Compulsory fair pay agreements risky for growth

13 Feb 2019

Compulsory Fair Pay Agreements risky for economic growth

Fair Pay Agreements would bring risks to business and the economy, says BusinessNZ.

The Fair Pay Agreements report released today proposes a system of industry-wide collective agreements for New Zealand workplaces.

BusinessNZ was one of three employer representatives on the working group who disagree with key recommendations of the report.

Chief Executive Kirk Hope says the compulsory nature of fair pay agreements and the risk of industrial action and productivity loss are key concerns.

“Being covered by a fair pay agreement would be compulsory for everyone in an industry or sector.  We disagree with this and think the decision to enter any employment agreement should be voluntary.

“Fair pay agreements would limit business flexibility, as a collective covering every business wouldn’t be able to meet the needs of individual firms.  Businesses that wanted differently would have to negotiate separate agreements on top of their fair pay agreement, and this secondary bargaining would increase the risk of industrial action, as happened with similar rules in the 1970s.

“There would be risks to productivity because everyone would have to attend paid stop-work meetings to agree on their fair pay agreement.   All employer representatives on the working group were concerned that about the consequences and costs of this.”

Kirk Hope said employers would want to see significant changes to the proposals to address the likely risks to business, jobs and growth.

BusinessNZ contributed to the Fair Pay Agreements Working Group on behalf of New Zealand business and regional business organisations EMA, Business Central, Canterbury Employers’ Chamber of Commerce and Otago Southland Employers Association.