Fair Pay Agreements are a sledgehammer approach to solving what may only be an issue affecting a handful of sectors, the EMA told the Select Committee hearing on Fair Pay Agreements (FPAs) today.

EMA Head of Advocacy and Strategy, Alan McDonald, appeared before the Employment and Work Relations Committee in Auckland today, saying the one-size-fits-all approach of FPAs was not appropriate for the demands of a modern, flexible and fast-moving workplace.

"Third party negotiators for employees and employers, locked in three to five year pay rates and conditions, and loss of flexibility can’t possibly work in in today’s hyper-flexible workplace," he says.

"How could we have rapidly moved to cope with COVID if we’d had to go through multiple negotiations in Wellington just to get the flexibility needed to keep many workplaces going?"

The agreements would be triggered if just 10 per cent or 1,000 workers in a sector decided they wanted such an agreement, a threshold the EMA says is undemocratic. They are also compulsory, with the International Labour Organisation, while not pursuing a case, noting that they are out-of-line with internationally accepted practice around voluntary wage bargaining.

"That means 90 per cent of workers have no say but must comply with the agreement anyway, while 100 per cent of employers must also comply. The vast majority of employees and their employers will have no voice at the table when these negotiations are carried out," says Mr McDonald.

"How will employees and employers even know when they are subject to one of these, who will decide what constitutes a sector or job description, who enforces these things, who are the negotiators and who keeps the records? All those questions add up to yet another large bureaucracy and more costs."

Mr McDonald says the EMA agreed with BusinessNZ and recommendations from Ministry of Business, Innovation and Employment that there was another approach to solving potential issues in a few identified sectors.

"MBIE recommended a market test, proper research into possible sectors where there may be an issue and a joint approach between employers and unions to identifying and resolving issues. We already have protections for vulnerable workers - although the Worksafe inspectorate could do with more resources to investigate those case," he says.

"But if there are sectors with system-wide issues for pay and conditions let’s identify them and work on them. We don’t need last centuries, centralised, one-size must fit all ideology imposed on a vastly different modern workplace."

About the EMA:

The EMA is New Zealand ’ s largest business service organisation dedicated to helping people and businesses grow. It offers advice, learning, advocacy and support for more than 7,600 businesses as members of the EMA , ExportNZ and The EMA’s Manufacturers Network. The EMA is part of the BusinessNZ Network and its territory spans the upper North Island. The EMA also offers many of its services nationally to member businesses, and through its partners.

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