The Fair Pay Agreement legislation has now been passed by Parliament – albeit it, with considerable controversy and opposition from employer groups. Transporting New Zealand believes the legislation will be difficult to implement, and would have a negative impact on our industry if we are indeed selected. Not enough thought has gone into the practical details. In fact, all the indicators show it will be a dog’s breakfast.

The political motivation for the legislation is to increase union membership. It’s all about setting wages and conditions for sectors like the old union award system did. Older readers will remember that; some of us who are a bit younger will know about it only in theory. I think New Zealand has come too far and going back to a union dominated control of wages and conditions is the way to go. That’s just not the kind of society we are used to living in. Both workers and employers alike expect more freedom and choice.  

Together with the BusinesNZ, we submitted strongly against Fair Pay Agreements. While they are fairly easy to initiate – you’ve got to have 1000 workers or 10% of the workforce – they will be cumbersome to put into practice.

We were worried that driving as a job is difficult to define – do you include taxi drivers or courier drivers, for example? Is driving for hire and reward the same as driving for a contractor? We are an industry of predominately small businesses, and if drivers are included in a Fair Pay Agreement, employers will be unable to choose what they pay, or some of the employment conditions, which they provide for their employees. Instead, that will be decided at a national level, possibly with some regional variations.

We believe that the heavy transport sector is not the target of the government when they say they want to prevent a race to the bottom in terms of wages and conditions. However, there is a real risk our industry could get tarred with that brush. The reason I was so concerned last week around the minister attacking us on wages and conditions is that’s the kind of thing that draws attention to us as a potential early fair pay agreement sector. Hospitality, bus drivers and retail are industries that are likely to be targeted; however, only about 7% of drivers in our industry are unionised currently.

The time and cost of negotiating on behalf of an industry is difficult, and it would divert our attention and energy away from every day operator issues. Frankly, we don’t have the legal or employment expertise, and even Business New Zealand says it would struggle to negotiate on behalf of employers. 

We are engaged with MBIE which is providing guidance on how the legislation will work for industries. Unfortunately, the legislation does not allocate the correct resources to support industry. Nevertheless, Transporting New Zealand has been very much the leading voice submitting to government on behalf of industry and we will continue to make our voice heard and keep the industry informed on what you need to know about the Fair Pay Agreement process.

In our recent survey, 80% of employers reported they had given their workers a pay increase in the last year, and the same survey showed that our median hourly wage had gone from $26 an hour in 2020 to over $31 an hour this year. This is a positive story to tell and hardly shows a “race to the bottom.”

The Road to success traineeship is encouraging new employees into the industry by promoting training and qualifications, and showing a clear career path. There are opportunities for existing employees as well, and they can gain bite-size micro credentials qualifications through Te Pūkenga (formerly MITO). Ideally, we would like to see all employers taking advantage of these opportunities. The more road transport operators who take these up, help us argue against a union or government that comes knocking for a Fair Pay Agreement.

We must continue to show we don’t need centrally controlled wage and condition setting. Operators have done great work in paying more and improving culture. One of the key challenges over the months ahead is for Transporting New Zealand to continually highlight our good stories and keep a Fair Pay Agreement away from our members.

– Nick Leggett is chief executive of Ia Ara Aotearoa Transporting New Zealand.

You can also listen to an audio version of Nick talking to David Killick here.

Photo 241893157 © David Burke |

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