Business

No room for individual contracts in Fair Pay Agreement proposals

Industries covered by the government's proposed nationwide Fair Pay Agreements will not be permitted to employ staff on individual contracts except in a few, temporary circumstances, according to reports leaking from the recommendations of the FPA Working Group to Employment Relations Minister Iain Lees-Galloway.

Led by Jim Bolger, the former National Party Prime Minister and Minister of Labour during the Muldoon era, the tri-partite working group involves trade unions, business representatives and employment law academics. It delivered its draft report to Lees-Galloway before Christmas. This is understood to include what one source described as "strongly worded" disagreements between union and employer groups.

Among the details emerging are that Fair Pay Agreements would cover all workers and employers in a defined industry and extend to any new employee.

The only circumstances where employees could be employed on terms outside the FPA would be temporary exemptions for small businesses, people entering the workforce for the first time, or people re-entering the workforce who had been out of the workforce for an extended period of time.

Such changes would be a major shift for industries where, since labour market deregulation in the early 1990s, unionised workforces have been largely replaced by people on individual contracts. Thta has decimated union membership.

The FPAs are the centrepiece of the second leg of the Labour-led government's industrial law reforms, aimed at improving the ability of trade unions to exert bargaining power in wage negotiations. The first tranche, passed last year, rolled back a variety of reforms implemented by the previous government.

Prime Minister Jacinda Ardern has sought to allay employers' concerns by suggesting that only one or two nationwide FPAs might occur within the current parliamentary term - the implication being they would likely cover employees of government agencies rather than private sector employers.

National, however, says the proposals now emerging indicate the government's agenda is to impose "compulsory unionism by stealth".

“Businesses and workers should be frightened. The recommendations from the working group are as radical as we originally feared - backwards, one-size-fits-all and rigid," said National’s workplace relations and safety spokesperson Scott Simpson.

Simpson said the proposals would see FPA bargaining initiated on the strength of 10 percent of all workers - both union and non-union - electing to seek an FPA.

The report recommends that only workers could trigger the compulsory FPA process, atlhough it appears that sectors in which harmful labour practices were present could also be cited as a trigger for beginning national negotiations.

A key element of any claim would be setting boundaries around any particular group of workers to be covered by an FPA. The working group recommendations are understood not to place restrictions on how broad or narrow that group might be defined to be, leaving that to be negotiated between the parties.

Employers would be expected to nominate national representative employer bodies to represent their interests while trade unions would represent workers covered by the category definition.

The proposals do allow FPAs to include regional pay variations. While enterprise-level agreements will be possible, they will be required to match or better the terms of an FPA.

Negotiations will have to be carried on in good faith and there will be no ability to call strike action while a negotiation for an FPA is underway, unless the action relates to issues outside the scope of the FPA.

The new national agreements could be struck for a maximum of five years before requiring renegotiation.

The headline of this article has been changed to the original BusinessDesk version, to better reflect the role of individual contracts within the Fair Pay Agreement proposals.

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