“Compulsory unionism is undemocratic, will be a wrecking ball on the economy, and doesn’t solve any identified problem,” says ACT Leader David Seymour....

“Compulsory unionism is undemocratic, will be a wrecking ball on the economy, and doesn’t solve any identified problem,” says ACT Leader David Seymour.

“Today’s proposal is far more radical than anything the Government has proposed before. It said it would initially be ‘one or two industries.’ Today’s proposal would allow any industry to have compulsory unionism forced on it by one-in-ten workers from day one.

“You cannot take a relic of the 1970s, dust it off, and make it stick 50 years on. We will wipe it off the statute books sooner or later, and the way this Government is abusing its power, it is starting to look like sooner.

“Have no doubt, the Government is proposing undemocratic compulsory unionism. Today’s proposal is that 10 percent of workers can start a process that has no off ramp. It would be compulsory for everyone in an occupation or sector. Even if the majority vote against the proposal, twice, it just gets referred to the Employment Relations Authority. They Authority then forces conditions on everyone in the occupation or sector.

“New Zealanders have voted with their membership, 70 percent to 20 percent over the past 30 years. Despite that, Michael Wood and Andrew Little won’t listen. They’re bringing back compulsory unionism whether we like it or not.

“When creating public policy, ACT always asks what is the problem we’re trying to fix? In this case there is no problem. It is a union hit on middle New Zealand who’ve said by their actions they want nothing to do with unions.

“The current law allows multi-employer collective agreements. The nurses have one. Labour are not doing anything new here, they are forcing something most workers don’t choose on any workforce where 10 per cent can be signed up to it.

“The current law has a comprehensive range of statutory worker protections. There is a minimum wage, protection for businesses that are sold, non-discrimination laws, and dispute rules. There is simply no problem to solve here.

“The original working group’s claim that wages have fallen as a percentage of economic output has been debunked by the data. The reality is that, since the Employment Contracts Act in 1991, wages as a percentage of GDP have trended upwards, not down. Making rules for more pay is not sustainable without productivity growth, that doesn’t come from complicated union negotiations.

“This is backed up the Ministry of Business Innovation and Employment (MBIE) Cabinet Paper.

“It says: “This policy proposal is significant: Fair Pay Agreements may make substantial structural changes to the economy and if not well implemented, the policy risks wide- spread negative effects on employment…. the RIS acknowledges there is minimal empirical evidence for the problem or policy response.”

“This is classic Labour Party. Pushing ahead with an ideological agenda over what is best New Zealanders, and in this case further squeezing middle New Zealanders.

“If everyone’s wages get raised regardless of effort, we will stop seeing people striving to work harder. Why bother when you’re getting the same amount as someone doing the job to worse standard. Employers will stop taking risks on people who might be less productive.

“I have no doubt that these agreements will lead to workplace bullying. Union thugs are the worst kind of thugs. Fair Pay Agreements only need 10 percent of workers to come into effect and if they’re voted down, they’ll still be imposed. On that membership drive, and on agreement votes, there will be bullying. Why would you introduce a law where one person’s pay and conditions can depend on another person’s vote?

“This is policy making madness. ACT would repeal this 1970s policy and bring New Zealand back into the 21st Century.”

The most egregious aspects of this new policy are:


  • 10 percent of workers can initiate an FPA process
  • All employers and employees within an industry would be bound by it
  • Once bargaining has been initiated, an FPA must result
  • An FPA can be voted down twice by employers and employees and still be forced on an industry
  • Unions won’t need consent to enter the workplace
  • Requires employers to give employees four hours off work for FPA bargaining

Economic impacts:

  • Risks wide-spread negative effects on employment
  • There is minimal empirical evidence for the problem or the policy
  • FPAs could increase the price of goods and services
  • The increase in labour costs could have disemployment effects, such as laying off employees, hiring fewer employees, or reducing hours

Human rights:

  • There will likely be employers and employees bound by the terms of an FPA negotiated by unions or employer organisations they are not affiliated with – undermines freedom of association
  • Once FPA bargaining has been initiated, an FPA will result. Initiation also only requires assent from employees, employers do not have a say – undermines voluntary collective bargaining

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