FPA Act takes us back to the future

Michael Woodhouse, Cargills Enterprises worker Michael Bardick, 2020 National Taieri candidate...
Michael Woodhouse, Cargills Enterprises worker Michael Bardick, 2020 National Taieri candidate Liam Kernaghan and Taupo MP Louise Upston during a campaign stop at the South Dunedin firm in 2020. Photo: Gregor Richardson
This week, after a tangled and at times excruciating filibuster, the Government finally passed its Fair Pay Agreements Act.

As well as being a clear example of the stark differences between the two main parties, the debate also showed that at its essence politics is personal and local.

At surface level, the beguilingly entitled law change seems uncontroversial: who is not in favour of fair pay?

Plenty of people it turns out, a beetroot-red National Party adding the law change to a shopping list of Labour legislation it has angrily vowed to repeal, while Act New Zealand claimed FPAs would be gone within its first 100 days should it make it into office.

Various business organisations also volubly expressed their dismay with a law change which harkens back to what many had thought was a bygone era.

Having an absolute majority in the House has given Labour the ability to enact profound law changes should it so wish, and this is the most nakedly partisan piece of legislation it has passed so far.

This should come as no surprise to anyone: this is the party of the worker, financially backed by unions and with several former union officials and organisers in the ranks of its MPs, so of course it was going to reform industrial law to suit itself.

Naturally, were the positions reversed, National would hardly act other than to pass legislation which placed employers’ interests first and foremost: this is one policy area where the party’s positions are polar opposites.

That said, it has taken Labour a while to advance this law change; it established a working group to examine bargaining reform four years ago, released a discussion paper a year later, and fielded more than 600 submissions during the consultation period.

It also garnered a complaint to the International Labour Organisation that the proposals breached a convention New Zealand is party to regarding the principle of free and voluntary negotiation.

But it is also now law, so what does the blessed thing do?

For anyone who remembers the award wage system and relativity bargaining, the Fair Pay Agreements Act will seem like a misty water-coloured memory of the way we were.

The sweeping economic reforms of the 1980s and ’90s upended all that and, until now, there has been little appetite for revision.

The Fair Pay Agreements Act is not quite the past reborn, but it is not far off.

Should an eligible union choose to — and nothing is more certain than that it will — it can apply to initiate bargaining for an industry-wide FPA.

To get to the starting blocks, at least 1000 workers in that sector or 10% of covered employees need to back the idea, or alternatively the sector might qualify via a "public interest test" for an FPA due to it, essentially, not being a terribly pleasant role to work in.

What has riled the Opposition though, is that the employee’s bargaining agent must be an eligible union . . . the employers are meant to be represented by an eligible employer’s association, but at this point they do not seem much inclined to play ball.

It was all hands on deck for National as it consumed as much parliamentary time as possible to delay the passing of the Act, and Dunedin list MP Michael Woodhouse and Invercargill MP Penny Simmonds took a stack of calls apiece as the committee stage dragged on over two days.

As a former Workplace Relations Minister, this was familiar territory for Mr Woodhouse.

He has firm political views about the Bill, but chose to begin with a personal question about workers who are the subject of a minimum wage exemption, such as the employees at South Dunedin firm Cargill Enterprises.

Penny Simmonds. Photo: Supplied
Penny Simmonds. Photo: Supplied
"I have a family member who works there and the money is important: he's paid fairly, he's very productive, despite his intellectual disability," Mr Woodhouse said.

"It would be a tragedy if, as a consequence of these changes, those roles were put at risk, so we need a commitment that that's certainly (a) not his intention, to dispense with the minimum wage exemption process, but also his confidence that that won't happen."

"His" being the current minister, Michael Wood, who replied that the exemption would work the same way against an FPA as it does now against the minimum wage: "If a permit says 80% of the minimum wage, it will apply to 80% of the minimum rate in the FPA."

Ms Simmonds, as a former chief executive of one of Invercargill’s largest employers, is also very familiar with industrial relations.

But as the mother of a child who one day might aspire to work somewhere like Cargill Enterprises, and as a former board member of Southland Disability Enterprise, clause 120 of the Bill was also one she was keenly interested in.

"The (Social Development) Minister, Minister Carmel Sepuloni, has said that it's her intention that the minimum wage exemption permits will actually go within this term of Government, so I'm wondering if [Mr Wood] can, first of all, confirm that he has had a discussion with Minister Sepuloni to find out whether that is actually still in the work plan for this this term," Ms Simmonds asked.

"And, if it isn't, then we really do need to get down to the real details of how this is going to work for the disability enterprises?"

Unfortunately for Ms Simmonds, and a host of disability enterprises, Mr Wood wasn’t spilling any beans.

"That is a question for Government, Cabinet, and the Parliament later," he said.

"That scheme currently applies, so it needs to be reflected in the FPA legislation because the FPA legislation deals with minimum entitlements."

Which rather goes to show that laws can have unintended consequences, and suggests that for this one very small but very special section of the work force, uncertainty remains whether fair pay will be fair for them.

Beat the Christmas rush

Perhaps emboldened by speculation that an early poll might be called, National has been getting cracking in selecting candidates for the next election.

Ms Simmonds has already been re-selected as National’s candidate for the Invercargill seat she holds, and applications closed this week for the seat of Dunedin: party processes mean it and potential candidates are not meant to comment until nominees have been assessed.

A party spokesman said dates for nominations for Waitaki, Taieri and Southland would be decided in the next few months.

mike.houlahan@odt.co.nz