If you are an employer who has decided to use an enterprise agreement to cover your employees, then it will need to be approved by the Fair Work Commission (FWC). Once the Commission approves it, your employees can begin working for you. However, the process of approval can be confusing and it is important that you understand what factors the FWC will take into consideration. This article outlines the various steps involved in the FWC approving an enterprise agreement for your business.
Step 1: Bargaining Representative Application
As an employer, you are automatically designated as the bargaining representative for your interests; however, you can also appoint someone else in writing if you would prefer. Your employees can appoint a bargaining representative in writing which can be themselves or an employee organisation to which they belong, such as their union.
Once you and your employees have agreed to the terms of the agreement, one of the bargaining representatives must apply to the FWC for approval within 14 days after the agreement is made.
Step 2: What to Include in the Application
If you are the bargaining representative and have chosen to lodge the agreement, you need to complete a declaration and have the employees’ bargaining representative complete one too. You then need an original copy of the written agreement to be signed by both parties. You will need three copies of the agreement, and any additional copies that the FWC may wish to give to the bargaining representatives if approved.
These documents can be:
- sent by email;
- lodged online;
- faxed; or
- posted.
Step 3: Approving the Agreement
The FWC will then assess your agreement and make sure it covers a number of requirements. Firstly, your employees must have genuinely agreed to the agreement being in place. Additionally, the agreement must:
- not contravene the national employment standards;
- pass the ‘better off overall’ test;
- meet the requirements for shift workers or outworkers, it applicable; and
- not undermine good faith bargaining if approved.
You must also include an expiration date, which cannot be more than four years from the date of approval. Furthermore, you should ensure that your agreement includes a cause concerning settling disputes, as this is an important area to regulate for the longevity of your relationship with your employees.
In the case of a multi-enterprise agreement, the FWC will also check that you and the other employers voluntarily agreed. There should be no evidence of coercion or threats during negotiations. Additionally, the agreement should only cover the employees who approved the agreement and not any who refused.
As an employer, it is essential to understand what employment laws have changed and their implications for your business — particularly the changes to the Fair Work Act 2009 through the new Closing the Loopholes legislation.
If the Fair Work Commission has any questions about your agreement, it might ask you to attend a hearing. However, if there are no issues, your agreement is likely to be approved without one. It can take around 50 days for your agreement to be approved. However, you can check on the progress by calling 1300 799 675.
Key Takeaways
Lodging your enterprise agreement should be a straightforward process. However, there are a number of serious considerations that the FWC will take into account when deciding whether to approve it. This includes whether:
- your employees’ rights are fairly represented within the agreement;
- the agreement contains the required details, such as an expiration date;
- you or other employers, where applicable, voluntarily agreed to be a part of the agreement; and
- all employees who are going to be covered by the agreement voluntarily agreed.
If you are unsure about whether the content of your agreement is sufficient to obtain approval, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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