Wellington Scoop

BusinessNZ rejects fair pay scheme, opposes centralised Wgtn control

News Release from BusinessNZ

BusinessNZ CEO Kirk Hope speaks about the refusal to be part of the Government’s Fair Pay Agreement scheme

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BusinessNZ has confirmed it is refusing to be the Government’s nominated partner in implementing unlawful compulsory national pay agreements known as Fair Pay Agreements (FPAs).

BusinessNZ CEO Kirk Hope says New Zealand’s peak business organisation is not prepared to be part of a compulsory scheme that is unfair and out of touch with modern ways of working and has formally rejected the Government’s offer to be the default bargaining party for employers in the FPA scheme.

“Compulsory FPAs are unlawful under both current domestic and international employment laws and are totally out of step with how we need to work in 2021.

“They aren’t needed, they remove the flexibility and autonomy of modern workplaces and won’t improve pay and conditions for hardworking Kiwis.

“We’ve told the Government from day one that FPAs are fundamentally flawed but they haven’t listened. MBIE officials sent us a letter during lockdown formally requesting we become the default bargaining party for businesses. That followed a Cabinet paper in May that wrote us into the proposed system without our agreement.

“After thoroughly reviewing the latest proposal, we’ve formally refused the Government’s offer. It’s wrong for us to be part of a scheme that will do more harm than good to businesses and employees.

“That also means we have turned down $250,000 in Government funding. The Government will fund the CTU the same amount to act for employees, but that also shuts out all non-affiliated unions, currently bargaining for their members, from the process, giving the CTU a monopoly on bargaining for all employees in New Zealand.”

Mr Hope says the BusinessNZ Network, directly and indirectly, represents over 70,000 businesses across the country employing nearly 80% of New Zealand’s workforce, but that still didn’t give the organisation a mandate to represent all businesses.

“Our role is to ensure policies are in place to deliver modern, smart, and flexible workplaces. FPAs don’t do that.

“The workplace environment has changed dramatically in the last 18 months and more so in the past five years since FPAs were first tabled by this Government. We could not have responded to the Covid crisis in the workplace the way we have if this inflexible scheme had been in place.

“It’s completely tone deaf for the Government to push through an employment relations system that is inflexible and unnecessary.

“How does it make sense to bring in FPAs, when they will make it much harder for businesses to accommodate the flexibility demanded by their employees?

“It’s another example of this Government trying to centralise control in Wellington when one of the biggest problems for employers is the lack of understanding of business and inflexibility in Wellington’s ministries and bureaucracies. Just ask teachers, police officers, and nurses how good it is to be under a centralised, bargaining system.

“We believe there is now a chance to re-set the current system to help us move forward and recover but that is not by going backwards and introducing FPAs.

“The Government needs to scrap FPAs and introduce what its officials recommended – improve and strengthen the current system to achieve better workplace relations.

“MBIE said the focus should be on strengthening the existing system where it will make a real difference to protect those who need it – not push through a flawed model that takes away everyone’s right to flexibility.

“The Government’s initial proposal targeted just a few occupations, but has now shifted and widened to include any workplace.

“FPAs are bad for business but worse for employees. If you want flexibility in your workplace to manage your lifestyle, you won’t be able to work that out with your employer anymore. You’ll need to ask someone in Wellington who knows nothing about your workplace or your needs.

“Entrepreneurial start-ups will be forced to pay the same rates as our largest, most successful businesses, flexibility for studies and exams could be lost and if you’re a small retailer in Kaitaia or Bluff you’ll have to meet the same pay and conditions as our largest retailers in Wellington and Auckland.”

Legislation is currently being drafted to bring in the compulsory agreements.

“We would hope the Government will pause and reflect over the summer break, and urge them to work with us in 2022 on a solution that is smarter and fairer for all Kiwis,” concluded Mr Hope.

News from First Union
This morning’s announcement by industry group Business NZ that it intends to renege on participation in the development of Fair Pay Agreements (FPAs) alongside the Council of Trade Unions (CTU) and Government represents an embarrassing turnaround and a conscious decision by business lobbyists to protect a low-wage economy, says FIRST Union General Secretary Dennis Maga.

“It seems Business NZ have given up on good faith negotiations on behalf of tens of thousands of workers and business owners and decided to go into spin mode to protect the status quo of easy exploitation and low wages,” said Mr Maga.

“As well as pulling out of their commitment to work alongside unions across the workforce in developing these industry-level FPAs, Business NZ are now spreading misinformation about the proposed agreements and misrepresenting the kinds of people and businesses they might cover.”

“Lifting the wage floor for workers in these industries is about creating a level playing field in industries where workers’ negotiating power has been eroded and the imaginary “hand of the market” has failed to correct working poverty and exploitation.”

“Forestry, supermarkets and the bus industry are three examples of important sectors of our membership where FPAs could meaningfully address some of the systemic problems that set in during the economic restructures of the last two to three decades and have only worsened since.”

“When Business NZ raises concerns that FPAs will ‘remove flexibility’ from business owners, they must mean the flexibility to pay unlivable wages, pit people against one another in the workplace and chip away at existing working conditions in a race to the bottom.”

“Working people in this country are facing skyrocketing living costs while corporate profitability has hardly taken a dent – the status quo only benefits the incredibly wealthy, and likely only a very small subset of their own member businesses, who will be frustrated by this move.”

“These comments should be seen for what they are – the beginning of a smear campaign in place of real participation – fear over ambition.”


  1. Ross Teppett, 9. December 2021, 9:28

    BusinessNZ only had a small role in FPAs anyway & their absence won’t derail the new system that deals to low pay, poor conditions, health and safety & gives working people a genuine voice in what happens at work. [via twitter]

  2. Laila Harré, 9. December 2021, 9:41

    Extremely disappointing news of BusinessNZ turn away from fair pay agreement process. They say ask nurses, teachers, police what they think of national bargaining. This is exactly what NZNO did in 2005, winning <40% increases for nurses where DHB bargains had driven standards down. [via twitter]

  3. bsmith, 9. December 2021, 9:45

    This bill will do none of the sort, apart from destroying small business. It is ludicrous to suggest one size fits all, as much as the unions would have us all believe.

  4. aom, 9. December 2021, 9:58

    “…New Zealand’s peak business organisation …” Talk about grandiose hogwash – a few self-appointed worshippers of neoliberalism that give business a bad name. One wonders if they are scared of FPAs as they might have their income reduced if subjected to one.

  5. Fleur Fitzsimons, 10. December 2021, 9:06

    Business NZ’s withdrawal from work on Fair Pay Agreements demonstrates how irresponsible business is when it comes to looking after workers and shows why Fair Pay Agreements are needed. Without rules about what to pay, employers simply walk away. [via twitter]

  6. M, 11. December 2021, 11:43

    That is quite rich coming from a city councillor who supports high rate increases and a member of the Labour Party that increased tax on petrol. The cost of living is just as important as a wage increase. Yes the council implemented the living wage, then increased the rates, so did their employee really get spare change or a chance to get ahead? Let’s all look at the whole picture. And let’s start in our own back yard.