This page is part of a series of pages with information for bargaining parties in the Fair Pay Agreement system:
Detailed information for bargaining parties can be found in the guide below:
The Fair Pay Agreements system brings together unions and employer associations to bargain for employment terms for all covered employees in an industry or occupation. This means that these organisations will meet to discuss and agree on a set of employment terms for the work being done within an industry or occupation.
Bargaining is between an employee side and an employer side
Fair Pay Agreement bargaining is between an employee bargaining side and an employer bargaining side.
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 that are approved to be an employer bargaining party. The employer bargaining side may also include specified employer bargaining parties representing state sector agencies.
Both the employer and employee bargaining sides must bargain for both employees and employers that are, and are not, members of their organisations.
Other eligible unions can also apply to be an employee bargaining party
Once an application to initiate bargaining has been approved, any eligible union can also be approved to be an employee bargaining party. All employee bargaining parties form the employee bargaining side.
To be approved as a bargaining party, eligible unions will need to apply to the Ministry of Business, Innovation and Employment (MBIE) on the MBIE issued form. They will also be required to provide evidence that shows they are eligible to apply.
An eligible union for the purposes of bargaining a proposed agreement, a proposed variation or a Fair Pay Agreement, is a union that has:
- at least one member who is a covered employee (an employee who performs work that is within the coverage of the proposed Fair Pay Agreement) and
- a constitution that enables the union to represent the collective interests of covered employees, whether the employees are union members or not.
- the rules of the union as registered under the Incorporated Societies Act 1908, or
- the union’s constitution as registered under the Incorporated Societies Act 2022.
For more information about initiating bargaining, refer to:
An employer association can apply to be a bargaining party on the employer side
An eligible employer association can also apply to become an employer bargaining party. Applications must be made in writing and on the form issued by MBIE.
Employer associations need to provide evidence that they are an eligible employer association.
An employer association is defined as an association of employers that:
- is an incorporated society registered under the Incorporated Societies Act 1908 or the Incorporated Societies Act 2022; and
- is independent from, and is constituted and operates at arm’s length from, any union or worker organisation
An eligible employer association has:
- at least one member that is an employer covered by the proposed Fair Pay Agreement
- a constitution that enables the employer association to represent the collective interests of covered employers for the purposes of bargaining for a proposed agreement, a proposed variation, or a Fair Pay Agreement (even if they aren’t a member of the employer association) and
- a constitution that is democratic, not unreasonable, not unfairly discriminatory, not unfairly prejudicial, and not contrary to law.
Constitution for employer associations means:
- the association’s rules as registered under the Incorporated Societies Act 1908 or
- the association’s constitution as registered under the Incorporated Societies Act 2022.
There can be more than one employer bargaining party and all employer bargaining parties (if more than one) form the employer bargaining side. In some situations, the employer bargaining side may also include specified employer bargaining parties representing state sector agencies.
Approval or decline of application
When a union or employer association has applied to be a bargaining party, as soon as practicable MBIE will assess the application and either approve or decline it.
If the application is declined, the union or employer association can apply again.
If the application is approved, within five working days MBIE will:
- publish that it has approved the application for the organisation to be either an employer or employee bargaining party. This will include the name of the bargaining party and state where someone can find the notice that the application to initiate bargaining has been approved
- notify other bargaining parties on the same bargaining side that it has approved the application. This will include giving them the name of the new bargaining party.
Deadline to apply as a bargaining party
Eligible unions and employer associations can only apply to be a bargaining party between the date that the application to start bargaining is approved and while bargaining is ongoing, which would be until either:
- bargaining is discontinued
- the Fair Pay Agreement is validated by MBIE at the end of the process just before the agreement becomes law
- a bargaining party applies for a determination by the Employment Relations Authority (the Authority) to fix the terms of the proposed agreement due to a representation gap.
Bargaining sides must represent covered employees and employers
Bargaining sides are both entitled and obliged to represent the collective interests of all covered employees/employers. They must use their best efforts to represent the collective interests of all covered employees/employers, whether or not each is a member of the bargaining party organisation. This involves:
- providing regular updates about the bargaining to all covered employees/employers
- giving all covered employees/employers the opportunity to provide feedback about the bargaining
- during bargaining, considering all feedback received from covered employees/employers
- advising all covered employees/employers of any ratification vote
- considering whether all interest groups of covered employees/employers are recognised and given the opportunity to provide feedback in relation to the bargaining
- not doing anything, either directly or indirectly, that is likely to mislead or deceive a covered employee/employer.
Māori must be represented
Bargaining sides must use their best efforts to make sure Māori employees or employers are represented in the process. This includes by:
- getting and considering feedback from representatives of Māori employees or employers
- considering whether the bargaining side should include a person that represents the interests of Māori employees and employers.
When the bargaining side is formed
The employee bargaining side is officially formed three months after MBIE notifies approval to initiate bargaining.
The employer bargaining side is formed either:
- three months after MBIE notifies approval to initiate bargaining if an eligible employer association has been approved as a bargaining party during that time
- the date a default bargaining party elects to be an employer bargaining party
- after the three-month period, on the date when an eligible employer association has been approved as a bargaining party, if this occurs before an employee bargaining party applies for the terms of the proposed agreement to be fixed by the Authority due to a representation gap on the employer side.
Ceasing to be a bargaining party
Bargaining parties can apply to MBIE for approval to stop being a bargaining party if:
- all other bargaining parties on the bargaining side agree that the bargaining party may cease to be a bargaining party
- it ceases to be a bargaining party following the process set out in the inter-party side agreement, or
- it is the final bargaining party on the bargaining side.
The application must be in writing and include:
- the details of the Fair Pay Agreement it is a bargaining party for
- the reason it wishes to stop being a bargaining party
- whether there are any other bargaining parties remaining on the bargaining side (and whether any of the remaining parties is a specified employer bargaining party).
The bargaining party is no longer a bargaining party on the date that MBIE approves the application.
Bargaining parties may also cease to be eligible as a bargaining party if they are no longer an eligible union, eligible employer association, or they no longer represent any covered employees or employers.
If a bargaining party becomes aware that it is no longer eligible to be a bargaining party, it must notify MBIE as soon as practicable but within five working days.