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Principles For Approval of Enterprise Agreements

December 2002

1. Preamble

1.1 The following principles are to be applied by the Commission pursuant to s 33(1) of the Industrial Relations Act 1996 (the Act), in determining whether to approve enterprise agreements unless it is satisfied, in accordance with s 35(3) that any departure from these principles would not prejudice the interest of any parties to the agreement.

1.2 These Principles take effect from the date of this decision and remain in force until varied by the Commission in accordance with the Act.

1.3 In deciding whether to approve an enterprise agreement, the Commission, in accordance with s 146(2) of the Act, must take into account the objects of the Act, including whether the enterprise agreement provides equal remuneration for men and women doing work of equal or comparable value under the agreement.

1.4 The Principles embody matters related to the negotiation and processing of agreements, criteria for approval and seek to ensure that agreements and the processes which lead to agreements are appropriate and, having regard to the particular circumstances and needs of the employees to be covered by the agreement, the agreement complies with the Anti-Discrimination Act 1977.

1.5 In particular, the terms and conditions of employment in a proposed agreement must not unlawfully discriminate, either directly or indirectly, on the grounds of sex, race, marital status, homosexuality, age, disability, transgender identity or responsibilities as a carer.

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2. Criteria for approval of enterprise agreements

2.1 Parties must demonstrate to the satisfaction of the Commission that they have followed all the requirements for approval, including:

1. involvement of the parties and/or their representatives in negotiation processes;
2. the parties understand the nature and effect of the agreement;
3. the parties did not enter the agreement under duress;
4. that all relevant employees are covered by the agreement; and
5. that the agreement does not breach relevant statutory requirements, including the requirements of Ch 2, Pt 2 (Enterprise Agreements) of the Act and the Anti-Discrimination Act 1977.

2.2 When the Commission is considering an enterprise agreement under s 35(2) of the Act, the Commission may also have regard to:

1. the wishes of the parties;
2. the award coverage of employees not covered by the proposed agreement;
3. the history of industrial regulation at the enterprise or workplace; and
4. other matters the Commission considers relevant.

2.3 Where a secret ballot is required pursuant to s 36(4) of the Act, the conditions of the ballot shall require that:

1. a returning officer be a person who is not the employer or a person selected by the employer
2. to be eligible to vote, the person must be an employee who is to be covered by the agreement at the time the ballot is conducted;
3. each eligible employee is able to vote only once in a ballot;
4. the employees were able to vote in secret;
5. time/times were fixed for the ballot which enabled all eligible employees the opportunity to vote where practicable;
6. the ballots were secure until counting commenced;
7. the returning officer count and declare the result of the ballot; and
8. ballots be retained until after the agreement is processed by the Commission.

The conditions of the ballot should usually include that:

1. each ballot form be initialled by the returning officer;
2. counting not commence until the ballot closed; and
3. scrutineers may observe the count of the ballot papers.

In addition, the Commission may inspect the ballot papers.

2.4 The Commission, in accordance with s 35(1) of the Act, is to satisfy itself that:

1. in the case of an agreement that covers employees to whom State awards would otherwise apply the agreement does not, on balance, provide a net detriment to the employees when compared with the aggregate package of conditions of employment under the State awards, and
2. in the case of an agreement that covers employees to whom federal awards would otherwise apply the employees are not disadvantaged in comparison to their entitlements under the federal awards, and
3. in the case of an agreement that covers employees to whom no State or federal award would otherwise apply the agreement does not, on balance, provide a net detriment to the employees when compared with the aggregate package of conditions of employment under a State or federal award that covers employees performing similar work to that performed by the employees covered by the agreement.

2.5 In determining the "no net detriment" test, in accordance with s 35(1)(b), the Commission should have regard to:

1. the benefits and conditions applying under the proposed enterprise agreement in comparison to those applying under the relevant award/s;
2. the conditions in the proposed enterprise agreement being considered as an aggregate package;
3. provisions in the Occupational Health and Safety Act 2000 and regulations directly relevant to the change in work patterns to be performed under the agreement;
4. the needs and circumstances of the enterprise;
5. the wishes of the parties to the agreement;
6. any other matters the Commission considers relevant.

Furthermore, in determining the "no net detriment" test, in accordance with s 35(1)(b), and without derogating from the above, the Commission shall have special regard to:

1. test case decisions of the NSW Industrial Relations Commission;
2. State decisions setting principles or provisions pursuant to s 51 of the Act;
3. minimum sick leave provisions for awards as prescribed under s 26 of the Act;

2.6 An enterprise agreement should, where appropriate, facilitate the establishment of consultative mechanisms and procedures appropriate to the size, structure and needs of the enterprise for consultation on matters affecting their efficiency and productivity.

2.7 In accordance with s 39 of the Act, an enterprise agreement may be required to contain dispute resolution procedures. The Commission is to have regard to whether those dispute resolution procedures facilitate the resolution of industrial disputes concerning discrimination in employment on a ground to which the Anti-Discrimination Act 1977 applies.

2.8 (a) Where the relevant award contains provisions for competency based vocational training, and vocational training is provided for in an enterprise agreement, it shall be in accordance with those provisions.

(b) Notwithstanding the terms of Principle 2.7(a), the Commission may approve training provisions which do not accord with the award provisions to meet the operational requirements of the enterprise or for any other good reason.

2.9 Where the proposed enterprise agreement includes a provision as to payment of an agency or union bargaining fee, the Commission shall consider whether the proposed provision is consistent with the provisions of the Industrial Relations Act 1996, and, where applicable, the rules of any relevant registered organisation.

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3. Process for approving agreements to be followed by the Commission

3.1 The Commission, in accordance with s 169(1) of the Act, must take into account the principles of the Anti-Discrimination Act 1977 when exercising its functions under these Principles including having regard to whether the enterprise agreement contains an anti-discrimination clause in the form of Attachment 1 to these Principles.

3.2 In approving enterprise agreements in accordance with the Act and Principles, the Commission may approve an agreement by way of an informal process. However, parties may be required to address the Commission on all matters required under the Act and Principles.

3.3 For the purpose of s 38(1) of the Act, where an enterprise agreement has been approved by a secret ballot pursuant to s 36(4) of the Act, one or more employees may be nominated by the employees to sign the agreement on behalf of all the employees to be covered by the agreement.

3.4 The responsibility for lodging the Comparison and Compliance Statement, pursuant to r 41 of the Industrial Relations Commission Rules 1996, rests with the applicant, provided that where individual employees are the applicant, it shall be sufficient that a selected representative of the employees files the required statement.

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4. Process ensuring sufficient information

4.1 During the negotiation of the agreement, consultative processes should be structured such that they encourage participation of all groups and categories of employees, which may include part-time and casual employees.

4.2 The negotiation process should therefore ensure that:

1. reasonable steps are taken to consult all employees who are to be covered by the agreement about the agreement;
2. reasonable steps are taken so that employees who are to be covered by the agreement have an understanding of the agreement and its effect;
3. employees are informed of the intention to have the agreement approved by the Commission and the consequences of the Commission's approval;
4. employees have access to the proposed agreement and the relevant award/s; and
5. employees have had reasonable time to seek advice independent from the employer; for example, including relevant industrial organisations of employees.

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5. Appropriate negotiating process

5.1 Where the parties have agreed to negotiate an agreement, they should attend meetings they have agreed to attend, provide documentation they have agreed to provide, and comply with agreed or reasonable negotiating procedures.

5.2 In negotiations for a proposed enterprise agreement, the parties will consider matters such as workplace reform, productivity and efficiency.

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Attachment 1 - Anti-Discrimination

1. It is the intention of the parties to this agreement to seek to achieve the object in s 3(f) of the Industrial Relations Act 1996 to prevent and eliminate discrimination in the workplace. This includes discrimination on the grounds of race, sex, marital status, disability, homosexuality, transgender identity, age and responsibilities as a carer.

2. It follows that in fulfilling their obligations under the dispute resolution procedure prescribed by this agreement the parties have obligations to take all reasonable steps to ensure that the operation of the provisions of this agreement are not directly or indirectly discriminatory in their effects. It will be consistent with the fulfilment of these obligations for the parties to make application to vary any provision of the agreement which, by its terms or operation, has a direct or indirect discriminatory effect.

3. Under the Anti-Discrimination Act 1977, it is unlawful to victimise an employee because the employee has made or may make or has been involved in a complaint of unlawful discrimination or harassment.

4. Nothing in this clause is to be taken to affect:

1. any conduct or act which is specifically exempted from anti-discrimination legislation;
2. offering or providing junior rates of pay to persons under 21 years of age;
3. any act or practice of a body established to propagate religion which is exempted under s 56(d) of the Anti-Discrimination Act 1977;
4. a party to this agreement from pursuing matters of unlawful discrimination in any State or federal jurisdiction.

5. This clause does not create legal rights or obligations in addition to those imposed upon the parties by the legislation referred to in this clause.

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Notes

1. Employers and employees may also be subject to Commonwealth anti-discrimination legislation.
2. Section 56(d) of the Anti-Discrimination Act 1977 provides:
   "Nothing in the Act affects ... any other act or practice of a body established to propagate religion that conforms to the doctrines of that religion or is necessary to avoid injury to the religious susceptibilities of the adherents of that religion."