Employment Law - The New Fair Work Act - Consequences & The Agreement Making Process (5)

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
• Collective Agreements

If a workplace agreement replaces guaranteed agreement terms or conditions in a reference instrument with benefits that may or may not be realised during the life of the agreement, the Workplace Authority Director would consider these arrangements to be a reduction in the employees’ terms and conditions.

In summary, the basic rule of thumb is that the no disadvantage test will most probably be approached by being considered in a global context whereby the conditions in the new agreement will be compared to the terms and conditions lodged in the ‘reference instrument’.

Sadly, the Explanatory Memorandum does not elaborate on what information FWA or the Workplace Authority will look for.

All agreements must adhere to an agreement making process. These steps are as follows:

Step One: An employer and employee must agree to bargain. In the event that the employer does not, a union representing employees will most probably apply for good faith bargaining orders.

Step Two: Once an employer has agreed to bargain they must notify their employees of their right to be represented in bargaining and they must give their employees 14days notice.

Step Three: Employees are to be represented by their union or nominate their own representative.

Step Four: All parties to act in good faith.

Step Five: Once negotiations have been concluded an employer may request that employees vote on a proposed agreement, 21days after it issues their employees with representation notices. The employer is required to provide employees with access to the proposed agreement at least 7days prior to seeking approval of the agreement and must explain the effect to them. An agreement then is approved when a valid majority of those voting for the agreement approve the agreement. The employer is responsible for holding the vote. All agreements are to be submitted to the FWA for approval within 14days.

Either the employer or employees or union may lodge the agreement.

Step Six: FWA must be satisfied that the ‘better off overall’ test is met (as described above) as well as the NES not being undercut, in addition to the fact employees and employers were not coerced into making the agreement, and that unlawful content as described above is not expressed in an agreement.

Step Seven: All agreements that are passed must be displayed on a noticeboard and each employee must have access to a copy of it.

Step Eight: The agreement is operable from the seventh day after the date of issue of the notice by FWA advising that the agreement has passed the no disadvantage test.

OR,

Step Nine: An agreement comes to an end at the nominal expiry date. Following the commencement of the transition legislation a collective agreement may not be terminated unilaterally unless the termination is in a manner provided by the agreement for termination following its nominal date and on the provision of at least 14 days written notice to the other party to the agreement and employees covered by the agreement.

Further, a party to a collective agreement that has passed its nominal expiry date may apply to FWA for an order to terminate the agreement. FWA may make an order to terminate the agreement provided that it is not contrary to the public interest to do so.

Therefore, the key point to note in this instance is the difference between an expiry date and termination of an agreement. Under the Fair Work Act collective instruments remain in force until they are terminated.