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 (the bargaining sides) 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.
Assessment by the Employment Relations Authority
Once the bargaining sides have come to an agreement the lead advocate from both sides must jointly submit the proposed agreement to the Employment Relations Authority (the Authority) for the Authority to check the agreement complies with the law.
The proposed agreement must not be submitted until both sides have agreed to the wording of the terms in writing and the agreement is signed by both bargaining side lead advocates.
The Authority will assess the proposed agreement isn’t contrary to any law and complies with:
- the Fair Pay Agreements Act and regulations
- the employment standards as defined in section 5 of the Employment Relations Act 2000
- any other relevant employment law.
The Authority will also assess whether the coverage of the proposed agreement overlaps with the coverage of an existing Fair Pay Agreement. If there is a coverage overlap, the Authority will determine which agreement gives the better terms overall for the work or type of work that overlaps in both agreements.
Based on that determination, the Ministry of Business, Innovation and Employment (MBIE) will adjust the coverage of either the proposed agreement or existing Fair Pay Agreement, so that only the agreement that provides the better terms overall will apply to that work or type of work. This may impact who is eligible to vote in the ratification vote of the proposed agreement.
No later than five working days after the Authority has approved the proposed agreement the:
- employee side must use its best efforts to notify all covered employees that a ratification vote will be held soon
- the employer bargaining side must use its best efforts to notify all covered employers that a ratification vote will be held soon.
Setting the date for the vote
The employer side must set the ratification vote as soon as practicable but at least 10 working days after the date the Authority notifies bargaining sides of approval. This is to ensure employers receive adequate notice of the ratification vote.
The employee side must set the ratification vote as soon as practicable but at least 40 working days after the date the Authority notifies bargaining sides of approval.
The minimum timeframe before ratification can be held on the employee side is longer to allow time for employers to notify employees and then provide an updated list of covered employee contact details to the employee bargaining side (excluding any employees that opt-out of having their contact details provided at this stage).
Notifying sides of the vote
At least 10 working days before the date the vote will take place, each side must use their best efforts to inform in writing the covered employees or the covered employers that they represent:
- that they may be eligible to vote for or against the proposed agreement
- how they can determine that they are entitled to vote
- the first date that they can submit their vote
- the final date that they can submit their vote
- the methods that they can submit their vote
- the consequences of the vote.
There must be at least one way of voting that is different than voting at their workplace, for example by postal voting or online voting.
All employees who believe that they would be covered by the Fair Pay Agreement if it were in force are eligible to vote in a ratification process for the proposed agreement. All employers who believe that they employ at least one employee who would be covered if the agreement were validated are also eligible to vote. An employee will be covered by the Fair Pay Agreement if at least 25% or more of the work or type of work they do is within coverage.
The bargaining sides must let each other know the results of the vote within five working days after the vote is finalised. If the ratification vote is successful, they then need to submit evidence of the process and results to MBIE, a statutory declaration that the process was held according to the agreed process and a copy of the proposed agreement.
MBIE will check to make sure the vote followed the law and the process set out in the bargaining process agreement.
If the ratification votes fail, the proposed agreement returns to bargaining. If the ratification vote fails a second time, either bargaining side is able to apply to the Authority for the proposed Fair Pay Agreement to be fixed by determination.
Overlapping coverage check
If the vote is successful or following the proposed Fair Pay Agreement being fixed by determination, MBIE will do a final check to make sure there is no overlapping coverage of the proposed Fair Pay Agreement with any existing Fair Pay Agreement that was not able to be identified previously. If there is a coverage overlap, they must:
- advise bargaining parties on each side of this, and
- advise both bargaining side lead advocates to submit the proposed agreement to the Authority to determine whether there is a coverage overlap, and which agreement provides the better terms overall.
Validation – Issue Fair Pay Agreement notice and publish agreement
Once the above have been completed, if satisfied that the agreement complies with the Act, MBIE may validate the agreement by issuing a Fair Pay Agreement notice.
If there is an overlap in coverage, MBIE may issue a notice that amends the coverage of an existing Fair Pay Agreement so that it no longer covers the work or type of work that will be covered by the new Fair Pay Agreement. MBIE may also issue a Fair Pay Agreement notice if the Authority fixed the terms of the proposed agreement.
A Fair Pay Agreement notice issued by MBIE is secondary legislation. This means that it is law and all covered employers must provide at least the employment terms specified in the fair pay agreement to their covered employees and a bargaining party for a Fair Pay Agreement must comply with any obligations imposed on the bargaining party in the Fair Pay Agreement.