AS Parliament resumes for 2017, AREEA members can expect Minister for Employment Michaelia Cash to pursue an important reform to the application of the Notice of Employee Representation Rights (NERR) that would provide members of the Fair Work Commission greater discretion to overlook minor procedural errors when approving enterprise agreements.

Minister Cash last week responded to an AREEA request for reform by confirming she would seek to add ‘common sense’ to the current overly technical interpretation of the provision of the NERR during bargaining, which is seeing members of the Fair Work Commission increasingly reject or invalidate agreements for minor errors.

The Minister’s intention to address the issue comes after an AREEA letter, written on behalf of AREEA members, highlighted a number of recent cases were agreements had been rejected due to minor procedural errors.

AREEA urges Minister Cash to reform NERR application

AREEA’s letter requests the Minister to take immediate action to ‘restore common sense to the Australian enterprise agreement making system’.

“The issue is a growing tendency towards an overly technical interpretation of the Regulations as a means to refuse the formal approval of enterprise agreements,” AREEA’s letter says.

“Specifically, minor deviations from the precise content of the legislative form at Schedule 2.1 of the Regulations (the Notice of Employee Representational Rights) have been interpreted by some Court and Commission members to amount to a fatal defect in the legislated enterprise agreement making process.

“This is in turn relied on as a basis for refusing the formal approval of a growing number of enterprise agreements otherwise validly made by an employer, its employees and their representatives.”

In a separate attachment AREEA highlighted to the Minister various cases including:

• Peabody vs CFMEU, where the agreement was overturned on appeal due to the three separate forms that comprise the NERR being stapled together (known colloquially as ‘staplegate’).
• Serco Australia vs United Voice, where the agreement was rejected due to the NERR referring to ‘Fair Work Australia’ instead of ‘Fair Work Commission’.
• Uniline Australia, where the agreement was rejected due to a issuing the NERR outside of the 14 day timeframe.
• Aldi vs SDA, where the agreement was rejected due to one word in the NERR being substituted for clarity reasons.

In its letter, AREEA also raises observations that union-endorsed agreements are appearing to be scrutinised less than non-union agreements when it comes to the Commission’s strict application of the NERR rules.

“AREEA is concerned about a number of instances where Commission members have approved applications for enterprise agreements with knowledge of a minor deviation from the precise content of the form and in circumstances where a union bargaining representative does not object,” it says.

“This demonstrates some level of discretion that is not fairly or consistently applied where employees choose alternate representation.”

AREEA asks Minister Cash to make a ‘basic, non-controversial’ drafting amendment to Regulation 2.05 of the Fair Work Regulations which would ‘give life to enterprise agreements otherwise properly made’.

Decisions “not common sense” – Cash

Two weeks after AREEA’s letter to Minister Cash, a Full Bench of the Fair Work Commission rejected two more agreements due to the ‘Fair Work Infoline’ phone number being provided on the NERR form as opposed to the Fair Work Commission infoline. There was no other issue found to prevent those agreements from formal/Commission approval.

Responding to these latest decisions and AREEA’s letter, Minister Cash outlined she would seek a legislative amendment to ensure agreements are not rejected for minor or trivial issues.

“These decisions and others like them do not pass the common sense test,” the Minister said.

“These provisions of the Fair Work Act are clearly not operating as intended. The government will introduce legislation to fix these anomalies and enable common sense to prevail.”

Further, AREEA noted that reform in this area would give life to recommendation 20.1 of the Productivity Commission’s 2015 review.

Implications for employers

The growing number of decisions rejecting agreements for technical NERR issues confirm AREEA’s concerns that:

• Strict compliance with the NERR only appears to be an issue when the FWC is reviewing non-union agreements;
• That there is a ‘triage unit’ in the FWC seemingly dedicated to ‘killing off’ non-union agreements rather than working with employers to have agreements validated; and
• That without a retrospective legislative fix, hundreds of agreements that have been approved despite errors in the NERR could be overturned on appeal.

AREEA understands Minister Cash will seek to reform the application of the NERR in the first half of 2017.

Considerations are still being given to whether this amendment will stand-alone or be part of a wider package of reforms in response to the Productivity Commission’s recommendations following its 2015 review of the entire workplace relations system.

In either case, this would be a much welcome reform for employers. It would provide Fair Work Commission members with more appropriate degree of discretion over these issues and inject some much needed ‘common sense’ into Australia’s agreement making system.

Click here to visit AREEA’s ‘news coverage’ library, which includes reporting on this issue by The AFR, The Australian and Workplace Express.

For more information, please contact AREEA’s director workplace relations, Amanda Mansini via [email protected]