FWC Uses New Legislation to Approve Enterprise Agreement Despite Procedural Errors


The Fair Work Commission has utilised recent changes to the Fair Work Act 2009 (Cth) to approve an enterprise agreement despite minor technical and procedural errors.

There are strict requirements under the Fair Work Act that must be adhered to for an enterprise agreement to be approved by the Fair Work Commission. These include:

  1. A Notice of Employee Representational Rights (NERR) must be issued to employees within 14 days of the employer agreeing to bargain or initiating bargaining;
  2. The NERR must be in exactly the form required by the Fair Work Regulations and must not contain any other material;
  3. Any vote to approve an enterprise agreement must occur at least 21 days after the NERR is issued;
  4. Prior to any vote, an access period of 7 days must occur whereby the proposed enterprise agreement is provided to employees and the terms of the agreement and effect of those terms are explained;
  5. Employees must be notified of the time and place at which the vote will occur and the voting method to be used at least 7 days before the vote;
  6. Application to the FWC to have the enterprise agreement approve must occur within 14 days of the employee vote to approve the agreement.

Due to the wording of the relevant provisions in the Fair Work Act, the FWC took a very strict approach to the above procedural requirements, especially in relation to the NERR. Even minor errors, such as additional pages being stapled to the NERR or because the NERR had been printed on company letterhead, had left the FWC unable to approve an otherwise genuinely agreed enterprise agreement.

However, at the end of 2018, section 188 of the Fair Work Act was amended to allow the FWC to approve an enterprise agreement even if the strict procedural requirements had not been met provided that the employees were not likely to have been disadvantaged by the errors, and that the errors were minor procedural or technical errors.

On 23 April 2019, Commissioner Lee utilised the new provisions in the Fair Work Act in the matter of Ross Alexander Family Trust T/A Drilltec [2019] FWCA 2394 to approve Drilltec Pty Ltd Exploration Drilling Employee Collective Agreement 2018-2021. This was despite the fact that the employer failed to follow the strict procedural requirements in the Fair Work Act regarding the approval of an enterprise agreement because:

  1. The managing director signed the Notice of Employee Representational Rights, which was content not prescribed by the Fair Work Regulations and therefore was a contravention of section 174(1A);
  2. The employer did not provide a clear seven days between the notification of employees of the time, place and method of the vote, and of the actual vote.

Commissioner Lee determined that both of these errors were not likely to disadvantage the employees as one error was a minor technical error, and the other was a minor procedural error.

The use of the new legislative provisions by Commissioner Lee highlights the clear benefits of the reforms which will lead to less delays in the approval of enterprise agreements.

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