The experiences of New Zealand’s critical frontline workforces were front and centre as the Government’s Fair Pay Agreement Bill passed its first reading today.
“At the heart of the Government’s economic recovery plan is people. We know when we invest in New Zealanders, they have greater opportunities to prosper, provide for their families, and contribute to our nation’s success,” said Workplace Relations and Safety Minister, Michael Wood.
“Today we heard from workers on how our current employment system isn’t working. Over the course of Covid we have been reminded of the fact that some of our most essential workers like cleaners, drivers, and retail workers, are some of the most under-valued in our labour market. As we rebuild from Covid, it is the right time to tackle some of these long-term inequalities in our country.”
Minister Wood said Fair Pay Agreements level the playing field by enabling employers and unions to negotiate a basic floor under the pay and conditions of workers in a sector.
“This will be critical in stopping the ‘race to the bottom’ we have seen in many sectors, which can see good employers undercut,” he said.
“Importantly, FPAs will shift the focus from competition based on low labour costs and instead will incentivise a focus on those things we know to improve productivity and our economic performance including skills and training, innovation, and the provision of better goods and services. Other countries with sector based bargaining, like Australia, have seen both higher wages and higher productivity than New Zealand over the past 30 years.
“Fair Pay Agreements have long been one part of our wider work programme focused on lifting the wages of those on low to medium incomes – ensuring better wages for employees is even more essential now as we begin to feel the global economic pressures caused by the war in Ukraine.
“Fair Pay Agreements were a 2020 Labour manifesto commitment, which we have extensively consulted on, taking a balanced approach to the final design,” Mr Wood said.
The Bill will go through a full Select Committee process and is expected to pass all stages this year, he said.