A major step towards a fairer system for New Zealand workers

The Government has taken another step today on its pre-election commitment to lift incomes and improve working conditions of everyday kiwis with the introduction of the Fair Pay Agreements Bill to Parliament, Workplace Relations and Safety Minister Michael Wood announced 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,” Michael Wood said.

“Fair Pay Agreements (FPAs) 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.

“For too long, New Zealanders working in critical roles like cleaners and bus drivers, whose work is keeping our country going during the pandemic, have lacked bargaining power to seek better wages and conditions. We want to turn that around and ensure workers get a fair go again. We’re proud to be a Government that backs everyday kiwis. 

“These agreements will improve wages and conditions for employees, encourage businesses to invest in training, and level the playing field so that employers who are trying hard to offer fair terms don’t get undercut and disadvantaged.

”We acknowledge that a balanced approach is needed and have designed FPAs to enable unions and employer associations to bargain together to set minimum standards for all employees and employers in an industry or occupation. 

“These negotiated, sector-specific minimum standards can take into account the costs and opportunities businesses have while ensuring more workers receive higher wages and better employment terms and conditions. FPAs will be a long-term, stable framework with Agreements being for 3-5 years, meaning that employer associations and unions can identify the most critical issues in their sector and then negotiate a staged approach to making improvements across the sector or occupational group. Some employers have told me that this will be an important tool to help solve long-running issues such as labour shortages caused by low pay.

“These changes will help employers by stopping the race to the bottom we’ve seen in various industries and encourage competition that isn’t based on low wages but on better products, services, and innovation.

“Fair Pay Agreements were a 2020 Labour manifesto commitment, which we have extensively consulted on, taking a balanced approach to the final design,” Michael Wood said.

The Bill will go through a full Select Committee process and is expected to pass all stages this year.