If your business is considering making an enterprise agreement, you must strictly comply with the procedural requirements of the Fair Work Act 2009 (FW Act) and ensure you use the newly amended Notice of Employee Representational Rights. For those who have already commenced bargaining, small mistakes made during the bargaining process may mean the parties’ agreement cannot be approved and the entire bargaining process must start all over again, which can be very costly and frustrating for all parties.

Updated Notice of Employee Representational Rights

When commencing bargaining with employees for a new enterprise agreement, employers must take all reasonable steps to give employees a Notice of Representational Rights (Notice).

Common mistakes which will invalidate a Notice include inserting additional words (except for employee names and details), deleting words (other than where the form expressly requires you to select an option) or attaching additional documents.  In the recent Full Bench decision MUA v MMA Offshore Logistics Pty Ltd & Ors [2017] FWCFB 660 the employer’s insertion of an incorrect telephone number invalidated the Notice and meant that the Fair Work Commission (FWC) could not approve the agreement.

From 3 April 2017, employers need to use the updated Notice available from the Fair Work Commission’s website.

The Notice of Representational Rights must be issued within 14 days of the ‘notification time’

Employers must issue the Notice no later than 14 days after the ‘notification time’, being the day on which the employer agrees to bargain or initiates bargaining.

In Uniline Australia Limited [2016] FWCFB 4969 (Uniline), even though 80 per cent of employees voted in favour of the enterprise agreement, a majority of the FWC Full Bench found that the agreement could not be approved as the Notice was invalid because it had been issued too late.  In a decision which attracted a lot of criticism, DP Gostencnik and Commissioner Riordan noted at [120]:

“If the legislative provisions provided some discretion about this and other pre-approval technical requirements then an examination of the actual impact of any deficiency upon the bargaining process and its outcome might result in the deficiency being disregarded. But that is not the legislative scheme the Commission is required to administer. It is a matter for Parliament to make such amendments to the scheme of the Act as it sees fit.”

Employer must take all reasonable steps to explain the terms of the proposed agreement

BGC Contracting Pty Ltd [2017] FWC 852 is another recent example of the strict approach adopted by the FWC when considering whether the employer has complied with its bargaining obligations.

Deputy President Binet noted that the employer had not provided hard copies of a modern award which was incorporated by reference into the agreement – it had only provided hard copies of the award in the employees’ crib room and links to online information.  DP Binet stated at [59] that:

where the employer seeks to rely on the incorporated material being freely available in the public domain online, the employer bears the onus of establishing that providing access online is reasonable in the circumstances.”

DP Binet considered that, as BGC’s employees were predominantly blue collar workers without ready access to computers, this onus was not discharged. Further, as BGC had failed to draw to employees’ attention provisions of the award which were more beneficial than terms in the proposed agreement, there were reasonable grounds for concluding that BGC had failed to take ‘all reasonable steps’ to explain the terms of the proposed agreement.

For these reasons, along with some other issues, DP Binet was not satisfied that the proposed agreement was ‘genuinely agreed to’ and the agreement was not approved.

Key take-away for employers

While enterprise bargaining presents a great opportunity to improve workplace productivity and flexibility, employers must ensure they strictly comply with all of the procedural requirements under the FW Act. The FWC is taking an increasingly pedantic and conservative approach to the interpretation of these procedural requirements.  An employer who deliberately or inadvertently fails to strictly comply risks being sent back to the starting line.  Consequently, before commencing the bargaining process, employers should ensure they have a thorough understanding of what is required to successfully navigate this complex process.

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