Fair Pay Agreements 2021: What You Need to Know

In 2018, the government of New Zealand announced their plan to introduce a Fair Pay Agreement (FPA) system to improve working conditions and wages of employees in industries with low pay rates. After extensive consultation with unions, employers, and other stakeholders, the government has finally released the details of the proposed FPA system.

So, what is a Fair Pay Agreement?

A Fair Pay Agreement is a legally binding collective agreement for a particular industry that sets minimum employment standards such as wages, hours of work, and leave entitlements. The aim of an FPA is to ensure workers in that industry are paid fairly and have decent working conditions. The agreements are negotiated between employers and unions (or other employee representatives) and must be approved by the government.

What are the benefits of Fair Pay Agreements?

– Improved wages and working conditions – FPAs ensure that all workers in an industry receive fair pay for the work they do and have access to reasonable working conditions.

– Reduced inequality – FPAs can help to reduce income inequality by ensuring all workers are paid fairly, regardless of their location or type of work.

– Increased job security – By setting minimum employment standards, FPAs can help to provide greater job security for workers, reducing the risk of layoffs or reduced hours.

Which industries will be covered by FPAs?

The government has identified industries with low wages and bargaining power as the first to be covered by FPAs. These are:

– Cleaning

– Security

– Retail

– Supermarkets

– Tourism and hospitality

– Forestry and logging

How will the FPA process work?

The process for developing an FPA will involve several steps:

1. Identification of an industry – The government will identify an industry that is suitable for an FPA.

2. Negotiation of the agreement – The employers and employee representatives will negotiate the terms of the agreement. The government will facilitate the negotiations but will not be directly involved.

3. Submission to the government – Once an agreement has been reached, it will be submitted to the government for approval.

4. Ratification – The government will consider the agreement and decide whether to approve it. If approved, it will become a legally binding agreement for all businesses in that industry.

When will FPAs be introduced?

The government aims to introduce the FPA system by mid-2021. The first FPAs are expected to be negotiated in late 2021 or early 2022.

In conclusion, the Fair Pay Agreement system is a positive step forward for New Zealand workers. By improving wages and working conditions in industries with low pay rates, the government aims to reduce inequality and increase job security. While it may take some time for the system to be fully implemented, it is a significant step towards a fairer and more equitable society.