Unfair pay agreement

Before I start, I want to make something clear. I believe in fair pay. It is the cornerstone of our way of life. The minimum wage should be for those starting out. That it has turned into a way of life for so many people is a shame. What I do not approve of is compulsory, across-the-board pay agreements which reward those that work hard and those that don’t in equal measure. There is nothing fair about that.

But that is were we are heading if the report from the Fair Pay Agreement Working Group is anything to go by. I have said this would be a case of ‘back to the 1970s’. However, it is much, much worse than that. It is more like back to Soviet Russia. quote.

Many of this country’s lowest paid and most vulnerable workers have every right to look back in anger at the steady, inexorable fall in the value of their wages, the undermining of working conditions and the perceived out-of-proportion rewards for their employers and many others in the business community.


Bolger’s group was assembled to address such inequities, and its report released this week suggests we go back to the future.


It recommends the creation of fair-pay agreements, a new version of the old collective bargaining that critics have labelled as “compulsory unionism by stealth”.

There is some sympathy for that argument because the proposal, if adopted, would mean that an entire industry would have to negotiate new minimum pay and working conditions if just 10 per cent or 1,000 workers in that industry, whichever is fewer, asked for it.

That creates the potential for major upheaval in businesses that have long moved on from the days of compulsory unionism and the environment that went with it. end quote.

So businesses that have no union members may suddenly find themselves forced into a pay agreement because a total of 1,000 workers across their industry have banded together to demand a pay increase for all workers in their industry. Just imagine the chaos that this might cause.

Let’s take an example. Legal secretaries. Let us say that 1,000 legal secretaries in Auckland got together and demanded a pay increase. Employers, scattered across the country, would be in turmoil, finding themselves having to pay the equivalent of Auckland wages in Invercargill. The employers will be led like lambs to the slaughter. They may not see it coming, and they may have no choice but to comply with the agreement, even if wages for their other employees are much lower. If that is the case, well… you know what happens next. quote.

But there is still the potential for major uncertainty, confusion and disruption for everyone within the complicated ecosystem that is our national economy.


If your aim is to support those most vulnerable workers, is such a blunt tool the right way to go?


This working group is right to address inequities on behalf of the country’s workers, but it should be careful not to throw out the businesses with the bathwater.

Stuff end quote.


Assuming that this legislation goes ahead more or less as proposed, this will be the beginning of major industrial disruption. Good relations between employers and workers are at extreme risk. Those industries that can automate would now be wise to do exactly that. Then, a lot of workers now on low wages will have no wages at all.

As I said, I support the idea of fair pay for a fair day’s work, but I also support the right of an employer to reward good workers appropriately. This proposal takes away all such opportunity. The business sector will object loudly to such proposals but expect objections to fall on deaf ears. Reducing everything to benefit the lowest common denominator is the aim of this government. Expect no less.

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