The Fair Pay Agreements system comes into effect on 1 December, which means eligible unions can start the process to initiate a Fair Pay Agreement. They will need to apply to the Chief Executive of MBIE for approval to begin bargaining for a specific occupation or industry.

Fair Pay Agreements aim to bring together employer associations and unions within a sector to bargain for minimum employment terms on behalf of all employers and employees in an industry or occupation.

Unions must include key information and evidence in their application. This includes evidence of meeting either a representation or public interest test. The representation test is met when the Chief Executive of MBIE is satisfied that at least 1,000 employees who would be covered by the proposed Fair Pay Agreement or, at least 10% of all employees who would be covered by it, support the application to initiate bargaining.

Bargaining cannot commence until the application to initiate bargaining is approved by MBIE and bargaining sides have formed.

Eligible employer associations can apply to be a bargaining party for the employer bargaining side that represents employers of the occupation or industry, of a proposed Fair Pay Agreement. Other eligible unions, beyond the initiating union, can apply to be a bargaining party for the employee bargaining side.

Further information about Fair Pay Agreements and the process is available on the Employment New Zealand website (employment.govt.nz/fair-pay-agreements). This information includes specific guidance for employers, employees and bargaining sides. 

People can check the status of a proposed Fair Pay Agreement and who the bargaining parties are, via a Fair Pay Agreement dashboard on the MBIE website (mbie.govt.nz/fair-pay-agreements/dashboard). This information will include who to contact on each bargaining side, for information and support during the bargaining process.

Notes:

· Key steps involved in making a Fair Pay Agreement happen, include:

· initiating bargaining for a proposed Fair Pay Agreement

· the bargaining process

· voting on the terms

· the finalisation process.

Once finalised, the Fair Pay Agreement is put into law.

· There are mandatory employment terms that will be included in a Fair Pay Agreement. These include minimum pay rates (including overtime rates and penalty rates), standard hours, leave entitlements, training and development and more.

MBIE’s role in the Fair Pay Agreement System:

· MBIE’s role is to operationalise the Fair Pay Agreements system, including to:

· establish the required processes

· provide guidance and information for bargaining sides, affected employees and employers

· support the bargaining sides to navigate the bargaining process and reach an outcome, including facilitating funding and availability of MBIE’s dispute resolution services, if sides reach an impasse.

· MBIE also has new statutory roles in the Fair Pay Agreements system, such as the Chief Executive of MBIE:

· deciding whether to approve initiation

· verifying the ratification vote

· finalising any agreements into law.

· Once a Fair Pay Agreement is agreed and put into law, the Labour Inspectorate can enforce it as part of their regulatory functions. MBIE also continue to provide support to the Employment Relations Authority in their roles.

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