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Enterprise agreements benchbook

An overview of legal procedure & case law

Coverage

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Table of contents

On this page

  • Coverage of agreements
  • Case example
  • Coverage of employees and employers
  • Coverage of employee organisations (unions)
  • When an agreement ceases to cover an employee, employer or union
  • Effect of an employee being covered by an enterprise agreement
  • References

 

Coverage of agreements

See Fair Work Act 2009 s.53

Requirement that there be at least 2 employees

An enterprise agreement cannot be made with a single employee. [1]

Case example

Agreement made with single employee

Re Construction, Forestry, Mining and Energy Union [2013] FWC 3143 (Watson SDP, 23 May 2013).

The CFMEU made an application for the approval of the Exactacut Pty Ltd and the CFMEU Concrete Sawing and Drilling Enterprise Agreement 2011-2015. On the information provided with the application only one employee was covered by the agreement at the time it was made and it was only that single employee who was involved in the agreement making process and voting for approval of the agreement.

Whilst it was accepted that in the future other employees may be employed and they would be covered by the agreement, at the time it was made, the agreement was made with a single employee and could not be approved.

Coverage of employees and employers

An enterprise agreement covers an employee or employer if the agreement is expressed to cover (however described) the employee or the employer.

Covers

An enterprise agreement can be expressed to cover all employees of the employer or just a group of employees (provided that the group of employees is fairly chosen). Individual employees are not generally named in the coverage clause.

The words however described (above) take into account the situation where the people drafting the agreement do not use the technical terms cover and may describe different categories of employees to be covered by the agreement in different ways.

Any reference in the Fair Work Act to an enterprise agreement covering an employee is a reference to the agreement covering the employee in relation to particular employment – the work that the employee performs under the terms and conditions of the enterprise agreement.

The coverage of an enterprise agreement can also be affected by an order of the Fair Work Commission or a court.

An enterprise agreement should clearly set out who is covered by its terms and conditions.

Example coverage clause

Scope

  1. This agreement will cover:
    1. BHP Billiton Minerals Pty Ltd ACN 008 694 782 (Company) in respect of its employees at the Cannington Mine who are covered by this Agreement;
    2. Employees of BHP Billiton Minerals Pty Ltd at the Cannington Mine who are covered by the classifications set out in clause 7(a) of the Agreement undertaking mining activities of any kind (including underground and open cut) (Employees); and
    3. The Australian Workers' Union (AWU), provided written notice is given in accordance with section 183(1) of the Fair Work Act 2009 (Cth) (FW Act) and the Fair Work Commission notes in the document to approve the Agreement that the Agreement covers the AWU. [2]

Applies

An enterprise agreement only confers rights and imposes obligations on a person if it applies to that person.[3]

For an enterprise agreement to apply to an employee and his or her employer, it must be in operation and cover the employee and employer and there must be no other provision of the Fair Work Act having the effect that the agreement does not apply.

Example

The Fair Work Act provides that if an employee and employer remain covered by an individual agreement made under previous laws, an enterprise agreement that is in operation and that covers the employee will not apply to the employee unless or until the individual agreement is terminated.

Only 1 enterprise agreement can apply to an employee in relation to particular employment at any time. However, if an employee has 2 jobs with 2 different employers, there could be different agreements applying to the employee in relation to the different jobs. In this instance, each job is treated separately in determining the employee's entitlements and each job can potentially be covered by a separate agreement.

An enterprise agreement can also apply to an employee’s employment with 1 employer in some circumstances but not in others (for example, if the agreement is site-specific and the location of the employee's work changes). The question of when the agreement applies will be determined by reference to the scope and coverage terms in the agreement itself. [4]

On-hire employees

An enterprise agreement does not cover on-hire employees unless it is expressed to cover the firm that employs the on-hire employees (sometimes referred to as an employment agency or labour hire firm) and the on-hire employees.

If the employment agency or labour hire firm is not covered by the enterprise agreement, its employees will not have the benefit of the agreement (even if terms of the agreement are expressed as giving entitlements to on-hire or labour hire employees or contractors).

Coverage of employee organisations (unions)

An enterprise agreement covers a union that was a bargaining representative of an employee who will be covered by the agreement if, before the Commission approves the agreement, the union makes an application to be covered by the agreement.[5] The Commission will note in its approval decision that the agreement covers the union.[6]

When an agreement covers (and applies to) a union, the union will have certain entitlements that it would not otherwise have. For instance, the union will be able to enforce the terms of the agreement.[7]

A union is covered by a greenfields agreement if the union is entitled to represent employees who will be covered by the agreement and was a party to the making of the agreement.

Related information

  • Types of agreement
  • Meaning of 'fairly chosen'
  • Entitlement of a union to have an enterprise agreement cover it

When an agreement ceases to cover an employee, employer or union

Ceasing to operate

An enterprise agreement continues to operate after its nominal expiry date unless it is replaced by a new enterprise agreement or terminated by the Commission.

An enterprise agreement that has ceased to operate does not cover any employee, employer or union.[8]

Terminating an agreement

An application can be made to the Commission for termination of an enterprise agreement prior to its nominal expiry date, where this has been agreed to by the employer and a majority of the employees covered by the agreement. Alternatively, an application to terminate an enterprise agreement that has passed its nominal expiry date can be made by any person covered by it, including a union.

Terms & conditions of employment after termination

After an enterprise agreement has been terminated, if there is no replacement agreement approved by the Commission, the minimum terms and conditions of employment are determined by the applicable modern award.[9]

If there is an approved enterprise agreement to replace the existing agreement, the replacement agreement cannot apply until the existing agreement is terminated or its nominal expiry date has passed.[10]

Effect of an employee being covered by an enterprise agreement

See Fair Work Act s.57

An employee can be covered by both a modern award and enterprise agreement, however only 1 instrument can apply to the employee in relation to particular employment at a particular time. If an employee is covered by an enterprise agreement, a modern award can continue to cover the employee, but does not apply to the employee in relation to the employment.

There may be multiple enterprise agreements covering an employee with the terms of the enterprise agreement itself defining when the agreement applies[11]. Only 1 agreement can apply to an employee in relation to particular employment.[12]

A modern award may cover the employer and employees in an enterprise other than those covered by an approved enterprise agreement.

References

[1] Fair Work Act s.172(6).

[2] Excerpt from BHP Billiton Cannington Enterprise Agreement 2013 [AE401373 PR537120] (PDF).

[3] Fair Work Act s.52.

[4] Re Cimeco Pty Ltd [2012] FWA 526 (McCarthy DP, 16 January 2012) [28]; see also Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 2206 (Ross J, Hamilton DP, Spencer C, 12 April 2012).

[5] Fair Work Act s.183.

[6] Fair Work Act ss.201(2)–(2A).

[7] Fair Work Act s.539, table item 4; see also Explanatory Memorandum to Fair Work Bill 2008 at para. 753.

[8] Fair Work Act s.53(5).

[9] Fair Work Act s.47(1).

[10] Fair Work Act s.58.

[11] Re Cimeco Pty Ltd [2012] FWA 526 (McCarthy DP, 16 January 2012) at para. 27.

[12] Fair Work Act s.58.

Updated time

Last updated

24 May 2019

 

 

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      • Periods of service as a casual employee
      • What is a genuine redundancy?
        • Job no longer required due to changes in operational requirements
        • Consultation obligations
        • Redeployment
      • What is the Small Business Fair Dismissal Code?
    • What makes a dismissal unfair?
      • Valid reason relating to capacity or conduct
        • Capacity
        • Conduct
      • Notification of reason for dismissal
      • Opportunity to respond
      • Unreasonable refusal of a support person
      • Warnings – unsatisfactory performance
      • Size of employer's enterprise and human resources specialists
      • Other relevant matters
    • Making an application
      • Application fee
      • Timeframe for lodgment
      • Extension of time for lodging an application
      • Who is the employer?
      • Multiple actions
      • Discontinuing an application
    • Objecting to an application
    • Commission process
      • Conciliation
      • Hearings and conferences
      • Preparing for hearings and conferences
      • Representation by lawyers and paid agents
      • Rescheduling or adjourning matters
      • Bias
    • Remedies
      • Reinstatement
        • Order for reinstatement cannot be subject to conditions
        • Order to maintain continuity
        • Order to restore lost pay
      • Compensation
        • Calculating compensation
        • Mitigation
        • Remuneration
        • Other relevant matters
        • Compensation cap
        • Instalments
    • Dismissing an application
    • Evidence
    • Costs
      • Costs against representatives
      • Security for costs
    • Appeals
      • Staying decisions
    • Role of the Court
  • Waltzing Matilda and the Sunshine Harvester Factory
    • Introduction
    • The book
      • Book launch
    • The film
      • Film launch
    • Historical material
      • 38 Hour Week Wage Principle [1983]
      • 40 Hour Week Case [1947]
      • 44 Hour Week Case [1927]
      • Apprenticeship indentures
      • Australian Minimum Wage and fitter (trades) rate since 1906
      • Boot Trades Case
      • Careers in Bootmaking and Boot Repairing
      • Cattle Industry Case 1966
      • Commercial Printing Case [1936]
      • Commonwealth Conciliation and Arbitration Act 1904
      • Cost of living newspaper articles from the early 1900s
      • Debates
      • Equal Pay Case 1969
      • Equal Pay Case 1972
      • Fruit Pickers Case
      • Gas Employees Case
      • Graph of Australian Minimum Wage since 1906
      • Harvester Case
      • Historic case judgments on the Fair Work Commission's website
      • Kingston's evidence
      • Linesmen's Case
      • Maternity Leave Case [1979]
      • Metal trades base level minimum wages [1967–2015]
      • Methods of wage adjustment
        • Establishing an Australian Minimum Wage 1907?1922
          • The origins of the Australian minimum wage
          • The 'needs' principle and 'capacity to pay'
          • Women's wages
          • First indexation decision
        • Quarterly indexation 1922–1953
        • The Great Depression 1931
        • Prosperity loadings 1937
        • World War II 1939–1945
        • The post-war period: 1953–1965 basic wage inquiries
        • The total wage 1966–1967
        • Removal of discrimination in award rates
        • Reintroduction of quarterly wage indexation 1975–1978
        • Six monthly wage indexation 1978–1981
        • Wage explosion 1981–1982
        • Reforming awards and work and management practices 1987–1991
        • Six monthly wage indexation 1983–1987
        • Enterprise bargaining and a minimum wage safety net 1991–1996
        • Statutory adjustments
        • The minimum wage in real terms
      • Mrs Beeton's cookbook
      • Paternity Leave Case [1990]
      • Personal/Carer's Leave Test Case [1995]
      • Piddington report
      • Re Bagshaw [1907]
      • Significant cases on the Fair Work Commission's website
      • Statistics for the purpose of comparison with the Australian minimum wage
      • The Amalgamated Society of Engineers v. The Adelaide Steam-ship Company Limited and Others
      • The Australian minimum wage from 1906
      • The Federated Marine Stewards and Pantrymen's Association v. The Commonwealth Steamship Owners' Association and Others
      • The Victorian minimum wage 1896
        • Legislative Council Second Reading Speech to the Factories and Shops Bill 1896
      • The first Award: 1906 Steam-ship Crew
      • 100 years of the minimum wage—Statistical comparison
    • Mrs Beeton's cookbook
    • Glossary
    • Related sites
    • Educational materials
  • AWRS First Findings report

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