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Fair Pay Agreement Update

The Fair Pay Agreements Bill has an overarching policy objective to enable employers and employees to collectively bargain industry-wide or occupation-wide minimum employment terms. 

At present, New Zealand’s employment relations and employment standards regulatory system only allows for collective bargaining at an enterprise level (i.e. between individual employers and unions). There is no mechanism for parties to co-ordinate collective bargaining across entire occupations or industries. The bill aims to address this gap and is the biggest shake-up in the employment relations sector for decades.

Fair pay agreements (FPAs) set minimum employment terms and conditions for an occupation or industry as a whole. Agreements are reached through sectoral bargaining between unions and employer associations and apply to all employees in a sector, regardless of whether they are a member of a union or not.

The Fair Pay Agreements Bill is now in Select Committee stage and the Select Committee will now hear from submitted and will consider any amendments to the Bill. The Select Committee is due to report back to Parliament in early October 2022.

The Fair Pay Agreement system is expected to commence shortly after the Bill has passed, at the moment this is anticipated to be at the end of 2022. 

If you want to know more, here’s the details of how the Bill would work as it is currently written - The Proposed Fair Pay Agreement System.

We’re hoping for some significant changes, particularly in relation to the potentially low threshold for the initiation of bargaining, the bargaining support payments suggested in the bill and the Employment Relations Authority role in setting Fair Pay Agreement Terms if bargaining reaches a stalemate or if ratification fails.