Fair Work Commission

Overview

The Commission may approve an enterprise agreement that may not meet certain requirements of the Fair Work Act 2009 if satisfied that a written undertaking meets the concern.

The Commission may only accept a written undertaking from an employer, after seeking the views of each bargaining representative and if satisfied that the effect of accepting the undertaking is not likely to:

• cause financial detriment to any employee
• result in substantial changes to the agreement.

When the Commission approves the agreement, any accepted undertaking(s) is both noted in the decision and is attached to the copy of the agreement published on the Commission’s website.

Undertakings & applications for approval of agreements

If the Commission has a concern that an enterprise agreement does not meet the approval requirements in ss.186 and 187 of the Fair Work Act (which includes passing the BOOT), the Commission can approve the agreement if it receives and accepts a written undertaking from the employer(s) covered by the agreement which addresses that concern.^[1] The undertaking is a commitment that the employer will comply with what is written in the undertaking in addition to or instead of a term of the agreement. The undertaking forms a part of the agreement and is legally binding on the employer.^[2]

As the employees have voted on the agreement as it was lodged, the Commission will not accept an undertaking if it will result in substantial changes to the agreement.^[3] The Commission must also be satisfied that accepting the undertaking is not likely to cause financial detriment to any employee covered by the agreement.^[4]

Undertakings are often used to address technical deficiencies in an agreement (for example, where a nominal expiry date is more than 4 years after the approval date or when a provision is expressed to exclude or reduce a provision of the NES). Undertakings cannot be accepted to fix some deficiencies such as non-complying flexibility and consultation terms.

Before accepting an undertaking, the Commission must seek the views of each person the Commission knows to be a bargaining representative for the agreement.^[5] A bargaining representative can be the employer (or someone appointed by the employer), an employee organisation that represents an employee covered by the agreement and/or anyone appointed as such by an employee. The Commission may ask for evidence that the undertaking was provided to the bargaining representatives. For example, the Commission may ask to see emails from bargaining representatives confirming they approve the undertakings.

An undertaking relating to an enterprise agreement must be signed by each employer who gives the undertaking.^[6]

Any accepted undertaking(s) is both noted in the decision and is attached to the copy of the agreement which is published on the Commission’s website. A copy of the decision accompanied by the agreement with the undertaking attached is sent to the employer and all the persons named on the Form F16 when the agreement is approved.

Undertakings & applications to vary agreements

The practices above also apply to undertakings to variations to agreements (except the variation of the agreement will be approved under s.212 and the undertaking will be used to address a failure to meet the requirements of s.211).

Undertakings previously accepted by Commission Members

How to submit an undertaking

The undertaking should be addressed to the Member who is dealing with your application and emailed to their chambers.

Undertakings are commonly submitted to the Commission in Word or PDF format as email attachments. There are no specific requirements for the format of undertakings, other than that they must be signed by all employers covered by the agreement.

Sample undertakings

Sample 1

Sample 2

Find out more

For more comprehensive information relating to undertakings

• Download Guide – Undertakings in enterprise agreements (PDF) (Published 20 August 2020) 

References

^{[1] Fair Work Act s.190(2).
[2] Fair Work Act s.191(2).
[3] Fair Work Act s.190(3). See also [2014] FWC 1955.
[4] FW Act ss.190(3) and 190(4). See also SDA v Beechworth Bakery [2017] FWCFB 1664 which deals with the requirements before the Commission will allow undertakings and whether ‘make good’ clauses in undertakings are enforceable.
[5] Fair Work Act s.190(4).
[6] Fair Work Regulations 2009 reg 2.07.}