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Enterprise Agreements approved within 21 days – good for jobs, the economy and faster payrises

Providing Influence and Industry Advocacy since 1918

Contact AREEA to find out more. When it comes to workforce & workplace relations advocacy, AREEA is right there with you.

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The Government’s Industrial Relations Omnibus Bill contains important reform proposals that are modest in nature; their key focus being directed towards keeping Australians in jobs and creating new ones.

One of these modest reforms would see the Fair Work Commission required ‘as far as practicable’ to approve all new enterprise agreements within 21 days of their lodgement.

Steve Knott AM, CEO of Australian Resources and Energy Group AREEA, provides the following statement on why this reform is a win / win proposal that would provide employees with faster pay increases together with providing much needed certainty to employers.

In recent times many employers have vacated the enterprise agreement (EA) making system due to Fair Work Commission (FWC) approvals processes taking several months and sometimes more than a year. As an administrative tribunal – not a Court as is the common misunderstanding – the FWC needs to serve its primary customers (employees & employers) in a more timely manner.

This is well within their remit and resourcing capabilities.

During last year’s Industrial Relations Working Groups, of which I was a member, the ACTU supported a 14-day approval period for EAs involving trade unions. At the very least this is tacit acknowledgement by unions that a serious problem exists with EA approval timeframes.

In restricting such EA approval efficiencies to union agreements only, the ACTU was wilfully seeking to prioritise their union membership recruitment endeavours ahead of the interests of the +90% of private sector women and men who are not union members.

The fact that they were pursuing this agenda, at odds with internationally recognised freedom of association provisions, in order to advance their own vested interests, was not surprising.

Surprising though was the FWC – the often-referenced ‘independent’ IR umpire – making its own submission on the Government’s IR bill; a submission that sought to thwart imposition of the proposed 21-day timeline.

At best this was a poorly executed ‘pea and thimble’ trick to obfuscate FWC inadequacies in approving EAs. Threats in their submission that FWC members could simply dismiss EA approval applications in order to meet the prescribed time limit is petulant child stuff.

All EAs must pass the same approval requirements including that they were genuinely agreed by employees and pass the Better Off Overall Test, or ‘BOOT’. Employees will not be left worse off by the government’s Bill; notwithstanding predictable but inaccurate union scare campaigns to the contrary.

The FWC now categorises EA approvals into ‘simple’ and ‘complex’ applications, giving itself additional leeway when assessing the latter category. This is no assistance to the end users, being employers tendering for commercial work and/or employees waiting for a pay increase.

If there are ‘exceptional circumstances’, the government’s IR changes would simply require the FWC to provide a written explanation on why they were unable to meet the 21-day deadline and further time was required.

One of the reasons the FWC currently cites as needing more than 21-days is they sometimes require ‘undertakings’ from the parties to ensure the agreement meets the statutory approval requirements.

In 2021, to offer up this as an excuse for delaying approval of EAs, is indicative of an administrative tribunal out of touch with modern workplace communication technology.

Most FWC members are on circa $500,000 per annum, some are on more. They all have well-paid associates in addition to a bevy of tribunal staff that are paid handsomely to analyse and undertake EA approval checks before applications even land on the FWC member’s desk.

To get an ‘undertaking’ from parties to an EA should be as simple as Facetiming relatives and friends. A video link could be setup, issues raised and resolved, all within minutes not weeks or months.

Further, the FWC’s submission omits that many EA approvals are subject to lengthy appeal processes that often delay approval for many months and sometimes more than a year.

This is totally unsatisfactory and in part a key reason many employers have vacated the EA making stream.

25,000 EA’s were in place in 2010. The fact that a decade later 9,800 EA’s are in place and 700,000 less employees are covered by them, is telling.

The exodus from EA making on the back of FWC requests for hypothetical undertakings, delays in approval and so forth is there for all to see.

FWC EA approval processes have been a common bane of AREEA members across mining, oil and gas and service sector members for some time now. For larger employers, opting out of EA renewals is now commonplace.

This is an economy wide phenomenon and not limited to the resources and energy industry.

For example, less than 12 months ago Bunnings withdrew its proposed EA covering 37,000 staff, citing frustrations about the highly technical, time consuming and burdensome tests.

McDonalds took similar action the year prior.

In the Bunnings case it did not hear from the FWC until 10 weeks after their EA was lodged and another 11 weeks before the FWC enquired about it.

A Kmart EA covering 36,000 employees was lodged in December 2018. The FWC’s non-approval was subject to successful appeal with the agreement ultimately being approved 11 months later.

It is indisputable that having the FWC approve all EAs within 21 days would be good for both employers and employees.

The FWC’s own submission acknowledges that over the past three years its EA approval time has fluctuated between 79 and 26 days, the latter highlighting a 21-day timeline is well within the administrative body’s resourcing capabilities.

The FWC is totally funded by Australian taxpayers. The 21-day time limit will clearly be an improved customer service delivery for employees and employers, a timeframe the FWC should embrace and seek to better, not bury in bureaucratic hyperbole.

Steve Knott AM is Chief Executive of the Australian Resources and Energy Group (AREEA) and a Board Director of the Australian Chamber of Commerce and Industry (ACCI).

MEDIA CONTACT: Brad Thompson | 0409 781 580 | [email protected]

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