The Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 passed through Parliament in the final sitting week for 2018. The legislation makes some important amendments to the Fair Work Act 2018, including addressing some of the problems that have been occurring regarding the FWC’s enterprise agreement approval process.

The amendments give the Fair Work Commission (FWC) more discretion to approve an enterprise agreement despite “minor procedural or technical errors” made by the employer in relating to certain aspects of the agreement-making process, provided that the employees “were not likely to have been disadvantaged by the errors’”.

The new provisions apply to:

  • Approval applications lodged with the FWC on or after 12 December 2018; and
  • Approval applications lodged with the FWC before 12 December 2018 which have not been finally determined.

 

FWC Amendment Act Decision

 

A hearing was conducted on 21 December 2018 by a Full Bench of the FWC to hear submissions about the effect of the new provisions on 10 specific enterprise agreement approval applications that appeared to contain errors to which the new legislative provisions may apply.

The Full Bench handed down a decision on 18 January 2019 clarifying the FWC’s interpretation of certain aspects of the new legislative provisions, including the points dealt with in the following extracts from the decision:

  • “Section 188(2) does not apply to all procedural or technical requirements with which an employer must comply when bargaining for an enterprise agreement. The ‘minor procedural or technical errors’ referred to in s.188(2)(a) must be errors ‘made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights’ (NERR).
  • “Generally speaking, the lower the level of non-compliance the more likely it is to be characterised as a ‘minor error’.”
  • “Some species of error are unlikely to be classified as ‘minor’, for example the deletion of the prescribed text of the NERR which deals with an employee’s right to appoint a bargaining representative and the role of the unions as the default bargaining representatives.”
  • “Cost or inconvenience to the employer and employee covered by an agreement associated with a delay in the approval of the agreement is not relevant to the question of whether the employees covered by the agreement ‘were not likely to be disadvantaged by the errors’”.
  • “The word ‘likely’ in s.188(2)(b) means ‘probable’ in the sense that there is an odds-on chance of it happening, rather than merely being some possibility of it happening. The word ‘disadvantaged’ suggests a deprivation which manifests in the employees covered by the agreement being prevented from substantively exercising their rights within the bargaining regime in Part 2-4 of the Act.”
  • “In assessing whether employees were not likely to have been disadvantaged by an error, it may be necessary to consider the particular circumstances of the employees concerned at the time the error occurred and the impact of the error on the subsequent course of bargaining. This may include considering any steps taken by the employer to address the adverse impact of the non-compliance.”

If you would like more information about the notice of employee representational rights, please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.

Alternatively, if you would like advice about the FWC approval process for enterprise agreements or providing undertakings, please contact your local employment, workplace and industrial lawyer in Sydney, Newcastle, Wollongong, Adelaide, Melbourne or Brisbane or email Ai Group Workplace Lawyers at info@aigroupworkplacelawyers.com.au.

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