You may have created an agreement with your employees only to realise you needed to change something or unfortunately terminate it. There are different processes to vary terms of the agreement, depending on the type of agreement you have entered into. Here’s a quick guide on the steps involved in amending or ending an enterprise agreement.
Changing an Agreement
The process is quite similar to making an agreement in the first place. You and your employees have to agree to change a term of the agreement, and once it is approved by a majority of your employees, you must apply to the Fair Work Commission to have it approved.
For a single-enterprise agreement, the change is approved by a majority of the employees who will be affected by the change. For a multi-enterprise agreement, the process is different from that of the original agreement. It has to be approved by a majority of the affected employees of each of the employers. Similarly, the process for a Greenfields Agreement differs from the original process, as a change to the agreement can only be made if at least one employee covered by the agreement has been employed.
The Fair Work Commission then undertakes the same approval process as with an original agreement, and must check that it still meets all of the requirements, including the ‘better off overall’ test and the National Employment Standards.
Terminating an Agreement
You and your employees may agree to terminate an agreement at any time while the agreement is in place. Your employees need to vote in favour of terminating the agreement, and then it needs to be approved by the Fair Work Commission. If you are looking to replace your old agreement with a new one, the old one will need to be terminated first, unless the old agreement has passed the expiry date.
If the employment agreement has passed its nominated expiry date, then you or your employees can apply for it to be terminated. The Fair Work Commission then makes sure it is not against the public interest for the agreement to be finalised, and it will also take into account whether terminating the agreement is appropriate in the circumstances. This includes your view, and the views of your employees and any unions that are involved. It is important to consider what impact the termination will have on all parties involved. The Fair Work Commission will also consider how terminating the agreement will affect your employees’ ability to bargain effectively.
The recent case of Aurizon Operations Limited: Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd  FWCFB 540 has enhanced the ability for employers to terminate agreements where negotiations with employees are dragged out well beyond the expiry date, particularly in circumstances where it affects the employer’s ability to handle business operations.
Changing or terminating an enterprise agreement can be tricky depending on your individual circumstances and your relationship with your employees. Getting the advice of a specialised employment lawyer from LegalVision may just be the help you need to ensure a successful outcome for your business. Contact us on 1300 544 755 if you have any questions.