An employer lodged for approval an agreement which enabled employees to opt out from coverage.  If an employee made this election, the underpinning award would apply.

At first instance, FWA refused approval, finding opting out of an agreement is not permitted by the FW Act.  On appeal, a Full Bench of FWA overturned this decision and approved the agreement.  The Full Bench found the employees were better off than an individual covered by the relevant award because they could choose to be covered by the more favourable agreement.  The union appealed to the Federal Court.

The Federal Court overturned the Full Bench decision and remitted the matter to FWA.  The Court found that even though employees could later opt out of the agreement, the group of employees to be covered by the agreement was sufficiently certain for the agreement to be valid.  However, the Court held the Full Bench had incorrectly applied the “better off overall test”, finding the choice to opt out from coverage was not a benefit, as it was a right to forfeit the beneficial agreement entitlements.  This election meant that an employee may be no better off than if the relevant award applied.

Construction, Forestry, Mining and Energy Union v Deputy President Hamberger [2011] FCA 719