6 June 2023 deadline looms for Fair Work Act key changes

This article is a follow up to the article that Gadens’ Workplace Advisory and Disputes team previously published in relation to changes to the Fair Work Act 2009 (Cth) that commence operation from 6 June 2023. The previous article can be found here.

Businesses should note 6 June 2023 down as a crucial date in their diaries from an industrial standpoint. We set out below key changes for businesses that will commence operation from 6 June 2023.

We consider below:

1. the sunsetting of zombie agreements;
2. changes to the bargaining and approval process for enterprise agreements; and
3. multi-employer agreements.

Sunsetting of zombie agreements

Should you have a pre-2010 enterprise agreement or other collective instrument, your business may be covered by what has colloquially been known as a zombie agreement. Changes to the Fair Work Act 2009 (Cth) require that employers with employees covered by a zombie agreement to be notified of various matters on or before 6 June 2023. Failure to make appropriate notification may result in the imposition of civil penalties against your business.

Regardless, zombie agreements are set to terminate on 7 December 2023 unless extended by application to the Fair Work Commission (FWC).

If you think your business may be covered by a zombie agreement, please let us know as we would be pleased to guide you through the notification and/or extension process.

Extensions to zombie agreements may be granted if the FWC finds that:

• circumstances make it reasonable to do so;
• bargaining is underway for a new enterprise agreement to apply instead; or
• that the employees would be better off overall under the zombie agreement than if they are covered by the applicable modern award (if any).

Changes to the enterprise bargaining process

Access periods are (notionally) a thing of the past! Approval requirements for enterprise agreements will be simplified. The FWC is publishing guidelines that will be taken into account for the purposes of approval. This includes taking all reasonable steps to provide employees with access to a copy of the enterprise agreement during a 7-day period ending immediately before the start of the voting process or a period that is otherwise considered reasonable. The approval of enterprise agreements will depend on whether the FWC is satisfied that covered employees have genuinely agreed to it. Where an agreement has union endorsement, this may result in enterprise agreements being approved more readily under these changes. Of course, explanations still need to be given to employees ahead of a vote, and enterprise agreements will still need to pass the better off overall test.

Other factors to be taken into account by the FWC to be newly satisfied that the proposed agreement has been genuinely agreed upon is outlined in the Fair Work (Statement of Principles on Genuine Agreement) Instrument 2023.

Further clarification is also being given to the approval process including simplifying the application of the Better Off Overall Test (BOOT). It is expressed to be a global assessment and not a line-by-line comparison between the proposed agreement and relevant modern award. In assessing the BOOT, FWC will no longer consider hypothetical situations as the FWC may only have regard to work patterns or kinds of work if they are reasonably foreseeable at the time the application for approval of an enterprise agreement is made to the FWC. Common views shared by unions and the employer will be given primary consideration by the FWC. Further, the FWC will have the power to amend agreements, where necessary, to address any concerns that do not meet the BOOT to limit the use of undertakings.

Importantly, the pre-existing tests in relation to the BOOT and genuine agreement will continue to apply in a transitional sense. That is, where the notification time (that is, at its simplest, when bargaining commences) and/or the date the agreement was made (that is, when a positive vote for the proposed enterprise agreement was achieved) occur before 6 June 2023, the old tests may be applied in some circumstances. As such, specific advice should be obtained prior to approval. For further detail, please read our article here.

Multi-employer agreements

The new changes will also aim to facilitate bargaining in specific industries by bringing in three new streams of bargaining agreements. Namely, they are supported bargaining agreements, single-interest agreements, and co-operative workplace agreements. Broadly speaking, these allow for bargaining for multi-employer agreements. The most contentious is the single interest stream.

Single interest employer authorisations allow bargaining representatives to group employers in some circumstances to bargain for a single multi-employer agreement which will cover various employers. The FWC can make the single interest employer authorisation to cover an employer with or without its consent (small businesses are of course exempt) in circumstances where it is not against public interest to do so and there are clearly identifiable common interests such as:

• the geographical location;
• being regulated by a common regulatory regime;
• the nature and operation of the enterprises;
• the terms and conditions of employment in those enterprises.

It is important that businesses move quickly to prepare for these changes. This may include ensuring that businesses have a plan in place should a single interest authorisation be sought to include them, including evidencing how the business may be able to refute the above circumstances to reduce risk of being roped into an existing agreement (that has already been made) or forced to bargain with other businesses as part of a single interest employer authorisation.

Conclusion

Further to this article, we have also published an infographic checklist for you to download and use which sets out the past and upcoming key changes and actions you can implement within your organisation.

Please feel free to reach out to anyone at Gadens who will be pleased to discuss any of these key changes with you further.

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Authored by:

George Haros, Partner
William Marshall, Senior Associate
Teresa Zhang, Lawyer