The Employment Relations Authority has set wages in an unresolved collective bargaining agreement for the first time.

FIRST Union members employed by Mitre 10 Mega in Dunedin and Mosgiel have won what is being described as a living wage, after the ERA imposed a wage increase on to employer Jacks Hardware and Timber Ltd, which operates the Mitre 10 store.

Jacks Hardware and Timber Ltd chief executive Neil Finn-House said he was pleased to have concluded the collective agreement negotiations.

"I am proud of the strong team culture we have in our Dunedin and Mosgiel stores," Finn-House said.

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"Our people are our most important asset and we have a robust reward structure and a real focus on career development and internal promotion.

"Maintaining that holistic, whole-of-career approach is a key priority for my team and I. We continuously strive hard to maintain our reputation as one of Otago's employers of choice."

However, chief executive for Retail NZ Greg Harford said the wage rate appears to be "out of kilter" with market rates for similar businesses in Dunedin.

The Authority ordered the minimum rate to be paid for staff without experience will be $19 an hour, $1.30 an hour more than the legal minimum wage.

"And $1 more than the median wage paid for entry level sales staff in heartland South Island regions," he said.

"While both the Union and the employer are hailing today's decision as a fair compromise, the rates set are higher than those being paid by comparable companies in the regional South Island market.

"When setting rates, all parties need to make sure that they are taking individual circumstances into account and that any comparisons made between businesses are comparing like for like."

FIRST union claims Jacks Hardware and Timber deliberately stalled their collective bargaining agreement.

If collective bargaining negotiations breach "good faith" the ERA has the ability to unilaterally set the provisions of a collective agreement.

Former Mitre 10 Mega employee Ann Burridge had worked for the company for 32 years and was being paid $17.25 when she was made redundant last year.

Burridge said she nearly "burst into tears with excitement" when she heard the decision.

The ERA was forced to step in as Jacks Hardware and Timber had put up every stop to prevent negotiations, she said.

In the ERA case Martin Dippie, the managing director of Jacks, said the company
could not afford to pay the level of increased wages the Union sought.

He said Jacks believed its staff were happy with their remuneration and the performance development review process (PDR) that Jacks undertook in August-September of every year.

However, ERA member Christine Hickey sided with the union.

The starting rate will now be set at $19 per hour, an experienced worker will be paid $21 per hour and a worker with a trade qualification $23 per hour.

Union retail Secretary Tali Williams says there has been a six-year battle to get Jacks Timber and Hardware to even negotiate with the union.

"With any other employer we don't need to get to the point of fixing wage rates, eventually they sit down and negotiate with us. But they pushed the limit of what the law allowed them to do," she said.

FIRST Union alleges Jacks intentionally restructured union members out of employment. There are currently only six union members employed by the Mitre 10 stores – down from about 30 when the negotiations began.

Williams says those members who have persevered over the years are "over the moon" for the 140 employees now eligible for the wage increase, even though many of them are no longer employed by Mitre 10.

"This has been six years of damn hard work," Anne Burridge said.

"I don't think I've ever had a drink before 5pm before, but I'm having one now."