Commentary- New Zealand needs an Australian style award system

Unionists rally during an Easter 2009 lockout of Auckland market researchers getting paid about half of what the company Synovate was paying its Australian market researchers.

COMMENTARY- Omar Hamed, Socialist Aotearoa (Wellington)

Closing the wage gap between New Zealand and Australia was a key plank of National’s election campaign in 2008. The problem for John Key however is that under his management the Tasman wage gap has grown significantly. Getting grilled by 3News Key went on the attack blaming Labour for the recession and the wage gap and claiming he had a “plan”.

The facts are unmistakeably obvious – under the Nat’s the gap between the New Zealand and Australian average wage grew from “$540 a week in December 2008 to $580 in March this year”.

In the courts, on the picket lines and in Parliament this week the calls to close the gap have again been heard. Yet absent however from all the debate about the widening pay gap is one key word: awards.

The main difference between Australian pay and New Zealand pay is that in Australia minimum pay rates for industries and occupations are set by the Australian industrial relations body Fair Work Australia. There are still union negotiated collective agreements and individual employment agreements but they can’t make the employee worse off than they would be under their industry or occupation award.

The modern awards are a set of 200 or so documents that set most employment conditions from minimum pay rates, hours of work, overtime rates and allowances. These awards are set by an independent panel that hears submissions from union and employer representatives.

Comparing Australia’s fast food industry award to what a McDonald’s worker in New Zealand receives shows how the award system benefits low paid workers and raises living standards.

Australian fast food workers receive a $6.25 per week laundry allowance for cleaning their uniforms. Kiwi workers receive no allowance. Australian workers must have their hours and days of work specified in writing at the start of their employment. These hours can only be varied by written agreement. In New Zealand many fast food workers have their hours and days of work varied from week to week. Many workers have their hours reduced as punishment for asking for rest breaks, sick leave or as one worker put it to me once, “Not kissing the bosses ass”.

Australian fast food workers have an Aus $15.00hr min wage where NZ McDonald’s workers are mostly on $12.75 to $13.25. Aussie fast food workers receive a 9% employer contribution superannuation, NZ fast food workers just 2% contribution to Kiwisaver. Australian McDonald’s workers must get a 10% loading for work after 9pm and a 15% loading for work after 12am. Some McDonald’s owners in New Zealand pay their employees an extra $5 per graveyard shift. The Aussies also get a 25% loading on Saturdays and a 50% loading on Sundays. Kiwi workers of course get no such weekend rates.

As can be seen from the evidence above the award system is the crucial difference in ensuring better wages and conditions for fast food workers. This comparison can be drawn across any number of occupations especially retail, cleaning, call centre and other traditionally un-unionised occupations and industries. The picture is clear. In order to close the growing wage gap New Zealand will need to establish a similar set of awards for our own industries.

From 1894 to 1991 New Zealand also had an award based remuneration system, where unions and employers made submissions to an arbitration board that would set the terms in each industry or occupation. Under awards New Zealand wages were able to keep pace with Australias. The National Party and the Employment Contracts Act of 1991 destroyed that system and the drop in real wages and the opening up of the wage gap from that time is well documented. If New Zealand workers, unions and the politicians that purport to represent them are serious about closing the gap then the legislative gap will have to be closed and the award based system reintroduced in New Zealand.