Fair Pay Agreement benefits employers and employees

Andrew Little

What a great couple of weeks for our beautiful country!

We are on top of the sailing world after winning the America’s Cup, we tied the Rugby series with the Lions and we are top of the pops after Lorde hit number one on the US album charts.

All these things make us proud to be Kiwis. But we still have big challenges at home.  One of the things we need to get right is fair pay for workers.

Our employment relations policy is all about fixing that problem.

A truck driver told me last year how he is working longer and harder just to get by and how he has not had an increase in his pay rate in six years.

Then there’s the young teacher I met at a Lions game the other weekend. He and his partner are teachers and earn good salaries but accept that they have little chance of ever owning their own home in Auckland with the rent they have to pay and the amount they have to pay for a deposit.

Lingering child poverty

When 40% of children in poverty live in a working household and two-thirds of workers’ pay fell in real terms last year, despite the economy growing, working people are not sharing in economic prosperity.

This is not fair. We need a fresh approach. We need balance in the law that governs employment relationships and the negotiation of wages and conditions.

Weak employment law has created avenues for some businesses to undercut good employers by driving down wages and minimising costs.

Wellington bus drivers

Consider what is happening to Wellington bus drivers right now.

The Wellington Regional Council has re-let the tender for bus services in Wellington. They have a preferred bidder – a new bus company. The new company does not have the buses to run the services yet. They do not have the bus drivers yet either.

It is assuming that drivers from the existing bus company will take up jobs with them.

But the new company is not offering the same terms and conditions of employment.

It plans to reduce the cost of the payroll but drivers have not had a say on this.

There has been no negotiation.

As it turns out, the bus company agreed to a lower price for its bid. And it wants the drivers to pay the cost of the shortfall with lower incomes.

Not justified

There’s no justification for reducing the price of labour when the job remains unchanged.

Productivity gains are not achieved by raiding workers’ pay packets.

They are achieved through good management and good technology. This is what good employment law must promote.

Labour realises that good employers share a commitment to strong employment standards and often face unfair competitive pressure from those employers who seek to employ workers just at the cheapest price.

This penalises businesses with good pay and conditions and it encourages the race to the bottom.

That is why we will work with unions and with businesses to develop and introduce a system of Fair Pay Agreements that will set minimum conditions on pay and conditions for workers across an industry.

The concept of Fair Pay Agreements is similar to the recent care and support workers settlement. Actually, everybody came together, worked it out together, and did a deal.

Good employment law should enable employees to be fairly rewarded for their work and ensure fair treatment.

Changing the Statute

That is why Labour will also scrap National’s ‘fire at will’ law or trial periods, which removed virtually all rights to a worker dismissed unfairly during their first 90 days.

I know that businesses welcomed it, but Treasury has found that the law has created no new jobs and not increased hiring of disadvantaged job seekers.

Labour will replace that law with one that restores fairness.

I have spoken to dozens of small employers about that issue and they tell me that they strive to treat employees on trial fairly by giving feedback and believe that is the right thing to do.

They fear long, drawn-out grievance procedures for someone employed for a short time and who did not work out. If a worker on a trial period is treated unfairly, they must have redress.

An employer who has done everything right should not be up for a legal fight that, even if they win, will cost them.

Restoring fairness

Labour’s replacement law restores fairness. It will ensure that employers are able to take workers on a trial basis and put in place a fast, fair, simple referee system for resolving disputes.

Claims will be dealt with within three weeks. There will be no cost to the parties and no lawyers will be allowed.

After nine years, we need a fresh approach to employment relations that is fair, practical and inclusive. One in which employers and employees have the confidence to face their future together.

That is Labour’s plan.

Andrew Little is Leader of the Labour Party of New Zealand and Leader of the Opposition in Parliament.

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