CEO comment - June 2018

14 June 2018

The Government has recently announced a Fair Pay Agreements (FPA) working group, which has representation on the group from BusinessNZ.

We are concerned with a FPA as the stated aim of this is to achieve a minimum rate of pay and minimum terms and conditions for all workers within an occupation or industry.

The minimum rate of pay agreed may be acceptable to some businesses, but may be challenging for small and medium sized businesses.

The first concern is cost. If everyone across a sector must receive the same minimum rate of pay, this would leave little room for individual employers and employees to agree on their own terms to suit their circumstances. Costs may spiral upwards and not all employers will be in a position to pay.

The second concern is flexibility. We live in a competitive environment and businesses need to continue to be creative and innovative to achieve flexible work practices, which can also work well for family and other commitments.

Finally there are concerns that industrial harmony may be more vulnerable to industrial pressure than workplace bargaining.

Concerns remain that strikes may be possible for ‘above FPA rates’, although the Government has proposed that industrial action is not permitted in negotiation for a FPA.

This is not the only potential change that businesses may be facing, with the Select Committee listening to submissions on the Employment Relations Amendment Bill and the Employment Relations (Triangular Relations) Bill.

As always your feedback is gratefully received

Virginia Nicholls