30 Jul HR Law Newsletter – July 2014

TIMEFRAMES FUNDAMENTAL IN ENTERPRISE AGREEMENT PRE-APPROVAL PROCESS

Despite the intentions of parties to a proposed Enterprise Agreement, the Fair Work Commission has demonstrated on a number of instances that it will refuse to approve an Enterprise Agreement in circumstances where the pre-approval timeframes have not been strictly adhered to. These cases provide some lessons for employers considering entering into an Enterprise Agreement:

1.   The vote cannot take place until at least the 22^nd day after an employer gives Notice of Representational Rights to its employees.

Lofa Pty Ltd ATF the Transpa Trust trading as Haycroft Workplace Solutions [2009] FWA 1348

In considering whether to approve an Enterprise Agreement submitted by Haycroft Workplace Solutions (“Haycroft”), Senior Deputy President Richards, examined the application of section 181(2) of the Fair Work Act 2009 (“FW Act”) which provides that an employer cannot request an employee to vote on whether to accept an agreement until at least 21 days after the employer provides Notice of Representational Rights.

In deciding not to approve Haycroft’s Enterprise Agreement, Senior Deputy President Richards found that the 21 day timeframe does not include the day that the Notice of Representational Rights was given. He further said that each of the 21 days following the day that the Notice of Representational Rights was given, including the final day, had to be a full day (i.e. part days do not count).

Therefore, employers cannot request employees to vote to accept an agreement until at least the 22^nd day after they issued the Notice of Representational Rights to their employees. Failing to comply with this strict timeframe will result in the Fair Work Commission rejecting the agreement.

2.   The vote cannot take place until the expiry of the “seven day” access period.

Pursuant to section 180 of the FW Act, at least seven days before the day that an employer requires an employee to vote to accept an agreement, the employer must provide to its employees:

(a)           A copy of the proposed agreement and any material referenced in the agreement; and

(b)           Notice of the time and place at which the vote will occur and the voting method that will be used.

When calculating the access period, employers should have regard to the following decisions of the Fair Work Commission:

(a)          The access period ends on the day prior to the voting date: McKechnie Iron Foundry Pty Ltd re McKechnie Iron Foundry Pty Ltd Single Enterprise Agreement 2010 [2010] FWA 3171; and

(b)          Calendar days should be used to calculate the seven day access period and not part days (which should not be included in the calculation): Hydro Electric Corporation [2014] FWC 4169.

Accordingly, employers should not require an employee to vote on whether to accept an agreement until at least the eighth day after the employer has complied with section 180 of the Fair Work Act.

3.   Ballot papers cannot be issued at the same time notice of the vote is provided

Concept Engineering (Aust) Pty Ltd [2014] FWC 4227

On 27 June 2014, the Fair Work Commission ruled that employers cannot notify employees of the date of the vote to accept an agreement at the same time as providing the ballot papers. Commissioner Ryan refused to approve Concept Engineering (Aust) Pty Ltd’s Enterprise Agreement in circumstances where the employer mailed their employee’s notification that a postal vote was to occur at the same time as providing the voting slip and return envelope.

Commissioner Ryan found that by issuing the voting slip and return envelope the employer had begun the voting process and accordingly had failed to strictly adhere to the seven day access period.

These recent cases highlight the importance of strictly complying with the FW Act pre-approval timeframes, as a failure may have the detrimental consequence of not having an Enterprise Agreement approved by the Fair Work Commission, which in all other circumstances may have met all the requirements for approval.

HR Law is able to assist employers to ensure their compliance with the FW Act pre-approval timeframes. Please contact us if you require any assistance.

UNION SUCCESSFUL IN TERMINATING SPOTLIGHT COLLECTIVE AGREEMENT

Shop, Distributive and Allied Employees Association [2014] FWA 4301

On 27 June 2014, Commissioner Gregory made the decision to terminate Spotlight Pty Ltd’s Collective Agreement effective 30 June 2014. The decision arises from an application under section 225 of the Fair Work Act 2009 (“FW Act”) by the Shop, Distributive and Allied Employees Association (“SDA”).

Section 225 of the FW Act provides that if an Enterprise Agreement has passed its nominal expiry date, a person covered by the agreement (i.e. an employer, employee or employee organisation, such as a union) may apply to have it terminated. In deciding whether to terminate an agreement, the Fair Work Commission must have regard to those matters set out in section 226 of the FW Act, including whether termination is contrary to public interest and the opinions of the other parties to the agreement.

SDA’s application was made after it unsuccessfully attempted to negotiate a new Enterprise Agreement with Spotlight. The nominal expiry date of the Spotlight Pty Ltd Australian Stores Enterprise Agreement 2009 (“Collective Agreement”), was 30 September 2012. SDA submitted that employees of Spotlight would be better off overall if the Collective Agreement was terminated and they were paid the entitlements contained in the General Retail Industry Award 2010 (“Award”).  Commissioner Gregory ultimately agreed with this submission.

In deciding to terminate the Collective Agreement, Commissioner Gregory held that such a termination was not contrary to public interest and overwhelmingly supported by the employees.

Spotlight has undertaken to continue to pay certain benefits contained in the Collective Agreement which are greater than the benefits conferred on employees under the Award.

Employers with agreements that are past the nominal expiry date should consider entering into a new Enterprise Agreement, particularly if the benefits contained in the expired agreement are less favourable than the relevant award, to minimise the risk of a similar section 225 application by a union or one of their employees.

HR Law is able to assist with any questions you may have about your current agreement/s or entering into a new Enterprise Agreement.