Fire and Emergency New Zealand’s (FENZ) annual remuneration review has awarded non-union employees a 2.4% pay increase – produced by the organisation’s own market benchmarking process – that exceeds the collective offer its unionised firefighters rejected more than a year ago. For New Zealand insurers and brokers who collect and remit the levy that funds almost all of FENZ’s operations, the dispute has direct commercial implications.
On July 14, 2026, FENZ announced a 2.4% pay increase for staff covered by its annual remuneration review – a process in which consultants Korn Ferry analyse wage movement against a peer group of comparable employers – according to the NZPFU. That figure exceeds what NZPFU members rejected in July 2025: a 2% increase from July 1, 2025, followed by 1.5% from July 2026 and a further 1.5% from July 2027, with no backpay and no adjustment for the 2024-25 year in which unionised firefighters received no increase at all. “The market rate vindicates NZPFU members’ outright rejection of FENZ’s previous offer,” the union said in a statement on July 14, 2026.
FENZ has not issued a public statement specifically addressing the benchmarking comparison as of publication date. On the substance of its bargaining position, however, a FENZ spokesperson told Insurance Business New Zealand in May 2026: “Our offer provides an increase of 6.2% over three years and compares favourably with the majority of public sector settlements that have been offered and ratified,” adding that the NZPFU’s last formal proposal was approximately three times its own in cost. The 6.2% three-year figure and the 2.4% single-year non-union benchmark produced by the same Korn Ferry process now sit in direct tension – a contradiction neither party has publicly resolved.
On June 16, 2025, an Order in Council came into effect requiring both FENZ and Health New Zealand to consult with the Public Service Commissioner and have regard to the Commissioner’s recommendations before agreeing to any terms and conditions of employment in a collective agreement. The Public Service Commission noted it was the first time this mechanism under section 116 of the Crown Entities Act 2004 had been used, and that it was intended to provide stronger central agency oversight of collective bargaining for the two agencies.
That structural constraint sits alongside a public sector wage environment in which recent settlements elsewhere have tracked higher than what FENZ has offered its unionised workforce. Primary teachers settled at a cumulative 4.7% increase within 12 months under an agreement ratified in April 2026. Around 12,300 Health New Zealand employees covered by a Public Service Association (PSA) collective agreement settled in February 2026 at 2.5% in year one from December 2025 and a further 2% from December 2026, alongside a $500 lump sum payment.
Overall public sector wage growth was 2.8% for the year to June 2025, while Public Service core wage growth was 1.2% for the same period, according to the Public Service Commission. FENZ has cited these commission guidelines as a constraint on its offer; the NZPFU has argued those guidelines are not immovable, pointing to the teacher and health sector outcomes as evidence.
FENZ draws approximately 95% of its operating revenue from levies on insurance policies. The organisation reports a combined workforce of around 14,900 paid and volunteer personnel, approximately 1,300 appliances, and roughly 600 stations, responding to around 89,000 incidents each year. From July 1, 2026, the levy calculation basis shifted from indemnity value to sum insured for non-residential property, with the applicable rate reducing to 7.76 cents per $100 of sum insured. For motor vehicles, a flat levy of $25 per vehicle now applies across all weight classes, up from $9.53 for light vehicles.
The government approved a 2.2% increase to the levy rate, having revised down FENZ’s initial proposal of a 5.2% increase. Minister of Internal Affairs Brooke van Velden said she was not convinced the larger increase was justified and requested an alternative solution from FENZ. The minister subsequently told Parliament that consultation had proceeded on outdated FENZ modelling: “We went out and consulted on old information, which when questioned was updated and revised, which is how we went down from a 5.2% figure to a 2.2% figure, because the modelling was simply out of date based on the forecasts.”
The industrial action – now in its 45th round of one-hour stoppages – has operational consequences that underwriters and reinsurers are monitoring. FENZ has confirmed that response times may be delayed in affected areas during strike hours, as volunteer crews respond from the next closest location, and that police receive 111 fire calls on FENZ’s behalf under agreed protocols during strike periods.
From an underwriting and actuarial perspective, these operational factors form part of the hazard and protection environment underpinning assumptions about probable maximum loss, expected loss ratios, and rating relativities by occupancy, construction type, and location. Reinsurers assessing New Zealand’s aggregate fire and catastrophe exposure may also review how they classify protection levels in areas experiencing repeated industrial action or structural resourcing changes, which could affect treaty pricing, attachment structures, and coverage terms – particularly where portfolios are concentrated in urban centres that rely heavily on career-staffed stations.
The Employment Relations Authority (ERA) has proposed a written exchange of revised positions. The NZPFU has declined, arguing proposals must be presented in person. “We need to be in the room to actually negotiate – something we do not think has really occurred at all in facilitation," the union’s National Committee of Management wrote in its ERA response on June 25, 2026. FENZ has stated it “remains ready to continue the facilitated bargaining process” and has called on the NZPFU to “re-engage constructively with a proposal that reflects both the value of firefighters’ work and the economic realities facing the organisation.” FENZ chief executive Kerry Gregory communicated in early March 2026 that a revised offer was being prepared; it had not been presented at the bargaining table as of July 14, 2026.
