Enterprise bargaining and agreement making
Key dates
6 June 2023: Major changes to bargaining and making agreements come into force.
What's changing?
New powers for the Fair Work Commission to resolve enterprise bargaining disputes
The FWC will be given power to make "intractable bargaining declarations" and then arbitrating where it is satisfied that there are no reasonable prospects of the bargaining parties reaching an agreement (providing prescribed minimum timeframes have been met ─ generally after at least nine months of bargaining). Parties who are subject to an intractable bargaining declaration will not be able to take protected industrial action from that point.
Application of the "better off overall test" (BOOT) in enterprise agreement approvals
The BOOT will be applied by the FWC as a "global" assessment, rather than a line-by-line comparison, of the proposed agreement and relevant modern award. Also, the FWC will only be required to consider reasonably foreseeable patterns of work or types of employment rather than unlikely theoretical scenarios when comparing entitlements for the purposes of the BOOT.
The FWC can also reconsider the application of the BOOT to an enterprise agreement already made, where there has been a material change in working arrangements, and will be empowered to amend or excise terms that otherwise prevent an agreement from passing the BOOT.
Procedural requirements for enterprise agreement-making
The requirement for a prescribed seven-day "access period" in advance of an agreement vote will be replaced with a broad requirement for the FWC to be satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement. The FWC apply its published "Statement of Principles", which outlines the factors it will consider in determining whether an agreement has been "genuinely agreed" by the relevant employees.
The requirement to provide a Notice of Employee Representational Rights (NERR) to employees, and then waiting 21 days before a vote is held on the agreement, will remain for single-enterprise agreements only.
The FWC, in approving enterprise agreements, will also need to be satisfied that the employees who have voted up that agreement have a "sufficient interest" in the terms of that agreement, and are "sufficiently representative" of the coverage of the agreement.
Greater limitations on the termination of enterprise agreements
This includes new limitations on the ability for the FWC to terminate enterprise agreements ─ including for example the FWC being satisfied that the continued operation of the agreement would be unfair to employees, or that the proposed termination would not adversely affect the bargaining position of the employees (ie. agreement termination cannot be used by the employer as a bargaining tactic), or the continued operation of the agreement would pose a significant threat to the viability of the employer's business.
Actions
From 6 June
Employers should consider the following:
- Are you currently in bargaining for new enterprise agreements/about to commence bargaining, and may be impacted by the new BOOT and procedural bargaining changes?
- Are you considering terminating any existing enterprise agreements, and will this now be less feasible given the new restrictions?
- Have you previously made enterprise agreements with small cohorts of employees, and this model may now be jeopardised with the new "sufficient interest" and "sufficiently representative" requirements?