In one of the more important advances in collective bargaining around the world, New Zealand recently passed an innovative sectoral bargaining policy, called Fair Pay Agreements. Labor supporters in Britain and Australia want to replicate elements of the policy in their countries, while for American audiences the most important lesson may be how New Zealand’s experiences highlight that sectoral bargaining — in conjunction with worksite bargaining — is necessary to improve working conditions in today’s economy and thus should be part of policy efforts to strengthen unions.
Sectoral bargaining, sometimes called broad-based bargaining or industrywide bargaining, is a type of collective bargaining between unions and employers that sets minimum standards on issues such as wages, benefits, safety, and training for all workers in a sector or occupation. Under New Zealand’s fair pay system, unions and employers will bargain for minimum terms and conditions for all employees in that industry or occupation. The agreements set a floor; unions and workers can still bargain at the worksite for higher standards, as is common in most sectoral bargaining systems.
The above excerpt was originally published in OnLabor.
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