Fair Pay Agreements Act 2022 Update: Industry collective bargaining for the “hospitality” industry is on the way

The Fair Pay Agreement Act 2022 (“FPAA”) was enacted and came into force in December 2022. It represents a significant potential change to New Zealand’s employment relations landscape. In particular, the FPAA aims to establish a regime for representative bargaining between employers and unions across entire industries, with a view to create binding minimum employment terms and conditions for employees in entire industries and occupations.

In this article, we will highlight the wide scope of the proposed coverage of the ‘hospitality’ industry FPAA bargaining. While ‘hospitality’ is commonly used to refer to cafes and restaurants, the workers at cafes and restaurants will only make up about half of the coverage scope. The FPAA bargaining coverage also encompasses accommodation, takeaway food services, catering services, cinemas, clubs and casinos. All employers and employees within the proposed coverage could potentially be bound by the outcome of the FPAA industry bargaining process. According to Unite Union, the proposed coverage is likely to apply to 160,000 workers and over 24,000 employers – all of whom could have different interests, priorities, workforce and financial circumstances.

FPAA applications that have been approved by MBIE

Since the FPAA came into force, a number of unions have applied to initiate bargaining for a FPAA instrument. To date (June 2023), five applications have been assessed and approved by MBIE:

1. the urban, rural and interurban bus transport industry – the proposed coverage includes bus drivers, coach drivers and bus cleaners;
2. the security officer and guard occupations – the proposed coverage includes all security officers, security guards, crowd controllers, armoured car escorts, bar security, bouncers, event security, night watchman, security concierge, and security service coordinators;
3. the “hospitality” industry – the proposed coverage includes accommodation providers, cafes, restaurants, takeaway food services, pubs, taverns, bars, clubs (hospitality), event catering providers, casino operations, and movie theatres. It also includes labour supply agencies that provide employees who work at these establishments;
4. the commercial cleaner occupation – the proposed coverage includes cleaners of offices, residential complexes, hospitals, schools, hotels, motels, industrial work areas, industrial machines, construction sites, and other commercial premises;
5. the early childhood education industry – the proposed coverage includes teachers (qualified and unqualified), managers, teacher aides, administrators and support staff at early childhood centres, kindergartens, Kohanga Reo, preschools, nurseries and creches.

Scope of coverage – types of businesses in “hospitality”

The proposed coverage of the FPAA bargaining will comprise of the following types of businesses (and their employees):

• Accommodation – this consists of employers (and their employees) mainly engaged in providing accommodation for visitors, such as hotels, motels and similar units.
• Cafes and Restaurants – this consists of employers mainly engaged in providing food and beverage services for consumption on the premises.
• Takeaway Food Services – this consists of employers mainly engaged in providing food services ready to be taken away for immediate consumption, including employers mainly engaged in supplying food services in food halls and food courts.
• Pubs, Taverns and Bars – this consists of hotels, bars and similar employers mainly engaged in serving alcoholic beverages for consumption on the premises, or in selling alcoholic beverages both for consumption on and off the premises. These employers may also provide food services and/or present live entertainment.
• Clubs – this consists of employers mainly engaged in providing hospitality services to members. These may include gambling and other social or entertainment facilities.
• Casino Operation – this consists of employers mainly engaged in operating facilities with a range of gambling services, such as table wagering games and poker/gaming machines.
• Motion Picture Exhibition – this consists of employers mainly engaged in screening motion pictures using a variety of visual media.
• Event Catering Services – this consists of employers mainly engaged in providing catering services at events.
• Labour Supply Services – this consists of employers mainly engaged in supplying their own employees to any business within the coverage. The work to be performed is generally temporary and carried out at the client’s site and under the supervision of the client’s staff.

Scope of coverage – types of workers in “hospitality”

The proposed coverage of the hospitality FPAA bargaining will comprise of the following types of workers:

• Cafe or Restaurant Manager – including Food and Beverage Manager, Fast Food Manager and Canteen Manager.
• Caravan Park and Camping Ground Managers.
• Accommodation Managers – including Resort Manager, Guest House Manager, Backpackers Manager and Duty Manager (Hotel).
• Licensed Club Manager, including Gaming Manager, Casino Duty Manager and Nightclub Manager.
• Bed and Breakfast Employee.
• Call Centre or Contact Centre Manager.
• Customer Service Manager, including Service Manager.
• Conference and Event Organiser, including Event Manager, Event Planner, Exhibition Organiser and Wedding Coordinator.
• Cinema Manager.
• Facilities Manager.
• Baker and Pastrycook.
• Butcher or Smallgoods Maker.
• Chefs and Cooks.
• Bartender, including Bar Steward.
• Barista and Cafe Worker, including Cafe Assistant, Cafe Attendant.
• Gaming Worker, including Dealer, Croupier, and Gaming Pit Boss.
• Hotel Service Manager, including Hotel Service Supervisor, Front Office Manager (Hotel), Head Housekeeper, Hotel Concierge, Hotel Office Manager and Head Porter (Hotel).
• Waiters, Food and Beverage Attendant, Sommelier and Wine Steward.
• Busser, including Dishwasher and Bar Back.
• Doorperson and Luggage Porter.
• Accommodation Receptionist, including Reservations Clerk.
• Ticket Seller.
• Fast Food Cook.
• Chef’s Assistant and Cook’s Assistant, including Bakery Assistant, Pastrycook’s Assistant, Butcher’s Assistant.
• Kitchenhand, including Kitchen Steward, Sandwich Hand and Pantry Attendant.
• Accommodation Housekeeper.
• Laundry Worker, including Linen Sorter and Folding Machine Operator.
• Caretaker, including Janitor.
• Handyperson, including Hotel Yardperson.
• Car Park Attendant, including Hotel Valet.
• Ticket Collector or Usher, including Venue Attendant and Turnstile Attendant.
• Delivery Driver, including Fast Food Delivery Driver or Restaurant Delivery Driver.
• Cleaner who cleans at Accommodation, Food and Beverage, Casino and Cinema premises.
• Alarm, Security or Surveillance Monitor.
• Security Officer, including Security Guards and Bouncers – who patrols and guards Accommodation, Food and Beverage, Casino and Cinema premises.
• Bus Driver in the accommodation sector.
• Beauty Therapist, including Nail Technician, Manicurist and Electrologist (Hair Remover).
• Cashier.

Next steps – obligations on employers within the proposed coverage

After an application to initiate bargaining has been approved by MBIE, there is an obligation to identify and notify the employers who would fall within the proposed coverage of the FPAA instrument. The employers that come within the proposed coverage will need to:

1. Identify their employees who would fall under the proposed coverage, and notify any unions that have members who would fall within the proposed coverage of the initiated FPAA bargaining, within 15 working days; and
2. Provide to the applicable employees a written statement that deals with the provision of the employees’ contact details to the initiating union, within 30 working days. The employer must allow 20 working days for any employees to advise that they do not want their contact details to be provided to the initiating union. After this opt-out period has passed, the employer then has 10 working days to provide the contact details of all other applicable employees to the initiating union.

Helpful links

For further background information, please refer to our previous article on this topic.

Further information on the FPPA bargaining process which MBIE has published can be found here.

Comments and conclusions

The scope of this FPAA industry bargaining will be extremely broad, as this will cover a broad range of employers and employees that provide vastly different services in different markets. According to Unite Union, the proposed coverage is likely to apply to 160,000 workers and over 24,000 employers. It is likely to be very difficult to find common interests across over 24,000 employers within the proposed coverage, and the representative body could struggle to adequately assess and balance the competing priorities and interests during negotiations of the FPAA instrument.

 The fact that such a broad-based industry bargaining has been initiated and approved to proceed under the new FPAA is no accident. It shows the underlying objective and policy design of the FPA statute, and in particular, the threshold to initiate bargaining for an industry FPA instrument.

Under the FPAA, a union may initiate bargaining by meeting the representation test, if a total of 1,000 employees who would be within the coverage of the proposed FPA support the application to initiate bargaining. However, as unions have been given the sole power to apply for and set the coverage of the proposed FPA, the representation test can be rendered a meaningless threshold by proposing a broad coverage (from which at least 1,000 employees must be within).

The fate and future of the FPAA will depend on the general election in October 2023, as it will determine whether the FPAA will be repealed. It is unlikely that bargaining of the hospitality FPA will be concluded before the election, although if the FPAA remains in effect, the resulting binding instrument could significantly impact a considerable number of workers and employers, given the extremely broad scope of the hospitality industry.