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HIGH COURT ALDI V SDA DECISION – IMPLICATIONS FOR THE BETTER OFF OVERALL TEST AND GREENFIELDS AGREEMENTS

On 6 December 2017, the High Court handed down its decision in the case of ALDI Foods Pty Ltd v Shop, Distributive & Allied Employees Association [2017] HCA 53. The decision presents some opportunities for employers wishing to make an enterprise agreement for a new project.

The High Court has confirmed that an employer can make an agreement for a new project with a group of existing employees who will work on the new project, even if the project has not commenced at the time when the agreement is made and the employees are engaged in another part of the employer’s business at the time. In appropriate circumstances, the decision provides an alternative to the negotiation of a greenfields agreement for a new project. The group of employees with whom the agreement is made would need to be a “fairly chosen group” and genuine agreement would need to be reached with them.

In another aspect of the decision, the High Court held that the FWC made a jurisdictional error in failing to apply the Better Off Overall Test correctly when assessing Aldi’s enterprise agreement. The Commission relied on a “comparison clause” in the agreement, rather than identifying those terms in the agreement that were more beneficial and less beneficial than those in the relevant award and carrying out an overall assessment of whether the employees were better off overall.

If you would like more information about the Better Off Overall Test and greenfields agreements, please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.

Alternatively, if you would like assistance in making an enterprise agreement for a new project or providing a Better Off Overall Test analysis for an enterprise agreement, please contact your local employment, workplace and industrial lawyer in Sydney, Newcastle, Wollongong, Melbourne or Brisbane or email Ai Group Workplace Lawyers at info@aigroupworkplacelawyers.com.au.

Published - 31/01/18

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