Key Points:
Employers entering negotiations for a new enterprise agreement must provide a notice of employee representation to employees within 14 days of the notification time.
Making an enterprise agreement can be a drawn-out process, as you and your workforce attempt to create a legal framework that works for both of you. With all of the detail you must discuss, it could be easy to lose sight of the technical requirements in the Fair Work Act (2009) (Cth). Unfortunately, as one employer recently discovered, these requirements are non-negotiable.
In Uniline Australia Limited [2016] FWC 2973, an application for the approval of an enterprise agreement was rejected by the Fair Work Commission following Uniline's failure to provide its employees with a notice of employee representation within the requisite 14 days of initiating the bargaining process - and throwing away over two years' worth of negotiation.
Notice to be represented
Section 173 of the Fair Work Act (2009) (Cth) requires an employer to issue a notice to each employee who would be covered by the enterprise agreement, as soon as practicable, and no later than 14 days after bargaining has commenced for an enterprise agreement.
Uniline took a little bit longer than 14 days to issue its notice - it was issued approximately two years after initiating the bargaining process in April 2014.
Genuine agreement
The Fair Work Commission will only approve an enterprise agreement if it considers that the employees to be covered by the agreement have genuinely agreed to it. Commissioner Roe in Uniline found that employees cannot be said to have genuinely agreed to the enterprise agreement unless the NER notice had been issued in accordance with section 173(3) of the Fair Work Act. As the notice was invalid, there was no genuine agreement as required by section 186(2)(a) of the Fair Work Act and the enterprise agreement was rejected.
What does this mean for employers?
The Uniline decision highlights the Fair Work Commission's reluctance to approve a proposed enterprise agreement where an employer has failed to comply with a mandatory procedural step, such as the 14 day timeframe.
All employers who are intending to commence bargaining for an enterprise agreement must ensure that once the bargaining process has been initiated that you provide the notice to the employees ASAP, or no later than 14 days following notification.
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.
