Peak body Retail NZ has praised the New Zealand government in repealing the Fair Pay Agreement.
The Fair Pay Agreements system aimed to bring together unions and employer associations to bargain for employment terms and conditions for all covered employees in an industry or occupation.
The system included support for bargaining parties to help them navigate the bargaining process and reach an outcome, as well as processes to ensure compliance.
Retail NZ CEO Carolyn Young said that the Fair Pay Agreement may have been well-intended, but actually created unnecessary complications of the existing robust employment laws.
“The Fair Pay Agreement legislation made assumptions about people working in very narrow, fixed positions, where in reality many retail workers have a mixture of responsibilities in their workplace,” Young said.
Fair Pay Agreement legislation was introduced into Parliament in March 2022 and signed into law by December of the same year. The repeal process has passed its third reading in New Zealand Parliament today, December 14.
Minister for Workplace Relations and Safety Brooke van Velden said the government has moved quickly to remove the “blunt tool” before any agreements were finalised.
“If finalised, these agreements would have made it tougher for businesses who are already struggling in a cost of living crisis by piling on rigid and costly legislation,” van Velden said.
“These costs would have been passed on to consumers and employees as businesses respond by hiring fewer people, reducing hours of work or increasing the price of goods and services just to stay afloat.
“To lift productivity and drive economic growth we need agile and flexible workplaces, where businesses have the confidence to innovate and grow, and employees have the freedom to agree on terms that work for them and their unique situation.”
The repealing of the legislation will have no impact on the current employment terms for workers because no Fair Pay Agreements have been finalised, van Velden said.
Retail NZ also welcomed the government's plan to extend the 90-day trial period for all businesses. Currently, 90-day trial periods are only open to employers with 19 or fewer employees.
Minister van Velden said extending the 90-day trial periods to all employers gives businesses the confidence to hire new people and increases workplace flexibility.
“Whether a business has 2 or 200 employees, bringing on any new employee costs time, it costs money and it is in the best interests of any business to find the right fit," van Velden said.
“The extension of 90-day trials also provides greater opportunities for employees. They allow employers to employ someone who might not tick all the boxes in terms of skills and experience but who has the right attitude, without the risk of a costly dismissal process.
“By extending 90-day trials to all businesses, not just those with fewer than 20 employees, we’re giving all businesses greater confidence to employ more New Zealanders."
Minister van Velden said the extension of 90-day trials will not affect other aspects of employment relations, such as the requirement to act in good faith, or worker protections regarding pay, conditions, leave, and health and safety.
“It is also important to note that extending the availability of 90-day trials does not mean that all new employees will have trial conditions, rather it provides the option to include this provision in employment agreements.
“The Bill will be passed under urgency before Christmas.”
Retail NZ: More can be done
Despite the latest government actions around workplace relations, Young said the Government can do a lot more to support an industry which employs over 230,000 New Zealanders.
“I am afraid we will still see long check-out queues in shops and malls around New Zealand leading into Christmas, as a result of the barrier our shop owners face in finding good staff,” Young said. “This busy period only highlights the recruitment problems in retail that are reaching crisis point over Christmas.”
In its Workforce Position Statement, Retail NZ claimed that current immigration settings and sick leave for part-timers are among the major challenges for shop owners in finding new staff who often lack the most basic work skills.
According to Young, the peak body estimates that the retail industry needs to recruit over 13,000 new staff, with many in skilled roles like the digital and data space. But Young said the biggest gaps are the unskilled positions.
“Unfortunately, the immigration laws require median wages to secure visas even for these unskilled jobs, which is often unaffordable for employers,” Young said, adding that slow processing visas is exacerbating the problem.
During the Christmas break, many retailers reportedly fill their vacancies with university and high-school students who often have no work experience. The impact of COVID on learning means that many young people have lower numeracy or literacy skills, and some have little awareness of what is expected of them in a professional environment, Retail NZ noted.
Young says that the current requirement to give 10 sick days to casual staff - whether they are full time or just work a few hours on a Saturday or Sunday - is also causing significant headaches.
“If you have a staff member who only works on Saturdays, they can still take 10 Saturdays paid sick leave throughout the year, which is an anomaly that needs to be addressed,” she said.
Young argued that it is fairer to retailers that sick days should become proportionate to the amount of days each person is contracted for. She said that retail offers a genuine career path, from the shop floor to management and executive roles in specialist areas.
“Retail NZ works hard to change that perception and attract top calibre candidates at every level, but the past few years since the pandemic have been extremely challenging for retailers.
“We hope the new Government can offer a helping hand with employment laws that are fit for purpose and easy to use for business owners.”