Fair Pay Agreements

Fair Pay Agreements will be the best change for workers in decades. They will set minimum standards across whole industries so we can win decent work – better pay, hours of work, health and safety, training, and worker input in decision making.

E tū is focused on making sure the Government get the Fair Pay Agreement legislation right, and helping the public understand how important this change will be for workers in Aotearoa.

The Fair Pay Agreements Bill is currently before Parliament! The current draft of the bill is very good overall, but there are some issues that we can address to make the final law even better. E tū members made over 1,000 written submissions on the bill!

The Fair Pay Agreements Bill – in brief

The purpose of the Fair Pay Agreements Bill is best explained in the explanatory note at the beginning of the bill:

The objective is to improve labour market outcomes in New Zealand by enabling employers and employees to collectively bargain industry-wide or occupation-wide minimum employment terms. The Bill builds on the analysis and recommendations of the Fair Pay Agreement Working Group in December 2018.

While New Zealand’s labour market has some strengths, it also has systemic weaknesses. These include a significant prevalence of jobs with inadequate working conditions, low wages, and low labour productivity. For example, Māori, Pacific peoples, young people, and people with disabilities are over-represented in jobs where low pay, job security, health and safety, and upskilling are significant issues. Barriers to good labour market outcomes are particularly prevalent for people who fall within more than 1 of those groups. The Bill will help address these issues.

Fair Pay Agreements will enable workers and their unions to negotiate a set of core minimum conditions for a whole industry. Nobody will be able to be employed in that industry on anything less, stopping a ‘race to the bottom’. Unions will still be able to negotiate collective agreements for their members over and above these minimum standards.

Once union and employer advocates have sat down at the bargaining table and come to a proposed settlement, they will take these back to the people they represent. For unions, that means taking a proposed settlement to the whole workforce – including non-members – and taking a vote where at least a simple majority of people will be required to settle a new Fair Pay Agreement. Employers will have their own voting process.

If negotiations break down, instead of industrial action, a process of compulsory arbitration will take place, whereby an independent person considers the claims and arguments of both union and employer advocates and makes a binding decision on a new Fair Pay Agreement. 

Fair Pay Agreements will be ground-breaking. They will bring collective bargaining to many workers who currently have no access to it. They will be crucial to building a high wage, high skill economy, where we can lift employment conditions without being undermined by the race to the bottom.

What’s next?

As the bill goes through Parliament, our submissions will be considered and some changes will be made. We expect the bill to have its Third Reading and then become law well before the end of 2022. Then we will begin organising to initiate the first Fair Pay Agreements as soon as possible!

As the bill is debated in Parliament, here’s what we know:

  • Inequality is endemic in our society and must be addressed.
  • Low wages and exploitative work conditions are a contributor to inequality.
  • Workers have better wages and conditions when they are in unions and have collective agreements.
  • Most workers in low wage industries are not in unions or on collective agreements.
  • Industry-wide bargaining will improve wages and conditions for low paid workers.
  • Industry-wide bargaining will create an even playing field for employers taking wages out of competition.
  • Fair Pay Agreements are the best opportunity to transform New Zealand’s low paid economy and the lives of workers, families and communities currently suffering from inequality and deprivation.

E tū supports and advocates for Fair Pay Agreements as one significant step to prosperity for workers and their communities.


The Fair Pay Agreements Bill

“Why New Zealand needs Fair Pay Agreements” – article by E tū Assistant National Secretary Annie Newman

Fair Pay Agreements Working Group final report

Fair Pay Agreement Cabinet Paper – E tū summary

BERL report commissioned by the Council of Trade Unions about sector-wide bargaining