BusinessNZ complaint to ILO on Fair Pay Agreements fails

Workplace Relations and Safety

The Government has welcomed the outcome of the International Labour Organisation’s consideration of New Zealand’s Fair Pay Agreements (FPA) system, following a complaint made to it by BusinessNZ.

“Despite efforts by opponents to misrepresent the purpose of FPAs, the ILO's Committee on the Application of Standards has not found that FPAs are inconsistent with international conventions, setting the record straight once and for all,” Michael Wood said.

“The ILO has instead suggested the Government continue to consult social partners on the proposed legislation, and to report back on it as part of New Zealand's regular reporting on ILO conventions. This is scheduled for 2024.  

“It was pleasing to have support from the Australian Government, alongside worker representatives from Australia, Samoa, Chile, Italy (who represented a number of European unions), the International Transport Federation and Public Service International. Each saw Fair Pay Agreements as a positive step for New Zealand workers. By contrast, no employer organisation spoke in support of BusinessNZ's case other than themselves and the employer spokesperson for their group.

“The Government is happy to discuss the future design of the FPA system, but active misinformation campaigns and vexatious complaints to international bodies, do a dis-service to the employers that actually want to make the change required to help New Zealand realise its economic potential.

“After the ILO conclusion it’s time for BusinessNZ to come back to the table and work with us to introduce a system that allows industries to set minimum pay and working conditions to stop a race to the bottom.

“Sector based minimum standards are common place across the OECD, including Australia and most of Europe. It’s time to leave the hyperbole at home and engage in rolling out an employment relations system that is fairly common place around the world.

“Our 30-year experiment with a low-cost labour model has not worked. Many workers have suffered, but, equally, our rates of labour productivity have been amongst the worst in the world under that regime. “The Government will consider the recommendations made by the ILO as part of the legislative process,” Michael Wood said.

The Fair Pay Agreements Bill is currently before the Education and Workforce select committee.