Fair Pay Agreements

Security guards, cleaners and supermarket workers nominated for first Fair Pay Agreements

By Pattrick Smellie

June 25 (BusinessDesk) - Peak trade unions are targeting security guards, supermarket workers and cleaners as the first lowly-paid sectors where new legislation to create nationally binding, sector-wide Fair Pay Agreements should be used.

Some 44,000 people work as cleaners, 6,500 work as security guards, while more than 200,000 people work in the retail sector, of which supermarkets are a significant subset.

"Making sure FPAs are brought in and done properly is the single biggest thing this 'well-being' government can do to help fix the problems including income inequality, child poverty, and low productivity that have caused so many problems for so many New Zealanders for so long," Council of Trade Unions president Richard Wagstaff said.

"There is no economic rationale for the current individualised bargaining framework," Wagstaff said during the launch of a report from the economic consultancy BERL at a joint media conference in Wellington. "However, there is a strong social well-being rationale for sector bargaining."

FPAs were a key recommendation of a tri-partite working group involving government, employers and trade unions, released in January. Workplace Relations Minister Iain Lees-Galloway was reluctant at the time to say when such legislation might be introduced.

Reflecting concern among employer groups that FPAs present a step towards a return to compulsory unionism - industries covered by FPAs would be required to be represented by trade unions - Prime Minister Jacinda Ardern has said there would be no more than "one or two" FPAs in the current term of Parliament.

The BERL report's high-level conclusions include that "organised decentralisation", where collectively negotiated employment agreements set bottom lines with national application, is endorsed by the Organisation for Economic Cooperation and Development, a rich countries' club.

It found no evidence either way that collective bargaining has impacts on productivity.

"Put that to one side," said BERL economist Ganesh Nana. The available evidence suggests that collective wage bargaining is "macro-economically neutral" while "New Zealand's abandonment of sector bargaining in the 1990s is linked to a decline in real wage growth."

The concept of organised decentralisation allowed firms to be flexible in their own sectors and geographies, but in ways that ensure that "it's not a race to the bottom", said Nana. They achieved that by setting a floor "in terms of not just wage levels but in terms of conditions and other elements of the labour market set-up" such as access to training, and setting the frameworks for otherwise excluded groups so that they are not exploited.

This was "quite a shift from old thinking on flexible labour markets where you leave it up to the individual, to having someone set the rules of engagement," Nana said.

(BusinessDesk)

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