Status of Bill
The Senate referred the Bill to the Senate Education and Employment Legislation Committee. The Committee’s report was tabled on 22 November 2022. The Committee has provided eight recommendations, including a recommendation that the definition of a ‘small business employer’ in the single interest employer authorisations section of the Bill be increased from 15 employees to 20 employees (including regular and systematic casuals), and that a statutory review of the Bill should be undertaken three years after the Bill receives Royal Assent.
Termination of enterprise agreements after nominal expiry dates
The Bill proposes to replace the rules for terminating an enterprise agreement after the nominal expiry date has passed, to ensure the process is fit for purpose and fair. The Government proposes that the changes will stop, other than in prescribed circumstances, the practice of employers applying unilaterally to the Fair Work Commission (FWC) for termination of a nominally expired enterprise agreement, where termination would result in a reduction of employees’ entitlements. This will include situations where the threat of termination may disrupt bargaining for new enterprise agreements.
Enterprise agreement approval
The Bill would amend the FW Act to simplify the overly prescriptive and complex requirements that need to be met for an enterprise agreement to be approved by the FWC.
The Government’s intention is to simplify the pre-approval requirements, while retaining sufficient safeguards for employees. This, the Government says, would encourage enterprise bargaining and also stop the FWC from having to refuse to approve enterprise agreements because of minor technical or procedural deficiencies that did not directly affect voting on the agreement. Various steps that an employer must currently take within strict timeframes under the FW Act would also be removed.
The requirements to provide a Notice of Employee Representational Rights (NERR) and to wait until at least 21 days after the last notice is given before requesting employees to vote on a proposed enterprise agreement would only apply to a proposed single enterprise agreement. The requirements would no longer apply to proposed multi-enterprise agreements or single interest employer agreements. A single interest employer agreement is a type of agreement that would apply to employers who are covered by a ‘single interest employer authorisation’ (SIEA), which is discussed in more detail below.
For multi-enterprise agreements and single interest employer agreements, these pre-approval requirements would be replaced with one broad requirement for the FWC to be satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement.
If the Bill passes, the FWC would be required to publish a ‘statement of principles’ containing guidance for employers about how they can ensure employees have genuinely agreed to an enterprise agreement. The statement of principles would be taken into account by the FWC when determining whether to approve an enterprise agreement. The FWC would need to be satisfied that the employees requested to vote on the agreement have a sufficient interest in its terms and are sufficiently representative, having regard to the employees the agreement is expressed to cover.
Single interest employer authorisations
Two or more employers that are not single interest employers, but have a close connection to one another, may be permitted to bargain for a single enterprise agreement. These employers must obtain a SIEA from the FWC.
The Bill will amend Part 2-4 of the FW Act to remove limits on access to SIEAs and simplify the process for obtaining them, and facilitate bargaining by:
- Removing the requirement for two or more employers with common interests who are not franchisees or otherwise single interest employers within the current meaning of ‘single interest employers’ under the FW Act to obtain a Ministerial declaration before applying for a SIEA;
- providing for employee bargaining representatives to apply for a SIEA to cover two or more employers, subject to majority support of the relevant employees;
- permitting employers and employee bargaining representatives to apply to vary a SIEA to add or remove the name of an employer from the authorisation, subject to meeting specified requirements; and
- inserting a new Subdivision to permit employers and employee organisations to apply to the FWC for approval of a variation to extend coverage of an existing single interest employer agreement to a new employer and its employees, subject to meeting specified requirements.
Amendments to the Better off overall test
If passed, the Bill would amend the better off overall test (BOOT) by:
- requiring the FWC to give consideration to the views of specified persons, including primary consideration to any common views expressed by the specified bargaining representatives, when applying the BOOT;
- applying the BOOT as a global assessment (i.e. not a line-by-line comparison between the proposed amendment and relevant modern award);
- requiring the FWC to only have regard to patterns or kinds of work, or types of employment, that are reasonably foreseeable at the time the BOOT is applied;
- enabling the FWC to directly amend or excise a term in an enterprise agreement that does not otherwise meet the BOOT; and
- enabling the BOOT to be reassessed if there has been a material change in working arrangements or the relevant circumstances were not properly considered during the approval process (reconsideration process).
The ’reconsideration process’ would allow employers, employees or their representatives to seek a reassessment of the BOOT where there has been a material change in working arrangements, or where the relevant circumstances were not properly considered during the approval process. The intention of the reconsideration process is to permit adjustments to the bargained outcome to the extent necessary to address the FWC’s concerns, not to reduce the entitlements or interfere with the working arrangements for employees who are not affected by the concerns, or unnecessarily disrupt the operations of the enterprise.
If passed, the Bill would give the FWC discretion to work with the parties during the approval process in a constructive manner, to consider specific objections and to amend or excise terms that do not otherwise meet the BOOT. This would limit the use of written undertakings which can make it harder for workers and managers to interpret an agreement, lead to future legal disputes if poorly drafted, and cause delays in agreements commencing.
Dealing with errors in enterprise agreements
The Bill also proposes to amend the FW Act to simplify the process for correcting any obvious errors, defects or irregularities in enterprise agreements, and provide a simple remedy to address the situations where the wrong version of an enterprise agreement or variation has been inadvertently submitted to, and approved by, the FWC.
Varying enterprise agreements to remove employers and their employees
The Bill will amend the FW Act to empower the FWC to vary single interest employer agreements and multi-enterprise agreements to remove an employer and affected employees from coverage. A decision to make a variation would be a joint decision of the employer and affected employees, and the variation would not take effect unless and until it is approved by the FWC. Safeguards will be included in the FW Act to ensure affected employees are sufficiently protected.
