“Fair Pay” Agreements are coming.
They will likely affect your business.

The Government has introduced a new law requiring “Fair Pay” Agreements (FPAs), which can now be triggered by the unions. Retail NZ is ready and prepared to negotiate on behalf of retail employers. These will be sector or occupational collective agreements that set minimum terms and standards for all workers in their relevant job or industry. It will be mandatory for all employers in an affected sector or occupation to apply FPAs, whether or not their employees are members of a union. FPAs are likely to mean: higher wage costs and less flexibility for your business.

Latest update 23 June 2023 

Since the introduction of the Fair Pay legislation in December 2022, the Ministry of Business, Innovation and Employment (MBIE) have received 10 Fair Pay Agreement applications in total​. 3 applications have now been withdrawn​. 

5 applications have been approved to initiate bargaining and form bargaining sides. This includes the Hospitality related general application. 2 applications are still being assessed, including the supermarket and grocery general application​. 

There is currently no general retail application lodged.  Sign up below for more updates!

To understand how this will impact your business contact us on 0800 FAIR PAY (0800 324 7729) or sign up for updates

We will keep you informed of developments impacting the retail and service sectors.

Frequently Asked Questions

Employer associations (like Retail NZ) and employee representatives (unions) will negotiate on behalf of their sectors.

Any eligible union can initiate the FPA process, which is then compulsory. To do so, a union needs to have:

  • the support of 1,000 workers (or 10 per cent of the affected workforce, whichever is smaller); or
  • satisfied a ‘public interest test’ based on specific criteria, for example low pay, or a history of poor pay progression.

All FPAs will need to include the following conditions:

  • base wage rates
  • ordinary hours
  • overtime and penalty rates
  • training and development.

Some other topics must be discussed, but don’t have to be agreed, like redundancy, leave provisions and health and safety conditions. Other employment terms can be included if both bargaining sides agree.

Currently there are two applications that would cover workers in hospitality, grocery and supermarkets. We expect a general retail FPA application at a later date.

Retail NZ opposes the Government’s proposals. The new legislation is hugely complicated, will drive significant costs for business, will remove flexibility for employers to set terms and conditions as they see fit (based on the current minimum employment standards) and will overall lead to reduced employment opportunities in the retail sector. However, the legislation has passed into law. 

Click here for the latest Fair Pay updates, exclusively for Retail NZ members.

Not a Retail NZ member? You can learn more about joining New Zealand’s leading retailing community here.

Do you have a question?

If you’d like to know more about Fair Pay Agreements please email [email protected], or give us a call on 0800 FAIR PAY (0800 324 7729).

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