Time to get to grips with FPA implications, firms told

Business South chief executive Mike Collins is urging employers to work out what the Government’s proposed Fair Pay Agreements (FPAs) will mean for them.

BusinessNZ — of which Business South is an affiliated member — recently complained to the United Nations’ International Labour Organisation (ILO), and said FPAs risked being placed on a list of alleged breaches of international labour law.

Mike Collins.
Mike Collins.

At the weekend, the ILO dismissed the lobby group’s request to condemn the policy.

It did urge the Government to consider the impact of the legislation and to ensure compliance with the ILO convention on collective bargaining.

Under the proposed law, employees would be able to force their employers to negotiate working conditions and pay if at least 10% of their workforce or 1000 staff agreed to it.

It also allowed for a "public interest test", meaning the threshold did not need to be met if there were systematic employment issues in that sector.

Mr Collins said while it was a shame the ILO had dismissed BusinessNZ’s claim, businesses, particularly small and medium enterprises, now needed to take the time to understand what the policy would mean for them.

Businesses had been too busy dealing with other matters, such as Covid-19 and the increasing cost of doing business, to stop and focus on FPAs, he said.

It was really important for people to work out the implications of FPAs for their businesses.

"Even though there has been a lot of publicity, people haven’t actually stopped and thought about what it all means," he said.

Some businesses did not understand why they had to be part of a centralised model when they already had good arrangements in place, Mr Collins said.

"We’ve got a lot of businesses who just don’t agree with it ... they don’t believe it’s a good policy change."

Anderson Lloyd partner John Farrow, of Dunedin, said the agreements were going to be a "massive issue" for the industries and professions the policy was initially targeting, such as security guards, bus drivers and cleaners.

While the Government hoped each agreement could take about a year to put in place, Mr Farrow believed that was "completely unrealistic".

There was already a "huge backlog" at the Employment Relations Authority because of Covid-19 and it, as well as the mediation service, would need to a lot more resources to cope with FPAs.

The process would be "very lengthy" and "quite intensive" and BusinessNZ’s criticism about that was warranted, he said.

"The cost across the board is going to be huge," he said.

Etu assistant national secretary Annie Newman was pleased with the ILO’s conclusion.

It was clear BusinessNZ’s case was not going to get anywhere because sector-based bargaining was a common feature in workplace relations systems throughout the world, she said.

FPAs would allow some of the country’s most vulnerable workers to have a real opportunity to improve pay and conditions and the ILO saw the merit in that.

Ms Newman wanted BusinessNZ to apologise for its actions and start engaging with FPAs in good faith.

--  riley.kennedy@odt.co.nz