New Zealand’s fair pay agreements: a new direction in sectoral and occupational bargaining

ABSTRACT

New Zealand is developing a new system of industry and occupational collective bargaining, called Fair Pay Agreements, aiming to establish negotiated terms, conditions and standards across specified industries, sectors or occupations. This article describes the proposal, its genesis and content, including how it will interact with other bargaining and wage-setting machinery in New Zealand. The article considers several important issues that remain to be determined including whether the system will be compulsory or voluntary; the determination of participating bargaining parties and their representation; whether FPA provisions will be extended to contractors or limited to employees; the extent of exemptions or flexibility; and the extent and nature of arbitration. The article considers whether FPAs have the potential to transform industrial relations in New Zealand, and contribute to a reinvigoration of collectivism in employment relationships. Finally, the article provides some international comparisons between the FPA proposal and models of sectoral standard-setting in other countries.

KEYWORDS:

• Fair Pay Agreements
• Industry and occupational bargaining
• Industry standards
• Collectivism

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. As of most recent OECD data, New Zealand’s collective bargaining coverage (still around 15%) was lower than all other OECD countries except the U.S., Korea, Mexico, Turkey, and Lithuania.

2. See Kelly (2011, 2013) for early incarnations of the union movement’s call.

3. For example, see Division 7, Content of Workplace Agreements, Subdivision A, Prohibited Content, of the repealed Workplace Relations Act 1996 (Cth.).

4. See Screen Industry Workers Bill 2020 and Recommendations of the (Film Industry Working Group 2018); Equal Pay Amendment Bill (19 September 2018) and (Joint Working Group on Pay Equity Principles 2016) and 2018.

5. In this regard, the FPA model is somewhat reminiscent of the pre-neoliberal practice of ‘over-award’ bargaining, common in the 1970s and early 1980s, in which unions would negotiate collective agreements (including at a multi-employer or sectoral level) to lift standards above those described in industry arbitration awards.

6. Of course the nature and effect of this dispute settlement process will depend on clarification of whether FPA provisions are treated as minimum standards.

7. This system is described by Forsyth and Howe as a union monopoly (2019, p. 222).

8. See (Singapore Ministry of Manpower 2020).

9. In some cases, unions and employers may negotiate consensus proposals that are then submitted to the Commission for approval, in which case approval is more likely and more timely; an example is the numerous temporary amendments to Awards that were implemented in response to the COVID-19 crisis (Workplace Express 2020).

10. Australia’s system allows enterprise agreements to include terms that are inferior to the minimum standards of the Awards, so long as they also include countervailing benefits which leave the workers ‘better off overall.’ The application of that better off overall test (BOOT) has been contested and controversial. Moreover, it would be weakened by new legislation tabled in 2020, increasing the possibility that individual workers or groups of workers could be worse off than under the relevant Award; see Peetz (2020).

11. In a few cases, industrial awards are still determined at the state level in Australia, and hence there is variation across states in provisions applying in some industries (mostly in public sector workplaces).

Additional information

Notes on contributors

Avalon Kent

Avalon Kent, LLB; LLM (1st class) & BA (Hons.) (Political Science and Industrial Relations).  Avalon specialises in employment & industrial law, anti-discrimination and feminist legal analysis. She has worked in Australian trade unions, private legal practice (on union cases), community law centres representing precarious and vulnerable employees and for the New Zealand Council of Trade Unions as a Legal Officer.  Avalon has recently taken a position as a Solicitor for the Public Service Association/Te Pukenga Here Tikanga Mahi in New Zealand, with a dedicated portion on work focused on pay equity cases.