Fair Pay Agreements

The Fair Pay Agreements Repeal Act has now passed through Parliament, and it repeals the Fair Payment Agreements (FPA) legislation.

FPAs came into force on 1 December 2022 under the previous government.  Under this system, unions and employer associations could bargain for employment terms and conditions that would apply to all employees (large or small) in an industry or an occupation regardless of whether they agreed with them, or even took part in the negotiation process.

The repeal Act will remove this compulsory bargaining framework, as well as the ability of the Employment Relations Authority to determine minimum employment terms across an entire industry.

As no FPAs have been completed, the impact of the repeal will be to remove the ability for any FPAs to be finalised. Once it is repealed, bargaining for initiated fair pay agreements will cease as there will be no legislative mechanism to bring any agreements into force.

The state of bargaining will then revert to the previous framework where employers and employees (or unions representing their members) have more flexibility to agree on their employment terms as long as these are above the minimum entitlement provisions specified in the Employment Relations Act 2000.