Employment and Migration Blog

Get the basics right when introducing (or updating) an Enterprise Agreement – or risk rejection!

Posted by Anna Ford on 6 Apr 2017

Falcon Mining Pty Ltd recently sought to have an Enterprise Agreement approved by the Fair Work Commission but essentially failed in its efforts because the HR Manager neglected to satisfy numerous requirements. 

In summary, the problems associated with the Enterprise Agreement, and the factors that the Fair Work Commission (FWC) collectively took into consideration in reaching its decision to refuse the application for approval included:

  • Incorrect statements in Form 16 (Application for approval of the Agreement) and Form 17 (Employer declaration in support of approval of Agreement). Specifically, the HR Manager incorrectly named the employer in parts of Form 16 and declared in Form 17 that the Agreement did not contain terms that were less beneficial than those in the Award, when that was not in fact the case;
  • Incorrectly naming the employer in the Notice of Employee Representational Rights;
  • Not taking all reasonable steps to provide and explain to relevant employees the effect of the Agreement and its terms, and not providing the explanation in an appropriate manner given the rosters and other circumstances of employees;
  • The dispute settlement procedure set out in the Agreement was not compliant;
  • The Agreement in part excluded the National Employment Standards; and,
  • The Agreement did not pass the BOOT (better off overall test).

The Commission acknowledged that undertakings could address the BOOT issues if the Agreement were to be approved. However, the number of undertakings required to address the concerns about the Agreement would result in substantial changes to the Agreement and therefore it didn’t meet the requirements of section 186 (General requirements – when the FWC must approve an enterprise agreement) and section 187 (Additional requirements – when the FWC must approve an enterprise agreement).

See Falcon Mining Pty Ltd [2016] FWC 5315 (14 September 2016) for more information. 

Not getting an enterprise agreement approved can create significant grief and sometimes embarrassment for a business, so it’s really important to get all the steps right from the beginning. Having sound knowledge of the stringent procedural requirements is a great starting point. 

If you are thinking about introducing an enterprise agreement into your workplace, it’s important to first consider the reason for wanting to introduce one (they aren’t necessary or suitable for all workplaces), and then before undertaking the process, making sure you have knowledge of all the procedural rules you need to comply with in order to properly introduce one. Coleman Greig’s employment law team can help with enterprise agreements for your workplace: