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  • Megan Wood

Into the bargain: what we have seen from the Fair Pay Agreements in action so far...


It has only been a matter of weeks, but the new FPA legislation has already led to some interesting developments. From the Unions and sectors already taking action to what it means for small businesses, this week I assess the impact of the FPA so far and what might lie ahead.

Last week the New Zealand Herald reported that the hospitality industry is likely to be among the first to make use of the new FPA legislation. The article asserted that Unite Union plan to submit the first official application to the Ministry of Business, Innovation and Employment (MBIE). Approval of the application would enable Unite to begin bargaining for an FPA on behalf of hospitality workers.

According to Unite Union national secretary John Crocker, the submission is supported by more than 1500 hospitality workers. This is a crucial detail as the FPA process dictates that a union can only act if they have support from a significant number of employees within the industry. As it stands the MBIE require, at a minimum, the support of 1000 or 10% of industry workers for a union to bargain for an FPA on their behalf. Alternatively, an FPA can be negotiated if the MBIE agrees that it satisfies a “public interest” test.

Thus far, the “public interest” test has not been put to the test. It will be interesting to see how this aspect of the FPA is interpreted and applied moving forward. There is no precedent for how the 1000 signatures will be verified.

Other sectors likely to submit an application in the coming months include First Union on behalf of supermarket workers and bus drivers, early childhood educators, cleaners and security guards.

The controversy surrounding FPAs is that if an agreement is reached it applies to all workers in the industry, not just the ones who belong to a union. A key concern is that FPAs will disproportionately affect small business owners. BusinessNZ advocacy director Catherine Beard told Newshub that the “scales are massively stacked against small businesses”, when it comes to FPAs and she believes “they will need all the help they can get”.

There are Government appointed services available to small business owners who may need help navigating the uncertain waters of the FPA, including the Employers Relations Authority (ERA). It is advisable, however, for businesses to be prepared and that is where impartial, professional advice from a consultant like myself can make all the difference. For advice on whether your business may be the target of an FPA claim and what to do if that arises, get in touch.

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