Big shake-up looming for industrial relations

Contentious workplace laws setting minimum terms and conditions of employment for workers in the same industry or occupation have been thrust back onto the political agenda.

The changes could herald the biggest shake-up in industrial relations in years.

Work Place Relations Minister Iain Lees-Galloway said a 10-person working group led by former National Party prime minister Jim Bolger would report back by the end of the year on the design of fair pay agreements.

The Government says fair pay agreements will lift pay and conditions by preventing a ‘‘race to the bottom’’ by preventing employers from competing with each other by lowering wages.

But employers have been nervous about their impact on business, and the uncertainty has contributed to the slump in business confidence since the election.

Lees-Galloway said many workers had not shared in the growth in the economy over the past 30 years and the result was a ‘‘hollowing out’’ of wages for middle-income earners.

Fair pay agreements would work by requiring agreement between unions and employers on minimum terms and conditions of employment for all workers in an entire industry or occupation – which employers say is effectively a return to centralised bargaining.

Fair pay agreements were the cornerstone of Labour’s industrial relations policy in the leadup to the last election, but the Government has moved slowly for fear of spooking business.

Council of Trade Unions president Richard Wagstaff said the announcement would help rebuild ‘‘a decent quality of life for working Kiwis’’.

The current system was market-driven and pushed wages down, Wagstaff said.

The return of fair pay agreements would be a turning point for workers and employers, he said.

‘‘Fair pay agreements put New Zealanders first and show our real competitive advantages are the Kiwi values of dignity, opportunity and respect.’’

In a speech to a business audience earlier this year, Prime Minister Jacinda Ardern acknowledged business confidence was the ‘‘elephant in the room’’.

The Government has moved quicker on other workplace laws, including changes to National’s 90-day ‘‘fire at will’’ law, and legislation raising the minimum wage to $20 an hour by 2022.

It has also announced plans to overhaul the ‘‘nightmare holidays act’’.

The Government says its 10-person working group includes ‘‘worker and business representatives, those with practical on-theground experience and experts in law, economics and bargaining systems’’.

Lees-Galloway said the Government would introduce legislation to implement its fair pay agreements once the working group reported back. Once the laws were in place, it would be up to unions and employers to create fair pay agreements in their industry of occupation.

Fair pay agreements would differ to existing collective bargaining because they would set minimum terms applying to all workers in an entire industry or occupation that all employers would be expected to meet.

Unlike existing collective bargaining, industrial action, including strikes and lockouts, would not be permitted in negotiations for a fair pay agreement.