The Government has introduced Fair Pay Agreement (FPA) legislation into Parliament. The proposal is the Fair Pay Agreement system will bring together employers and unions within a sector to bargain for minimum terms and conditions for all employees in that industry or occupation. The proposed system will include support for bargaining parties to help them navigate the bargaining process and reach an outcome, as well as processes to ensure compliance.

Summary: Effect on our industry if the Bill is enacted

Master Electricians opposes the Bill for several reasons; outlined below are the impacts this will have on our industry:

• It will lead to increased costs for our businesses and disadvantages for apprentices and tradespeople
• It will intensify already problematic capacity and capability issues
• The increased costs will make it too expensive (and not financially viable) to train the next generation
• Our employer members will not be able to afford the costs associated with taking on apprentices
• Employers who train apprentices compete against companies which do not employ and train apprentices. In a FPA landscape, these employers may have to pay their apprentice workers the same amount as their competitors who have a fully certified workforce. Put simply: they will no longer be incentivised to employ and train apprentices.
• It will lead to fewer apprentices being trained. This would be contrary to other government policy and inconsistent with support previously offered in the support of apprentices. It would create real problems for the future of the electrical industry with wider implications for New Zealand because of potentially dangerous outcomes resulting from unsafe electrical work. This, in turn, would create implications for the wider construction industry.
• It would add uncertainty and increase labour costs, making current fixed price contracts unprofitable, and possibly loss-making, with no way to retrospectively capture the cost increase.

There is also no-one in the industry with the resources to represent employers in both the negotiation and settlement context. 

Our view

• It would be unreasonable to expect an Industry Association such as ours to advocate for 100% of the electrical industry.
• Our member numbers indicate that 70% of the electrical contracting employers would have no entity to represent them.
• As a not for profit, we are not resourced to provide employer representation or bargaining.
• Master Electricians cannot bear the cost of representation and bargaining.
• Many thousands of small companies may have requirements imposed on them with no means to plead a case.
• We are in a regulated trade with many levels’ “electrician” from apprentice to journeyman to electrician to inspector.
• There are many different competence level requirements that further define electrician.
• To advocate for all electrical workers as one, or to have one sector in our industry instigating an action for all, appears to be unworkable.
• This alone should provide a case to defer any progression until this fundamental issue is resolved.

What we want

What the Select Committee needs to do:

• We recommend that the Bill does not proceed.
• We agree with the BusinessNZ submission that any issues the Bill is supposed to address can be dealt with through a system of voluntary collective bargaining built on present provisions for codes of practice and multi-employer collective agreements.
• As an alternative, while our strong preference is that the Bill does not proceed, if it does, we recommend clauses 122, 123 and 125 of the Bill be amended:
  • In terms of their applicability to apprentices and those in training, so that:
  • Apprenticeships are not included in any FPAs.
  • Apprentices should not be able to initiate a ‘union’ to negotiate their own separate FPA.