Approval process

On this page:

• About the approval process
• Pre-approval steps to be taken by employers
• When is a vote successful?
• Unlawful content
• Applying for Fair Work Australia approval
• What Fair Work Australia considers
• Better off overall test
• Approval of an enterprise agreement with undertakings

About the approval process

Once bargaining is complete and a draft agreement has been made certain steps must be taken to ensure the agreement is valid.

Pre-approval steps to be taken by employers

The employer must ensure that:

• the terms of the agreement, and the effect of those terms, are explained to the employees
• the explanation is provided in an appropriate manner (e.g. appropriate for young employees or employees from culturally diverse backgrounds).

Employees must endorse the agreement by voting for it. A vote must not occur until at least 21 days after the day on which employees were given notice of their representational rights (see Bargaining section).

During the 7 day period before voting for the agreement, the employer must ensure employees are given a copy of:

• the agreement
• any other material incorporated by reference in the agreement.

The employer must also notify employees of:

• the time and place at which the vote will occur
• the voting method that will be used.

When is a vote successful?

The agreement is made when:

• Single-enterprise agreement that is not a greenfields agreement—a majority of the employees of the employer, or each employer, who cast a valid vote endorse the agreement.
• Multi-enterprise agreement that is not a greenfields agreement—a majority of the employees of at least one of the employers, who cast a valid vote endorse the agreement.
• Greenfields agreement—it has been signed by each employer and each relevant employee organisation that the agreement covers.

Unlawful content

Agreements should not include any unlawful content. This includes:

• a discriminatory term
• an objectionable term
• a term that confers an entitlement or remedy in relation to unfair dismissal before the employee has completed the minimum employment period
• a term that excludes, or modifies, the application of unfair dismissal provisions in a way that is detrimental to, or in relation to, a person
• a term that is inconsistent with the industrial action provisions
• a term that provides for an entitlement to right of entry
• a term that excludes the Australian Fair Pay and Conditions Standard or any part of it during the bridging period.

Applying for Fair Work Australia approval

Once an enterprise agreement is made, a bargaining representative for the agreement must apply to Fair Work Australia for approval of the agreement using Form F16—Application for approval of enterprise agreement.

The application must be lodged with Fair Work Australia within 14 days of the agreement being made or within such further period as Fair Work Australia allows.

The application must be accompanied by:

• a signed copy of the agreement
• any declarations that are required by the FWA Rules or regulations to accompany the application.

What Fair Work Australia considers

To approve an enterprise agreement, Fair Work Australia must be satisfied that:

• the agreement has been made with the genuine agreement of those involved
• the agreement passes the better off overall test and does not include any unlawful terms or designated outworker terms
• the group of employees covered by the agreement was fairly chosen
• the agreement specifies a date as its nominal expiry date (not more than four years after the date of FWA approval)
• the agreement provides a dispute settlement procedure
• the agreement includes a flexibility clause and a consultation clause.

Better off overall test

Before approving an enterprise agreement, Fair Work Australia must ensure the agreement or variation passes the better off overall test.

This test requires that each of the employees to be covered by the agreement are better off overall than under the relevant modern award.

The better off overall test is outlined in the Fair Work Act 2009 and applies to agreements made on or after 1 January 2010. Agreements made before 1 January 2010 are subject to the no-disadvantage test under the Workplace Relations Act 1996.

Approval of an enterprise agreement with undertakings

Fair Work Australia may approve an enterprise agreement that does not meet the requirements in the Fair Work Act 2009 if satisfied that a written undertaking meets the concern.

Fair Work Australia 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.