Fair Pay Agreements
The Government has introduced Fair Pay Agreement legislation into Parliament.
The Fair Pay Agreement system will bring together employers and unions within a sector to bargain for minimum terms and conditions for all employees in that industry or occupation. The proposed system will include support for bargaining parties to help them navigate the bargaining process and reach an outcome, as well as processes to ensure compliance.
Fair Pay Agreement system
The Fair Pay Agreements Bill was introduced into Parliament on 29 March 2022 and people now have an opportunity to comment on the Bill during the Select Committee process.
Read Workplace Relations and Safety Minister Michael Wood’s announcement on the Fair Pay Agreement Bill Introduction:
In May 2021, the Government announced the design of the Fair Pay Agreement system. The design was informed by the Fair Pay Agreement Working Group and public consultation, as well as involvement from the New Zealand Council of Trade Unions and BusinessNZ.
In addition to the Fair Pay Agreements Bill, a parliamentary paper was lodged on 31 March 2022. This explains that the Government proposes to change the Bill, to make the default bargaining party role voluntary, and add a new process (the backstop) where, if no eligible representative steps forward to be a bargaining party on one side, then the Employment Relations Authority will set the terms of the Fair Pay Agreement.
The Committee is seeking public submissions on this backstop proposal alongside the Bill through the Select Committee process.
Parliamentary paper on a proposed policy change to the Fair Pay Agreements Bill G.46C(external link) — New Zealand Parliament
A summary of the proposed Fair Pay Agreement system design is below.
Initiating Fair Pay Agreement bargaining
The bargaining process
Support for Fair Pay Agreements
Finalising a Fair Pay Agreement
The Fair Pay Agreements Bill is now going through the full parliamentary process. People have an opportunity to have their say during Select Committee and submissions are being accepted until Thursday 19th May 2022. Find out more about the select committee process and how to make a submission here:
Fair Pay Agreements Bill(external link) — New Zealand Parliament
The Fair Pay Agreement system is expected to commence shortly after the Bill has passed, anticipated to be at the end of 2022.
Fair Pay Agreement discussion paper
In October 2019, the Government released a discussion paper that sought feedback on a range of options for the design of a Fair Pay Agreements system. The consultation closed 27 November 2019.
- Designing a Fair Pay Agreements System: Discussion paper [PDF 2MB]
- Initial summary of submissions on the Fair Pay Agreements discussion [PDF 1.4MB]
- Supplementary summary of submissions on the Fair Pay Agreements discussion paper – overall merits of the system [PDF 1.9MB]
- Final summary of submissions on the Fair Pay Agreements discussion document [PDF 1.3MB]
Fair Pay Agreement Working Group
A Fair Pay Agreement Working Group was set up in June 2018 to make recommendations on the design of a sector-level bargaining system. It was chaired by Rt Hon Jim Bolger ONZ.
The Working Group looked at:
- the criteria and process to initiate bargaining on a Fair Pay Agreement
- how bargaining participants will be identified and selected
- what Fair Pay Agreements should cover in terms of scope
- bargaining rules and dispute resolution processes, and ratification and enforcement of Fair Pay Agreements.
The Working Group provided its recommendations to the Minister for Workplace Relations and Safety in December 2018.
Announcement of the establishment of the Working Group(external link) – Beehive website
Proactive release of policy advice on Fair Pay Agreements
- Fair Pay Agreements Regulatory Impact Assessment update to account for the expansion of LI powers: Regulatory impact statement [PDF 767KB]
- Advice on contractors in the Fair Pay Agreements system [PDF 618KB]
- Advice on legislative structure of Fair Pay Agreements [PDF 520KB]
- Background information and next steps on Fair Pay Agreements [PDF 2.1MB]
- Cover Briefing for draft FPA cabinet paper [PDF 840KB]