Under the Fair Work Act, the job of reviewing enterprise
agreements for approval has been returned to the industrial
tribunal, Fair Work Australia. Until an agreement has been
approved, it will not operate to provide full protection from
agitation about changes to conditions and industrial action.
Getting agreements in a form able to be approved is a crucial step
in the smooth introduction of new or revised conditions in
The tribunal is taking its job very seriously. Agreements have
been refused approval for a wide variety of reasons, from mistakes
in meeting timing requirements to failing to demonstrate that an
agreement passes the "better off overall test".
The Fair Work Act has introduced a new bargaining regime, and
reliance on past experience of what can be achieved is liable to
mislead. Undertakings to the tribunal can cure only some
An area of danger is inclusion in an agreement of conditions
that cross the line into being "unlawful terms".
This will result in approval being refused. One type of unlawful
term is a term that provides an entitlement to enter premises to
hold discussions with employees. Under the Fair Work Act, the only
entitlement to exercise right of entry for specific purposes
(including discussions with employees) is under the right of entry
provisions of the Act itself.
The tribunal has in a recent decision drawn a distinction
between an entitlement to enter premises, and an invitation
(Pacific Dunlop t/a Dunlop Foams  FWAA 1401, 22
February 2010). In this decision the tribunal approved an agreement
that included this provision: "An authorized [union]
representative is entitled to enter at all reasonable times
upon the premises and to interview any employee, but not so as to
interfere unreasonably with the Employer's business".
The basis for the decision was that the entry right is in the
nature of a conditional invitation, and so does not amount to an
entitlement. The decision recognises that an invitation is
something that can be withdrawn at will, but the provision in the
agreement falls short of this mark. Despite this, the agreement was
This decision will, no doubt, lead to union demands for similar
provisions to be agreed to during enterprise bargaining
negotiations. In responding to those demands, employers need to
know that the legal position is not settled. An appeal against the
approval decision has been flagged. A successful appeal would mean
that any agreement made in the meantime that includes a similar
"invitation" to enter premises may not be
Hunt & Hunt has recently alerted employers to a separate
controversy about whether an enterprise agreement must provide for
compulsory arbitration of disputes under its dispute settlement
provisions. On appeal a full bench of the tribunal decided that
compulsory arbitration was not required, and overturned the
original decision under appeal. These issues show the process of
bedding-in of Fair Work Act provisions dealing with enterprise
agreements is far from over.
It is crucial for employers to stay aware of issues that could
cause a long and complicated bargaining process to fall at the last
hurdle, affecting employee morale and expectations.
The Quick Five
Applications to approve enterprise agreements are being closely
scrutinised in Fair Work " Australia.
Mistakes in content or process can lead to an approval
application being refused, and " involve the disruption of
reopening bargaining and carrying out further votes.
Inclusion in an agreement of an "invitation"
to union officials to enter premises may pass " the approval
tests, but this could change suddenly.
Careful formulation of any condition around "right of
entry" is necessary.
To have the best chance that a negotiated agreement contains
appropriate conditions and " will be approved first time
around, an employer should be independently satisfied their "
agreement is sound and the right process has been followed.
Tim Lange recently joined David Thompson as a partner in Hunt
& Hunt's Melbourne team as a leading practitioner in
employment and industrial relations. He has extensive experience in
advising employers on enterprise bargaining strategy.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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