Fair Pay Agreements: What to Know

Words by Niamh Vaughan (she/her)

In November of last year, the Fair Pay Agreement Act passed its third reading in Parliament, supported by Labour, the Greens, and Te Pāti Māori. Fair pay agreements (FPA) allow employees and unions to negotiate with employers on what a fair level of pay within an industry is. 

Make Work Fair, a campaign backed by the New Zealand Council of Trade Unions, describe FPAs on their website as having the ability to ensure that “nobody in [an] industry can be paid less than the rate agreed. It’s like the minimum wage, but for a specific industry. This will be negotiated by unions and employers in that industry.”

Alongside pay, an FPA can ensure fairness of negotiations over leave, working hours, and health and safety.

Industries with FPAs in force include bus drivers, supermarkets, hospitality, and early childhood education.

Aidan Donoghue is a current VUW student who works part-time for the New Zealand Council of Trade Unions as the FPA organiser for Wellington. Previous to his current job, he did a four-year stint in hospitality, one of the industries green lit for FPA bargaining.

“Fair Pay Agreements are the biggest breakthrough in workers’ rights in 30 years, and are guaranteed to provide untold protection and benefits for all working class Kiwis, especially youth,” says Aidan. 

The Labour Party stated in a press release as the bill passed that FPAs “will not only improve wages and working conditions, [they] will also encourage businesses to invest in training and level the playing field for employers trying to do the right thing.”

Neither ACT nor the National Party are in favour of the Fair Pay Agreement Act, believing that its implementation will harm the economy and that not all workers will want to engage in bargaining. 

Paul Goldsmith, National’s Workplace Relations and Safety spokesperson stated, “Fair Pay Agreements will make New Zealand’s workplaces less agile and flexible and make all workers beholden to a union agenda. It will force employers and workers within a sector to bargain for minimum terms and conditions for all employees in that industry or occupation, regardless of whether or not they want to be included.”

Both National and ACT plan to repeal the act if elected into government later this year.