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Fair Pay Agreements

Fair Pay Agreements

The Government has recently passed the Fair Pay Agreements legislation. The introduction of FPAs is one of the most significant changes to New Zealand’s employment relations system.

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Please find below a FAQ about FPAs and how they will impact businesses, if your particular sector or occupation is covered by one.

You can also find more information about FPAs on the MBIE website here.

If you have any specific questions, or would like to speak directly to someone about FPAs, please contact AdviceLine: 0508 656 757

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A Stance on FPAs

The new Fair Pay Agreements (FPA) legislation, passed by Parliament on Wednesday 26 October, is problematic for employers and employees, and retains a number of controversial features.  

“The legislation includes compulsion clauses, which remove employee and employer choice around whether to opt into an FPA or not,” says Business South Chief Executive, Mike Collins.   

Earlier this year, the International Labour Organisation (ILO) formally requested the Government ensure the proposed legislation was compliant with ILO Convention 98. Under this Convention, the ILO requires collective bargaining to be voluntary and respect the autonomy of the parties.    

“Instead, the legislation requires either compulsory arbitration or government approval of the results of collective bargaining,” says Mr Collins. “This is clearly not compliant with the Convention.”  

He says the legislation is complicated and impractical, and unfair to both workers and employers.  

“Our members do not believe FPAs will deliver the claimed benefits. They are unworkable in practice and will lead to a significant increase in disputes and litigation.” 

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How FPAs May Affect You

The Fair Pay Agreements Act 2022 is based on an hourly, wage-based, approach to work, meaning every hour worked will need to be counted and paid at the rate appropriate to the period the work was performed. It means it will become virtually impossible to employ a worker on an annual salary. 

Currently there are seven live applications to initiate bargaining for a Fair Pay Agreement:

  • Rural and Urban Bus Drivers and Cleaners (First Union)
  • Hospitality Sector (Unite Union)
  • Supermarkets and Groceries (First Union)
  • Commercial Cleaners (E-Tu)
  • Security Guards (First Union)
  • Early Childhood Education (NZEI)
  • Stevedoring Services (MUNZ)
FPA Webinar August 2023

Fair Pay Agreement Webinar | 8 August, 2023

Watch the recording of the Fair Pay Agreement webinar held on 8, August 2023, and get an update on the Fair Pay Agreement (FPA) process from BusinessNZ's Paul McKay. You will also find find out where things are at with FPA and hear a range of questions/answers.