Enterprise bargaining in Australia can resemble a blood sport – players jostle for position and try to land as many hits on their opponent as they can, with the ultimate goal to get the enterprise agreement over the line or kill a deal and limp off the field.
Too often we see employers reach agreement with their employees and bargaining representatives, only to lodge the enterprise agreement and have it rejected by the Fair Work Commission (the Commission) for procedural deficiencies.
To ensure you aren’t given a yellow card for a technical foul, you need to understand the rules of play. If your enterprise agreement doesn’t comply with technical requirements of the Fair Work Act 2009 (Cth) (the Act) and the Fair Work Regulations 2009 (Cth) (the Regulations), you’re unlikely to get it over the line without significant delay, and may be directed to start again.
Our top 10 tips to consider:
- Consider which employees will be covered by the proposed enterprise agreement
The employees covered by the enterprise agreement must be fairly chosen. This means an enterprise agreement must cover all employees employed by the employer unless the particular group covered by the enterprise agreement is geographically, operationally or organisationally distinct. For example, if an employer seeks to exclude casual employees who perform the same work as the full time and part time employees, it is likely that the Commission will not be satisfied that the group of employees is fairly chosen.
- Comply with timeframes
There are numerous timeframes with which employers must comply for agreement making purposes. These include the timing with which important documents are given to employees and notice of when particular events are occurring. The Commission has a date calculator on its website to assist with complying with these timeframes.
- Get it right – the Notice of Employee Representational Rights form
There are strict requirements in relation to the form and content of the Notice of Employee Representational Rights (NERR). Schedule 2.1 of the Regulations contains a template of the NERR which must only be changed where the notice indicates. Whether altered on purpose or by accident, changes to the NERR can result in the entire enterprise agreement application being dismissed on the basis of noncompliance.
- Include mandatory terms
Every enterprise agreement must include the following terms:
– Dispute resolution procedure – a term which sets out how disputes in relation to the enterprise agreement or the National Employment Standards (NES) are dealt with.
– Flexibility term – a term which allows an employee and employer to agree to an arrangement to varying the effect of the agreement.
– Consultation term – a term which sets out the consultation obligations where there is a major workplace change that is likely to have significant effects on the employees or where there is a change to an employee’s regular roster or ordinary hours of work.
- Identify the relevant Modern Award and classifications
You will be asked to identify the relevant Modern Award which would otherwise cover the employees. This is used by the Commission to assess whether the employees are better off overall. To minimise any delay, identify the correct Modern Award and align the classifications under the proposed enterprise agreement with the relevant classifications under the Modern Award.
- Understand the NES entitlements
The NES set 10 minimum employment entitlements that apply to all employees. Enterprise agreements can provide employees with more beneficial entitlements when compared with the NES, however the Commission cannot accept a reduction to these entitlements, even if employees receive higher rates of pay.
- Use clear wording
If the enterprise agreement incorporates the Modern Award, it is important that the wording used in the agreement makes this expressly clear. Using a phrase such as the agreement is read in conjunction with the Award rather than the agreement incorporates the entire Modern Award, will likely result in a request for further clarification from the Commission.
- Provide all relevant information
To avoid delays in the processing of your application, provide the Commission with all the relevant information to assess the application. This includes describing the actual steps taken to comply with particular provisions of the Act (i.e. instead of using the phrase “we provided employees with a copy of the agreement” explain how it was provided, e.g. hand or email).
- Comply with nominal expiry dates
Nominal expiry dates must be no more than four years from the date the agreement is approved by the Commission, not the date the agreement commences.
- Sign and date forms
The regulations require that the agreement and the supporting documents are signed and dated. There are specific requirements setting out who can sign these documents and what information should be included on the signature page. You should ensure that those who are signing the agreement and supporting documents have adequate authority to do so.
For more information on enterprise bargaining, please do not hesitate to contact us.