Senate amendments have stalled the long-awaited legislation to give the Fair Work Commission discretion to approve an enterprise agreement despite technical defects in a Notice of Employee Representational Rights.

Employers experienced in the enterprise bargaining process are likely to be aware of the strict requirements in the Fair Work Act 2009 (Cth) with respect to the distribution of the Notice of Employee Representational Rights (NERR). For some, this knowledge may have come at the cost of bitter experience: through the rejection of an application for approval of an enterprise agreement, caused by problems with the NERR.

Earlier this year the Government introduced legislation, the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017, which, amongst other things, was intended to rectify this problem by providing the Fair Work Commission with a discretion to approve an enterprise agreement, despite minor procedural defects in the NERR, as long as those defects did not disadvantage employees. This Bill is yet to be passed, leaving employers with some hard options.

What's the problem with the Notice of Employee Representational Rights in enterprise agreements?

For those unfamiliar or lucky enough never to have had issues raised with the NERR issued as part of enterprise bargaining, the Fair Work Commission has taken a narrow view of the requirements for issue of the NERR. The Act requires that the only content included in the NERR is that prescribed by the legislation. As a result, it has been held that:

  • a NERR issued with other documents stapled to it had been altered or modified and, as a result, was not sufficient to meet the strict requirements of the Act;
  • NERRs issued that incorrectly referred to the Fair Work Ombudsman contact details, rather than the Fair Work Commission, with no other defects, were found to invalidate bargaining;
  • even a NERR issued on company letterhead with company logo had the potential to invalidate the NERR and strict compliance with the Act.

The delay in fixing the procedural hurdle to approval of otherwise valid enterprise agreements

Passage of the Bill has stalled, much to the disappointment of all parties, particularly those with an application currently before the Fair Work Commission for approval of an enterprise agreement, which has been identified as defective due to problems with the NERR.

The legislation was significantly delayed before the Senate, with the Bill eventually being passed with amendments. Those amendments, however, are wholly unrelated to the content of the Bill as it previously stood, and in fact are designed to address concerns with respect to reduction of penalty rates. As a result, the Bill needs to be reconsidered by the House of Representatives which does not sit again until February 2018.

In any event, based on current positions expressed by the Government, the amendments proposed are unlikely to be passed, meaning the Bill will once again be delayed in Parliament until the Government can to address the unrelated issue of penalty rates.

What should employers engaged in enterprise bargaining do?

It is hoped that Parliament will be able to pass the Bill, or a new Bill in relation to the proposed NERR amendments, early in 2018.

In the meantime, employers commencing enterprise bargaining should download the latest version of the NERR directly from the Fair Work Commission's website, and issue this to employees without any other amendment or information or documentation attached.

If you have already commenced bargaining and your NERR is not in the correct form or has errors in its content, try to come to an agreement with bargaining representatives to cease bargaining and recommence with a new NERR. While this may seem to be a somewhat artificial process, the Fair Work Commission has confirmed that this will be accepted to rectify the technical defect with early bargaining.

If you have already made an application for approval of an enterprise agreement and problems with the NERR are identified, you can either:

  • withdraw the application and recommence bargaining; or
  • potentially seek to have the Fair Work Commission hold the application for a short period of time, in the hope the Bill is passed in the near future. However, this is unlikely to be a satisfactory solution for organisations who require industrial certainty in their negotiated terms and conditions.