Fair Pay Agreements were a 2020 Labour manifesto commitment, with the long-anticipated Fair Pay Agreements Bill introduced to Parliament at the end of March 2022 and passed in October 2022.
- The Bill had it’s first reading on 5 April 2022
- Consultation on the Bill closed on 19 May, 2022
- The Select Committee reported back on 5 October, 2022
- The Bill passed it’s 3rd reading and was passed into law on 26 October, 2022
- The Fair Pay Agreement system comes into effect from 1 December, 2022
Update – FPA Bill passes 3rd reading – legislation passed into law, 26 October, 2022
The Fair Pay Agreements Bill was passed into law on 26 October. It passed with support from Labour, the Greens and Te Pāti Māori, while National and ACT opposed it. It will come into force on 1 December, 2022.
It is our understanding that the sectors that will be prioritised for FPAs leading into the election next year will be cleaners and security guards.
View the Association’s statement on the announcement of the Bill passing.
The Fair Pay Agreement system focuses on lifting the wages of those on low to medium incomes by proposing a framework for collective bargaining of Fair Pay Agreements (FPA’s) that would set minimum employment terms across specific industries or occupations. In many respects it takes New Zealand back to a system of national awards.
There are certain things that are mandatory to be included in an FPA, such as
- when the FPA comes into force and expires (an FPA must apply for no less than three years, but no more than five years),
- its coverage,
- the normal hours of work,
- minimum base wage rates,
- overtime,
- penalty rates and any superannuation entitlements.
Some other topics must be discussed but don’t have to be agreed, like redundancy, leave, and health and safety. Other employment terms can be included if the bargaining sides agree. You can find out more about the steps to the Fair Pay Agreement framework here.
The increasing compliance burden continues to take its toll on many of our members and the Association does not agree that that the Fair Pay proposals will achieve what they set out to achieve. Placing further compliance pressures on employers will create a more challenging employment market when we currently already operate in an environment with extremely robust minimum standards in place, that provides wide-ranging protection for employees. Low unemployment and minimum wage levels also provide enough incentive for employers to put their best foot forward with regards to pay and conditions – increases to minimum wage rates, have resulted in New Zealand’s minimum wage being one of the highest in the OECD.
The Association strongly supports an environment that provides fair working conditions for all that are employed in New Zealand, however, we oppose the procedures proposed through the Fair Pay Agreement system.
Find out more about the Fair Pay Agreements Bill here.
View the Select Committee report here – 5 October, 2022.
How you can help
Voices demonstrating the FPAs impact on real people will be critical as the Fair Pay Agreements Act comes into force. We are looking for NZ employers who would be interested in being part of a working group for the Restaurant Association as we approach the FPA implementation.
If this sounds like you, or would simply like to have a discussion about how else you can show your support, we would love to hear from you. However you choose to participate, we will ensure the arrangements suit you.