On 17 April 2019, the Fair Work Commission (“FWC”) handed down a decision in Australian Nursing and Midwifery Federation v Domain Aged Care T/A Opal Aged Care (“Opal”).
Whilst the FWC had, at first instance, approved the Opal Aged Care 2017 Enterprise Agreement (“Agreement”) (subject to undertakings), the FWC Full Bench upheld an appeal against the agreement’s approval by the Australian Nursing and Midwifery Federation (“ANMF”). As such, the original decision was quashed and remitted it back to Commissioner McKinnon for redetermination.
The decision may have significant implications for aged care providers considering, or already undertaking, enterprise agreement negotiations, including:
- The ‘Better Off Overall Test’;
- The pre-approval requirements of proposed agreements; and
- The agreement application process.
The ‘Better Off Overall Test’ (BOOT)
The ANMF appealed the original decision of the FWC on 10 grounds, most notably the Agreement did not pass the BOOT, and therefore should not have been approved.
The BOOT applies in all matters relevant to Australian enterprise agreements, and essentially requires employees are ‘better off’ under a proposed agreement than they would be if the relevant award applied (in this case, the Nurses Award 2010). You can find the specifics of the BOOT under sections 186(2)(d) and 193 of the Fair Work Act 2009 (Cth) (‘FW Act’).
It is not uncommon for the FWC to take a ‘pedantic’ approach when considering whether a proposed agreement passes the BOOT. Therefore, employers should make themselves fully aware of the requirements under the relevant modern award to ensure the agreement meets this threshold.
Inevitably, the Full Bench found the ANMF’s issues regarding the BOOT were enough on their own to quash the original decision.
This outcome may have a significant impact on the way casual nurses are paid under the Nurses Award 2010 and the ability for aged care providers to have their EBA pass the BOOT. Please see our next blog on the issue for more details.
Pre-Approval Steps to be Taken by Employers
The Full Bench also considered if there were other reasons the original decision should be quashed, and found Commissioner McKinnon had erred in concluding the content of the agreement was permissible and did not contain any unlawful terms.
For example, the ANMF appealed the original decision on the basis that the terms of the Agreement did not actually cover employees of Opal Aged Care, and the FWC’s subsequent decision to amend the Agreement’s coverage was unlawful. Indeed, the Full Bench found the FWC is not empowered to vary an enterprise agreement’s coverage during the approval stage, as the agreement must have been genuinely agreed to by the relevant employees prior to the approval application. Furthermore, the Agreement was also found to have likely contained unlawful terms with regards to paid maternity leave.
The decision reiterates that before the FWC will approve an enterprise agreement, employers must ensure the following are satisfied:
- The agreement contains the applicable “mandatory terms” (such as a dispute settlement clause, a term allowing for individual flexibility arrangements and a consultation term);
- The agreement deals only with “permitted matters”;
- The agreement does not contain “unlawful content” (such as discriminatory clauses, or clauses dealing with unfair dismissal rights, right of entry rights and conditions or OH&S rights other than those in accordance with the FW Act);
- The terms of the agreement do not contravene the National Employment Standards contained in the FW Act.
Applying to the FWC for Approval
The Full Bench also expressed concerns about Opal’s oversights during the application process, giving onlookers a clear picture of the FWC’s (strict!) expectations when it comes to properly lodging an enterprise agreement for approval.
For instance, the Full Bench were concerned the agreement had been approved despite Opal not submitting a ‘signed copy’ of the agreement with their application.
Employers must be aware of the requirements when lodging applications, specifically noting they must lodge a:
- F16 Application for Approval;
- F17 Declarations In Support – which must be accompanied with a copy of the ‘Notice of Employee Representational Rights’ provided to employees; and
- Original of the
written agreement signed by the bargaining representatives to the agreement
- (If you are lodging a hard copy) three copies of the agreement and sufficient additional copies to enable a copy to be provided to each bargaining representative in the event of approval by the FWC.; or
- (If lodging electronically) a PDF version of the signed agreement.
Are you Prepared to Tackle an Upcoming EBA Negotiation?
As the Opal decision makes clear, the EBA process is extremely difficult to navigate and even harder to execute properly. At Workplace Wizards we are passionate about being in the employer’s corner and aiding them to negotiate, draft, vote on and lodge a proposed EBA to make the process less stressful and to ensure it gets approved by the FWC.
We offer a variety of flexible and competitive packages including fixed fee for partial/total support during the EBA negotiation, ‘pay as you go’ packages for as little or as much assistance as you need, or a mixture of both. Make sure you get in touch with Nathaniel Ganeson on 0447 336 280 or email firstname.lastname@example.org for your 20 minute free and no-obligation consultation.