Fair Pay Agreements

12 Feb 2019

Workplace Relations and Safety Minister Iain Lees-Galloway has announced the Government are now considering the recommendations of the Fair Pay Agreement Working Group which reported back last week on the issue of introducing Fair Pay Agreements.

There is a degree of irony that Rt Hon Jim Bolger is spearheading this movement since it was his Government who introduced the Contracts Act in 1991 which was the basis for the Individual Employment Agreement allowing businesses and workers to negotiate freely and which most companies use today.

Fair Pay Agreements are designed to set minimum standards (primarily to lift wages) across an industry or occupation over and above legislative minimums (the minimum wage). Bearing in mind the Government is aiming at an adult minimum wage of $20 this is a very significant increase.

The Labour led Government has indicated "no more than one or two" fair pay agreements in the current electoral term, that is until Oct 2020.

The biggest concern over this kind of legislation is the lack of opt-out option for business and the very low threshold by which the issue can be forced. The proposal at this stage forces an entire industry into fair pay negotiations if 10% of the workers ask for it.

Huge concern from opposition policital parties and business advocates are currently being voiced. Even Treasury have said "Labour’s policy will harm our economy and the opportunities it creates. Centralised bargaining will make it harder for firms to remain competitive and they will lay off workers as a result"

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