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The Workplace Relations Act 1996 (Cth)  the "WRA") was repealed in 2009. However, this does not mean that it does not still affect some working relationships, as agreements made under that Act will continue to operate until the agreement is terminated, either by a termination of employment or a new agreement.

The WRA, as amended by Work Choices, created several classes of workplace agreements (see: Part 8 Div 2, WRA). They include:

  • Australian Workplace Agreements (AWAs);
  • union collective agreements;
  • employee collective agreements;
  • multiple business agreements; and
  • employer greenfields agreements.

The Transition to Forward with Fairness Act removed the ability to make and lodge new AWAs (a form of statutory individual agreement) after 28 March 2008, but it created a new type of individual agreement, an Individual Transitional Employment Agreement (ITEA), which a specified class of employer could make and lodge until 31 December 2009. From 31 December 2009 no new statutory individual employment agreements were able to be made or lodged.

Agreements (both individual and collective) made under the WRA continue to operate under the Fair Work Act 2009 (Cth) (the :FW Act"). The FW (TPCA) Act provides that the NES apply to all national system employees from 1 January 2010. Therefore, from 1 January 2010 the NES provides additional minimum terms and conditions for employees on statutory agreements.

Australian Workplace Agreements / Individual Transitional Employment Agreements

AWAs

The Transition to Forward with Fairness Act removed the ability to make and lodge new AWAs after 28 March 2008. AWAs made and lodged before 28 March 2008 can remain in place until they are terminated. From 1 January 2010 employees employed on AWAs have the additional protection of the NES.

Collective Agreements/Enterprise Agreements

Collective agreements under the WRA continue to apply to groups of employees employed in a single business or part of a business because of the savings provisions under the FW (TPCA) Act, Schedule 3. Before the Work Choices amendments, collective agreements were called certified agreements. Under the FW Act they are enterprise agreements. From 1 July 2009 statutory agreements are able to be made under the FW Act.

Employee collective agreements may be made between an employer and its employees about the terms and conditions of employment that will apply to some or all of that employer's employees (s327, WRA).

Union collective agreements may be made between an employer and a trade union about the terms and conditions of employment that will apply to some or all of that employer's employees (s328, WRA).

Union greenfields agreements may be made between an employer who proposes to establish a new business and a trade union, about the terms and conditions of employment that will apply to some or all of the future employees employed in the new business (s329, WRA).

Fair Work Act Agreements

Since 1 July 2009 statutory agreements are able to be made under the FW Act. They are known as enterprise agreements. Under section 172 of the FW Act there are two types of statutory agreements:

  • single enterprise agreements; and
  • multi-enterprise agreements.

Single enterprise agreements can be made in two ways. Firstly, an agreement can be made between an employer or two or more employers that are single interest employers and employees. A trade union may or may not be covered by this type of agreement. Alternatively, a single enterprise agreement can be made for a genuine new enterprise (a greenfield), between an employer or two or more employers that are single interest employers and one or more trade unions.

Multi-enterprise agreements can also be made in two ways. Firstly, a multi-enterprise agreement can be made between two or more employers that are not single interest employers and employees. A trade union may or may not be covered by this type of agreement. Alternatively, a multi-enterprise agreement can be made for a genuine new enterprise (a greenfield) between an employer or two or more employers that are single interest employers and one or more trade unions.

How workplace agreements come into force

Under the FW Act an agreement comes into operation seven days after the agreement is approved by Fair Work Australia (FWA) or a later day specified in the agreement (s54, FW Act).

Better Off Overall Test (FROM 1.7.09)

Since 1 July 2009 an enterprise agreement has needed to pass the "Better Off Overall Test" ("BOOT") to be approved by FWA. Agreements made prior to 27 March 2006 and between 28 March 2008 and 30 June 2009 were subject to a no disadvantage test before being approved. Section 193 of the FW Act provides that a non-greenfield, enterprise agreement passes the BOOT if FWA is satisfied that each employee and prospective employee would be better off overall if the agreement applied to them than if the relevant modern award applied to them.

Section 189 of the FW Act provides that if an agreement fails the BOOT, it may still be approved by FWA if it is satisfied that due to exceptional circumstances the approval would not be contrary to the public interest. An agreement approved on this basis can only have a nominal expiry date of a maximum of two years after approval.

Workplace agreements approval procedures

For each type of enterprise agreement there are different procedures for making an agreement (s182, FW Act.

For a single enterprise agreement (that is not a greenfields agreement): The agreement is made when the majority of employees cast a valid vote in favour of approving the agreement.

For a multi-enterprise agreement (that is not a greenfields agreement): The agreement is made when the majority of employees of at least one of the employers cast a vote in favour of approving the agreement.

For a greenfields agreement: The agreement is made when it is signed by the employer and each relevant trade union that is expressed to be covered by the agreement.

Under section 180 of the FW Act an employer must take reasonable steps prior to the agreement being voted on to ensure:

  • that the employees have had access to the written agreement;
  • that the employees are advised of how, when and where the vote will take place; and
  • that the terms and effect of the agreement have been explained to the employees.

Enterprise agreements come into force only once they have been approved by FWA. Before approving an enterprise agreement, FWA must be satisfied of a number of matters, including:

  • that the agreement passes the BOOT, or if it fails the BOOT should be otherwise approved;
  • that the agreement does not contravene section 55 of the FW Act, including that the agreement does not seek to exclude any provisions of the NES (s186(2)(c), FW Act);
  • that the agreement includes a nominal expiry date of not more than four years after FWA approves the agreement and a dispute resolution clause (s186); and
  • if the agreement is not a greenfields agreement, that the employees genuinely agreed to the agreement (s186(2)(a)).

Content of enterprise agreements under the FW Act

The content of an enterprise agreement is largely a matter for the parties. However, there is some content that the FW Actrequires, permits and prohibits. Under section 55 of the FW Act an enterprise agreement cannot exclude the NES or any provision of the NES (see: "National Employment Standards"). Part 2-2 of the FW Act allows enterprise agreements to deal with some matters in the NES.

What an Agreement Should Contain

An enterprise agreement under the FW Act should contain:

  • A nominal expiry date. This is the date after which the agreement may be replaced by a new agreement. Under section 186(5) of the FW Act, the date may be specified in the agreement but must, other than for ITEAs and agreements failing theBOOT but approved on the basis of special circumstances, be no later than four years after the date on which the agreement was approved by FWA. If no date is specified in a collective agreement, then the nominal expiry date is four years from the date it is approved by the FWA. For ITEAs, the nominal expiry date is the earlier of a date specified in the agreement or 31 December 2009. For agreements failing the BOOT but approved on the basis of special circumstances, the nominal expiry date is the earlier of the date in the agreement or two years after the day on which FWA approved the agreement (s.189 FW Act).
  • A dispute settlement procedure. A procedure that deals with disputes about any matters arising under the agreement, and in relation to the NES, must form part of an enterprise agreement (s186(6)).
  • Minimum entitlements. Although not required to be part of a workplace agreement, the NES provides minimum entitlements to employees and cannot be excluded by an enterprise agreement (s55). The minimum entitlements of employees can be improved in an enterprise agreement.
  • A flexibility term. Under section 202 of the FW Act an enterprise agreement must contain a flexibility term that allows an employee and an employer to agree that terms of the enterprise agreement have effect in relation to the employee and the employer as if the agreement were varied by that arrangement. The flexibility term must require the employer to ensure that the employee is better off overall under the proposed flexibility arrangement. If the enterprise agreement does not contain a flexibility term, then the model flexibility term prescribed by the regulations will be taken as a term of the enterprise agreement.
  • A consultation term. An enterprise agreement must contain a consultation term which requires an employer to consult with employees about major workplace change that is likely to have a significant effect on employees (s205). If the enterprise agreement does not contain a consultation term, then the model consultation term prescribed by the regulations will be taken as a term of the enterprise agreement.

What An Agreement May Contain

The content of a workplace agreement is substantially in the hands of the parties. For matters to be included in an enterprise agreement under the FW Act they must fall within one of the following categories:

  • matters relating to the relationship between the employer/s and the employees;
  • matters relating to the relationship between the employer/s and the relevant union/s;
  • deductions from wages authorised by the employee; and
  • how agreements will operate.

See: section 172(1) of the FW Act.

What An Agreement Must Not Contain

An enterprise agreement under the FW Act must not contain a term that is an unlawful term (s186(4) FW Act). Unlawful terms are defined in section 194 of the FW Act to include:

  • discriminatory terms, being terms that discriminate on the basis of the employee's race, colour, sex, sexual preference, age, physical or mental disability, martial status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
  • objectionable terms, being terms that would require or permit conduct in breach of the "General Protections" contained in the FW Act, discussed below under "General Protections";
  • a term that would confer additional rights on an employee to claim unfair dismissal within the minimum employment period (for a definition see: "Unfair dismissal", below) or would exclude or detrimentally modify an employee's unfair dismissal rights;
  • a term inconsistent with employees' or employers' rights in relation to industrial action; or
  • a term that modifies union officials' rights of entry into workplaces.

Operation of workplace agreements

Australian Workplace Agreements / Individual Transitional Employment Agreements

AWAs

The nominal expiry date of an AWA is the earlier of the nominal expiry date specified in the agreement or five years from the date an AWA is lodged with the OWA. An AWA operates until it is terminated, replaced or declared void by a court. It may only be terminated in accordance with the WRA, which requires, at least, that the agreement exceed its nominal expiry date.

A party who breaches an AWA may be liable in damages to the innocent party for the breach and may be ordered to pay a civil penalty up to $6,600, in the case of an individual, and $33,000 for a body corporate.

ITEAs

The nominal expiry date of ITEAs is the earlier of the nominal expiry date specified in the agreement or 31 December 2009, but ITEAs will continue to operate until terminated or replaced (ss352 & 347, WRA).

Collective Agreements

Under the Transition to Forward with Fairness Act: The nominal expiry date of a Work Choices collective agreement is the earlier of the nominal expiry date specified in the agreement or five years from the date it is lodged with the OWA. A collective agreement remains in force until it has passed its nominal expiry date and is replaced by another collective agreement (s347(5) WRA as amended by Work Choices).
A party who breaches a collective agreement may be liable to pay a civil penalty and be ordered to pay any unpaid wages or other amount the court finds was required to be paid by the relevant term of the agreement.

Under the FW Act: Under section 186(5) of the FW Act, the nominal expiry date may be specified in the agreement but must, other than for ITEAs and agreements failing the BOOT but approved on the basis of special circumstances, be no later than four years after the date on which the agreement was approved by the FWA. If no date is specified in a collective agreement, then the nominal expiry date is four years from the date it was approved by FWA.

An enterprise agreement will come into operation seven days after it is approved by the FWA or a later day specified in the agreement (s54, FW Act). 

Enterprise agreements will continue to operate after their nominal expiry date until they are terminated or replaced.

It is unlawful to engage or threaten to engage in any action with the intention of coercing a person to, or not to, make a collective agreement, or to approve or vary or terminate such an agreement. However, since 1993 the law has permitted and accepted that coercion in the form of  lawful industrial action may occur when agreements are being negotiated. To that end, industrial action by employers, employees and unions can be permitted and protected by the FW Act if it is applied towards the making and supporting of claims for a new agreement. Therefore, it is not unlawful to engage in protected industrial action. However, industrial action will only be protected if the procedures for protected industrial action in the FW Act are complied with (see: Chapter 3 Part 3-3 of the FW Act). (Also see: "Industrial Actions".)

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