Fair Pay finally a reality


Last week was one of my highlights at Parliament, because we introduced Fair Pay laws into the House.

This means that security guards, cleaners, bus drivers, retail workers and others here in the Taieri electorate and around New Zealand will finally have decent pay and conditions.

To me, these are the sorts of transformational changes to people’s lives that make the hurly›burly of political life worthwhile.

For our lowest paid workers, Fair Pay Agreements (FPAs) mean exactly what they say: fairer pay, and also better working conditions, so that people can work with dignity and have their work valued appropriately.

In some cases currently, businesses are forced to lower their quotes to get a contract because other companies pay lower wages and can then lower their quotes.

This becomes become a “race to the bottom” in which good employers can get undercut.

FPAs level the playing field by enabling employers and unions to negotiate a basic floor under the pay and conditions of workers in a sector.

Unions initiate the FPA process, by meeting a representation threshold of support from either 10% or 1000 workers in coverage, or a public interest test.

The initiating union must decide which work they want covered.

Parties can later agree to change the coverage. FPAs can be occupational FPAs or industry specific.

Contractors are not currently included, but the Government plans to begin work soon to incorporate contractors into the Fair Pay Agreements Act.

Penalties will be applied to employers who try to avoid FPA coverage by misclassifying employees as contractors.

We know our current employment system isn’t working.

Over the course of Covid we have been reminded of the fact that some of our most essential workers are some of the most under›valued in our labour market.

As we rebuild from Covid, it is the right time to tackle some of these long›term inequalities in our country.

FPAs will shift the focus from competition based on low labour costs and instead will incentivise a focus on those things we know to improve productivity and our economic performance, including skills and training, innovation, and the provision of better goods and services.

Other countries with sector› based bargaining, like Australia, have seen both higher wages and higher productivity than New Zealand over the past 30 years.

Fair Pay Agreements 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.

Fair Pay Agreements were a 2020 Labour manifesto commitment, which we have extensively consulted on, including with the major union and employer groups, taking a balanced approach to the final design.

We have many hard›working critical workers in my extended whanau who juggle two or three jobs trying to make ends meet and equip their children with education for a better future.

I can’t wait for them — and all those others around Aotearoa New Zealand — to finally receive decent wages and work conditions.