BusinessNZ and the Council of Trade Unions, “as well as potentially providing a support person and direct financial assistance to bargaining parties”, he said.

The government will now draft legislation, which will be introduced later this year, and is expected to pass in 2022.

National’s social media team lept into action.

It is a shame they did not /engage sarcasm chip/ read the background material including the report from the Fair Pay Agreements working group which included employer and union representatives and was chaired by, check my notes, former National Prime Minister Jim Bolger.

The report said this in italics and bolded:

There is no recourse to industrial action during bargaining

And typical National.  They are totally indifferent to the poverty that workers who perform vital roles are experiencing but are happy to lie about industrial action so that they can try and prevent something beneficial happening.

The proposal, so far, does not suggest or even hint at the possibility of compulsory unionism being reintroduced.  The recommendation of the working group was that negotiated fair pay agreements should cover both union members and non union members.

Of course this will mean that unions may not be properly resourced to do the job.  The working party report says “[t]he Government will need to consider whether additional resources for bodies involved in dispute resolution and enforcement are needed during the detailed design and implementation of the overall system.

There will be attacks from the right on this proposal.  They are already warming up their attack lines.  From Jason Walls at the Herald:

BusinessNZ chief executive Kirk Hope said employers were not interested in compulsory nationwide pay agreements, irrespective of funding offered.

“They would take away business’ right to a say over wage-setting and would lead to labour disputes and strikes.”

He added they are contrary to international law, which says collective agreements should always be negotiated voluntarily.

“Business cannot support the plan to implement them.”

The Canterbury Chamber of Commerce said fair pay agreements had no place in New Zealand’s modern workplace.

“Fair pay agreements would force payment of higher wages within sectors which could force some newer, smaller firms out of business, reducing competition, productivity and growth,” chamber chief executive Leeann Watson said.

“It would also destroy contracting, as it would cover all contractors in a sector.”

National is similarly sceptical: “Labour’s so-called fair pay agreements may be celebrated by unions who are struggling for survival, but they will not improve things for individual workers.”

The party’s workplace relations spokesman Scott Simpson said the new rules would see 90 per cent of a workforce at the mercy of the other 10 per cent.

Entire industries would be bound by agreements whether they participate in the FPA bargaining process or not, Simpson said.

The breach of international law claim is an interesting one.  Australia has had a similar model for the past eleven years.    It has consistently protected unions and collective bargaining better than New Zealand over the past four decades and wages are higher there.  Clearly below all the bluster this is the right’s main concern, workers being paid properly.

This proposal could do more to reverse the damage caused by the Employment Contracts Act than anything else tried since the 1990s.  Let’s do this.

34 comments on “Onya Michael ”

  1. Ad 1

    The decision by Minister Robertson to put a wage freeze of much of the public sector without warning, 24 hours before Minister Wood rolled out his labour sector regulation by fiat, shows that they have already set aside one of the two key triggers of their own recommendations: the Public interest trigger where there are "harmful labour conditions in the nominated sector or occupation."

    The state is of course a monopoly employer to nearly a quarter of our population.

    In many public service sectors COVID19 and accelerating poverty has massively increased the harmful labour conditions.

    With the remaining unionised capacity within the public service, I hope the Minister and the CTU start bending the accusing finger of labour re-regulation back on themselves before they step outside their own patch.

  2. Tricledrown 2

    How could Labour get this so wrong dumb idea..

    • mickysavage 2.1

      Don't you think cleaners and bus drivers should be paid more?

    • ghostwhowalksnz 2.2

      Tell that to Australia…. industry wide agreements are a central part of their collective bargaining system

      It is of course minimum standards


      Its probably the only way NZ can 'catch up with Australia' -TM John Key- in wages . When I returned to NZ in late 80s from Melbourne I got more pay here.

      • alwyn 2.2.1

        "I returned to NZ in late 80s from Melbourne I got more pay here."

        Did you say thank you to Roger Douglas? After all, given the date you state, he would have been Minister of Finance for about 4 years then. Unfortunately about the time you returned was the time that Lange had his unfortunate brain fade, decided it was time for a cup of tea and sacked Douglas.

        Wouldn't things be so much better if it had been Lange who went and Douglas who had stayed?

    • Louis 2.3

      @ Tricledrown "Last year the Public Service Commissioner issued guidance to Public Service agencies asking them to have nil or minimal pay increases for public servants until June 2021.

      “Today the Public Service Commissioner is updating that guidance to make clear that pay restraint will need to continue to be exercised across the Public Service for the next three years”


  3. Pat 3

    An odd week of announcements from what appears to be a bi polar Government.

    The Fair Pay Agreement suggests the Goverments moves on minimum wages, holidays and sick leave wont achieve the desired outcomes….strange given they havnt had time to take effect.

    Unless this is part of a comprehensive realignment of the economy that has yet to be revealed (perhaps at Budget 2021) this makes little sense…especially in light of the previously announced PS wage freeze.

    • ghostwhowalksnz 3.1

      Fair pay agreements include different minimum wages for different industries.

      Minimum pay say for a cafe worker would be different to a supermarket chain or in a call centre. Those with higher skills and qualifications get more.

      based on Australia, their Fair Pay system doesnt cover state government workers- who have different collective agreements.

      Here the individual ministries negotiate with PSA, so theres variations between them

      • Pat 3.1.1

        Am well aware of that and would suggest that they are also an exceeding inefficient method of attempting to achieve better wages/ conditions than the blanket minimums outlined.

        There is always a push effect from the increased minimum when the base is increased to maintain relativity.

        On its own this is not going to improve the position of low paid workers or encourage investment in NZ industries but it will make importing look even more attractive.

        • RedBaronCV

          Importing. We could have a border health and safety levy on goods to prevent countries with no standards undercutting our labour market. Plus tax measures on overseas remittances – they could be non deductible – that would fix a lot of it.

          • Pat

            As stated…

            "Unless this is part of a comprehensive realignment of the economy that has yet to be revealed (perhaps at Budget 2021) this makes little sense…"

            Industry bargaining will achieve nothing especially if we continue to turn a blind eye to the exploitation that continues to ignore (largely with impunity) even the basic legislated minimums.

    • Corey Humm 3.2

      Not odd. Perfect. Bash high paid 100 k earning public servants who the public think gets paid too much anyway 24 hours before announcing an unprecedented, in the last fourty years, reform of unionization. This drowns out the noise from the nats from a bunch of insane PSA activist's and greenies who are going ballistic over winz managers not getting a payrise.


      This govt is getting exceptional at coms. They were able to attack the lanyard mafia in wellington and be pro union at same time and the two stories cancelled themselves out

      Machiavelli would be impressed.

      More moves like this would be nice

      • Pat 3.2.1

        Perfect??…what pray tell will it achieve, apart from signalling to all and sundry that wage inflation is off the table?

  4. RedLogix 4

    At last. This more than anything else is what I expected a Labour govt to do.

    I recall having a beer with Sir Michael Cullen about 13 yrs ago and asked him why Clark's govt never got around to labour reform like this – and his answer was that they judged the general environment too hostile for it to succeed.

    Well I think now is the time. Unions in this country have been given an opportunity to show they can step up as a responsible and constructive element of our economy.

    • Incognito 4.1

      Agree 100%!

      Going by the reception it has received here on this site, which would be among the more welcoming receptions, I’d have thought, I can see why it would have been impossible previously.

  5. Sabine 5

    We have different industrial wage agreement in Germany, and general the government buts out of these and says very little.

    They are conducted between the different Unions and their counterparts the Employers Groups also sorted by industry.

    At the moment i think they are simply announcing the upheaval of everything to literally hide that they can't even organise a piss up in a brewery.

    We have homeless that are not being looked after, our schools still fall apart and some even need to demolish class rooms, we have our hospitals not coping, understaffed and under payed, we have toddlers in preschool that don't get breakfast or lunch, and so on and so forth, open crime, vandalism etc and these guys want to take another thing apart cause why not?

    Good grief, they are useless.



    As for fair pay, someone send Mr. Wood to speak to the people that were just told that they wont' be getting any increases for a few years? Or is that 'fair pay' only for some, but not all?

  6. Byd0nz 6

    On wage freeze.
    Hard working people who have been on the minimum wage for years and years never get a wage rise from the greedy employer, wages only go up when the minimum wage is raised, but it still falls short of a living wage. Pensioners have been on a wage freeze since Ruth Richardson stomped on them, if you compare the pension to a 40 hour week, it's about 7 dollars an hour, or in other words, way below the poverty line.

    But oh, those poor buggers on 100,000 +, finding it hard to pay the mortgage on their second or more property that they rent out at robbery rates, they should at least get a box of tissues from the Gvt.

    • Descendant Of Smith 6.1

      "Pensioners have been on a wage freeze since Ruth Richardson stomped on them"

      Ahhh no they haven't. Pensions have always, as benefits once were, been 65% of the average wage and have continued to rise accordingly.

      Only benefits were decoupled from the average wage to the point that from being the same they are now $140 or more apart from each other. Richardson did cut NZS by $20 per week which was reinstated by Helen's labour government. She did not put it back on benefits nor did she re-instate benefit rates back.

      Youth were most affected with a triple whammy – $20-00 per week cut, increases linked to CPI which moves much slower than average wage and the movement of the lower under 18 youth rate (which was mainly paid to kids delivering papers / milk boys etc) to 24.

      • Descendant Of Smith 6.1.1

        "Hard working people who have been on the minimum wage for years and years never get a wage rise from the greedy employer, wages only go up when the minimum wage is raised, but it still falls short of a living wage."

        Agree it sucks but that's why workers need to join together and unionise. I have always believed governments, in the absence of wide spread unionism should announce general wage orders that deliver minimum payrises each year. Move the minimum and everyone else up to say $100,000 ) since this government seems to like this figure) by a % increase that reflects inflation . Either that or make it manadatory for contracts to have annual cost of living increases.

  7. RedBaronCV 7

    How many times has this been "announced" now. They have had 4 years in power – why was this policy (even if useless) not ready to go the minute the opportunity arose.

    As to the policy itself

    – Labour could stop channelling the likes of David Cameron and the Uk tory party with state sector austerity wages.

    – Who decides what "industry" an employer is in. Them ?

    – Who decides how to classify a worker. I can see a lot of cleaners becoming sanitising specialists.in a hurry.

    – Can a worker decide to join and how easy is that likely to be.

    OTOH a couple of measures to improve things straight away could be:

    – all contractors become permanent staff after 6 months.

    – all work visa holders are joined up to a union with the fees paid by the employer and unions notified of their whereabouts. These would cover compulsory workplace inspections of such things as salary records and other business compliance. No compliance and prosecution follows plus if the employer is on some sort of visa they get booted. I'm sick of reading stories about exploited workers when we could front load the system so that there was compliance from day 1 and save all the expensive state intervention through Courts etc. It would benefit better emplyers too who follow the rules so they don't lose business to the rule dodging cost cutters.

    • Incognito 7.1

      How many times has this been "announced" now. They have had 4 years in power – why was this policy (even if useless) not ready to go the minute the opportunity arose.

      Short answer: MMP

      I have no idea “[h]ow many times has this been “announced” now” but I don’t know either why this would be relevant.

      • RedBaronCV 7.1.1

        Yes I understand that this is the sort of policy NZF would possibly hang up on but it doesn't even now feel "well prepared". It's as if the work on it has started only recently – surely it could have been good to go long before now. They had a few years in opposition to sort this sort of stuff out beforehand.

        As to "announcing " it more than once – it's the doing that counts. Talking about it repeatedly is just kicking the can down the road with no actual action. Trying too pacify the plebs without actually improving their ability to act in their own interests in the free fire zone of the local workplace. Frankly this workplace stuff sounds like Nanny knows what's best for the workforce after consulting with employers. I'm just not that impressed – sorry.

        • Incognito

          All good, please don’t say “sorry” to me!

          I think some of the thinking has been in place for a while but to get it to the policy stage requires a lot of preparation and checking for consistency with other and existing policies and a lot of legal details, I’d imagine, which can only be done when in Government. It does indeed feel a little rushed but the election clock is ticking and Covid-19 threw a huge spanner in the works.

          I don’t get your second paragraph, sorry cheeky

          • RedBaronCV

            Labour have had years in opposition and time in government to work out what policy for the wage earner workforce they want to implement when they have the power which they now do. But they still appear to be developing policy – rather late in the day – and frankly I don't see it reining in the mess in the modern workforce. Nor do I like the nanny state attitude – I would have thought empowering people to help themselves would give faster more widespread results.

  8. Tiger Mountain 8

    Well this announcement certainly surprised–did not expect Fair Pay Agreements to be greenlit during this term even a few months back. Some of my Labour loyalist friends in unions were looking sheepish whenever I asked how FPAs were going. One confessed earlier this year that it would take strong campaigning to get it over the line.

    Now I actually support FPAs due to the wage and condition floor they should provide. In my Northland and Far North region various business initiatives, particularly Iwi based, are underway, but traditional organising methods likely may not be quick enough to make the progress needed to capitalise on the flow of Pacific “slave” labour being cut off due to COVID. Effectively paying the union fee is a good touch too for workers with no or little institutional memory of collective workplace organisation.

    As long as there remains a two tier system of FPAs plus enterprise bargaining, I am ok with the policy. It is a form of centralised wage fixing and a form of a return to arbitration, no doubt about that. It is the most substantial restorative move since National tried to, and almost succeeded in, wiping out unionism totally with the Employment Contracts Act.

    I remain a trenchant critic of this timid majority Govt. until they act on a state house mega build, raise benefits, and start rolling back the State Sector Act and all the rest of it. But, while awaiting real world implementation of FPAs, they appear to have got this substantially right. The wailing from the EMA and all the rest clearly illustrates the mildest of reforms will not be tolerated by the arsehole employer class who have become way too accustomed to having things totally their way since 1991.

    • Patricia Bremner 8.1

      As you say Tiger Mountain, screaming at the mildest reforms is usual for the entitled.

      Many reforms need careful consideration to avoid unintended consequences, so take time.

      Personally I am delighted to see FPAs coming in, along with the surge in house building and consents is a great sign, and the beginning of the tunnel in Auckland, the Three Waters Policy work, the Maori Wards on Councils, the banking reforms, the tenor and direction is good. The respect for Law and Science by this Government at home and Internationally, and not forgetting progress with mycoplasma bovis and covid.

      So yes, to see the end of Bill Birch's Contract Act as the basis of our employment relations is great. That ruined many lives and reduced skilled workers to a spiral of penury, applying for lower and lower paid contracts.

  9. Incognito 9

    This is fairly good piece on the new Fair Pay Agreement system by Luke Malpass. It contains some interesting detail & info.


  10. If anyone in National bothered to read the FPA proposal they would see it prohibits strikes for a FPA. So there will be no return to the 1970s. A possible downside for unions is that they don't bother trying to organise further than they already have in the private sector. FPA should have a supporting commitment to organise and build power in the private sector.

    • Enough is Enough 10.1

      The right to strike should be fundamental. Why is it prohibited?

      • Incognito 10.1.1

        Because it runs counter to good faith negotiating and bargaining.

      • Craig Hall 10.1.2

        To make it easier to maintain social license for the changes and to minimise National's ability to rage about the ferry strikes in the school holidays etc. Hence the Employment Relations Authority can make a binding determination if the parties bargaining for the FPA don't ratify it.

  11. Descendant Of Smith 11

    Part of the decline in rural areas has been the undercutting of local employers by out of towners paying less to their workers and winning contracts. This not only wrecked local livelihoods but in some cases meant things that wouldn't be fixed later by the locals who either said "go get those wankers from Auckland who you got to build it" – that's an actual quote or the locals were no longer around and more as their businesses folded. Lots of good employers who paid decent wages vanished in this way.

    Hopefully this will encourage local people to start up again knowing they are less likely to be undercut.

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