Government releases Discussion Paper on Fair Pay Agreements

Agreements, Government / 17 December 2019
Government releases Discussion Paper on Fair Pay Agreements

The Ministry of Business, Innovation and Employment (MBIE) has released a Discussion Paper for the design of the Fair Pay Agreement (FPA) system. This follows the Fair Pay Agreement Working Group Report released earlier this year which we discussed in our article.

A copy of the full Discussion Paper can be found here.  In summary, the Discussion Paper discusses practical possibilities, raises questions and seeks feedback in six key areas in respect of FPAs including:

Initiation of bargaining         

  • Whether employers should also be able to initiate FPA bargaining.
  • Whether the threshold required for workers to initiate bargaining should be set at 10% of affected workers or some other numerical threshold.
  • Whether a public interest test and representation test would need to be satisfied before bargaining could be initiated.
  • Who should be responsible for notifying workers and businesses of FPA bargaining.

Coverage of FPAs      

  • Ability to renegotiate coverage to change who is covered during bargaining.
  • Whether employers should be able to obtain a temporary exemption from an FPA in certain circumstances, such as where an employer could face going out of business.
  • Whether the parties can negotiate for region-specific FPAs.


  • Who the representatives in bargaining could be, and the support that would be required for bargaining to be an efficient and effective process.
  • Options for how costs involved in FPA bargaining process could be shared such as having government support.
  • Possibility of requiring a government-appointed “navigator” to assist FPA bargaining.

Dispute resolution

  • Possibility of using existing employment dispute resolution frameworks for disputes that arise concerning FPAs.
  • Whether a public body would be required if agreement cannot be reached and discussion around possible rights of appeal.

Anti-competitive behaviour

  • Possibility of establishing an independent government body to analyse an FPA for potentially significant negative impacts and safeguarding against anti-competitive outcomes.

Concluding an FPA

  • How to conduct a ratification vote, the percentage of support that would be required for ratification to occur, and how the terms of an FPA could be enforced.

Submissions to MBIE will be used to develop final proposals in relation to FPAs for the Government to consider.

Please contact us if you would like to discuss the potential impact FPAs may have on your business. We will keep you updated on the development of FPAs.

Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.

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