Business NZ chief executive Kirk Hope says the Government promising to rule out industry-wide striking on Fair Pay Agreements is good for business.

"It's great news in terms of the Government's commitment to ensuring that the industry wide fair pay agreements don't lead to striking action," he said. "That always concerned business and I think it is very useful for the Government to confirm that very early on."

Hope told Newstalk ZB it was critical the businesses were involved in the decision making process following the axing.

"I think it is critical that business is involved in the decision making if these changes are to work at a practical level," he said. "It will be businesses and representatives of businesses that will be negotiating these changes or the outcomes of these changes with workers and unions."

Advertisement

Small businesses would likely find it hard to get their heads around the proposed changes, Hope said.

"When you've got changes at this scale it will be incumbent on the Government, and also Business NZ or organisations like Business NZ and member organisations, to ensure that we are able to make businesses certain about what the changes are, what impact they'll have and most importantly how they'll be able to comply with the new rules."

The Government is giving assurances that industry-wide strikes will not be possible under its proposed Fair Pay Agreements, which would set minimum standards across entire industries.

The agreements represent a major change to the workplace and have been hailed by unions, but criticised by the National Party as taking industrial relations back to the 1970s.

Workplace Relations Minister Iain Lees-Galloway has assured businesses that the agreements - which could include pay rates, weekend rates, hours per week - would not allow workers to have industry-wide strikes.

"Business NZ was very concerned about industry-wide strike action, so there will be no mechanism for striking if you're pursuing a Fair Pay Agreement.

"The flipside is that if the parties can't agree, there will need to be some form of arbitration to make a final decision."

Discussions on Fair Pay Agreements will include unions and businesses, with legislation being introduced within 12 months as part of other changes, including:

• double the number of labour inspectors to 110 (cost of $9m)

• abolish youth rates

• look at ensuring proper pay for those who work over 40 hours a week

• look at improving job security for casual and seasonal workers

Business NZ chief executive Kirk Hope said it was good to know that industry-wide strikes would be illegal.

"Business generally is grateful for that clarification."

He said he was approaching the agreements with an open mind, but certain details would need to be fleshed out, including which industries would be looked at first, and who the representatives for employers might be, particularly for smaller businesses.

Lees-Galloway said Fair Pay Agreements would prevent a "race to the bottom" across an industry, such as bus drivers.

"Councils obviously are looking for best value for money when tendering for services. A new bus company comes along and says we can do it cheaper. How? Cutting wages.

"If we can get rid of the competition on wages, the competition becomes about how good the service is, things that businesses should be competing on."

Industry-wide agreements were common in Europe and Australia, but not in the US or the UK.

On youth rates, Lees-Galloway said there was no evidence that youth rates had improved the job market for young people.