Fair Pay Agreements Will Challenge General Practice In New Zealand

Thursday, 1 October 2020, 11:16 am
Article: Ian Powell

Fair Pay Agreements (FPA) are strongly promoted by two of the three current coalition government parties (Labour and Greens). They were a feature of Labour’s 2017 election campaign and it was expected that the Employment Relations Act would have been amended by now to enable them. But NZ First’s support was not forthcoming and both Labour lacked sufficient ‘political steel’ on this issue and the Council of Trade Unions advocacy was insufficiently effective.

However, with at the time of writing, the most likely outcome of the general election on 17 October being a Labour-Greens government (Labour majority is the next likely cab of the rank), FPAs should be a dead cert next year.

Given the purpose and scope of FPAs this would be a positive development for many of the most vulnerable in the workforce. They have a transformational feel about them. But they will also pose interesting challenges for general practice from the standpoint of the interests of GP practice owners as employers and the salaried GPs they employ.

FPAs would also raise a difficult challenge for the New Zealand Medical Association (NZMA) and a challenging opportunity for the Association of Salaried Medical Specialists.

What are FPAs

The purpose of FPAs is to provide an ability to collectively negotiate legally enforceable terms and conditions of employment for workforces in sectors (ie, industry-wide) where negotiating multi-employer collective agreements (MECAs) is very difficult, perhaps impossible. The sectors most likely to be eligible for FPAs are those disparate, usually smaller and relatively isolated employers and workforces. Forestry, transport and agriculture are examples that immediately come to mind. So does primary healthcare.

FPAs would have much the same legal enforceability status as MECAs although their scope would be narrower largely around ‘pay and rations’ issues such as salaries, allowances, reimbursements, some forms of leave, and some basic employment protections.

Scope of FPAs

The RCGPNZ 2018 workforce survey of over 5,000 GPs doesn’t identify the number of salaried GPs because it combines (without differentiation) long-term employees from contractors. The combination represents 48%. GP partners represent 36% but anecdotally many are also salaried to the practice they own, if only for tax reasons.

The results suggest that at least 3,500 GPs work in practices. The proposed threshold for employees wanting FPAs is 10% of affected employees or 1,000, whichever is the lesser. If the proportion of GPs salaried to practices willing to initiate FPA negotiations was as low as 30% this would mean over 1,000 GPs. In this situation only a little over 100 GPs would be required to initiate.

These salaried GPs would require union representation. They are eligible to join ASMS and a small number employed already have but, in the absence of a collective agreement, the scope of representation is limited.

To take advantage of the opportunities FPAs would provide ASMS would need to undertake a recruitment organising campaign preceded by a scoping exercise. There would of course be a practical difficulty over what to do with GP partners who are also salaried to their practice.

An FPA could be very attractive to these salaried GPs. The basis for any FPA claim from ASMS would be the ‘pay and rations’ in the MECA they negotiate with the DHBs. Salaried GPs employed by DHBs are eligible to be covered by this MECA and are (GP liaison officers and West Coast GPs for example). Those that are vocationally registered are remunerated on the specialist scale.

Although a small minority compared with the practices there are also salaried GPs employed by corporate employers. This would be less difficult for ASMS but would still be challenging because of the disparate workplaces. FPAs should be achievable with these employers but so also might be a preferable collective agreement instead.

The challenge of general practices

ASMS is most noted for its representation of DHB employed senior doctors including the negotiation of their MECA. But it also has experience of collective bargaining for GPs outside DHBs. This includes a national MECA covering hospices, a national Family Planning collective agreement, a MECA covering union and community health centres in the Wellington region, and several single employer collective agreements covering a range of community trusts. These have been positive outcomes although largely inferior conditions compared with the MECA covering DHBs.

GPs salaried to practices would be a challenging opportunity for ASMS. This includes the dilemma of practice owners salaried to their practices. But its experience of negotiating for GPs would help.

It would be impossible for practices to sustain a credible argument that vocationally registered GPs that they employ should not be remunerated the same as their DHB employed colleagues. Other strong incentives in the DHB MECA are six weeks annual leave, CME leave, reimbursement of expenses, and subsidised superannuation. An FPA would be very attractive for locum GPs many of whom had their employment vulnerability exposed with layoffs in response to Covid-19.

If FPAs take off it would provide a further interesting challenge for ASMS because of the new recruitment opportunities. Its membership is predominantly doctors employed in secondary and tertiary care. A significant expansion in GP members would be a new dynamic possibly leading to changes in the union’s decision-making processes.

NZMA would face a different challenge. For several years NZMA negotiated the MECA on behalf of most practices covering the nurses they employed who are represented by NZ Nurses Organisation. This appears to have worked well and both NZMA and NZNO have maintained a professional relationship throughout.

There is no conflict of interest representing GP practices as employers where nurses are the employees. Doctors employed by GP practices is another matter. To act on behalf of one group of members or potential members against another group (possibly larger) would be disastrous for membership retention and recruitment.

Further, NZMA (and general practices) has taken the principled position of supporting pay parity of practice employed nurses with their DHB employed colleagues. It would not be sustainable to take a different position for practice employed doctors

But, for every challenge, there is an opportunity. This might be for NZMA to reassess its purpose and how it functions as the medical professions only pan-professional organisation.

© Scoop Media

Ian Powell

Otaihanga Second Opinion is a regular health systems blog in New Zealand.

Ian Powell is the editor of the health systems blog 'Otaihanga Second Opinion.' He is also a columnist for New Zealand Doctor, occasional columnist for the Sunday Star Times, and contributor to the Victoria University hosted Democracy Project. For over 30 years , until December 2019, he was the Executive Director of Association of Salaried Medical Specialists, the union representing senior doctors and dentists in New Zealand.

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