The Government blinks first as unions claim a win in negotiations with Minister Chris Hipkins

Public Service Minister Chris Hipkins speaking after his meeting with the CTU at Parliament, Wellington. Photo / Mark Mitchell

The unions have claimed a victory in their opening skirmish with the Government over public sector pay and the freeze of many workers' pay.

Both sides have been locked in pay negotiations today, after the unions expressed their frustration with the Government over its new pay guidance plan.

In a statement this afternoon, Council of Trade Unions (CTU) president Richard Wagstaff revealed the guidance set out by the Government last week would be reviewed next year.

Speaking to media before going into the House this afternoon, Hipkins confirmed this concession had been made and the review will take place "at the end of next year".

In the pay guidance released last week, the review was scheduled for mid-2023.

"We're in unusual and unpredictable times, and we've agreed to bring the review forward by a few months," Hipkins said.

"In good faith bargaining, there is room for compromise."

Speaking to the Herald, Wagstaff said this was a win for public sector workers.

"From our point of view, it worked," he said when asked about how the negotiations went.

"We asked for that [the guidance] to be reviewed with our input and our consolation and he [Hipkins] agreed," Wagstaff said.

"We said three years is a long time – we want to discuss it next year."

In Wagstaff's statement, he said there was an "absolute agreement" that bargaining will be in good faith without pre-determined outcomes.

"It was also agreed that there is scope to discuss cost of living increases in negotiations for all union members covered by collectives, with higher increases for low paid workers and that there is no pay freeze," he said.

Going forward, Wagstaff said the channels of communication are open – "we agreed to have further discussions,"

PSA National Secretary Kerry Davies said today's talks were "frank and constructive".

"There was agreement today that more workers should receive scheduled increases through step-based pay systems. Negotiations enable these pay systems to be implemented."

Hipkins was not available for comment after question time today, before speaking to reporters before Question Time he said that in "good faith bargaining there is room for compromise".

"We're trying to avoid getting into a cycle where the unions are incentivised to not settle – but we will look at it again next year."

In a further statement to media, Hipkins said the expectations set out last week "have not changed".

"We're in unusual and unpredictable times, and we've agreed to bring the review forward by a few months. It's worth taking stock at the end of 2022 to see whether the situation has changed sufficiently to revise the guidance," he said.

"We are committed to accelerating pay equity and parity processes and prioritising wellbeing and workload issues."