In November’s HR Breakfast Club Forum, BAL Lawyer within Employment & Investigations Team, Dogu Yesildag, discussed the reforms to Enterprise Agreements and Bargaining. As discussed in Dogu’s November HR Breakfast Forum, the Fair Work Act Amendment (Secure Jobs, Better Pay) Bill introduced significant changes to the Fair Work Act 2009 (‘the FWA’). Among those of which were to enterprise agreements and the process of bargaining for them.
Some of the topics Dogu covered included:
Gabrielle and Kieran began by highlighting the Employee v Contractor relationship as the binary distinction at the heart of Australian employment law. It was noted that employees have a whole suite of workplace rights, whereas contractors do not. This distinction can often be blurred due to the fact case law has developed a long list of indicative criteria, although none are decisive and are based on a fact-heavy inquiry. It was later presented that in the past three decades there has been an increase of the use of contract labour. While contrasting how to determine each of these employment relationships, Gabrielle and Kieran referenced two recent cases: CFMMEU v Personnel Contracting (2022) and ZG Operations v Jamsek (2022). These authorities outlined the evolution of the test in determining if one is an employee or independent contractor in being ‘all in the contract.’ The ratio highlighted from Personal Contracting summarises that where the terms of the parties’ relationship are in a written contract, the legal rights and obligations are decisive of the character of the relationship.
An enterprise agreement is an agreement made at a firm level that includes terms and conditions of employment, include wages and leave entitlements, for a period of up to 4 years from the date of approval.[1]
There are two main types of enterprise agreements: a single-enterprise agreement and a multi-enterprise agreement. A single enterprise agreement refers to agreements that have two or more employers who engage in a joint venture or common enterprise. A multi-enterprise agreement is like the former, however it covers employers in an industry, rather than employers in a joint venture or common enterprise.
Enterprise bargaining describes the process of negotiation generally between the employer, employees and the bargaining representatives with the goal of making an enterprise agreement. The FWA sets out the requirements for bargaining for a proposed enterprise agreement.
Initiation
Recent amendments introduced changes to bargaining streams including, how a bargaining process may be started and how employers may be ‘forced’ to initiate bargaining by their employees or bargaining representatives.
If an employer refuses to bargain the terms of an enterprise agreement, employees may attempt to encourage their employer to engage in good faith bargaining through applying to the Fair Work Commission (‘FWC’) for bargaining orders.
Variations to existing agreements
Amendments permit an employee or employee organisation to apply to the Commission for a variation to an existing single-enterprise agreement. The commission is required to order a variation if certain conditions are met including, but not limited to that the variation has been ‘genuinely agreed’ to by the affected employees and that the employer has at least 20 employees at the time of the application.
Variations to authorisations
Amendments allow bargaining representatives (of a new employer not party to an authorisation) to vary an authorisation to add a new employer. Certain conditions need to be met, those of which are similar to the conditions required to vary existing agreements.
Errors in enterprise agreements
The Commission has new powers to correct errors in enterprise agreements or on application by an employer, employee or union covered by the agreement. The Commission can now decide how they wish to correct errors in an agreement.
Procedural requirements for approval of an agreement
Now, a single broad required that ‘the Fair Work Commission must be satisfied that an enterprise agreement has been genuinely agreed to by the employees’. This removes some of the prescriptive pre-approval requirements, simplifying the approval process.
Termination of enterprise agreements that have passed their nominal expiry date
The Commission must terminate an enterprise agreement if it is satisfied that a certain condition may apply. For example, if the continued operation would be unfair to the employees who the agreement covers or the agreement is unlikely to, or doesn’t cover any employees. The Commission must also consider among other factors whether it is appropriate in the circumstances to terminate the agreement, and the views or the employer or employers, employees or unions that it covers.
The previous test for termination of an agreement was whether it was ‘contrary to the public interest to do so’. The amended test places more stringent requirements on employers, providing greater barriers on unilateral termination applications.
Amendments require a ‘global assessment’ of whether an employee would be better off under the terms of the agreement or the relevant modern award. Prior to the amendments, such an inquiry was typically defined by a ‘line-by-line’ approach.
To register for future HR Breakfast Club forums, visit our monthly forum page and register to attend.If you have any questions or wish to discuss your circumstances with a lawyer, please contact the BAL Lawyers Employment Law & Investigations team on 02 6274 0999.
[1] https://www.fwc.gov.au/what-enterprise-agreement