Workplace minister Michael Wood slams BusinessNZ's stance on Fair Pay Agreements

Michael Wood, Minister of Transport and Workplace Relations and Safety. Photo / NZME

Workplace and safety minister Michael Wood has brushed aside BusinessNZ's criticism of the Government's planned Fair Pay Agreements.

Wood, who is also transport minister, said Fair Pay Agreements would benefit New Zealand's most vulnerable workers, including bus drivers, cleaners and not force entire sectors to the bargaining table.

Wood's comments follow a Herald article quoting lobby group BusinessNZ saying New Zealand risked being placed on a list of alleged breaches of international labour law, alongside Venezuela, Columbia, Egypt, Hungary, Malaysia and Mauritius if it continued with its proposal to introduce Fair Pay Agreements.

Chief executive Kirk Hope said there were concerns Fair Pay Agreements would essentially force collective bargaining, which would have detrimental effects on the country and its reputation internationally, as well as set a bad example on the global stage.

BusinessNZ claimed the ILO has put New Zealand on the list of the 40 "worst cases" of breaches of international labour treaties.

It has since admitted it changed the name of the list title from "preliminary" to "worst case", but defended doing so.

The actual title of the ILO report is "Preliminary list of cases as submitted by the social partners Committee on the Application of Standards".

Speaking to the Herald, Wood said the only reason the proposal had come to the attention of the UN's International Labour Organisation was because BusinessNZ had made a formal complaint about the plans focused at supporting low-paid workers.

"What we consistently have unfortunately is misrepresentation about what's happening," Wood said.

"Fair Pay Agreements are fundamentally about stopping the race to the bottom, and supporting essential workers doing essential work.

"Making comments that compare New Zealand to countries like Venezuela are ridiculous. A country like Australia has a sector-based model for setting employment terms and conditions, pretty similar to what we are proposing; and they're a free and democratic country," said Wood.

"The IOL has not made any ruling against New Zealand and the IOL has not put New Zealand on any kind of blacklist as indicated in those comments. The IOL is simply going through a process in response to a complaint that BusinessNZ made."

Wood said the complaint would be considered by the IOL next month.

The Fair Pay Agreements were designed to collectively support low-paid workers to "get a better deal" with their employer, he said.

"Employers and employees are still able to come to their own agreements - individual or collective agreements - over and above that. It pitches as a basic [starting point] a bit like the minimum wage, but more specifically for the sector.

BusinessNZ, however, argues that sector-wide collective bargaining is outdated and stifles innovation and favour cities over regional workplaces, among other impacts.

The group claims the introduction of compulsory Fair Pay Agreements would be "trampling on people's human rights".

Woods said Government had developed the proposal as a means to boost local productivity, which similar models in action had done in Australia.

"It is to stop the race to the bottom where we see groups of people who do critical work in New Zealand like our cleaners, bus drivers, supermarket workers, those people who got us through Covid, who are stuck on some of the lowest wages and worst conditions in our economy. That's not fair or reasonable, but it actually doesn't support good productivity either. We need a higher road path where we invest in skills and good wages - that's how we will grow our economy and everybody will become more prosperous."

The Fair Pay Agreements bill before the select committee and receiving submissions until the end of the week. Submissions will be heard in early June and the bill is anticipated to return to the House and be passed into legislation in October.

Fair Pay Agreements were part of Labour's manifesto during the election campaign.

This story has been updated to correct the statement originally made by BusinessNZ that the ILO list was a "worst case" list. The actual title was "Preliminary list of cases as submitted by the social partners Committee on the Application of Standards".