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.
Employment terms that must be included in all Fair Pay Agreements
The Fair Pay Agreements Act requires the bargaining sides to agree certain terms that must be included in a Fair Pay Agreement and to at least discuss other specified terms. The employment terms that must be bargained for and agreed on are:
- the date the agreement comes into force and when it expires
- the coverage of the agreement, written clearly enough that employers and employees can determine the work or type of work covered
- for each type of work covered, and for each class of covered employees, the standard hours during which the base pay is payable for work performed
- the minimum base wage rates, rates for overtime worked, penalty rates, and when these rates apply
- adjustments to the minimum base wage rates, rates for overtime worked and penalty rates over the term of the fair pay agreement
- training and development arrangements for covered employees
- how much leave a covered employee gets
- governance arrangements for the bargaining sides when the agreement is in force
- the process for bargaining sides to engage with each other if a variation is requested.
Topics that must be discussed during bargaining
When bargaining for a proposed agreement, the bargaining sides must discuss whether the proposed agreement will specify:
- the objectives of the proposed Fair Pay Agreement
- health and safety requirements
- arrangements relating to flexible working
- arrangements relating to any redundancy.
Limits on how certain terms may differ between employees
Terms set out in a Fair Pay Agreement do not have to be the same for all covered employees, but there are restrictions on how the terms may differ.
Like minimum wage requirements, bargaining sides can bargain different minimum base wage rates that apply while employees are:
- starting out in employment (aged between 16-19 inclusive and have not been employed for more than 6 months by any employer) or
- being trained.
You can find out more about these rates:
Minimum wage exemption permits will also still be relevant. If there is a permit in place that specifies a base wage rate, then that will apply instead of the Fair Pay Agreement. If the permit states a percentage, then that percentage will be of the base wage in the Fair Pay Agreement rather than the national minimum wage (if the Fair Pay agreement base wage is higher than the minimum wage).
Bargaining sides can also bargain different pay rates or leave entitlements for different groups of employees, but only if that difference is based on:
- the occupation of the employees,
- the role of the employees within an occupation (for example, seniority in roles)
- the district employees live in. For example, if employees live in a district where the cost of living is lower (a rural area where the rent is cheaper than the rent in a city).
Most other terms of a Fair Pay Agreement can differ between groups of employees unless that differentiation is contrary to any law, including relating to a prohibited ground (for example, discriminating on the basis of sex or race).