The FPA Repeal: Implications and Strategies for HR Teams in New Zealand

Feeling a touch of whiplash? You're not alone. In a swift turn of events, as part of the new Government’s 100-day plan, the Fair Pay Agreements (FPA) legislation has been repealed — barely a year old since its enactment in late 2022.

This abrupt change means there are likely a few tweaks you’ll need to make in order to make sure you’re in compliance with the repeal. Unfortunately, it’s not quite as simple as unticking a few boxes, so let’s cut through the noise of opinion, and give you the essentials — what's changed, what hasn't, and how to adjust your HR practices accordingly.

Background on the Fair Pay Agreement

What's the deal with the FPA?

Last year, New Zealand saw the introduction of the FPA legislation. The general idea was to level the playing field by standardising employment terms across entire industries. Think of it as a move to sync up wages, work hours, and other conditions, especially in places where bargaining power was a bit thin on the ground.

The flip side of the coin

As with all things political, not everyone was cheering. Businesses and groups like the ACT party raised their eyebrows, arguing that one rule for all industries just didn't fit. They were worried about soaring operational costs and the potential strain on businesses, especially during tough economic times.

The new government, led by National and ACT, campaigned on boosting productivity and giving businesses more room to breathe. They believed that letting companies negotiate terms that made sense for their unique situations was the way to go for a healthier economy.

So, in a nutshell, while the FPA had its heart in the right place, aiming for fairness, business groups and the incoming government felt the execution wasn’t so fair. And that's why we're seeing a backtrack now, as the new government follows through on its campaign promise to roll the FPA back.

The FPA Repeal unpacked: key takeaways for HR teams

Impact on new FPA applications and existing employment yerms

Post-repeal, the Ministry of Business, Innovation, and Employment (MBIE) will no longer take new FPA applications, which is a big shift in the employment landscape. Oddly enough, no FPAs were actually finalised in the year they were submitted, so nothing actually changes for the current employment terms for workers in any sector in New Zealand.

Collective bargaining and union dynamics

Despite the repeal, the core process of collective bargaining remains unaffected. If unions represent your employees, expect to continue negotiating collective agreements. The only thing that changes is that any collective bargaining will only impact the groups negotiating, not the entire sector. MBIE also stresses that the principle of good faith in these negotiations is still crucial.

Encouraging cooperative working relationships

HR should now focus on fostering collaborative relationships among employees, unions, and employers. This involves working together to agree on suitable employment terms, aiming for mutually beneficial arrangements.

Adhering to existing employment laws

The FPA's repeal does not change the relevance of other employment legislation. HR teams need to keep up with their compliance with existing employment laws while adapting to these changes. If in doubt, you can go to resources like the Employment New Zealand page on FPAs for guidance on minimum employment rights and responsibilities.

If you really want to get into the nitty-gritty, you can read the FPA legislation here.

Data Privacy

With the FPA gone, any personal data gathered for FPA purposes (e.g. data from people applying to be part of an FPA) needs a review, so aligning with the Privacy Act 2020 is crucial. If the data’s purpose is outdated because of the repeal, securely disposing of it is the way to go. We’ll go into more detail about this in the next section.

The bigger picture

The repeal of the FPA isn’t just about changing a few documents. It's a larger conversation about how you engage with your employees and what kind of workplace culture you want to promote. Regardless of the legislation in place, try and think of it as always striking that sweet spot between organisational goals and employee satisfaction.

In-Depth on privacy obligations post-FPA repeal

Adhering to the Privacy Act 2020

With the FPA repealed, organisations that collected personal information for FPA-related purposes need to handle this data carefully, and strictly in accordance with the Privacy Act 2020. The Act sets clear guidelines on how personal data should be handled, making sure that HR teams and organisations as a whole respect the privacy and confidentiality of individuals.

Securely disposing of redundant data

Data no longer relevant for its original FPA purpose has to be disposed of securely, in line with Privacy Principle 9. This is a key step in preventing data misuse and protecting individual privacy rights.

When retention is okay

There are exceptions to data disposal. If personal data was collected for ongoing purposes, like union membership, or if required by the Public Records Act, retention is allowed by HR.

Responding to privacy concerns

If there are concerns about data misuse or privacy breaches, employees have the right to go to the Office of the Privacy Commissioner, so be sure to treat staff data with the respect it deserves.

How a Single Source of Truth can simplify post-FPA HR management

In the wake of New Zealand's FPA repeal, you might be wondering, "What now?" The answer lies in adapting and staying agile, and here's where a Single Source of Truth (SSOT) system, like Jemini, becomes your go-to partner.

An SSOT system acts as a master database, harmonising and housing all employee-related information – from personal details to employment contracts and payroll data. It's the backbone of efficient HR management, ensuring consistency, reducing errors, and keeping everything in sync, particularly vital in rapidly changing legislative environments.

While it's true that the repeal hasn't altered existing employment terms (since no FPAs were finalised), it's not just business as usual. The legislative landscape is always going to change, and this is where an SSOT system shines.

Staying ahead of future changes

With no FPAs finalised, your current employment agreements stand, but what about when new regulations roll in? An SSOT system is like having a crystal ball – it keeps you one step ahead, making sure that you're always in tune with the latest legal requirements.

Efficiently managing varied agreements

Each employee's agreement might be unique, and keeping track of these without getting tangled up can be a challenge. An SSOT system acts as a centralised hub for all these agreements, making management a breeze.

Maintaining data privacy with confidence

As we’ve gone to lengths to show, respecting and protecting employee data is critical. An SSOT system helps you do just that, aligning with the specifics of the Privacy Act 2020 to ensure your data handling is as secure as it is efficient.

Facilitating clear communication

Uncertainty can lead to unrest. Clear communication is key, and an SSOT system aids in the visibility of your HR data with your team, fostering a culture of transparency and trust.

In essence, having Jemini's SSOT at your fingertips means you're not just reacting to changes but proactively preparing for them. It's about making your HR management as responsive, secure, and efficient as possible. You can read more in our article 7 reasons you need a Single Source of Truth in your payroll and HR software.

Where to next with Jemini

While the legislative whiplash of the FPA repeal might just be another day at the office for HR, it really does highlight why organisations need modern platforms like Jemini. By providing a central, reliable source for all HR and payroll data, Jemini ensures that no matter how the legislative winds shift, your organisation remains compliant and ahead of the curve.

At Jemini, we’re well-versed in the art of adapting to these legislative tides. Our arsenal, equipped with Jemini's cutting-edge tools, is designed to help you navigate these changes with ease and confidence. By partnering with us, you're ensuring that your HR framework is not just responsive to the currents of change, but also primed for the opportunities they bring.

So, if you're looking to make your HR practices as adaptable and forward-thinking as the world they operate in, reach out to us at Jemini. Let's harness the power of Jemini to turn legislative (and any other) challenges into strategic victories for your business.