Federated Farmers has supported Business New Zealand’s decision to opt out of the government’s plans for it to be a partner in implementing so-called ‘Fair Pay’ agreements. Feds had already indicated it will not function as a mediator for what we’ve termed the government’s flawed pay negotiation scheme. The FPA issue is now in front of Parliament’s Education and Workforce Select Committee. In the following article, BusinessNZ CEO Kirk Hope outlines the organisation’s position.

The Government has taken its phone off the hook and is ignoring widespread opposition from New Zealand business owners and employees to its unlawful compulsory national pay agreements scheme, known as FPAs.

Four months after BusinessNZ wrote to the Government withdrawing from acting for employers to implement the flawed scheme, the peak business organisation is still waiting on a reply.

BusinessNZ CEO Kirk Hope says the organisation wrote to Workplace Relations Minister Michael Wood in December to express its deep concerns about the out-of-touch and out-of-date scheme, after the Government wrote BusinessNZ into the proposed system without its agreement.

Hope says BusinessNZ was flooded with messages of support for its stand against compulsory national pay agreements. “Kiwis  don’t believe there is a need for the Labour government’s so-called ‘Fair Pay Agreements’ and don’t want their right to flexibility in the workplace to be taken away.

“However, the lack of response from the Government and  comments they’ve made elsewhere make it clear they’re determined to plough on with FPAs, despite them being fundamentally flawed and out of touch with modern ways of working.

“It’s really disappointing that the Government hasn’t taken the summer break to reflect on the concerns of businesses big and small about FPAs and go back to the drawing board on this bad policy. These proposed compulsory national agreements should be scrapped.”

FPAs couldn’t come at a worse time than now as businesses face mounting pressure from runaway inflation, labour shortages, fast rising costs, supply chain issues and the Omicron response, Hope says.

The workplace environment has changed dramatically in the decades since New Zealand last used compulsory national agreements for wage bargaining and particularly over the past two years of Covid when workplace flexibility has come into sharp focus.

“Implementing FPAs does not recognise the reality of modern workforces and the current environment in which they operate.

“Omicron and the way in which New Zealanders are now learning to live with the virus, means that employers and employees are now having to work together to ensure flexible working practices while meeting Covid-19 isolation requirements. FPAs would largely take away the ability to do this.

“At a time when workplaces practices are becoming more flexible not less, it’s hard to understand why the Government is determined to go backwards by introducing FPAs.”

Hope says BusinessNZ will continue to fight on behalf of its members until the Government does what its own officials have recommended – scrap FPAs and focus on improving and strengthening the current system.

“MBIE have recommended that a better approach would be to introduce a limited set of sector-based minimum standards where a labour market problem has been established. We agree – instead of imposing an unnecessary FPA system across all industries, we are focused on achieving better outcomes for the Kiwis who most need them.”

Hope says that compulsory FPAs are unlawful under both current domestic and international employment laws and are totally out of step with how New Zealanders need to work, now and into the future.

Feds’ stance on FPAs

In our original submission to MBIE, Federated Farmers expressed strong opposition to the imposition of FPAs, noting there wasn’t sufficient evidence the proposals will provide the expected benefits relative to the likely costs and risks.
Farming is not an industry which fits easily under a Fair Pay Agreement (“FPA”) structure given the number of small owner/operators, the complexity of work requirements (including between industries and across seasons), a reliance on the contractor model, and the lack of benefit from collective rather than individual arrangements. However, farming as a sector is heavily reliant on other sectors (processing, transport and construction for example). Inefficiencies in these areas can significantly impact the farming sector, particularly given the ‘just in time’ nature of the modern economy, the nature of primary production, and our reliance on export revenue.