Misunderstanding on so called fair pay law

NewstalkZB reports:

Asked what impact the legislation will actually have, Tibshraeny explains: “Fair pay agreements are a way of requiring employers and employees to agree on baseline conditions and pay.”

This is incorrect. It does not require employers and employees to agree. In the current law requires such an agreement but this law will allow a Govt appointee to set conditions and pay for an entire industry regardless of agreement.

Under the proposed rules, if a public interest is met, or 10 per cent or at least 1000 workers in an industry or occupation decide to start a negotiation process with employers, negotiation needs to happen.

Minimum pay and working conditions will only be ratified if a majority of both employers and employees in a sector agree to them. All employers and employees get a vote.

This is not right. If a mere 10% of employees (or in a large industry of 100,000 it could be 1%) say they want an industry wide agreement, then there will be one imposed no matter what employers or employees vote on.

“Presumably, to get a majority on both sides, you will need the conditions to be reasonable,” Tibshraeny says.

No you don’t.

If there is a stalemate in the negotiations, the matter can be passed on to the Employment Relations Authority.

Not so much can, but will. If a proposed FPA is not agreed upon twice, then a union can unilaterally take it to the Employment Relations Authority. There will be compulsory arbitration which will bind every single employer – even if 99% voted against it.

The ERA will establish a panel of 3 people who will have the power to impose terms and conditions on an entire industry or profession – it could be every journalist in New Zealand or it could be every cafe worker – regardless of if they work for a owner operated cafe in or Starbucks.

So who appoints the ERA? The Government of course. They are appointed for four year terms, so a Government can quickly appoint an entire slate of ERA members who will be far more likely to rule in favour of the unions (who partially fund the Labour Party).

The Government could have given the power to determine an FPA to the Employment Court. The Employment Court Judges must be with at least seven years experience and crucially they taken a judicial oath and are appointed for life. a Government can’t just not reappoint incumbent Judges to replace them with friendly faces.

So there is a reason the Government has given the FPA power to the ERA, not the Employment Court.

This legislation is even worse than the awards of the 1970s. They still required agreement to be reached between employers and unions. This law does not. 1,000 union members can get terms and conditions imposed on 99,000 other workers through the compulsory arbitration clauses.

Nothing on Earth will stop the Government from passing this law, as the unions want this even more than compulsory unionism. But it won’t survive a change of Government, and nor should it.

UPDATE: My post shouldn’t be seen as implying the journalist quoted has not described the law correctly. Rather they have just not assumed that unions would always take a proposed FPA to the ERA if employers did not agree to it.

But personally I think it is almost unthinkable that a union would not do so. They wouldn’t go the the time and expense of drawing up a proposed FPA and just dropping it simply because employers didn’t agree to it. Why would they?

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