New Zealand on Oct. 27 passed into law a bill that will provide a framework for collective bargaining for fair pay agreements across entire industries or occupations rather than just between unions and particular employers.
The new bargaining system, called the Fair Pay Agreements, is set to take effect on Dec. 1.
It is likely that the base terms in an FPA will be greater than the current legal minimums, according to a press release by Edwards Law. The Recruitment, Consulting & Staffing Association, which represents the recruitment, staffing and workforce solutions industry across Australia and New Zealand, expressed concerns that the law would be a financial and administrative burden to employers.
Certain employment terms are required to be included in a Fair Pay Agreement, including defining the work covered by the Fair Pay Agreement; the standard hours, minimum pay rates (including overtime rates and penalty rates), training and development; how much leave an employee can have; and how long the Fair Pay Agreement applies.
Key steps. To establish a Fair Pay Agreement, a union would apply to the chief executive of the Ministry of Business, Innovation and Employment for approval to negotiate a Fair Pay Agreement for a specific occupation or industry.
If the application is approved, employee and employer bargaining sides may form, and the bargaining process begins. Once the bargaining sides agree, covered employees and employers can vote on whether they support the employment terms proposed, and if there is a majority from both bargaining sides, the Fair Pay Agreement will be finalized and set as law.
The Employment Relations Authority may decide the terms of an FPA if the parties fail to agree on the FPA or if no employers participate in negotiating for an FPA, according to Edwards Law.
Staffing industry response. The Recruitment, Consulting & Staffing Association, which represents the recruitment, staffing and workforce solutions industry across Australia and New Zealand, expressed concerns with the law through a formal response when it was referred to the Education and Workforce Committee for inquiry and report.
In its response, the RCSA highlighted that the legislation carries with it increased costs and considerable administration burden for employers. Additionally, the association made clear how the framework would reduce the ability of individual employers and their employees to negotiate and determine their own working arrangements and how the legislation is inconsistent with the state of the current employment market.
“We argued that individualized working arrangements, terms and conditions are increasingly becoming standard practice and that the labor and skills crisis has given workers increased bargaining power,” the RCSA stated. “We also expressed concern that low thresholds for initiating bargaining, the lack of employer organizations with experience in bargaining and an inability to access information that identifies all employers across an industry or occupation would combine to create a process, and subsequent agreement, that is ineffective in representing all of those to whom it may apply.”
The bill was opposed by the National and Act parties, which have vowed to repeal it should they win control of the government next year, as well as BusinessNZ.