New analysis published today by the NZ Initiative casts doubt over the recommendations from the Government’s ‘Fair Pay
Agreements’ working group, says Business Central.
"The NZ Initiative report questions the key underpinnings of the FPA recommendations, and concludes such agreements
would put workers’ jobs at risk and stifle innovation in our economy," says Business Central Chief Executive John
"New Zealand’s labour market is currently strong. Unemployment stands at 4.2 per cent and wages rose 3.4 per cent last
"The Government needs to carefully consider the full implications of its working group’s proposals. Poorly
thought-through changes could significantly damage this country’s productivity and economic growth, as the NZ
Initiative’s research demonstrates.
"Agreements between employers and employees must be fair and voluntary. The key failing of the FPA regime is its return
to compulsory and prescriptive arrangements that accompanied widespread industrial strife the last time New Zealand
"Inflexibility in our labour market would harm workers, the unemployed, consumers, exporters, entrepreneurs and the
economy as a whole.
"All this at the very time when increasing global competition, greater use of automation, and future-of-work innovation
is making workers demand more flexibility from their bosses, not less.
"There is also concern that the Government’s immigration reforms are focused on introducing FPAs into sectors desperate
for people to fill labour shortages.
"The best way forward is for the Government to make agreements voluntary, as proposed by employer representatives. This
could mean FPAs operate as "Code of Good Practice" which would be non-binding unless the employer agrees to give it the
status of a multi-employer collective agreement.