Many employers and their staff have become increasingly frustrated due to unexplained delays in having Enterprise Agreements (EAs) that they have negotiated, approved by the Fair Work Commission (FWC).
Please read on for explanation of what has (or has not) been happening.
Under the Fair Work Act 2009 (the Act), the FWC is required to report annually to Parliament via the relevant Minister, in the form of ‘Annual Performance Statements’ under the signature of the General Manager.
The President of the Commission sets various ‘performance indicators’ (benchmarks), against which the activities of the FWC may be assessed by the Parliament, and ultimately, we the Taxpayers.
In the most recent report (for the year 2017-18) by the General Manager the following data was put forward for consideration:
Number of applications received 5,287, down by seven percent on the previous year. The greatest number of applications filed under the current legislation was in 2014-15 (6,005).
Outcomes, of the number received this year, eighty two percent were approved; of these sixty eight percent required ‘undertakings’ being given by the employer to remedy aspects of the contents of the EA which were either unclear or contradictory, or at variance with the requirements of the Act.
It is important to note that the level of ‘undertakings’ (sixty eight percent of all applications) have risen significantly since 2013 when only twenty two percent required such actions.
This year one percent of applications were formally refused approval by the FWC, whilst seventeen percent were withdrawn by the applicants.
2018 commenced with benchmarks in place relating to the time required for processing applications (not requiring ‘undertakings’); fifty percent of the total received were to be addressed by the FWC within three weeks and one hundred percent to be finalised within eight weeks of lodging. By 1st July the President had cause to extend the timelines in relation to applications involving the employer giving ‘undertakings’ to fifty percent being processed within ten weeks and one hundred percent within sixteen weeks of lodgement.
In their report the General Manager noted various factors as having contributed to the blow-out in the timeframes for the approval process, which included:
- The diversion of administrative resources to keep more than 300 agreement applications in abeyance while waiting for the passage of the ‘Fair work Amendment (Repeal of 4 yearly Reviews and other measures Bill 2017)’. The bill finally received assent on 11th December;
- Results of various Commission and Federal Court cases relating to the proper interpretation of the ‘Better off Overall Test’;
- The limitation placed on resources available during the currency of the 4 yearly review of Modern Awards.
Currently, parties to an enterprise agreement that has been genuinely agreed to, cannot receive approval from the FWC if there are minor procedural or technical errors in relation to the requirements of the Act concerning the ‘Notice of Employee Representational Rights’ (NERR) and other steps required to be taken for employees to approve a proposed agreement.
Unfortunately the passage of the bill through the Parliament will only benefit the parties to agreements lodged the day after the date of assent (being the 12th of December 2018). Those in the system prior to that date may still find themselves falling foul of procedural requirements imposed by the Fair Work Act which saw “form” unduly dominate over “substance” of key steps in negotiating and ultimately approving an EA, which gave rise to types of cases identified by the Productivity Commission as being “absurd”.
Over the past eighteen months to two years the number of applications for approval of EAs has declined significantly as parties are dissuaded by a set of circumstances which they have little control over.
Those who persist in pursuing new or replacement workplace arrangements through enterprise bargaining are finding it more difficult and time consuming.
Regardless of the outcome of the next Federal Election, it is unlikely that much of the current system of the agreement making endorsement process will escape review and or alteration. Time will tell if this will achieve the desirable outcomes for all parties.