The Fair Work Commission (FWC) has declined to approve two enterprise agreements, finding the application clause to be "problematic".

The FWC declined to approve two enterprise agreements because they provided that:

  1. the agreements would remain in operation until they were replaced by other agreements made with the union (as opposed to made with the employees); and
  2. the agreements would apply to entities associated with the employers which were, at that point in time, “indeterminate”.

The FWC held that the operations clause was “inoperable” because it:

  • provided that the replacement agreement was to be made with the union, when, in fact, agreements can only be made between employers and employees; and
  • endeavoured to anticipate the outcome of a future bargaining process.

The application clause was found to be “problematic” because it purported to apply to unidentifiable employers of the future and to future employees of those employers.  The FWC felt this would undermine the collective bargaining rights of those employees.  

The FWC provided an opportunity to the parties to consider avenues through which the agreements could be saved.  However, in two subsequent decisions the FWC found that undertakings provided by the union were insufficient to cure the problems and, consequently, the agreements were not approved.