Some Important Indications As To When An Enterprise Agreement May Not Be Approved

Commissioner Roe of Fair Work Australia (FWA) was required to determine whether a proposed Enterprise Agreement should be approved. The application to approve an Enterprise Agreement was made by Peel Finance Brokers (Waterdale Enterprises Pty Ltd as Trustee for the Boag Family Trust T/A Peel Finance Brokers). The Company has five employees and the Company submitted that all five voted in favour of the Agreement.

After the application was lodged with FWA, Commissioner Roe made an initial assessment and wrote to the Company with some concerns about the proposed Agreement, including:

· the Agreement did not appear to be collective because it had a single employee’s name, details and signature;

· the Agreement was in the form of an individual contract which contradicts Section 3(c) of the Act which states that statutory individual contracts “can never be part of a fair workplace relations system”;

· the Agreement included common law agreement provisions which would make them enforceable terms that might not have otherwise been enforceable at common law - such as a confidentiality clause that included restraints;

· a concern that the procedure for bargaining might not have followed the Act;

· the application was lodged 17 days after the Agreement was signed when it should have been lodged within 14 days;

· there was a concern that the policies and procedures of the Company were a part of the Agreement but there was no evidence that employees received a copy of the policies;

· There was no right of refusal for employees in relation to working public holidays as per the National Employment Standards

· concern that the Better Off Overall Test would not be met in terms of loadings, overtime, etc

These above issues and others were addressed by the Company’s bargaining representative prior to the hearing.

At the hearing undertakings were given by the Company’s bargaining representative to rectify and clarify some of the issues. However the Commissioner still had concerns that there was no genuine agreement by employees to approve the agreement because the majority of employees signed the agreement on 16 March and the employer declaration stated that voting concluded on 23 April, and the employer signed the documents for the majority of employees on the same day that notice of employee representational rights was given - suggesting that employees did not have an opportunity to exercise their representational rights.

Ultimately the Commissioner found that there was no genuine agreement by employees to the Agreement and therefore it could not be approved.