Update: the latest on Fair Pay
Latest update: 31 October 2023
Learn more about what is happening on the “employer side” of the bargaining process for Hospitality and Grocery Fair Pay industry Agreements in the FAQ below.
Update: 15 September 2023
Since the introduction of the Fair Pay legislation in late 2022, the Ministry of Business, Innovation and Employment (MBIE) has received ten Fair Pay Agreement applications in total. Three applications have now been withdrawn.
Six applications have been approved to initiate bargaining and form bargaining sides, this includes the hospitality related general application, and the supermarket and grocery general application.
There is currently no general retail application lodged.
Both the proposed Hospitality and the Supermarket/Grocery Fair Pay Agreements have obligations that currently apply to employers within these industries. See below for further details!
Fair Pay Industry Updates
Fair Pay FAQs
FPA’s are legally binding agreements that set out minimum pay and conditions between employers and employees across an entire sector.
This means that employee and employer representatives will meet to discuss and agree on a set of employment terms for work being done by employees. All employees within the sector will be covered by the final agreement and cannot opt out.
If 1,000 workers in an industry or an occupation, or 10% of their workforce (whichever is smaller) request a Fair Payment Agreement, an eligible Union can then apply to MBIE to initiate bargaining.
Once MBIE has received the application, it is reviewed and assessed against legal requirements. MBIE also run a verification process to check that the threshold used to initiate the application (either 1,000 workers, or 10% of the workforce) has been met.
If the application is approved, MBIE will publicly notify that it has approved the application and will publish the details. Bargaining sides representing employer and employees are then formed.
A Fair Pay Agreement must include who is covered by the FPA; standard hours; minimum pay rates, including overtime and penalty rates; training and development; how much leave an employee can have; and how long the FPA applies for.
Some other topics must be discussed but don’t have to be agreed, like redundancy, leave, and health and safety. Other employment terms can be included if the bargaining sides agree.
Infographic of the Fair Pay Agreement system [source MBIE]
The employee bargaining side is made up of one or more eligible unions who are approved to be an employee bargaining party. The employer bargaining side is made up of one or more eligible employer associations, like Retail NZ, that will go through an application and approval process to be an employer bargaining party.
Good Faith
Throughout the bargaining process, and once the FPA is in force, you are required to work with your employees in Good Faith. This is the same obligation that is in place for all other employment relationship dealings in New Zealand. Acting in Good Faith means that you can’t mislead employees, or act in a deceptive way.
An example of not acting in good faith could be trying to influence employee’s decision-making regarding union membership, or trying to influence which way they choose to vote on the terms of an FPA.
Providing information to employee representatives
If you have employees covered by the proposed Fair Pay Agreement that are existing members of a union organisation, you must do your best to identify and inform those unions about the approval to initiate bargaining, and where they can find the notice from MBIE giving information about the approval.
This must happen within 15 working days of the initiating union informing you of the approval to start bargaining for a new Fair Pay Agreement.
Providing information to employees within coverage
When the union has been approved to begin bargaining, they need to provide certain information including where you can find the notice issued by MBIE, a statement for you to provide to your covered employees, a document asking employees about their contact details, plus giving them the option to opt out of their contact details being shared. This information must be shared with employees as soon as possible, and no later than 30 working days after you receive notification from the union.
If any of your covered employees don’t want their contact details passed onto the union, they need to let you know in writing. You should keep a record of who has opted out for the duration of the bargaining process. Note: covered employees that have opted out of the process will still be able to vote and are still covered by the Fair Pay Agreement if it is passed into law.
You need to provide this information to each covered employee individually, for example by email, rather than posting it on a staff notice board.
If you have a new employee join your business during bargaining that will be covered by the proposed FPA, you will also need to provide this information to them.
See more information about what information you are required to provide to employees, and when it needs to be completed by under the proposed Hospitality Fair Pay Agreement here {LINK TO MEMBER ONLY FAIR PAY PAGE) “Fair Pay” Updates – Retail NZ
Collate and send an electronic record of your employees contact details.
You must collate contact details of all of your employees within coverage (that have not opted out of having their details shared) and provide these in electronic form (no printed forms!) to the initiating union, no earlier than 20 working days, and no later than 30 working days after giving the above-mentioned information to your employees.
If you have new employees that join your business during bargaining, the timeframe is no later than 60 working days.
Note: It’s important to ensure you don’t provide details of any employees who have opted out.
Union Meetings
During the bargaining process, unions can organise meetings with your employees that are within the coverage of the proposed FPA. The union must give you at least 14 days’ notice of the date and time of the meeting, and work with you to ensure the timing works for you, so that you can make sure your business can continue to operate during the proposed meeting time.
The union is entitled to organise a maximum of 2 meetings, no longer than 2 hours each during the bargaining process.
Provided the union has provided sufficient notice and worked with you in good faith to find a suitable time for the meeting, you must allow your employees to attend these meetings, and pay them if the meeting is during their normal work hours.
Allowing employee representatives access to your workplace
Unless you have a certificate of exemption (generally only issued for religious reasons) a union representative can access your workplace without prior notice, but only if their primary reason for visiting is to do with a Fair Pay Agreement.
Employees must not unreasonably be forced to take leave, or have wages deducted for this visit. The representative is required to comply with any health and safety or security policies you have in place.
What if you don’t comply?
Non-compliance with these requirements could lead to penalties under the Act. We recommend taking these actions within the timeframe required to ensure you’re in line with the new legislation.
As members will be aware, on 1 December 2022 Unite Union applied to commence a Fair Pay Agreement bargaining process in the hospitality industry. That application was approved by MBIE on 29 May 2023. Since then, another two unions (E Tu and Raise the Bar Union) have joined the union side of the Hospitality bargaining process.
Following that, on 23 December 2022 First Union applied to commence a Fair Pay Agreement process in the grocery supermarket industry. That application was approved by MBIE on 11 July 2023.
In both processes, the ‘employer side’ of the bargaining is currently being pulled together.
In the Hospitality process there are nine different representative organisations involved, including Retail NZ. The number of organisations involved reflects the breadth and complexity of the hospitality industry, which is said to involve about 24,000 different employers and about 150,000 employees. In the Grocery supermarket process, there are eight different representative organisations.
Over recent weeks Retail NZ has been working with the other employer organisations involved in each of the two processes, to develop a framework to govern how the employers will work together through the negotiating process, in the event that the process continues. We expect to be in a position to share more details about this work, with those members who are directly impacted, in the next week or so.
Of course, in the meantime, the countdown to the election continues. The main political parties have starkly opposed views on the future of the Fair Pay legislation, and whether we need to be concerned about Fair Pay Agreements is likely to be apparent once the outcome of the election is known.
Update: 31 October 2023
In the Hospitality process the ‘employer side’ has raised concerns with Unite Union about the use they have been making of employee contact information. There is a concern that information that was gathered for FPA purposes has been used by the Union for more union purposes. The ‘employer side’ has challenged the Union about this and the parties are in ongoing discussions about this, and about what will happen to employee contact information after the Fair Pay legislation is repealed.
In the Grocery process, there will be an initial meeting between some of the employer parties this week, to discuss what, if any, steps are required to be taken before a new government is formally announced and the future of the legislation is clarified.
The contact details required are the employees name, job title, employer, primary work location, and their work email address OR phone number. If the employee doesn’t have a work email or phone, then a personal email address can be provided.
Employee contact details need to be emailed to Unite Union at [email protected]
Fair Pay Agreements set minimum employment terms for covered employees. If an employment term in an Individual Employment Agreement or Collective Employment Agreement is better than the term in a Fair Pay Agreement, then that term will apply. If the Fair Pay Agreement term is better, the Fair Pay Agreement term will apply.
Once a Fair Pay Agreement is passed into law, the employment terms of the Fair Pay Agreement apply to any employee where 25% or more of their work is covered by the agreement.
if an employee is covered by more than one Fair Pay Agreement, the agreement that covers the greater percentage of their work applies. This is so that only one Fair Pay Agreement will apply to a particular employee.
The Fair Pay legislation covers how all employee contact details will be managed and handled, you can read more here Your privacy – information we collect during the Fair Pay Agreement process » Employment New Zealand. These obligations also apply to Unions, who must be very careful with any information provided to them.
Retail NZ is committed to representing employer’s voices throughout the Fair Pay process. Here are some of the ways to keep in touch and stay informed:
- Sign up to receive updates on Fair Pay “Fair Pay” – Retail NZ
- Call us on 0800 FAIR PAY (0800 324 7729) or email [email protected]
If you’re not a Retail NZ member, and looking to sign up for Fair Pay updates, please click here.
