Nurses strike in Wellington, 2018. (Photo by Hagen Hopkins/Getty Images)

The Fair Pay Agreements (FPAs) announced on Friday is the biggest deal for employment relations in our generation, writes Matt McCarten.


On Friday, the government made what is possibly the most transformational move for the vulnerable working poor since the Michael Joseph Savage government introduced widespread union membership in 1936.

This announcement of the Fair Pay Agreements (FPAs) proposal is stunning in its scope. It sets up a process of union negotiated employment agreements for every sector and industry. So, if a union has 1000 members (or 10 percent) in a sector, it can initiate collective bargaining for all the employers and their employees in that sector. The government will help fund these negotiations.

This makes it very real. It’s no longer an aspiration. This will transform the lives of hundreds of thousands of workers now and in the future. It will change the entire power relationship between capital and labour. This is the biggest deal for employment relations in our generation.

When this was first raised a decade ago, I was sceptical. The late president of the Council of Trade Unions, Helen Kelly, would regularly traipse up to parliament and  badger parliamentarians on the importance of having fair pay agreements for industry sectors. I was Labour’s chief of staff under David Cunliffe and Andrew Little, and there was more politeness than enthusiasm shown to her for her proposal.

I remember my eyes glazing over at one meeting when Kelly said her proposal wouldn’t include wage rates. In front of others, I muttered: “What’s the point of asking workers to sign up to an agreement that doesn’t include wages?”

She looked pained, bit her lip, but glared daggers. The price for my insolence was a private one-on-one meeting where she explained to me, as if to a child, the importance of tactical decisions to soothe nervous MPs. She kept me there until she was able to persuade me of its merits and extract a promise of my support.

Michael Wood’s proposal hit my desk on Friday, and the right to negotiate wage rates is included. Holy crap! They actually knocked this bugger off.

FPAs are based on a paper prepared by a group chaired by Jim Bolger. Yeah, that’s right — the former prime minister who brought in the Employments Contracts Act in 1991 that screwed the unions and workers, big time.

Workers still feel the negative impacts of those draconian employment laws today. Bolger clearly has had a late in life conversion. He has produced a paper that will go a long way to undo his anti-worker legacy. As a good Catholic, he’s probably looking for redemption. Friday was a good start.

Helen Kelly’s successor at the Council of Trade Unions, Richard Wagstaff, is one of those quiet, unassuming people who are frequently underestimated. Kelly was a firebrand and a sharp-tongued scrapper — I should know, I was frequently on the receiving end of her shots.

Wagstaff is the opposite. Always polite, affable and measured. He has doggedly pursued this project that will structurally change the power between employers and workers. The union movement owes so much to Kelly, Wagstaff and other trade union leaders, such as John Ryall, for what this change will bring. All those who played a part should take a bow.

In Jacinda Ardern’s first term, New Zealand First stymied the FPA strategy. But after Labour won an overwhelming majority at the last election, there was no excuse. And they have followed through as promised.

Michael Wood, a former unionist and the lead minister on the FPA, deserves a lot of credit too. He is one of our most diligent and competent MPs, and his reputation among the inevitable competing forces is one of integrity and honesty. That is key to getting this shepherded across the line with everyone still at the table.

When people sneer at unions supporting the Labour Party, they forget that it was the unions that founded the party in 1916 because they wanted a voice for workers.

Achieving this initiative is why it’s important to have a pro-worker government.

Last term, Labour was able to say it was Winston Peters who stopped it. E Tū and other blue-collar unions shovelled bucket-loads of money into the Labour and Green election coffers leading up to the last election.

This is the payback they deserve. It will allow the union movement to raise the living standards and protections for all workers, not just the members of current unions. It’s a victory for all workers.

On the downside, this proposal is also the political gift the National Party so desperately needs. It’s red meat for their rabid base. They will claim that small businesses will be forced into wage structures that will eat into their profits. They will claim that it will put companies out of business. National MPs and their far-right allies will be screeching non-stop that union bosses are bringing back compulsory unionism through the back door.

That’s the political communications risk that will make Labour very skittish if they don’t get it right.

This is a hill that both sides have no choice but to fight on. It’s a class war. National knows it, and relishes it. If Judith Collins gets it right, it will save her leadership. Her Māori bashing is just tired and lazy. It exposes her as nasty, racist, dated and irrelevant.

This, however, is a fight between the rights for workers and the right of business to exploit them. Now, that’s a real fight. And it affects the lives of all New Zealanders.

Since Rogernomics was introduced in 1985 by the Lange government, the social democrats have vacated the economic justice ground to the neoliberals. They’ve been too embarrassed to admit the treachery of the Labour Party.

But this single initiative moves the economic distribution of the spoils of capitalism into the centre of the political debate where it should be. Any objective observer knows that, for 30 years, the pendulum has been on the side of the employing class.

For the first time in 30 years, I feel that the politics that matters to the working poor will become centre stage. Both the political wing and the industrial wing of the labour movement can win this debate by using real examples of what it will mean to workers’ lives. We must focus on why the present system is rorted (which it is) and why the poor have been getting more and more screwed (which they have been).

This government has a real chance to transform our society into one of economic justice for all — not just one which benefits the rich and the privileged middle class. If so, it will have the same impact on our country as the first Labour government when it brought us the benefits of a welfare state.

We are at the crossroads. Will the Ardern government become an equal of the Michael Savage government, or just a kinder version of the Clark government? The die is cast. At last, a fight that matters to all New Zealanders.


Matt McCarten (Ngāpuhi) is a unionist with a long involvement in politics, mainly as a political strategist and organiser with the Alliance and then the Labour Party, where he was formerly chief of staff. He’s based in Auckland.

© E-Tangata, 2021

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