Fair Pay Agreements: Big shake up on the horizon

The Government is introducing Fair Pay Agreements, and as one commentator puts it, it could be “the biggest shake-up in the employment sector for decades.”

It’s a system similar to Australia’s Modern Awards. A Fair Pay Agreement sets out working conditions and minimum pay across an entire sector. They are negotiated by a union, and a business representative group such as BusinessNZ. Some employers might be affected by resulting agreements who weren’t actually involved in the negotiations.

While this is likely to lead to better working conditions across sectors, it’s also likely to complicate matters for businesses. A single business might be subject to multiple Fair Pay Agreements, requiring them to set different pay and conditions for different types of employee. That’s a lot more complex than the status quo, and it seems likely businesses will need to call on a lot more HR and employment law advice.

The Fair Pay Agreements Bill is planned for release later this year. People will be able to comment on the Bill through the Select Committee process. It’s something we’ll keep you posted on.

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