The Fair Pay Agreements Act is designed to allow employers and unions with a sector to bargain for minimum employment terms for all covered employees in an industry or occupation. The Act aims to improve wages and reduce income inequality.
It has now passed into law, so applications to initiate bargaining can be made by employee groups from 1 December 2022. The following diagram explains how the system works:
The Fair Pay Agreement system.
What does this mean for employers?
If your workers are part of a union and initiate bargaining with your business, you have responsibilities under the new Act, including working with your employees in good faith, providing information, allowing employees to attend FPA meetings and allowing a union rep access to your workplace. Both sides – employees and employers – will have access to a support person paid for by the Government.
You can
read more about your responsibilities here.
What if I have a small business?
For those businesses that employ only a few people, it’s unlikely that you will be directly engaged in collective bargaining.
You are more likely to be affected by a new collective agreement that sets out minimum conditions for your industry. You will need to meet those conditions, even if your workers are not members of the union that negotiated the agreement. That might include pay rates, work hours, and leave arrangements, for instance.
If there is an FPA agreement that applies to your employees, you’ll get to vote on it when it goes out for ratification.
Need to know more?
Concerned about the impact the FPA could have on your business? We can talk you through the potential pitfalls and recommend specialist advice where required.
We’re here to help, so do get in touch if you have any questions.