Better off overall test (BOOT)

Table of contents

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adjournment

To end proceedings or to suspend them to another time or place.

appeal

To request that a decision of a single member of the Commission be reviewed by a Full Bench to determine if the decision made is consistent with the Fair Work Act 2009. An appeal can only be made on the grounds that an error of law or fact has been made. A person must seek the permission of the Commission to lodge an appeal by lodging a Form F7—Notice of Appeal.

bullying at work

Bullying at work, as defined by the Fair Work Act 2009, occurs when:

  • a person or a group of people behaves unreasonably and repeatedly towards a worker or a group of workers while at work, and
  • the behaviour creates a risk to health and safety.

Bullying does not include reasonable management action carried out in a reasonable manner.

bullying policy

A formal procedure outlining the processes used, including disciplinary measures, to resolve bullying in the workplace. A policy would normally include definitions of bullying, a worker's responsibility in relation to bullying and the step by step process that should be adopted when bullying is reported.

code of conduct

A set of rules and responsibilities that govern an organisation. A code of conduct generally sets out appropriate and inappropriate behaviour of employees within an organisation.

Commission

Abbreviation for Fair Work Commission.

Commonwealth

Refers to the Commonwealth government or an Australian territory.

conference

A private proceeding conducted by a Fair Work Commission Member.

constitutionally covered business

A constitutionally covered business is:

  • a proprietary limited company
  • a foreign corporation
  • a trading or financial corporation formed within the limits of the Commonwealth
  • the Commonwealth
  • the Commonwealth authority
  • a body corporate incorporated in a territory
  • a business or organisation conducted principally in a territory or Commonwealth place.

It does not include sole traders, partnerships, some state government employees, corporations whose main activity is not trading or financial.

decision

A judgment or conclusion reached after considering the facts and law. A decision in relation to a matter before the Commission can include the names of the parties and will generally outline the basis for the application, comment on the evidence provided and include the judgment of the Commission in relation to the matter. A decision can be made by a single member or a Full Bench of the Commission. It is legally enforceable.

directions

Instructions given to the parties by the Commission that set out a timetable in accordance with which they must file in the Commission and serve on each other an outline of submissions, witness statements and any supporting documents.

evidence

Information which tends to prove or disprove the existence of particular belief, fact or proposition. Certain evidence may or may not be accepted by the Commission, however the Commission is not bound the normal rules of evidence. Evidence is usually contained within or attached to a witness statement or provided verbally by a witness in a hearing.

Fair Work Act 2009

The principal Commonwealth law governing Australia's workplace relations system. Go to the Fair Work Act 2009.

Fair Work Commission

Australia's independent, national workplace relations tribunal, established under the Fair Work Act 2009, from July 2009 to December 2012. Fair Work Australia assumed the functions of the Australian Industrial Relations Commission, and the Australian Fair Pay Commission and the agreement-making function of the Workplace Authority. Fair Work Australia was renamed the Fair Work Commission on 1 January 2013.

Full Bench

A Full Bench of the Fair Work Commission is convened by the Fair Work Commission President and comprises at least three Fair Work Commission Members, one of whom must be a Deputy President. Full Benches are convened to hear appeals, matters of significant national interest and various other matters specifically provided for in the Fair Work Act 2009.

harassment

Unwanted and offensive conduct or behaviour by a person or persons directed towards another person based on an attribute such as a person’s age, gender, race, religion or a disability. Harassment can be physical or psychological.

hearing

A public proceeding conducted by a Fair Work Commission Member. A hearing is generally more formal than a conference, and may be held if the matter can't be resolved at mediation, conciliation or conference.

jurisdiction

The scope of the Commission’s power and what the Commission can and cannot do. The power of the Commission to deal with matters is contained in legislation. The Commission can only deal with matters for which it has been given power by the Commonwealth Parliament.

jurisdictional objection

An objection to an application on the basis that the Fair Work Commission does not have jurisdiction to deal with the matter. A jurisdictional objection is not simply that the respondent thinks the applicant's case has no merit.

matter

A case or legal proceeding before the Commission.

mediation

An informal, confidential and voluntary process. It is one of the processes used by the Commission to facilitate the resolution of a grievance or a dispute between parties by helping them reach an agreement.

Member

A person appointed by the Governor-General to decide matters at the Commission. A Member may be the President, a Vice President, a Deputy President or a Commissioner.

non-constitutional corporation

An entity that is not a constitutional corporation. The following are not constitutional corporations:

  • sole traders
  • partnerships
  • some state government bodies
  • corporations whose activities do not include significant trading or financial functions (e.g. some charities).

order

An order is a ruling made by a Fair Work Commission Member after he or she hears your case. Once an order has been made, anyone bound by that order must follow it.

outcome

The end result of an application made to the Commission.

outline of submissions

A written document that clearly sets out the key elements of a case. All facts, information and evidence that you wish to bring to the attention of the Commission should be included in your outline of submissions.

partnership

An organisation in which two or more persons carry on a business together and it is not a constitutional corporation as defined.

party

A person or organisation involved in a matter before the Commission. A party is generally known as either an applicant or a respondent. 

principal

A person or business that has entered into a contract for services with an independent contractor.

private enterprise

A business owned and operated by private individuals for profit, instead of by a government or its agencies.

procedural fairness

When persons are treated equally or fairly before the law (also known as due process). For example, procedural fairness occurs when both parties to a dispute have an opportunity to be heard or to defend themselves.

pty ltd

A proprietary limited company. A constitutionally covered business.

reasonable management action

In relation to an anti-bullying application, reasonable management action is the action or behaviour of management that is considered to be carried out in a reasonable manner. Reasonable management action does not constitute workplace bullying.

Reasonable management action may include:

  • performance management processes
  • disciplinary action for misconduct
  • informing a worker about unsatisfactory work performance or inappropriate work behaviour
  • asking a worker to perform reasonable duties in keeping with their job, and
  • maintaining reasonable workplace goals and standards.

In each of these examples, if they are not carried out in a reasonable manner, then they could still be considered bullying.

service/to serve

A requirement to send a copy of a document (and all supporting documents) to another party or their representative, usually within a specified period. A person’s obligation to serve documents can be met in a number of ways. The acceptable ways in which a document can be served are listed in Parts 7 and 8 of the Fair Work Commissions Rules 2013.

sole trader

An organisation in which one person is responsible for the business.

WHS

Abbreviation for work health and safety.

WHS state or territory regulator

A body established by a state or territory government which regulates WHS laws in a particular state or territory. To find contact details for the regulator in your state or territory, go to the Enquiries page.

witness statement

A person who gives evidence in relation to something they saw, heard or experienced. A witness is required to take oath or affirmation before giving evidence at a formal hearing. The witness will be examined by the party that called them and may be cross examined by the opposing party to test their evidence.

worker

In relation to an anti-bullying application, the definition of a worker is drawn from the Work Health and Safety Act 2011. A worker can include:

  • an employee
  • a contractor or subcontractor
  • a person employed by a labour hire company who is working at a particular business or organisation
  • an outworker
  • an apprentice or a trainee
  • a work experience student
  • a volunteer.

Only people who are considered to be workers may apply for an order to stop bullying at work.

workplace

A place where a person performs work.

workplace bullying

See bullying at work.

Introduction

See Fair Work Act 2009 s.193

An enterprise agreement that is not a greenfields agreement passes the better off overall test if the Fair Work Commission is satisfied, as at the test time, that each award covered employee, and prospective award covered employee, would be better off overall if the agreement applied than if the relevant modern award applied.

What is the BOOT?

The better off overall test considers the terms that are more beneficial and less beneficial to employees in an agreement, compared to the terms in the relevant modern award.

The better off overall test requires the identification of agreement terms which are more beneficial, and the terms which are less beneficial, and then an overall assessment is made as to whether employees would be better off under the agreement than under the relevant award.[4]

The better off overall test is not applied as a line by line analysis. It is a global test requiring consideration of advantages and disadvantages to award covered employees and prospective award covered employees. The application of the better off overall test therefore requires the identification of the terms of an Agreement which are more beneficial to employees when compared to the relevant modern award, and the terms of an Agreement which are less beneficial and then an overall assessment of whether an employee would be better off under the Agreement.[5]

The Commission must be satisfied that each award covered employee and each prospective award covered employee would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.[6]

The question posed by the better off overall test is not whether each employee is better off under the Agreement compared to their particular existing working arrangements but whether they are better off overall if the Agreement applied rather than the relevant modern award.[7]

An agreement may pass the test even if some award benefits have been reduced, as long as overall those reductions are more than offset by the benefits of the agreement.[8]

Individual flexibility arrangements must be disregarded

When determining whether employees will be better off overall the Commission must disregard any individual flexibility arrangement agreed to by an employee and employer under the flexibility term in the relevant modern award.[9]

This is because it is assumed that any arrangements made under the flexibility term in a modern award would be considered in the negotiating process, and potentially will form part of the agreement, or be negotiated again under the flexibility term in the agreement if approved.

When is the test time?

The better off overall test is applied as at the test time – this is the time when the application for approval of the agreement was made (the date the application was lodged with the Commission).[1]

Who is an award covered employee?

An award covered employee for an enterprise agreement is an employee who:

  • is covered by the agreement, and
  • at the test time, is covered by a modern award that:
    • is in operation
    • covers the employee in relation to the work that he or she is to perform under the agreement, and
    • covers his or her employer.

Note: The enterprise agreement will only apply to an employee once it commences operation (ie after the agreement is approved by the Commission).

Who is a prospective award covered employee?

A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

  • would be covered by the agreement, and
  • would be covered by a modern award that:
    • is in operation
    • would cover the person in relation to the work that he or she would perform under the agreement, and
    • covers the employer.

Prospective award covered employees are considered in the application of the better off overall test because sometimes an agreement may cover classifications of employees in which no employees are actually engaged at the test time. Extending the application of the better off overall test to these types of employees guarantees the integrity of the safety net.[2]

A prospective award covered employee is a future employee – a person who will be employed under the terms of the enterprise agreement.

An illustrative example is provided in the Explanatory Memorandum:[3]

The Moss Hardware and Garden Supplies Pty Ltd Enterprise Agreement 2010 covers the classification of Assistant Store Manager. At the test time for the better off overall test, Moss Hardware and Garden Supplies Pty Ltd does not employ any Assistant Store Managers. However, it has recently announced that it will restructure its staffing arrangements to introduce this new position. The Assistant Store Manager classification is covered by the relevant modern award. Assistant Store Managers employed after the agreement commences operation would therefore be prospective award covered employees. The Commission would need to be satisfied that the agreement passed the better off overall test in respect of these persons.

References

[1] Fair Work Act s.193(6).

[2] Explanatory Memorandum to Fair Work Bill 2008 at para. 824.

[3] Explanatory Memorandum to Fair Work Bill 2008 at para. 824.

[4] Re Armacell Australia Pty Ltd [2010] FWAFB 9985 (Giudice J, Acton SDP, Lewin C, 24 December 2010) at para. 41, [(2010) 202 IR 38].

[5] Ibid.

[8] Ibid., at para. 8.

[9] Fair Work Act s.193(2).

 

 

 

 

 

 

 

 

 

 

Updated time

Last updated

24 May 2019

 

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