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 is now going through the full parliamentary process.

The Bill is now at the Select Committee stage.

Read Workplace Relations and Safety Minister Michael Wood’s announcement on the Fair Pay Agreement Bill Introduction:

A major step towards a fairer system for New Zealand workers(external link) — beehive.govt.nz

People have had the opportunity to make a submission to the Select Committee on the Bill. The submissions period closed on 19 May 2022.

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 received 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.

Next steps

The Select Committee will now hear from submitters who would like to present their evidence and it will then consider any amendments to the Bill. The Select Committee is due to report back to Parliament in early October 2022.

Find out more about the select committee process and how to make a submission on the New Zealand Parliament website:

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.

Background documents

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.

Read the Minister's announcement on the release of the Working Group's report(external link) — Beehive website

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

Last updated: 03 June 2022