The Secure Jobs, Better Pay Bill (‘the Bill’) was passed by both houses of Federal Parliament on 2 December 2022. This represents the most extensive legislative reform for employers since the introduction of the Fair Work Act in 2009.
(Secure Jobs, Better Pay Bill) 2022 – Amendments to Bargaining & Enterprise Agreements
This article is the third part in our series on the Secure Jobs, Better Pay Bill 2022 (‘the Bill’) and focuses on the amendments to enterprise bargaining and agreements.
Our review of the changes on workplace laws following the Bill have been covered in a series of 3 articles:
- Article 1: What Does it mean for Employers?
- Article 2: Amendments to the building and construction industry
- Article 3: Bargaining and Enterprise Agreements This article will focus on the main amendments for all employers
The Bill reduces barriers to multi-enterprise bargaining and expands the role of the Fair Work Commission to resolve bargaining disputes including the power to resolve the dispute by way of arbitration.
The Bill has not introduced new streams of multi-employer bargaining but reduces the barries to the current streams being:
- Supported bargaining – this stream is designed to assist industries with low agreement coverage. It is very similar to the low-paid bargaining stream but removes the definition of low-paid. The amendment will allow the Fair Work Commission to consider matters such as prevailing pay conditions in the relevant industry and whether the employers have common interests. Employees may apply to the Fair Work Commission to have themselves and their employer added to a supported bargaining authorisation without the employer’s consent. A vote is then conducted by the employer cohort, and if the employees of one named employer don’t vote in favour of the agreement, the agreement won’t apply to them.
- Single interest employer authorisations – the single interest employer has been removed with the introduction of the “common interest employers” who can bargain together for a multi-enterprise agreement. The intent is for employers with clearly identifiable common interests to easily bargain together and aims to ensure the operations of business activity of these employers are reasonably comparable. The amendments make it easier for employers to be included to existing single enterprise agreements, including without the employer’s consent (providing a majority of employees approved), with the following caveats:
- employers with more than 20 employees cannot be added to a single interest employer agreement authorisation without their agreement; and
- the Fair Work Commission has the discretion to refuse an application if it is satisfied that on the day it will approve the relevant application, less than nine months past since the most recent nominal expiry date of the agreement.
- Co-operative workplaces – is the rebranding of multi-enterprise agreements. The main amendment is for employers and employees to be covered by or added to an existing enterprise agreement.
Employers negotiating as part of a multi-enterprise agreement obtain the written consent of every union acting as a bargaining representative for the agreement.
The purpose of the amendment is to reduce the barriers for bargaining to replace or amend existing agreements.
The Fair Work Commission has been granted additional powers to assist parties in bargaining disputes.
- Intractable bargaining declarations – the Fair Work Commission will now have the power to issue an intractable barraging declaration, and after an optional period of time for the parties to negotiate, issue a determination. The minimum bargaining period is the later of 9 months after the nominal expiry date of the existing agreement or 9 months after the day bargaining starts.
- Fewer barriers to arbitration – the Fair Work Commission can arbitrate bargaining disputes by issuing a workplace determination following the intractable bargaining declaration.
- No party can unreasonably withhold agreement for a proposed enterprise agreement to be put to a vote.
These provisions commence on 6 June 2023.
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A significant change to the Fair Work Act is in the process to terminate an enterprise agreement which has passed its nominal expiry date.
Previously, the Fair Work Commission would only need to be satisfied that the termination is not contrary to public interest. The Fair Work Commission now is required to be satisfied of one of the following before termination of the enterprise agreement:
- Continuing the operation of the enterprise agreement would be unfair to the employees covered;
- The enterprise agreement does not, and is not likely to, cover any employees; or
- The continued operation of the enterprise agreement poses a significant threat to the viability of the business which could be alleviated by the termination of the agreement on the condition that the employer guarantees the termination entitlements under the agreement.
These conditions make it more difficult for employers to terminate enterprise agreements which have passed the expiry date. These changes commenced on 8 December 2022.
The Better Off Overall Test (‘BOOT’) which is used by the Fair Work Commission to assess whether the enterprise agreement suits the employees has been amended to enable the Fair Work Commission to undertake the BOOT as a global assessment rather than consideration of the agreement line by line. The Fair Work Commission will only be applied to reasonably foreseeable patterns or types of work under the agreement in an attempt to avoid the agreement being rejected due to unlikely hypothetical scenarios. The impact of the amendment is that it is likely that parties will be more successful when making the application to the Fair Work Commission.
The benefit of the BOOT is that the Fair Work Commission can now amend the enterprise agreement without the need of all employees voting on it again to ensure that the process is more streamlined. The termination provisions will require employers to bargain with employees for the out-of-date agreements at risk of the agreement continuing in force.
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The information in this article is not legal advice and is intended to provide commentary and general information only. It should not be relied upon or used as a definitive or complete statement of the relevant law. You should obtain formal legal advice specific to your particular circumstance. Liability limited by a scheme approved under Professional Standards Legislation.