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2015–16 Major application types: Enterprise agreements
Enterprise agreements constitute a significant part of the Commission's work. As well as assessing and approving enterprise agreements, the Commission assists parties with the process of making them and with resolving disputes arising from bargaining and disputes arising under enterprise agreements.
An enterprise agreement is a binding instrument made between an employer and employees (or in the case of a greenfields agreement between the employer and relevant union/s) that governs terms and conditions of employment.
Before approving an enterprise agreement, the Commission must be satisfied it meets the legislative criteria set out in the Fair Work Act, including that it passes the 'better off overall test' (BOOT). This test requires that each employee to be covered by the agreement is better off overall than under the relevant modern award. Other requirements the Commission must be satisfied have been met include that the agreement:
- has been made with the genuine agreement of those involved
- does not include unlawful terms or designated outworker terms
- covers a group of employees that was fairly chosen
- specifies a nominal expiry date (not more than four years after the approval date)
- provides a dispute settlement procedure
- includes a flexibility clause and a consultation clause
Applications dealt with
In 2015–16, 5,529 applications to approve enterprise agreements were made to the Commission. Of these, 4,801 were approved, 53 not approved, and 595 withdrawn.
The number of applications to make an enterprise agreement received during the reporting cycle was lower than in previous years, in line with a general decline in application rates since 2011–12, which coincided with the bargaining round for the building, metal and civil construction industries.
The overwhelming majority of agreement approval applications made to the Commission during the reporting cycle were for single enterprise agreements.
Performance
During 2015–16, the Commission:
- received 5,529 enterprise agreement applications
- finalised 5,449 enterprise agreement applications
- received 33,065 visits to the Enterprise Agreement Benchbook
- since March 2016, the 'Making a Single-Enterprise Agreement: step by step guide' has been downloaded 2,758 times
Figure 10: Applications for approval lodged
Agreement approvals
The Commission improved the timeliness of approving agreements for all types of applications (single enterprise, greenfields and multi-enterprise) lodged against each benchmark measured.
The benchmarks for agreement approval finalisations are:
- 50 per cent of all agreements finalised within 3 weeks
- 90 per cent of all agreements finalised within 8 weeks
- 100 per cent of all agreements finalised within 12 weeks
In 2015–16, 56.8 per cent of applications were finalised in 3 weeks, compared to 49.6 per cent in the previous year. In addition, 99.2 per cent of all agreement applications were finalised within 12 weeks, of which 95 per cent were finalised within 8 weeks.
The average number of days taken to finalise 50 per cent of single enterprise agreement applications in 2015–16 was reduced by 3 days (from 21 days to 18 days) and by 7 days (from 56 days to 49 days) for 90 per cent of applications from the previous year.
The improvements in timeliness are largely a result of the agreement triage process the Commission has progressively adopted in 2015–16, following an earlier successful pilot.
Under the process, a team of administrative staff analyse agreements to form a preliminary view of whether they meet the statutory requirements required by the Fair Work Act. The analysis includes completing a checklist that was developed by senior Commission Members. The team's analysis assists Commission Members, who continue to make the decisions on whether or not to approve agreements.
In addition to the improvements in timeliness, other benefits of the centralised process include a greater capacity to identify and respond to trends and systemic issues. Agreement approval applications in particular industries are generally allocated to the same Member to consider. This is one of the ways the process promotes greater consistency and rigour in the approach to agreement approval applications, which has contributed to a greater number of applications being withdrawn. When issues that may lead to an agreement not being approved are drawn to the parties' attention, the application is often withdrawn. In 2015–16, 595 applications were withdrawn, compared to 407 in 2014–15 and 294 in 2013–14, despite similar numbers of applications for approval being made.
By the end of the reporting period, the new process applied to 90 per cent of applications for approval of agreements.
During 2015–16, the Federal Parliament amended the Fair Work Act to extend good faith bargaining obligations to greenfields agreement negotiations and to enable an employer to apply to the Commission for approval of a greenfields agreement if no agreement had been reached with the relevant employee organisation/s within a six month 'negotiation period'. In addition to the standard approvals test, the Commission is required to ensure these agreements are consistent with prevailing industry standards. The Commission did not receive any applications to approve such greenfields agreements, made under s.182(4) of the Fair Work Act, during 2015–16.
Figure 11: Agreements benchmarks
| Finalised within | 3 weeks | 8 weeks | 12 weeks | Nunber of Agreements finalised beyond 12 weeks |
|---|---|---|---|---|
| Benchmark | 50% | 90% | 100% | 0 |
| 2014–15 | 49.6% | 90.5% | 97% | 167 |
| 2015–16 | 56.8% | 95% | 99.2% | 41 |
| Type of application | KPI | Percentage of matters | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 50% | 90% | ||||||||
| 2015–16 | 2014–15 | 2013–14 | 2012–13 | 2015–16 | 2014–15 | 2013–14 | 2012–13 | ||
| s.185-Single-enterprise — lodgment to finalisation (days) | 32 days | 18 | 21 | 17 | 16 | 49 | 56 | 50 | 54 |
| s.185-Greenfields — lodgment to finalisation (days) | 32 days | 12 | 14 | 14 | 14 | 35 | 46 | 41 | 38 |
| s.185-Multi-enterprise — lodgment to finalisation (days) | 32 days | 28 | 34 | 26 | 22 | 85 | 90 | 54 | 64 |
| Type of application | Lodged | Approved | Not approved | Application withdrawn | Total finalised1 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 –16 |
2014 –15 |
2013 –14 |
2012 –13 |
2015 –16 |
2014 –15 |
2013 –14 |
2012 –13 |
2015 –16 |
2014 –15 |
2013 –14 |
2012 –13 |
2015 –16 |
2014 –15 |
2013 –14 |
2012 –13 |
2015 –16 |
2014 –15 |
2013 –14 |
2012 –13 |
|
| s.185 — Single-enterprise | 5,238 | 5,449 | 5,945 | 6,333 | 4,523 | 5,027 | 5,602 | 6,051 | 48 | 114 | 99 | 59 | 582 | 382 | 269 | 281 | 5,153 | 5,523 | 5,970 | 6,391 |
| s.185 — Greenfield | 258 | 407 | 749 | 712 | 252 | 399 | 745 | 685 | 1 | 2 | 3 | 3 | 9 | 17 | 20 | 29 | 262 | 418 | 768 | 717 |
| s.185 — Multi-enterprise | 33 | 66 | 60 | 42 | 26 | 55 | 56 | 36 | 4 | 1 | 1 | 1 | 4 | 8 | 5 | 4 | 34 | 64 | 62 | 41 |
| Total | 5,529 | 5,922 | 6,754 | 7,087 | 4,801 | 5,481 | 6,403 | 6,772 | 53 | 117 | 103 | 63 | 595 | 407 | 294 | 314 | 5,449 | 6,005 | 6,800 | 7,149 |
1 Results are not confined to applications lodged in this period.
| Industry | Percentage of applications processed via triage | Percentage finalised within 3 weeks (Benchmark 50%) | Percentage finalised within 8 weeks (Benchmark 90%) | Percentage finalised within 12 weeks (Benchmark 100%) | Number of agreements finalised beyond 12 weeks |
|---|---|---|---|---|---|
| Building, metal and civil construction industries | |||||
| 2014–15 | 26% | 58.4% | 91% | 97% | 40 |
| 2015–16 | 91% | 68.5% | 96% | 98.8% | 15 |
| Manufacturing and associated industries | |||||
| 2014–15 | 6% | 53.5% | 94.8% | 98.1% | 16 |
| 2015–16 | 88% | 61.5% | 96.5% | 99.4% | 5 |
Assistance with agreement making
The Commission has powers under a number of sections of the Fair Work Act to assist the bargaining process if requested to do so.
In 2015–16, 404 bargaining applications were made to the Commission. Of these, 184 were applications to deal with a bargaining dispute.
| Type of application | 2015–16 | 2014–15 | 2013–14 | 2012–13 |
|---|---|---|---|---|
| s.229 — Application for a bargaining order | 111 | 87 | 96 | 78 |
| s.236 — Application for a majority support determination | 71 | 96 | 77 | 74 |
| s.238 — Application for a scope order | 28 | 12 | 24 | 15 |
| s.240 — Application to deal with a bargaining dispute | 184 | 270 | 208 | 231 |
| s.242 — Application for a low-paid authorisation | 0 | 0 | 1 | 0 |
| s.248 — Application for a single interest employer authorisation | 10 | 11 | 16 | 8 |
| Total | 404 | 476 | 422 | 406 |
The year ahead
The Commission expects, and is planning for, applications for agreement approval to rise significantly in 2016–17, largely due to a spike from the building, metal and civil construction industries.
In 2016–17 the Commission will continue to add to its agreement making education material to assist parties with agreement making and the lodging of compliant applications. It will also see the final stage of the agreements triage process implemented resulting in all agreement applications for approval being processed in this way.