Employment Law - The New Fair Work Act - Collective Agreements (4)

Welcome to our 5 Part series on The New Fair Work Act. We hope you find the series interesting and informative. You can find the rest of the series at the links below

• What Is It and What Does It Do
• New National Employment Standards
• Contracting With Employees
• Consequences & The Agreement Making Process

Agreements, as described above, must contain the following compulsory clauses to be registered:

• A flexibility clause which can be based on the AIRC’s model flexibility clause;
• A consultation clause which will, as part of a model clause, be deemed to be included in all agreements unless displaced by the parties;
• A nominal expiry date of 4 years or less;
• A disputes settlement clause under the agreement or as outlined as part of the NES;
• A model disputes procedure clause designed to avoid industrial disputes;
• The base rate of pay in a collective agreement cannot fall below the applicable award rate.
• Agreements under the new legislation cannot contain any ‘unlawful terms’ which can be defined as: breaching freedom associationprovisions which in turn are defined to mean the principle of the freedom of employers and employees alike to work and join associations which can protect their interests and to do so without unreasonable interference or constraints;
• Clauses which breach anti-discrimination laws; sections of agreements which seek to extend unfair dismissal protections to people who have not served the statutory qualifying period, or sections of agreements which provide for the payment of a bargaining services fee to a union, or clauses in agreements which provide for additional rights of entry to premises for union officials;
• An agreement, to be registered, must pass the no disadvantage test whereby the principle of an employee being ‘better off overall’ whereby any employee that will be covered by a collective agreement who has been previously covered by an industrial instrument, must then be better off than under the relevant industrial instrument. Agreements made after the new legislation from July 2009 will be judged against the no disadvantage test. An agreement passes this test if, no balance, it does not reduce an employees’ overall terms and conditions of employment. In determining whether a collective agreement or indeed an IETA passes the no disadvantage test, the Director of the Workplace Authority must have regard to the work obligations of the employee(s) under the agreement and he or she may contact the employer, employee, and if relevant the bargaining agent, union or organisation bound by the agreement;
• In respect to a non-greensfields agreement it passes the better off overall testif FWA is satisfied at the test of time that each award covered employee would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee;
• In relation to a greensfields agreement passes the better off overall test if FWA is satisfied, at the test of time, that the prospective award covered employees for the agreement would be better off if the agreement applied to the employees than if the relevant modern award applied to the employees.

In the absence at this stage of any statutory factors to be taken into account of how this provision will be applied, it may mean for example, that the FWA Director in the future would regard the no disadvantage test as not being met after considering the following monetary and non-monetary instances:

• Wages or salary;
• Penalty rates;
• Overtime payments;
• Annual leave loading;
• Annual leave;
• Meal allowance;
• Redundancy payments; and
• Long service leave arrangements;