Collective bargaining power
On 1 December, Fair Pay Agreements will become law and could impact the way you run your business.
This is a significant change in managing employment relations and will see the establishment of an industry-wide collective bargaining scheme.
Unions will work on behalf of employees to negotiate with business groups to set or agree on minimum pay and working conditions. Fair Pay Agreements could cover all employees of a specified occupation, or they could be wider and cover an entire industry.
The key takeaway is this. Once a Fair Pay Agreement is finalised, it will apply to all employees covered by the scope of the agreement, regardless of whether they were involved in the process or not.
If business groups refuse to negotiate with the union, or an agreement can’t be reached, the Employment Relations Authority can step in and enforce a Fair Pay Agreement.
The union representing the employee is required to try its best to notify employers that their staff are covered by an FPA, but the responsibility is ultimately on you as the employer to make sure you’re complying with the standards of the FPA, otherwise penalties could result, and you could be required to back pay your employees any entitlements. Keeping up a good relationship with your staff so you know what is happening is key.