Construction Worker

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

Mike Collins Christopher Luxon Dinner

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.”