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Tips & traps of Enterprise Agreements

David Bates
17 October 2018

Here at Harmers, we routinely assist employers through the minefield that is Enterprise Agreement-making. What was once a relatively straight-forward exercise is today, unfortunately, comprised of a complex series of steps that must be carefully followed and documented.

While it simply isn’t possible to cover this topic in any depth here, there are a few tips and common traps we nonetheless thought we’d highlight, given just how many new Agreements are falling down at the last hurdle, due to procedural failings. 

Tip 1: Fill in the paperwork as you go

Once a new Agreement has been approved by employees in a ballot, it needs to be lodged with the Fair Work Commission for formal approval. Each Agreement needs to be accompanied by a Form F16 and a Form F17. The latter is a very detailed statutory declaration that can often take a long time to complete. We recommend you start completing this form at the beginning of the process, and then update it as you go. 

Trap 1: Don’t ignore the strict timeline requirements

Extremely strict time-related rules apply to Enterprise Agreement-making and if you break any of these rules, your Agreement will ultimately be rejected and you’ll be back at square one (it really is as bad as it sounds!). Here are just some of the timing rules that must be followed:

The Notice of Employee Representational Rights (“NERR”) must be issued to all employees who will be covered by the Agreement within 14 days of the ‘notification time’;

There must be a minimum of 21 days between the date the last NERR is issued and the date the employer requests employees approve a proposed Agreement; and

There must be 7 clear days before a ballot takes place, during which employees have access to the draft Agreement and any other relevant documentation (this is called the ‘Access Period’); and

New Agreements must be lodged with the Fair Work Commission for approval within 14 days of a successful ballot.

Tip 2: The Fair Work Commission has published an online date calculator

The Fair Work Commission has now published an online ‘date’ calculator that makes it much easier to comply with these complex rules. You’ll find the calculator here.

Trap 2: Don’t forget: All new Agreements must pass the BOOT

‘BOOT’ stands for ‘Better Off Overall Test’, and all new Agreements are assessed by the Fair Work Commission against the BOOT. The Fair Work Commission can generally only approve a new Agreement if it passes the BOOT. An Agreement will pass the BOOT if it can be shown each employee covered by the Agreement will be left better off overall under the terms of the Agreement, as compared to any otherwise applicable Modern Award.

Tip 3: Make sure you know which Modern Awards apply

If you don’t know which Modern Awards apply to the employees who will be covered by a proposed Agreement, you’ll have no way of knowing if it will pass the BOOT! Always get expert advice about Award coverage before you start the negotiation process.

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