"The Labour Party campaigned extremely transparently on this. It is a manifesto commitment, the policy has been developed up and very well signalled," Wood said.
But Business NZ chief executive Kirk Hope said his organisation had been written into the FPA process without his consent.
"Compulsory FPAs are unlawful under current domestic and international employment laws and are totally out of step with how we need to work in 2021," Hope told the Herald.
"They aren't needed, they remove the flexibility and autonomy of modern workplaces and won't improve pay and conditions for hardworking Kiwis."
Unions can begin an FPA negotiation if they get support from 1000 workers who would be covered by the agreement, 10 per cent of a workforce, or meet a public interest test - people do not need to be union members to count towards this.
Unions would negotiate agreements with sector organisations. If a sector organisation did not negotiate, then Business NZ would act as a "backstop" negotiator.
Business NZ, which has never backed the agreements, has now withdrawn from being that backstop negotiator - taking itself out of the FPA process altogether.
"That doesn't particularly impact the rollout of Fair Pay Agreements because in most cases we expect employer sector groups will do most of the bargaining," Wood said.
He added that where bargaining breaks down, the Employment Relations Authority "will have a role - and we've resourced them to do it".
Wood said there would be no "backstop" group to replace Business NZ.
"There is potentially a useful role for them [Business NZ] to play here; it is a little bit unusual that in this case Business NZ are indicating they don't want to do that.
"The consequence of that is that there might be some agreements that are determined by the authority, rather than bargained by a representative of employers," Wood said.
