31 Mar 2022

Fair pay bill tipped for plenty of scrutiny during parliamentary process

7:10 am on 31 March 2022

The Fair Pay Agreements Bill introduced this week is expected to bring about the biggest change to workplace laws since the Employment Contracts Act was passed in 1991.

teacher and kids playing with geometric shapes, early learning

The bill may help those working in sectors such as early childhood to gain higher wages, the CTU says. Photo: 123RF

BusinessNZ has already come out fighting against the bill, which the Council of Trade Unions said would provide minimum fair pay standards for some of the lowest paid people employed at supermarkets, cleaners, security and early childhood centres.

However, Simpson Grierson senior employment solicitor Rachael Judge said the bill goes much further to give the highest paid members of the workforce, such as doctors and skilled tradespeople, the right to negotiate fair pay agreements.

"It is a significant act that has 244 sections to it, and it is an entirely new act rather than simply amending our existing legislation, so I think it's going to be very significant in terms of its implications for New Zealand workforces," Judge said.

One of the issues was the compulsory aspect of a fair pay agreement struck by employees and employers.

Negotiations with employers could be initiated by 1000 employees or 10 percent of the workers under the proposed coverage.

The resulting agreement on fair pay would then be applied to all workers and workplaces in that sector, such as all childcare centres and all childcare workers.

However, she said sector-based employer groups were not set up to conduct bargaining, which could make it difficult for the parties to reach an agreement.

If there was a failure to reach agreement, Judge said the bill provided for the Employment Relations Authority to set the terms and conditions of a fair pay agreement.

"So the authority, despite having a very heavy workload, will be required to also take on this role of essentially setting terms and conditions for an entire industry or occupation and there will be a very limited ability to appeal what is determined in terms of the terms and conditions for that fair pay agreement."

Judge expected the bill would attract a large number of submissions from proponents and opponents.

"We may see a number of changes to the bill as it progresses through the parliamentary process, but at the end of the day, it will end up being subject to that process and to the final decisions following select committee and the various readings of the bill."

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