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Fair Pay Agreements Bill: What It Means for Business Owners in Marlborough

Fair Pay

The Fair Pay Agreements Bill is now law in New Zealand, and came into effect on 1 December 2022. This new law brings unions and employer groups together to negotiate fair pay for workers in specific industries or occupations.


Starting the process

To start the process, a union must apply to the Ministry of Business, Innovation and Employment to negotiate a Fair Pay Agreement. Once the application is approved, the union and employer group can form bargaining teams and begin negotiations. If the teams can agree on the terms, the workers and employers can vote on the proposal. If a majority of both groups agree, the Fair Pay Agreement becomes law and sets the minimum pay and other employment terms for everyone in the industry or occupation.

What MUST an agreement include?

The Fair Pay Agreement must include certain employment terms, such as the standard hours of work, minimum pay rates, training and development opportunities, leave entitlements, and the duration of the agreement. Unions that are approved to bargain on behalf of workers must also represent those who are not union members. The same is true for employer associations representing employers.

What are my responsibilities as an employer during bargaining?
  • Working with your employees in good faith
  • Provide information to unions your employees are members of
  • Provide information about the Fair Pay Agreement to your employees
  • Prepare and provide an electronic record of employee contact details
  • Allow employees to attend two 2-hour Fair Pay Agreement meetings
  • Allow a representative of an employee bargaining party access to your workplace
  • Give your employees an opportunity to opt out of sharing their details for the ratification vote
  • Prepare and provide an electronic record of employee contact details
An employer who fails to comply with these obligations may be liable to a penalty imposed by the Employment Relation Authority.
How will it effect business owners?

For some business owners, this may result in an increase in labour costs. However, the law also aims to promote fair pay and better working conditions, which could potentially lead to increased productivity and improved morale among workers. Additionally, the law applies to all employers within the industry or occupation, so it levels the playing field and ensures that all businesses are competing on equal terms.

Overall, the impact on business owners will depend on the specific terms of the Fair Pay Agreement and the industry or occupation in which they operate. Some business owners may experience increased labour costs, while others may see benefits from improved worker morale and productivity.


If you have any questions about Fair Pay Agreements, the Marlborough Chamber recommends the following resources:


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