Fair Pay Agreements not that fair

In News6 MinutesBy NZ Trucking magazineMay 14, 2021

In Wellington it‘s termed the “Friday dump”, when the Government puts out a press release it doesn‘t want too much media attention on. Friday is a bit of an outlier in the media cycle, even in this time of 24-7 news online.

Last Friday (7 May 2021), the Government put out such a press release, announcing one of the most significant changes to the nature of employer-employee relations in New Zealand in many decades. Fair Pay Agreements (FPAs) will be on the legislative table this year, and law by next.

While this move to what could end up being compulsory unionism was a pre-election commitment by the Labour Party, we had hoped consideration would be given to the economic growth and improvement in productivity that will be required for New Zealand competing in a post-Covid world.

Centralised wage bargaining and compulsory unionism are the antithesis of growth and productivity.

Quite rightly, BusinessNZ issued a response saying “significant problems with planned Fair Pay Agreements have not been addressed, and the plan to implement them should be terminated”.

The Australian Fair Work Act, on which these FPAs are based, gives significant political power to the unions. It also puts many dollars in the pockets of employment lawyers who mop up for individuals after the unions leave them high and dry in individual disputes.

Unions are not interested in the individual. They exist to raise funds to back the Labour party so they can get laws like this passed.

In Australia that relationship seems to be crumbling. This week, The Australian reported that Victorian unions, representing 85,000 workers, will formally ask the Australian Labor Party to return hundreds of thousands of dollars in affiliation fees. The unions object to a legal argument from the ALP that affiliation fees are akin to donations, which means the unions cannot vote in ALP pre-selections. Unions pay a quarterly fee of $1.43 per member to be affiliated with Labor in Australia, bringing the fees for the seven unions close to $500,000 a year. On top of that, unions contribute major donations ahead of state and federal elections, with the CFMEU (Construction, Forestry, Maritime, Mining and Energy Union) contributing more than $1 million to Bill Shorten‘s campaign in 2019, The Australian says.

So, let‘s be very clear what this move is about – politics, and money for politics. I‘m not critical of that in itself; it takes money to pay for campaigns and each side of politics takes money from respective support bases. I do think however, that there should be transparency in these things and we should call them for what they are.

New Zealand‘s minimum wage is among the highest in the Organisation for Economic Co-operation and Development (OECD) countries. Generally, we have good, safe working conditions, all covered by existing laws. Compulsory unionism ended in New Zealand in 1991 – 30 years ago. We don‘t want to turn back that clock because it is certainly not the worker who will gain from it.

The trucking industry is not heavily unionised, with good reason. Drivers want choices about how and when they work. Trucking varies tremendously between different companies, regions, freight types and vehicles used. National, or even regional awards, are not going to be flexible enough to allow for that variation, or to meet driver needs. With driver shortages, good drivers have flexibility and should see continued increases in their pay as a result.

Unionising the workforce will not alleviate a worker shortage. Quite the opposite will occur; it will make the road freight industry less attractive to people who want flexibility, including women who are moving into our industry because they can start early and get home in time for the after-school run for their children.

We understand the Labour Party has the numbers to push this law through, ignoring submissions that oppose any aspects of it, which is the fortunate place of a party with all the power. But we back BusinessNZ in suggesting a voluntary approach to achieving the desired goals – minimum standards for all employees and employers in an industry or occupation – would be at least more consistent with New Zealand‘s obligations under international labour law.

Our industry is working on the idea of developing an industry accord; a shared commitment between government and industry to ensure workforce conditions, supply, development and health and safety are all at desirable standards. This would be a voluntary sign-up, not compulsory.

You can read our submission on the 2019 discussion paper on Fair Pay Agreements here.

By Nick Leggett, CEO, Road Transport Forum