New Zealand passes new sectoral bargaining law
by Niall Shanahan
 
The new legislation covers base wage rates, ordinary hours, overtime and penalty rates, with scope for redundancy, leave, and health and safety.
The new legislation covers base wage rates, ordinary hours, overtime and penalty rates, with scope for redundancy, leave, and health and safety.

The Fair Pay Agreements (FPA) is the name of a new sectoral bargaining system which has just been passed into law in New Zealand, which commentators say will radically expand unions’ collective bargaining power.

 

FPAs are essentially collective agreements struck, not between a union and a single employer, but a union and every employer in an industry. The new system is designed to boost pay and working conditions in sectors and occupations characterised by lower earnings and subcontracting. Australia is set to follow suit with similar legislation.

 

A working group on sectoral bargaining was set up in 2018 and draft legislation was eventually introduced last year. Developments in New Zealand and Australia were cited in the research behind the recently published report by the High-Level Group on collective bargaining in Ireland.

 

The new legislation covers base wage rates, ordinary hours, overtime and penalty rates, with scope for redundancy, leave, and health and safety. FPAs can be occupational or industry based, and trade unions can trigger the FPA process if they meet a representation threshold of support from 10% (or 1,000) of workers, or a “public interest test.” 

 

New Zealand's Workplace Relations Minister, Michael Wood commented: “For too long New Zealanders working in critical roles like cleaners, supermarket workers, and bus drivers whose work was essential to keep our country going during the pandemic, have been undervalued by our workplace relations system.

 

“Fair Pay Agreements are about turning that around and ensuring that working kiwis get a fair go again,” he said.

 

Commentators have expressed concerns that the new system might be scrapped if the conservative opposition, the National party, which is opposed to the FPAs, wins the NZ elections due to take place next year.

 

 

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