By Vaughan Granier

The Fair Pay Agreements Bill passed its third and final reading in Parliament on 26 October 2022 and will be implemented effective 1 December 2022.

It is safe to say that the New Zealand Council of Trade Unions (NZCTU) intends to move swiftly to commence bargaining in several sectors and have initiated their “Make Work Fair” roadshow which kicked off today in Auckland.

The roadshow will see the NZCTU travel to all ends of the country providing information about Fair Pay Agreements and, more importantly, signing up employees to meet the legislative threshold test. As can be seen from their dedicated website the workers who are likely to target Fair Pay Agreements are:

  • Security guards.
  • Cleaners.
  • Bus drivers.
  • Early childcare centre workers.
  • Hospitality workers.
  • Supermarket workers.
  • Forestry workers.

Fair Pay Agreements will enable unions to bargain for improvements in certain workplace conditions. These could include:

  • Minimum pay rates.
  • Pay scales for experience and qualifications.
  • Overtime rates and limits.
  • Allowances for difficult/unpleasant/shift work.
  • Penalty rates.
  • Compulsory training/skills development budgets.

Things will move swiftly

The National Party has promised to repeal this legislation if voted into Government. With this looming, the NZCTU is motivated to move swiftly to entrench Fair Pay Agreements before this can occur. That means, for the above sectors at least, there is an urgent need to understand the legislation and establish a strategy to meet the inevitable demand for bargaining, with preparation and insight.

While the exact approach the Nationals might take to repealing the legislation is unclear, it seems likely that any Fair Pay Agreements finalised before the election – and perhaps even those underway during the election – will not be affected by the possible repeal of the Fair Pay Agreements Act. It would therefore be risky for any employer to rely on the hope of a repeal or to treat any bargaining request lightly.

What might unions do?

The threshold for representation under Fair Pay Agreements is low (10 per cent representation of workers in the relevant sector), and employers will quickly face requests for access to the workplace by unions in order for them to deliver to the required 10 per cent threshold. This will be so even if there has historically been very little indication of union activity in the business. Employers need to be mindful that membership in any union is voluntary, and requests from unions to attend workplaces cannot be unreasonably refused, even if the employer feels the union would not be welcomed by the employees.

Employers need to act quickly

With the Fair Pay Agreement process likely to move swiftly after 1 December 2022, it is important that employers be prepared.

A priority for employers will be talking to each other and keeping abreast of the latest developments within their industry sector. The responsibility will be entirely on each employer to find out how to engage with and participate in their industry or sector bargaining forum so that their voices can be heard. If employers fail to do so they are likely to be left with employment obligations that don’t work for them and which make their businesses more complicated and expensive to run. We know from our Australian friends that this is their biggest complaint about the Australian version of Fair Pay Agreements.

How enableHR can help?

We believe HR should be simple. Simple enough for you to run your business confidently. Inside enableHR is everything you need to manage the entire employee lifecycle, from recruitment and onboarding to managing your people and termination. If you’d like to see enableHR in action, contact us to learn more about how we can help your business.

Vaughan Granier is the National Relations Manager for HR Assured NZ, enableHR’s sister company. He has over 24 years’ experience in international human resources, health and safety, and workplace relations management. With over 13 years working in New Zealand and Australian companies he provides in-depth support to leadership teams across all areas of HR, Health and Safety, and employee management.