Strikes and lockouts to be banned during negotiations for new Fair Pay Agreements

Strikes and lockouts will be banned during negotiations for a Fair Pay Agreement, the new collective bargaining system the Government is introducing.

The Government has today named former National Party Prime Minister Jim Bolger as chair of a working group to make recommendations on the new Fair Pay Agreement system.

Workplace Relations and Safety Minister Iain Lees-Galloway says a Fair Pay Agreement will be an agreement between unions and employers that sets minimum terms and conditions for all workers in an entire industry or occupation, without the need to bargain with every employer individually.

Unlike existing collective bargaining, industrial action will not be permitted in negotiations for a Fair Pay Agreement.

Mr Lees-Galloway said many workers in New Zealand have not shared in the growth in our economy over the last 30 years. 

"We have seen the hollowing out of wages for middle income earners," he said in a statement.

Fair Pay Agreements will prevent employers from competing with each other by lowering wages, he said.

They may also facilitate industry-wide discussions around issues such as training or safety.

The Minister says Fair Pay Agreements are also intended to increase workplace productivity.

"Preventing a race to the bottom on wages encourages businesses to compete on the basis of innovation, customer service and increasing efficiencies. These incentives are intended to lift business productivity."

The working group is expected to make recommendations to the Minister for Workplace Relations by the end of this year and Cabinet will then consider the recommendations.

Under existing rules, a collective agreement generally only applies to employees who are members of the union and who work for the employer that agreed to the collective agreement.

The Minister says around 324,000 people, or approximately 18 per cent of employees, are covered by a collective agreement in both the private and public sectors. 

In the private sector, 9.2 per cent of employees are covered by a collective agreement. That's 134,000 people out of a total of 1,450,000.

Members of the Fair Pay Agreement Working Group are: