Fair Pay Agreements

The recently passed Fair Pay Agreements legislation brings together unions and employer associations within a sector to bargain for minimum employment terms for all covered employees in an industry or occupation. What does this mean?

It means that these organisations will meet to discuss and agree on a set of employment terms for the work being done. In some situations, in the event parties cannot agree then the Employment Relations Authority may determine what those minimum employment terms will be.

Who is bargaining between:

Fair Pay Agreement bargaining is between an employer side and any eligible unions that are approved to be an employee bargaining party for the employees. They will represent all covered employees, including employees that are not members of the union. If the work performed is covered by the proposed Fair Pay Agreement, the union(s) will bargain on their behalf.

Eligible employer associations, including industry associations, approved to be an employer bargaining party, will bargain on the employer side. These organisations must also bargain on behalf of employers that are not their members

Māori must be represented

Both bargaining sides must use their best efforts to make sure Māori employees and employers are represented in the process. This includes by:

• getting and considering feedback from Māori employees and employers
• considering whether each bargaining side should include a member that represents the interests of Māori employees or employers.

What terms must be in a Fair Pay Agreement

Any Fair Pay Agreement must include what work is covered by the agreement and standard hours, minimum base rates (including overtime rates and penalty rates), training and development, how much leave an employee can have and how long the agreement applies for.

Bargaining, voting and the Fair Pay Agreement becoming binding and enforceable

It may take some time for both sides to reach an agreement on a set of employment terms they can both agree with. Once the bargaining sides agree and the proposed Fair Pay Agreement is confirmed to be compliant with the law, all covered employees and employers in that sector will be able to vote on whether they agree with the terms or not. If a majority agrees from both sides, the voting process and result will be confirmed by MBIE (the Ministry of Business, Innovation and Employment) and the Fair Pay Agreement will be finalised and be binding and enforceable.

This information is not a substitute for legal advice, we recommend that if you identify problems in the areas listed you consult with someone before acting on any material you have read