Failure to Properly Comply with Pre-Approval Steps put Agreements at Risk of Not Being Approved

The Fair Work Act 2009 (Cth) (the Act) contains a number of mandatory pre-approval steps which, if not followed, put an enterprise agreement at risk of not being approved by Fair Work Australia, despite employees voting to approve the agreement. Two recent decisions of the full bench have examined the necessity for compliance with the requirement to notify workers of representation rights.

The Notice of Representational Rights

Section 173 of the Act requires an employer to take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who will be covered by the agreement and is employed at the notification time for the agreement. The notification time is usually the time when the employer agrees to bargain or initiates bargaining for the agreement.

The form of the notice of representational rights is contained in Schedule 2.1 to the Regulations to the Act. The notice specifies that an employee may appoint a bargaining representative to represent them and that the union may be an employee’s default bargaining representative.

Approval Vote

An employer cannot request that employees approve an enterprise agreement until 21 days after the last notice of employee representational rights is given. Failure by the employer to comply with this 21 day requirement may result in Fair Work Australia determining that employees have not genuinely agreed to the enterprise agreement and therefore not approving it.

Recent Cases

In two recent cases it has been argued that an employer’s failure to provide a notice of representational rights or make an amendment to the notice of representational rights should result in the enterprise agreement not ultimately being approved by Fair Work Australia.

Incomplete Notice

In the first of the cases the AMWU argued that the employer’s failure to include a section of the prescribed notice contained in Schedule 2.1 of the Regulations rendered the notice of representational rights invalid and meant that the enterprise agreement was not genuinely agreed to by employees.

Fortunately, the full bench determined that a notice of representational rights consistent with Schedule 2.1, except with an omission of the type in this case (minimal), still notified employees of the right to appoint a bargaining representative and therefore did not prevent the enterprise agreement from being approved.

Failure to Provide Notice

In the second case, an employee covered by an enterprise agreement argued that the employer’s failure to provide the notice of representational rights to himself and other employees in his team should prevent the enterprise agreement from being approved.

In that case, the employer conceded at the appeal hearing that those employees had not been provided with a notice of representational rights but that it had taken all reasonable steps to give the notice to the employees.

Those steps included the HR Manager emailing the notice to the relevant site managers with instructions to put the notice in the lunch room and on the notice board at each site, reminding the site managers about this requirement twice, conducting an audit of some of the sites and confirming with union delegates that the notice had been distributed.

Again, fortunately, the full bench held that the HR Manager had complied with the Act because he had taken all reasonable steps to provide the notice of representational rights to the employees and that the failure to notify some employees, despite these steps, did not prevent Fair Work Australia from being able to approve the enterprise agreement.

However, these employers may not have been so lucky. In the first case it was fortunate that the omission from the notice did not have the effect of changing its message – some other amendments or omissions have been found to invalidate the notice.

In the other case it was fortunate that the HR Manager had been so vigilant in following up the site managers he had instructed to provide the notice to employees. If he had not been able to adduce that evidence, he would not have been able to satisfy Fair Work Australia that the Company had taken all reasonable steps.

Key Lessons for Employers

The key lessons for employers from these and other pre-approval steps cases are to appreciate that these steps are as critical to an enterprise agreements approval as the better off overall test and the employees’ vote.

An employer should not make any amendments or deletions to the notice of representational rights except as provided in the Schedule.

Further, an employer should put mechanisms in place to ensure any site management undertaking the pre-approval steps appreciate their importance, are properly instructed, and that site management confirm, preferably in writing, that each necessary step has been undertaken shortly after it has been undertaken.

If you would like a copy of the notice of representational rights, a pre-approval steps guide or any assistance in relation to negotiating an enterprise agreement please contact National Workplace Lawyers on +61 2 9233 3989. 

National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.