Enterprise agreement approvals taking to long

You shall not pass quickly (through the FWC) - Ai Group members are reporting they are going as grey as a certain Tolkein-esque wizard as a result of delays they have been experiencing in seeking to have their enterprise agreements approved by the Fair Work Commission (FWC).

These reports are supported by the recently released FWC 2016-2017 Annual Report, which confirms in the last financial year, the FWC’s timeliness in agreement approval performance was slower than in recent financial years.

What is driving the slowing of the process?

The delay is largely because of the increased rigour with which the FWC agreement triage team is assessing whether an enterprise agreement meets the strict requirements of the Fair Work Act 2009 (Cth) (Act), including whether the agreement passes the better off overall test (BOOT).

The triage team is required to perform a more detailed BOOT analysis following the FWC Full Bench’s decision in Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Ltd [2016] FWCFB 2887. Here the Full bench found that while the BOOT is a global test, it requires consideration of whether every individual employee is better off overall under a proposed enterprise agreement. If employees working particular work patterns (e.g. considerable overtime on a regular basis) will not be better off under the agreement, it will not pass the BOOT.

What can employers do?

A Bill has been introduced into Parliament in an attempt to reduce delays by allowing the FWC some discretion to approve agreements despite minor or technical failures to meet the Act’s requirements. However, this Bill is yet to be passed into law and so delays will not be rectified in the near future.

In addition, the new Bill will not assist employers whose enterprise agreements do not pass the FWC’s strict BOOT assessment, and who may need to provide undertakings or even go back to another vote to remedy an issue identified by the FWC.

As a result, it has never been more important for employers to adopt a strategic approach to enterprise bargaining that complies with the Act’s requirements and keeps up with the latest trends.

Jarrad Parker is a Senior Adviser in Ai Group's Workplace Relations Team. This blog first appeared on the Ai Groups blog plage.