Big city union practices are not going to be "rammed down the throats of the provinces", New Zealand First leader Winston Peters says, after his party won concessions on the Employment Relations Amendment Bill.

The bill passed its second reading this evening with support of all three Government partners after Workplace Relations Minister Iain Lees-Galloway made changes to it following horse-trading with New Zealand First.

Most significant are the retention of 90-day trials for businesses with more than 20 employees, limiting the access of unions to non-unionised workplaces and reinforcing the right of employers to opt out of multi-employer collective agreement (Meca) bargaining.

Peters said the changes were down to commonsense, the process of democracy and using select committees properly.

Advertisement

"It's a serious victory for the economy," he told reporters today.

"You can't always get what you want but you can get as much as you possible can in the interests of the economy."

Peters said the clarification of the Meca provisions, under which employers can opt out of bargaining on reasonable grounds, meant that "we're not going to have an Auckland-established union practice rammed down the throats of the provinces. How can Whanganui be Auckland?"

Whanganui Chamber of Commerce chief executive Marianne Arnold welcomed his sentiment, saying small and regional businesses juggled a lot already and it was good to have that recognised by central Government.

"They are putting a focus on us where we have been kind of in the shadows before, or doing a lot of work for New Zealand but not really being recognised in any way that was particularly helpful. It's really heartening," Archibald said.

Clayton Mitchell, New Zealand First's industrial relations spokesman, told Parliament there had been hundreds of submissions on the bill which worried that without an opt-out clause, Mecas were going to be problematic.

"What it was going to do was actually tie up the provincial and regional parts of New Zealand with the cost structures of our larger areas and cities. Now what we've got is a position where those businesses, after engaging in serious negotiations, have the ability to now opt out of those Mecas."

Prime Minister Jacinda Ardern denied that the changes watered down one of Labour's flagship policies.

Advertisement

"What we've done is clarified provisions around obligations around settlement through Mecas. Some would argue that that already existed in this law but this adds clarity," she told reporters.

"It makes it very explicit that there isn't a duty to conclude."

National's workplace relations spokesman Scott Simpson said the bill forces extra costs on business, allowed pay rates to be settled elsewhere and let union officials enter workplaces unannounced.

National would repeal the legislation if it won the 2020 election, he said.

BusinessNZ chief executive Kirk Hope said the changes would make parts of the legislation more acceptable to business but there were still areas of concern and small and large businesses would still be hoping for further changes during the committee stages of the bill.

E Tū union national secretary Bill Newson said the changes reflected the compromises of coalition politics.

"If we initiate bargaining for a multi-employer agreement, under the new provisions those employers are obliged to sit down and negotiate with us in good faith but they're not obliged, as I understand it, to reach agreement with us."

"The bar is much lower with the multi-employer collective agreements."