Business NZ warns Labour’s policy means employers will no longer get to decide their own pay rates

from writes:

As a result it looks as if might get through to the election without having to explain its policy.

Yet it would appear to herald the biggest  change in a generation.

This is what we can glean about it, based on the information released so far.

The policy is called ‘fair pay agreements’.  These would be large collective agreements covering all workers in the same occupation, and their employers.

Supermarket, hospitality and childcare workers, cleaners, support workers and similar occupations would be likely targets for this policy.

It would mean everyone in that occupation being awarded the same minimum pay, and being able to bargain – and strike – for extra pay on top of that.

Unions would start bargaining with the employers concerned, and employers would be required by law to take part in the bargaining, even if they didn’t want to.

Then, once bargaining had started, employers would be required by law to come to an agreement with the unions concerned, even if they didn’t want to.

The result could be an occupational wage round where wages are forced up without the voluntary agreement of employers.  

This is the critical part. For the last 25 years or so wages and salaries are set through agreement between the employer and employees (or their union). An employer has to agree to the wages they are obliged to pay. They can be pressured through strike action, but they have to agree.

What Labour is proposing is that the Government will set wages for an entire industry. Individual employers will have no ability to opt out. Their agreement will not be needed. So employers will lose control of their biggest cost centre – staff.

It is concerning that Labour says it will take a year to work out the details of this policy.

That is not good enough. Voters need to know the detail – just as with Labour’s tax policy.

On the sketchy details available, this policy seems very like the national awards of the 1970s and ’80s.

Yet to hear how it is different in any way.

It would be very helpful if Labour could let us know what differences there are – if any – between national awards and fair pay agreements.

We need to know this, because national awards and second-tier bargaining gave us the worst ever period of strikes in New Zealand’s history.

Back to the 70s when New Zealand had one industry after another out on strike.

This column has been updated with Hope’s expanded definition of second-tier bargaining. Labour disagrees with Hope’s view but did not identify any factual errors and declined an offer to submit a right of reply opinion column.

So Labour said Hope was wrong but could not actually say how.

They didn’t do a right of reply because the last thing they want is to have voters realise what their policy will entail. This is their huge huge payoff to their union funders. If they can get to implement this policy, then the unions will gain millions in revenue and be able to pass more of that through to Labour.

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