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Enterprise Agreements - What is the Latest?

FWC Approval Trends

The trends in the Fair Work Commission (FWC) approval process arising from the central assessment team are as follows:

  • The deduction of pay – The FWC advises that such clauses are inconsistent with the Fair Work Act 2009 (Cth). There are limited situations when an employer may deduct from an employee’s wages but, for the most part, this is not permitted. Such deductions require authority by the employee and, typically, must be for the employee’s benefit.

  • Loaded hourly rates – For loaded rates agreements, the recent FWC ruling (Loaded Rates Agreements 2018) provided for an examination of existing roster patterns as well as the potential for roster patterns to change in consideration of the BOOT. Where a roster is not, or cannot be firmly determined, a ceiling on the application of the loaded hourly rate must be contained in the agreement.

  • Shift work definitions that are not consistent with the Modern Award shift work definitions require undertakings to align with the Modern Award definitions.

Additional Process for Enterprise Bargaining

Recent Full Bench decisions of the FWC in the Federal Court have added complexity and additional process in the making of enterprise agreements.

Access Period

A recent authority provides that the ballot notice and the final agreement must be provided to the employee for 8 calendar days before ballot. That is, the ballot can be held no earlier than 7 calendar days after the day the ballot notice is issued (Construction, Forestry, Maritime, Mining and Energy Union and Ors v CBI Constructors Pty Ltd [2018] FWCFB 2732 (21 June 2018)).

Explanation of Terms of the Agreement

Greater emphasis is now given by the FWC to the accuracy and detail of the explanation of the terms of enterprise agreements owing to the One Key and Shamrock decisions. Employers must conduct information sessions which address the details of the agreement and how employees will be affected by its proposed terms as compared to the Modern Award or previous agreement. Employers should also be prepared to be transparent regarding these conversations in their Statutory Declarations. Procedures should be established for these explanations, including taking notes or minutes of the information sessions for submission to the FWC.

This follows previous articles that the complexity of the bargaining process, the comprehensive review of applications for approval of enterprise agreements by a central team, and unfettered interventions by aggrieved unions has significantly delayed and extended the bargaining process. A six month window may need to be considered for the drafting, bargaining and approving of enterprise agreements.

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