Fair Pay, Fair Play

Fair Pay Agreements (FPAs) offer Labour the chance to live up to their promise of being a transformational government. It is vital they forge ahead with FPAs in spite of bad faith criticism from the right and business interests. The Council of Trade Unions could not make it any more clear- FPAs represent a once in a generation opportunity to increase wages, give workers a voice in their workplaces, revitalise the union movement and set minimum standards for industries. All these things would go a way toward addressing wealth inequality and the asymmetrical power relationship between the working and the owning classes. Progressives of all stripes, anti-poverty campaigners, unionists and everyday working class people must get behind this legislation. We need to show the government how much we need this change.

This is urgent work. The current state of industrial relations is institutionally hostile to collectivism, unionism and “equality-promoting practices”. The legal framework which governs employment relationships is largely unregulated and individualised. This is by design. It is the legacy of the Employment Contracts Act, an extreme piece of legislation passed by the Fourth National government which revolutionised employment relations. Overnight, the previous system of national-level collective bargaining and high density unionism was undone. Unions were decimated, from covering over 70 percent of New Zealand workers to a dismal 16 percent. Despite the flowery rhetoric at the time about how this new ‘modernised’ framework would allow flexibility, choice and trickle-down wealth, it did the opposite. In fact, you can draw a direct link between an explosion in wealth inequality and what was effectively the de-unionisation of New Zealand. Let’s call it what it is- a historic transfer (or theft) of wealth from the working class to the owning class. In almost every way, working class New Zealanders today are worse off as a result of this brazen act of robbery. It is time to right this wrong and FPAs are a good start towards that aim.

To explain what FPAs are, and why their implementation would be such a promising development for those of us who want to live in a society without skyrocketing wealth inequality and the associated social breakdown it creates, let’s go back to basics. Taking directly from the Labour Party’s 2017 manifesto, what FPAs aim to do is

“set minimum conditions, such as wages, allowances, weekend and night rates, hours of work and leave arrangements for workers across an industry based on the employment standards that apply in that industry”

What that means is that unions will be able to bargain at a sectoral level for terms and conditions that would cover the entire sector. For example, rather than having to unionise and bargain for workers at every single Countdown supermarket in the country, supermarket workers will have one overarching ‘Fair Pay Agreement’ which will outline the minimum terms and conditions in the sector. The word minimum is important here, because despite what you might hear, FPAs will not set maximum standards. They will not prohibit business from paying workers more, or rewarding hard work. Currently our fragmented and unregulated economy creates a race to the bottom when it comes to wages. Businesses take advantage of non-unionised workers and individual employment agreements to suppress wages. The aim of FPAs is to prevent this by creating sector wide minimum standards. Importantly, it is also a fertile environment to rebuild a union movement that enables workers to realise their collective power and interests.

There is good reason for progressives to be excited about FPAs while, at the same time, it is important to be cognisant of the potential issues with the framework as it is proposed. As it stands, independent contractors are not included and this could be a major issue. We know that more and more businesses are taking steps toward reconfiguring their workers as contractors. This is a handy trick to further casualise the employment relationship and get out of having to provide basic entitlements to workers. We can’t ignore the fact that businesses have this powerful tool to potentially evade the standards set out by FPAs. It is for this reason that the Council of Trade Unions is demanding that contractors are included in the legislation. I agree and I hope progressives are gearing up for a fight on this next year because it is vital.

The fact that FPAs are even on the Labour government’s legislative agenda is a testament to changing winds and neoliberalism’s waning dominance. The previous Labour-led government, headed by Helen Clark, made paltry reforms to ameliorate the worst effects of the Employment Contracts Act, but did little to change the fundamentals. Fast forward to 2021 and the fundamentals of neoliberalism are being questioned at the highest level and rightly so. Michael Wood, the Minister for Workplace Relations and Safety, is someone for the left to take notice of. He has worked hard to push FPAs through. Wood, a former unionist, is one of the few truly progressive voices in government. It goes without saying Jacinda Ardern and her cabinet are not radicals. They are centrists through and through. The fact is the centre has shifted leftward and that is reason to celebrate.

With the government coming under attack by business, the New Zealand Herald and the rightwing for not capitulating to their demands during the current COVID outbreak, it will be tempting for Labour to pivot right and abandon FPAs. The opposition to FPAs is fierce. BusinessNZ’s withdrawal from the process, and their refusal to represent businesses in FPA bargaining, is a testament to just how adverse business is to the idea of paying decent wages and workers having union representation. That shouldn’t come as a surprise, but it could spook a government which doesn’t always have the courage of its convictions. This is an enormous opportunity for Labour to transform our country for the better. Let’s make sure they don’t blink.

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