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What Are FWC Agreements?

Enterprise agreements are agreements written by large organisations detailing the conditions of employment for their employees. The Australian Fair Work Commission, in accordance with the Fair Work Act 2009, has the ability to approve these types of agreements, which are sometimes referred to as FWC agreements. Different industries have different awards or minimum conditions that must be met for their employees. Enterprise agreements must leave employees in a better position than they would be in under the relevant award for their industry.

The Fair Work Commission publishes enterprise agreements which they have approved on their website.

What can FWC Agreements include?

FWC agreements or enterprise agreements can include terms such as:

  • Pay rates;
  • Conditions of employment such as work hours, breaks and work arrangements for overtime;
  • Processes by which consultations can take place about the agreement;
  • Arrangements for resolving disputes about the agreement; and
  • In what circumstances and for what purposes deductions can be made from an employee’s wages where they authorise such deductions.

FWC agreements cannot include terms that would be unlawful, such as a term that is discriminatory.

What are the different types of FWC agreements?

There are three main types of enterprise agreements. These are:

Single-enterprise agreements

These types of agreements are between one employer and one or more employees. They can also be more than one employer and employees where the employers are essentially the one enterprise, e.g. franchises;

Multi-enterprise agreements

These types of agreements are among two or more employers; and

Greenfields agreements

These types of agreements are between a new enterprise and prospective employees. These agreements can be either single-enterprise agreements or multi-enterprise agreements.

For how long do enterprise agreements operate?

FWC agreements continue to operate until they are changed or ended through an application to the Fair Work Commission.

Enterprise bargaining process

There are specific processes and timeframes that must be followed by employers, employees and other relevant parties during the bargaining process for the formation of an enterprise agreement.

Once an employer decides they want to begin the bargaining process for an enterprise agreement, they must notify employees as soon as practical of their intention to do so and the employee’s right to be represented in the bargaining process.

Good faith during the bargaining process

All persons or representatives in the bargaining process must bargain in good faith. This means:

  • Participating in meetings at times which are reasonable;
  • Providing information that needs to be disclosed for bargaining to be in good faith at required times;
  • Responding to draft terms or agreements made by other representatives in the bargaining process in a timely way;
  • Genuinely considering proposals made by other parties to the bargaining process and providing reasons for the positions held about these proposals;
  • Acting fairly; and
  • Genuinely engaging in the bargaining process with the other bargaining representatives.

As a person or representative participating in the bargaining process, you are not required to:

  • Give up your position in relation to various parts of the proposed agreement; or
  • Reach an agreement on terms that are proposed for the agreement

What if employees are unhappy with a FWC agreement?

If a majority of employees want to enter into a bargaining process with their employer to form a new agreement and the employer refuses there is scope for a bargaining representative to apply to the Fair Work Commission to compel the employer to negotiate. The employer will be required to bargain to make a new agreement with their employees where the Commission makes a determination that they must do so after such an application is made.

Fair Work Commission orders in relation to bargaining disputes

Sometimes, an agreement cannot be reached among bargaining representatives. In such circumstances, the Fair Work Commission may have the power to intervene, either to help the parties to bargain or to make an order about a particular dispute in the bargaining process.

Approval process for FWC agreements

For an FWC agreement to be reached, there must be a successful vote. For each of the three types of FWC agreements, the majority required is as follows:

  • Single-enterprise agreement – a majority of employees endorse the agreement;
  • Multi-enterprise agreement – a majority of employees of at least one of the employers agree to the FWC agreement. If only a majority of employees of one or some of the employers agree to the FWC agreement, the agreement can be approved so that it only applies to those employees and their employer;
  • Greenfields agreement – each employer and each relevant employee organisation must agree to the FWC agreement.

Once an FWC agreement has been reached, a bargaining representative must make an application to the Fair Work Commission for the agreement to be approved.

If you require legal advice or representation in any legal matter, please contact Armstrong Legal.

Kathryn Sampias

This article was written by Kathryn Sampias

Kathryn Sampias has a Bachelor of Laws, a Bachelor of Arts and a Graduate Diploma in Journalism. Kathryn was admitted to practice in 2005 and practised law for more than eight years, working both in private practice (mainly in defence litigation for professional indemnity disputes) and in the public service for the Australian Securities and Investments Commission (ASIC) in enforcement.

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