BusinessNZ has confirmed it is refusing to be the Government’s nominated partner in implementing unlawful compulsory national pay agreements known as Fair Pay Agreements (FPAs).

BusinessNZ CEO Kirk Hope says New Zealand’s peak business organisation is not prepared to be part of a compulsory scheme that is unfair and out of touch with modern ways of working and has formally rejected the Government’s offer to be the default bargaining party for employers in the FPA scheme.

“Compulsory FPAs are unlawful under both current domestic and international employment laws and are totally out of step with how we need to work in 2021.

“They aren’t needed, they remove the flexibility and autonomy of modern workplaces and won’t improve pay and conditions for hardworking Kiwis.

“We’ve told the Government from day one that FPAs are fundamentally flawed but they haven’t listened. MBIE officials sent us a letter during lockdown formally requesting we become the default bargaining party for businesses. That followed a Cabinet paper in May that wrote us into the proposed system without our agreement.

“After thoroughly reviewing the latest proposal, we’ve formally refused the Government’s offer. It’s wrong for us to be part of a scheme that will do more harm than good to businesses and employees.

“That also means we have turned down $250,000 in Government funding. The Government will fund the CTU the same amount to act for employees, but that also shuts out all non-affiliated unions, currently bargaining for their members, from the process, giving the CTU a monopoly on bargaining for all employees in New Zealand.”

Mr Hope says the BusinessNZ Network, directly and indirectly, represents over 70,000 businesses across the country employing nearly 80% of New Zealand’s workforce, but that still didn’t give the organisation a mandate to represent all businesses.

“Our role is to ensure policies are in place to deliver modern, smart, and flexible workplaces. FPAs don’t do that.

“The workplace environment has changed dramatically in the last 18 months and more so in the past five years since FPAs were first tabled by this Government. We could not have responded to the Covid crisis in the workplace the way we have if this inflexible scheme had been in place.

“It’s completely tone deaf for the Government to push through an employment relations system that is inflexible and unnecessary.

“How does it make sense to bring in FPAs, when they will make it much harder for businesses to accommodate the flexibility demanded by their employees?

“It’s another example of this Government trying to centralise control in Wellington when one of the biggest problems for employers is the lack of understanding of business and inflexibility in Wellington’s ministries and bureaucracies. Just ask teachers, police officers, and nurses how good it is to be under a centralised, bargaining system.

“We believe there is now a chance to re-set the current system to help us move forward and recover but that is not by going backwards and introducing FPAs.

“The Government needs to scrap FPAs and introduce what its officials recommended – improve and strengthen the current system to achieve better workplace relations.

“MBIE said the focus should be on strengthening the existing system where it will make a real difference to protect those who need it – not push through a flawed model that takes away everyone’s right to flexibility.

“The Government’s initial proposal targeted just a few occupations, but has now shifted and widened to include any workplace.

“FPAs are bad for business but worse for employees. If you want flexibility in your workplace to manage your lifestyle, you won’t be able to work that out with your employer anymore. You’ll need to ask someone in Wellington who knows nothing about your workplace or your needs.

“Entrepreneurial start-ups will be forced to pay the same rates as our largest, most successful businesses, flexibility for studies and exams could be lost and if you’re a small retailer in Kaitaia or Bluff you’ll have to meet the same pay and conditions as our largest retailers in Wellington and Auckland.”

Legislation is currently being drafted to bring in the compulsory agreements.

“We would hope the Government will pause and reflect over the summer break, and urge them to work with us in 2022 on a solution that is smarter and fairer for all Kiwis,” concluded Mr Hope.