Response to the introduction of the Fair Pay Agreements Bill is mixed - while some are welcoming the move, saying it will benefit workers, other business groups are calling for it to be canned.
Under the bill, employees will be able to force their employers to negotiate working conditions and pay if at least 10% of their workforce or 1000 staff agreed to it.
The bill also allowed for a 'public interest test', meaning the threshold didn't need to be met if there were systematic employment issues in that sector. This could include low pay, low bargaining power, lack of pay progression, long hours or contractual uncertainty that wasn't compensated adequately.
It was hoped the proposed law can "improve labour market outcomes in New Zealand by enabling employers and employees to collectively bargain industry-wide or occupation-wide minimum employment terms".
National leader Christopher Luxon said, if he were prime minister, he would scrap fair pay agreements.
"Fair pay agreements are a complete jump back to the 1970s. They cause rigidity. I think people, in a modern workforce today, want massive amounts of flexibility.
"These agreements won't give them that."
Meanwhile, ACT's David Seymour likened the Bill to "compulsory unionism".
"We have a cost of living and productivity crisis in this country. You're not going to solve that by making it more bureaucratic to employ people."
The issue came to a head in Parliament on Tuesday afternoon.
Luxon asked the Prime Minister what her Government was doing, as the cost of living rises, to help "the squeezed middle" who didn't qualify for assistance like Working for Families payments.
Jacinda Ardern said the Government had already taken steps like making a 25 cent per litre cut on their fuel excise and road user charges for three months.
She said changes to the Family Tax Credit from April 1 would also benefit more middle-income earners.
Luxon then asked: "Why does the average Kiwi work for an hour to earn what the average Australian earns in 45 minutes?"
Ardern responded: "Because of the productivity issues that we have, and that is exactly what things like fair pay agreements are about.
"Welcome, welcome, Mr Luxon, to the Labour Party."
Luxon then claimed the Finance Minister had stopped talking about productivity.
Ardern said she invited Luxon to meet with the Workplace Relations Minister, "because it seems that perhaps he takes a more favourable view of fair pay agreements than he thinks".
Seymour later interjected: "Can the Prime Minister explain to New Zealanders how her policy of putting large groups of workers all on the same contract will make them more productive - that is, produce more so they can take home more?"
Ardern said Seymour had neglected to acknowledge that, for some people, it just meant their pay rates were just being lifted to match what some in their sector were already receiving.
"It's an acknowledgement that there are some sectors where there is a race to the bottom in terms of wages and conditions. This creates a fairer playing field.
"It means that you will see innovation in some sectors where, instead of pursuing cheap labour, we will see innovation and improvement in productivity," she said.
Workplace Relations Minister Michael Wood said in 2021 fair pay agreements would "improve wages and conditions, as well as help support our economic recovery".
“For too long New Zealanders working in critical roles like cleaners, supermarket workers, and bus drivers whose work was essential to keep our country going during the pandemic, have been undervalued by our workplace relations system," he said.
On Tuesday, Wood said the agreements, "have long been one part of our wider work programme focused on lifting the wages of those on low to medium incomes - ensuring better wages for employees is even more essential now as we begin to feel the global economic pressures caused by the war in Ukraine".
”We acknowledge that a balanced approach is needed and have designed FPAs to enable unions and employer associations to bargain together to set minimum standards for all employees and employers in an industry or occupation.
“These negotiated, sector-specific minimum standards can take into account the costs and opportunities businesses have while ensuring more workers receive higher wages and better employment terms and conditions."
E tū union said the proposed law change would provide "a regulatory foundation for setting pay and conditions across whole industries, through negotiations between employers and workers through their unions".
E tū member and security guard Rosey Ngakopu said the proposal was "not just about pay".
"In our industry, guards also need FPAs to ensure we have the right conditions across the board."
Retail NZ chief executive Greg Harford said FPAs would end up driving up consumer costs.
"The proposed law is designed to drive up costs of businesses, and cost increases will be likely passed on directly to the consumers," Harford said.
"This will simply add a further burden to the inflationary pressures facing the economy."
Business NZ chief executive Kirk Hope said the Bill "should simply be canned".
"The scheme would make it compulsory for businesses to take part in collective bargaining, and compulsory for them to accept union demands or imposed arbitration," Hope said.
Business NZ would also not accept $250,000 a year from the Government "for supporting compulsory bargaining in major sectors of the economy".
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