An Enterprise Bargaining Agreement (EBA) needs to include a nominal period that outlines the length of the agreement. If the nominal period has lapsed, both employees and employers can begin renegotiation. However, if the agreement is still in existence within the nominal period, are you able to vary or terminate the agreement? There are few factors to consider which can determine whether an EBA can be varied or terminated.
Termination by Agreement
Although a nominal period may not yet be reached, it is possible to terminate an EBA at any time. This can, however, only occur if all parties have agreed to the termination. In most cases, this occurs through a secret ballot. The vote needs to be publicised to all employees and details of the time, location and procedure need to be set out. A majority of votes needs to be met to approve the termination of the EBA.
Once a successful ballot has been finalised, the requisite forms (either Form 24 or Form 28) need to be lodged with the Fair Work Commission within 14 days of the ballot taking place. As with the approval of the EBA, the Fair Work Commission needs to decide whether:
- the termination of the agreement was appropriate in light of the union’s views;
- employees genuinely agreed to terminate the agreement; and
- employees were provided with a sufficient opportunity to decide.
After Nominal Expiry Date
An EBA has a nominal expiry date and after this date has lapsed it leaves it open for any of the parties to apply for the termination of the agreement. Once again the Fair Work Commission needs to decide whether the termination can be fulfilled. Termination will come into effect if the commission believes that it is not contrary to the public interest to do so and that a termination will be appropriate in the particular circumstance.
Individual Flexibility Arrangement
An individual flexibility arrangement (IFA) is not necessarily a termination of the EBA. That said, all EBAs do need to include a clause allowing both the employer and employee to introduce an IFA. The arrangement can vary the terms and conditions of the EBA. It needs to be genuinely agreed upon by both the employer and the employee and similarly to the EBA, also needs to meet the “better off overall” test.
Variation
Employers and employees can also agree to vary an EBA. These variations, however, do need to be approved by the Fair Work Commission. The variation also needs to be endorsed by a vote and needs to be lodged within 14 days of the change. There is also another way that an EBA can be amended. Any party to an EBA can request the Fair Work Commission to consider a variation of the agreement if it is particularly ambiguous or uncertain.
Conclusion
There are various ways an Enterprise Bargaining Agreement can be terminated or varied. If you are an employer experiencing a transition in your enterprise or an employee looking to initiate changes in your Enterprise Bargaining Agreement, speak to our team of specialist employment lawyers who can provide you with guidance on the process of termination or varying your agreement.