Powers of the Commission

See Fair Work Act 2009 s.590

The Fair Work Act sets out various requirements as to how the Fair Work Commission may proceed in considering whether to approve an enterprise agreement.

The Commission may, except as provided by the Fair Work Act, inform itself in relation to any matter before it in such manner as it considers appropriate, such as by holding a hearing.[1]

Most enterprise agreement approval applications are dealt with without holding a hearing.

The Commission may inform itself by inviting oral or written submissions or by requiring a person to provide copies of documents or records, or to provide any other information to the Commission.

See Fair Work Act s.593

If the Commission holds a hearing in relation to a matter, the hearing must generally be held in public. If the Commission is satisfied that it is desirable to do so because of the confidential nature of any evidence, or for any other reason, the Commission may:

• order that all or part of the hearing is to be held in private
• make orders about who may be present at the hearing
• prohibit or restrict the publication of the names and addresses of persons appearing at the hearing, or
• prohibit or restrict the publication of evidence, or its disclosure to some or all of the persons present at the hearing.

Decision

If the Commission approves an enterprise agreement, a copy of the Commission decision and the approved enterprise agreement must be published.[2]

An approval decision must include:

• if the model flexibility term or model consultation term is taken to be a term of the agreement – that these terms are so included
• if a union has given notice that it wants to be covered by the enterprise agreement – that the agreement covers the union, and
• if the agreement was approved after accepting an undertaking – that the undertaking is taken to be a term of the agreement.[3]

Operative date – 7 days later

An enterprise agreement approved by the Commission comes into operation 7 days after the agreement is approved, or if a later day is specified in the agreement – that later day.[4]

Although an enterprise agreement cannot commence before the 7 day period has passed, the benefits of the agreement may be expressed to be payable from an earlier date. For example, payment of wage increases may be backdated to a date earlier than the commencement of the agreement. There is no requirement for an employer or employees to agree to such terms.

While benefits provided by the agreement terms may be backdated, a term of an enterprise agreement cannot remove an entitlement with retrospective effect.

Interaction between one or more enterprise agreements

Only 1 enterprise agreement can apply to an employee at a particular time as it relates to their particular employment.

If an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment, and another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation, then:

• if the earlier agreement has not passed its nominal expiry date – the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date, or
• if the earlier agreement has passed its nominal expiry date – the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and
• once the agreement ceases to apply, it can never so apply again.[5]

Single-enterprise agreement replaces multi-enterprise agreement

If a multi-enterprise agreement applies to an employee in relation to particular employment, and a single-enterprise agreement that covers the employee in relation to the same employment comes into operation, the multi-enterprise agreement ceases to apply to that employee when the single-enterprise agreement comes into operation.

Failure to comply with the agreement making requirements under the Fair Work Act could lead to a refusal to approve an enterprise agreement. The Commission may refuse to approve an agreement for a number of reasons including that:

• pre-approval requirements were not met
• employees were not fairly chosen
• the agreement does not pass the better off overall test, or
• undertakings that were offered would result in financial detriment or substantial change.

Approval of an enterprise agreement may also be refused if compliance with the terms of the agreement may result in a person committing an offence against a Commonwealth law or a person being liable to pay a pecuniary penalty in relation to the contravention of a Commonwealth law.[6] If approval is refused on this basis, the Commission may refer the agreement to any person or body considered appropriate.[7]

Decision

If the Commission refuses to approve an enterprise agreement, a copy of the Commission decision is published.[8]

Where to from here?

If approval of an agreement is refused on the basis that proposed undertakings would result in substantial changes to the agreement, this does not mean that that an enterprise agreement with such changes cannot be approved.[9]

The employer could consolidate the original agreement and the undertakings into a proposed new agreement and immediately recommence the process under the Fair Work Act for making a new agreement.[10]