News roundup

Fair Pay Agreements Bill passes into law

The Fair Pay Agreement (FPA) bargaining system introduced into Parliament received Royal Assent on 1 November 2022 and has been passed into law. The Act itself came into force on 1 December 2022.

The Ministry of Business, Innovation and Employment has published relevant information: Fair Pay Agreements page (Employment New Zealand website): Fair Pay Agreements | Employment New Zealand (employment.govt.nz)

• Info sheet for employees: Understanding Fair Pay Agreements – A quick guide for employees (employment.govt.nz)

• Info sheet for employers: Understanding Fair Pay Agreements – A quick guide for employers (employment.govt.nz)

• Updated information on the Ministry of Business, Innovation and Employment website: Fair Pay Agreements | Ministry of Business, Innovation & Employment (mbie. govt.nz)

The Fair Pay Bill was intended to set out industry or occupation-specific minimum employment terms (pay and conditions), which include minimum wage rates, ordinary hours, overtime and penalty rates. Amendments require FPAs to also establish “the arrangements for training and development” of covered employees and their leave entitlements.

Employers on hiring blitz despite recession fears

New Zealand employers remain on a hiring blitz, according to the latest RCSA Jobs Report. The National Job Index climbed 3.9 per cent in the past three months to October 2022, a huge rebound from the previous quarter when it fell to 8.8 per cent.

“This latest data indicates most employers are ignoring the negative narrative around inflation and interest rates and are forging ahead with the hiring process,” RCSA CEO Charles Cameron states.

“Staff shortages remain a huge issue across New Zealand, and skills shortages continue to impact business operations across a whole range of sectors. Job opportunities have grown 20.5 per cent in September, compared to the same time last year.”

Financial services is an interesting exception, with job opportunities remaining unusually weak. Postings in the sector fell 17.4 per cent this quarter, in line with a similar decline in the previous quarter.

“Employers in financial services are far less inclined to increase headcount right now. I guess it’s not surprising this sector is more cautious in a climate of economic change, given its closeness to predictions of downturn,” says Charles Cameron.

Pay gap petition

Mindthegap, an advocacy group that campaigns for the public reporting of gender and ethnicity pay gaps in New Zealand, has recently handed over a petition to the government, calling for the start of gender and ethnicity pay gap reporting.

The group has also launched New Zealand’s first Pay Gap Registry – involving voluntary reporting by businesses. This aims to encourage all organisations to commit to reporting their pay gap. According to the StatsNZ Household Labour Force Survey 2021, for every $1.00 a Pākehā man earns, a Pākehā woman earns $0.89, a Māori man earns $0.86, an Asian man earns $0.86 and a Pasifika woman earns $0.75.

The Mindthegap campaign believes that to close the pay gaps, pay gap reporting is required here, just as it is in Australia, the United Kingdom and many other countries.

Four Uber drivers are ruled employees

Four Uber drivers in New Zealand have recently won an employment case, which ruled they were employees of the global ride-sharing provider, and not contractors.

In the recent judgment, Chief Judge Christina Inglis found that each of the four drivers, in this case, were entitled to the rights and protection under New Zealand employment law, such as minimum wage, guaranteed hours, holiday pay and bereavement leave.

Before this employment case:

• in 2015, a California court ruled that Uber drivers were employees

• in 2020, the French supreme court recognised the rights of Uber drivers to be considered employees

• in 2021, in the United Kingdom Supreme Court, Uber failed to defend its claim that its drivers were self-employed

• in 2022, in Belgium, Uber struck a deal with a Belgian union to start negotiations on the working conditions of its drivers.

Although the ruling in New Zealand currently applies only to the individual drivers, it may have a broader impact. A First Union strategic project coordinator says it was a “landmark legal decision, not just for Aotearoa New Zealand, but also internationally”.

‘Quiet fleecing’ could be a better term

According to the Economic Policy Institute (EPI) in the United States, we need to talk about quiet fleecing. Workers are more productive than ever, but their pay hasn’t kept pace.

The ‘quiet quitting’ trend may have been getting a lot of attention in recent months, but the EPI argues the defining trend of the past 40 years of US economic history is ‘quiet fleecing’ and we should be talking much more about it.

According to the EPI, net productivity rose 61.8 per cent from 1979 to 2020. Hourly pay, meanwhile,

increased by just 17.5 per cent during those 41 years, meaning that productivity grew 3.5 times as much as wages over the past four decades after adjusting for inflation.