BusinessNZ has warned Labour's fair pay agreements marks the biggest change to industrial relations in a decade, and called on the party for greater detail on how it will work.

OPINION: In a close electoral contest, we need to know what's being promised.

National and Labour are neck and neck in the polls, so it's only fair that voters should know what each party would deliver if it won the election.

Last week, voters were very interested to find out the confirmed tax policies of the main parties.

Cameron Burnell/STUFF BusinessNZ chief executive Kirk Hope says Labour's fair pay agreements raise the prospect of strike action rippling across a complete occupation, as unions sought second-tier agreements on top of the 'fair pay agreements'.

By the end of last week there was reasonable clarity on what taxes would, and would not, be imposed.

READ MORE:

* Labour faces tough questions over 'Fair Pay Agreement' policy

* 'Negative' attacks on tax give National a boost, but both leaders say race is close

* Truth or fable: Fact-checking the final leaders debate

Unfortunately there is another policy area remaining that's far from clear – industrial relations.

Labour has promised a very large change in this area, but has not explained what it is or how it would work.

Meanwhile, none of the other parties have offered detailed industrial relations policies at all, so it hasn't really been possible for anyone to compare industrial relations policies across all parties.

As a result it looks as if Labour might get through to the election without having to explain its policy.

Yet it would appear to herald the biggest industrial relations change in a generation.

This is what we can glean about it, based on the information released so far.

The policy is called 'fair pay agreements'. These would be large collective agreements covering all workers in the same occupation, and their employers.

Supermarket, hospitality and childcare workers, cleaners, support workers and similar occupations would be likely targets for this policy.

It would mean everyone in that occupation being awarded the same minimum pay, and being able to bargain – and strike - for extra pay on top of that.

Unions would start bargaining with the employers concerned, and employers would be required by law to take part in the bargaining, even if they didn't want to.

Then, once bargaining had started, employers would be required by law to come to an agreement with the unions concerned, even if they didn't want to.

The result could be an occupational wage round where wages are forced up without the voluntary agreement of employers.

This raises the prospect of small employers simply not being able to pay the wage levels imposed.

It also raises the prospect of strike action rippling across a complete occupation, as unions sought second-tier agreements on top of the 'fair pay agreements'.

That's more or less all that we know about this policy.

It is concerning that Labour says it will take a year to work out the details of this policy.

That is not good enough. Voters need to know the detail – just as with Labour's tax policy.

On the sketchy details available, this policy seems very like the national awards of the 1970s and '80s.

Just as with national awards, there would be an element of coercion to get all employers signed up to the collective.

Just as with national awards, there would be the ability for occupation-wide strikes as part of second-tier bargaining - the collective deals on top of award settlements were (and are) known as second tier bargaining. Under the Employment Relations Act 2000, employees may strike if they are bargaining for a collective agreement with their employer.



Labour's Fair Pay agreements will permit collective bargaining on top of Fair Pay agreements (second tier bargaining) provided the deal is not less than the Fair Pay agreement. The right to strike exists in this case.



If Fair Pay agreements are minimalist in their outcomes in order to cater for weaker employers, history suggests that it is very likely that deals will be sought to "top up" the outcome at enterprise level.

Is this policy a re-run of national awards?

It would be very helpful if Labour could let us know what differences there are – if any – between national awards and fair pay agreements.

We need to know this, because national awards and second-tier bargaining gave us the worst ever period of strikes in New Zealand's history.

Is this how it would be with Labour's fair pay agreements policy?

Labour needs to explain how this will not happen again.

Kirk Hope is the chief executive of BusinessNZ

​Editor's note: This column has been updated with Hope's expanded definition of second-tier bargaining. Labour disagrees with Hope's view but did not identify any factual errors and declined an offer to submit a right of reply opinion column. Stuff declined Labour's request to put a statement at the end of this opinion column.