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Fair Pay Agreements: Your responsibilities

Do you know what your responsibilities are if your industry or occupation is approved to begin bargaining for a  Fair Pay Agreement?  

New fair pay agreements (FPA) law came into effect on December 1 last year, marking the biggest shakeup in New Zealand employment in decades. Six months on, how could your business be affected?

What’s an FPA?
The new fair pay agreements law allows employees to bargain collectively for industry- or occupation-wide minimum employment terms, such as pay, leave, and training standards. It’s designed to give workers more power to negotiate terms within an industry.

To initiate bargaining for a fair pay agreement, a union needs to represent either 10% of the employees who would be covered by it, or 1,000 employees, or show there’s a public interest case. Importantly, an employee does not need to be a member of the initiating union, or indeed any union, to be covered by a fair pay agreement.

What does it mean for you?
The FPA system will bring more small businesses into the industrial relations process, though the bargaining party/ies for employers are employer associations, of which they may or may not be members.
Unions are now more likely to seek access to businesses to obtain information about pay and working conditions from employees.

What happens next? And what should I do?
It would be best to seek business advice ahead of an
FPA affecting your business coming into effect. By law, compliance is expected of all within coverage, regardless
of whether they have been involved in the bargaining.
The compliance burden will likely grow for SMEs in the years to come. The changes could eventually lead to rising costs for small businesses as industry-wide and occupation-wide pay agreements are agreed.

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Employment New Zealand - external link