Update on Fair Pay Agreements

Last week the Government announced that a working group to develop a plan to introduce Fair Pay Agreements (FPAs) across entire industries and occupations has now been set up.

The group will be led by former National Prime Minister Jim Bolger.

While we still don’t know how FPAs will work in practice, what we do know is that the Government is looking to use FPAs to set minimum standards for wages and employment conditions like allowances, weekend and night rates, hours of work and leave arrangements for all workers within industries.

It is proposed that FPAs will be determined through collective bargaining between unions and employers within each sector, without the need for negotiations with each individual employer.

FPAs would not make ineffective Individual Employment Agreements or Collective Agreements. They would sit alongside these agreements.

The concept of FPAs is not new. Australia has been using them for nearly a decade now. Whether the Government is intending to replicate the Australian model is yet to be known. It is also not clear what effects they will have on businesses and their bottom lines, though it is to be hoped this will be considered by the Working Group.

The Working Group will make recommendations to Minister for Workplace and Safety, Iain Lees-Galloway by the end of 2018, which will then be considered by Cabinet. The Working Group will be seeking public submissions at some stage. If you would like assistance with or more information on submissions please contact us.

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If you have any queries in respect of Fair Pay Agreements, or any other employment law issues, please contact our Employment Law Team.