Labour to set up ‘fair pay rates’
Labour is promising to boost incomes, and stop a race to the bottom by bad employers, with an employment relations package that includes a move to base industry employment standards.
Announcing the policy yesterday, leader Andrew Little said the aim was to prevent ‘‘a race to the bottom’’ seen in some industries where good employers were undercut by bad employers trying to drive down wages.
‘‘Labour’s sensible changes will help boost incomes and support employers who offer good pay and conditions. It’s the right thing to do after nine years of a government that has put profits ahead of a fair return for working people.’’
Key changes proposed by Labour include a lift in the minimum wage from $15.75 to $16.50. It would base future rises on the cost of living for those on low incomes.
‘‘Over time we will work towards lifting the minimum wage to two-thirds of the average wage as economic conditions allow,’’ Little said
The party would also replace the 90-day trial period – what Labour calls the ‘‘fire-at-will’’ policy – with a law that retains 90-day trials but offers protection against unjustified dismissal and a ‘‘referee’’ service to resolve disputes.
Little said Labour had always supported trial periods that included recourse for employees in the event of unjustified dismissal.
‘‘Employers, particularly small businesses, have legitimate concerns that resolving employment disputes can be time-consuming and expensive.’’
So a referee would be used who would hold short hearings without lawyers present and make quick decisions on reinstatement or award damages up to a set cap. The service would be free to use but would cost the government $4 million a year, Labour said.
But the most controversial element of the package is likely to be fair pay agreements (FPAs) that would set basic employment conditions across an industry ‘‘based on standards that apply in that industry’’.
FPAs ‘‘will be agreed by businesses within an industry and the unions representing workers within that industry’’.
‘‘The recent care and support workers’ settlement is an example of how employers, employees and government can come together to create an agreement that sets base conditions across an industry.’’
Little said FPAs would prevent ‘‘a race to the bottom’’.
‘‘The current law undermines good employers who pay their employees well and offer good working conditions. Labour’s sensible changes will fix this,’’ he said.
FPAs would create a framework for fair wage increases where good employers were not commercially disadvantaged for doing the right thing.
The FPAs would cover all workers and workplaces in a relevant industry, and FPA talks would begin once ‘‘a sufficient percentage’’ of employers or employees called for one.
That threshold and ‘‘the precise implementation’’ of FPAs would be developed in government, Labour said.
Other elements in the policy include a promise to promote the living wage by paying all workers in the core public service, at an estimated cost of $15m per year, and extending that to contractors over time.
It would also double the number of labour inspectors to 110 at a cost of $9m.
Employers and manufacturers group the EMA said it had deep concerns about Labour’s policy.
‘‘Our current system provides flexibility which allows individual companies to bargain with their own workers to develop employment agreements which suit the needs of business and its workers,’’ EMA chief executive Kim Campbell said.
But unions welcomed proposed law changes.
Council of Trade Unions president Richard Wagstaff said the policy was being celebrated by working people as innovative, futurefocused and fair.
‘‘We are excited to see Labour’s commitment to introduce fair pay agreements which would set basic employment conditions across an industry. This is such an important issue for working people whose pay and conditions are constantly under threat.’’ the