Enterprise agreements are an important area of the Commission’s work. The Commission can help with the process of making enterprise agreements, and is required to assess and approve agreements.

Enterprise agreements are made between an employer and their employees about the terms and conditions of employment. Before approving an enterprise agreement, the Commission must ensure the agreement or variation passes the better off overall test (BOOT). This test requires that each of the employees to be covered by the agreement are better off overall than under the relevant modern award.

Approval of agreements

Applications to approve enterprise agreements declined by 4.7 per cent in 2013–14. This was the second consecutive year of decline following a 17.3 per cent fall in 2012–13.

Table 21—Enterprise agreement approval applications
Type of application Lodged Approved   Not approved Application withdrawn Total finalised*
11–12 12–13 13–14 11–12 12–13 13–14   11–12 12–13 13–14 11–12 12–13 13–14 11–12 12–13 13–14
s.185—Single-enterprise 7812 6333 5945 7440 6051 5602   79 59 99 264 281 269 7783 6391 5970
s.185—Greenfields 705 712 749 665 685 745   3 3 3 27 29 20 695 717 768
s.185—Multi-enterprise 48 42 60 44 36 56   1 1 1 3 4 5 48 41 62
Total 8565 7087 6754 8149 6772 6403   83 63 103 294 314 294 8526 7149 6800

* Results are not confined to applications lodged in this period.

Approval of agreements is not automatic. The Commission must be satisfied that:

  • the agreement has been made with the genuine agreement of those involved
  • the agreement passes the BOOT
  • the agreement does not include any unlawful terms or designated outworker terms
  • the group of employees covered by the agreement was fairly chosen
  • the agreement specifies a date as its nominal expiry date (not more than four years after the date of Commission approval)
  • the agreement provides a dispute settlement procedure, and
  • the agreement includes a flexibility clause and a consultation clause.

Agreement approval times

The Commission strives to approve agreements in a timely manner. To this end, the Commission introduced timeliness benchmarks for dealing with applications for the approval of agreements in July 2012.

Table 22 shows the median number of days taken to finalise 50 per cent and 90 per cent of applications. This year the time to approve 90 per cent of single enterprise agreements improved to 50 days from 54 days in 2012–13. The time to approve 90 per cent of multi-enterprise agreements also improved by 10 days from 2012–13. The time taken by the Commission to finalise 90 per cent of greenfields agreements rose by three days.

Table 22—Enterprise agreements—timeliness
Type of application   Median time (days)
50% of matters 90% of matters
KPI 2011–12 2012–13 2013–14 2011–12 2012–13 2013–14
s.185—Single-enterprise—lodgment to finalisation 32 days 17 16 17 53 54 50
s.185—Greenfields—lodgment to finalisation 32 days 21 14 14 58 38 41
s.185—Multi-enterprise—lodgment to finalisation 32 days 35 22 26 91 64 54

Assistance with agreement making

Employers and employees usually complete enterprise agreement negotiations (or bargaining) themselves. But these negotiations can break down or become deadlocked, meaning an agreement between the parties cannot be reached.

In these situations the Commission has a variety of powers to assist the bargaining process if requested to do so under the terms of a number of sections of the Fair Work Act 2009.

The number of bargaining applications rose by 3.8 per cent in 2013–14 after falling 19.3 per cent the previous year.

Table 23—Bargaining applications—lodgments
Type of application 2011–12 2012–13 2013–14
s.229—Application for a bargaining order 99 78 96
s.236—Application for a majority support determination 62 74 77
s.238—Application for a scope order 30 15 24
s.240—Application to deal with a bargaining dispute 307 231 208
s.242—Application for a low-paid authorisation 1 0 1
s.248—Application for a single interest employer authorisation 31 8 16
Total 503 406 422

Providing assistance with bargaining can see some innovative techniques employed by Commission Members and lead to positive outcomes for all parties, as demonstrated by Case study—Catholic Education Victoria.

Promoting productive enterprise agreements

In support of the recommendation contained in Towards more productive and equitable workplaces—an evaluation of the Fair Work legislation, the Commission will conduct and publish qualitative research to identify clauses in enterprise agreements that enhance productivity or innovation. The purpose of the project is to help enterprises to become more productive by informing them about productivity enhancing measures other enterprises have introduced through their enterprise agreements.