Collective Agreement Guide

A collective agreement is a written employment agreement negotiated between an employer (or group of employers) and a registered union. It sets out terms and conditions of work such as pay rates, leave entitlements, hours of work, and other benefits. Unlike individual employment agreements, a collective agreement applies to all union members covered by it.

In New Zealand, collective agreements are an important part of employment relations. They give employees a stronger voice by negotiating as a group, while employers benefit from having consistent terms across their workforce. For businesses, especially in sectors like healthcare, education, and public services, collective agreements are a key part of compliance and good workplace culture.

In this guide you’ll learn:

• What collective agreements are and why they matter
• How collective bargaining works in New Zealand
• The difference between collective and individual agreements
• Practical tips for employers managing collective agreements
• Links to official NZ resources and examples
  

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What is a Collective Agreement?

A collective agreement is a legally binding employment contract negotiated between a union and an employer. It outlines pay, hours, leave, and working conditions for all union members covered by the agreement.

For example, the NZEI collective agreement sets out the terms for teachers and support staff in schools, while the NZNO collective agreement applies to nurses and healthcare workers. These agreements make sure that workers across the same job category have the same conditions, which helps maintain fairness and consistency.

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Why Do Collective Agreements Matter for NZ Businesses?

Employers in Auckland and across New Zealand often ask: What does a collective agreement mean for my company?

The answer is simple: it creates a clear framework for managing staff. By having terms set out in advance, businesses reduce disputes, improve employee trust, and build stronger workplace culture.

One Auckland business we worked with shared how collective bargaining helped them stabilise staffing after years of high turnover. With a new support staff collective agreement, employees felt recognised and valued, which reduced resignations.

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Who Does a Collective Agreement Apply To?

A collective agreement applies to:

• All union members whose roles are covered by the agreement.
• Employers who negotiated or signed the agreement.
  

Employees who are not union members must still have an individual employment agreement, but it cannot be less favourable than the collective agreement.

If a worker joins the union later, they can then be covered by the collective agreement.

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Collective Agreements vs Individual Agreements

One common question is: What is the difference between a collective employment agreement and an individual agreement?

• Collective agreement: Covers all union members in the workplace who fall under the roles described in the agreement. Negotiated between employer and union.
• Individual agreement: A personal contract between one employee and their employer. Often used when no union is present.
  

For employers, understanding both is crucial. You may need to manage both collective and individual contracts within the same workforce.

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The Collective Bargaining Process in New Zealand

The collective bargaining process is the negotiation stage where unions and employers discuss and agree on employment terms. In New Zealand, this process is guided by the Employment Relations Act 2000, which requires both parties to bargain in good faith.

Steps usually include:

1. Union initiates bargaining.
2. Employer and union representatives meet to negotiate.
3. Proposals are shared, discussed, and revised.
4. Members vote on the proposed agreement.
5. If accepted, the agreement is signed and registered.

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Examples of Collective Agreements in NZ

Some well-known collective agreements include:

• NZEI collective agreement – covers teachers, principals, and support staff in education.
• Support staff collective agreement 2025 – sets pay rates and working conditions for school support staff.
• NZNO collective agreement – applies to nurses and healthcare staff.

Employers in these sectors must be aware of the relevant agreement and apply its terms correctly. A good practice is to keep a collective agreement sample on file for quick reference.

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Practical Tips for Employers Managing Collective Agreements

• Always provide new staff with a copy of the collective agreement if they join a union.
• Check expiry dates; agreements usually run for 2–3 years.
• Budget ahead for wage increases agreed in collective bargaining.
• Communicate changes clearly to managers and payroll teams.
• Keep records of both collective and individual employment contracts.

These steps help avoid compliance issues and strengthen employee relations.

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Key Takeaways

• A collective agreement is a legally binding contract between a union and employer.
• It applies to all union members covered by the agreement.
• Employers must ensure individual agreements are not less favourable than collective ones.
• Collective bargaining is part of building strong and fair workplace culture in New Zealand.
• Staying compliant with agreements reduces disputes and supports long-term employee trust.

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