An FPA can also contain regional differences in terms and conditions, as long as they comply with the Human Rights Act and minimum employment entitlements.
FPAs can sit alongside Collective Agreements, which can still exist within specific companies or across an occupational group, but must be on top of the minimum standard set by an FPA.
Unions will represent employees within an industry or occupation (including non-union members), and employers will choose representatives who meet specified requirements. In this regard the Council of Trade Unions (CTU) and Business NZ will each receive funding to support their coordination roles in the FPA system.
Only unions, not employers, will be able to initiate bargaining for an FPA. To initiate, the union would apply to the Ministry of Business, Innovation and Employment, demonstrating that they have met either:
• The Representation Test: that they have the support of 10 percent, or 1000 employees (whichever is lower) within an industry or occupation to initiate bargaining, or
• The Public Interest Test: where there is evidence to show that there is either low pay, low bargaining power, a lack of pay progression, or long hours or contractual uncertainty that is not adequately compensated within an industry or occupation and that an FPA would be deemed to be in the public interest.
The initiating union must decide which work they want covered. This could be based on an occupation (eg bus drivers), or on an industry (eg supermarkets). If there is an overlap in coverage between two FPAs, the second one only applies if the workers would be better off overall. Currently, contractors are not included in coverage.
Once bargaining for an FPA has begun, the proposed process ensures it will also come to an end. In this regard, once the parties reach an agreement, the FPA can be ratified with a simple majority of both employee and employer voters.
• Employers will have one vote per employee in coverage, with a slightly higher vote weighting for employers with fewer than 20 employees in coverage.
If a first ratification vote fails, the parties will go back to bargaining. However, if a second ratification vote fails, the FPA will be referred to the Employment Relations Authority for determination. Industrial action cannot occur during FPA negotiations.
Based on recent comments from both the Workplace Relations Minister, Michael Wood, and CTU president, Richard Wagstaff, it is highly likely that the first FPAs to be initiated will cover those employees working in critical roles like cleaners, supermarket workers and bus drivers. However, the legislation will not limit this to just those groups. Any union that can meet the initiation criteria will be able to commence the process for an FPA in the occupation or industry of their choosing. This could lead to widespread activity across multiple industries or occupations. Watch this space.
I recommend connecting with your relevant industry or employers' association, which no doubt will be keeping a close eye on developments and providing updates to members, in what appears to be one of the most significant changes to the employment landscape in recent times.
The information contained in this article is of a general nature and is not intended as legal advice.
■ Craig is the HR and employment relations specialist for Business Central in Hawke's Bay and Gisborne. Email:
