Submission by the Australian Council of Trade Unions to the Fair Work Commission (AG2024/3500, AG2024/3501, AG2024/3502, AG2024/3503)
Introduction
The Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (“the Amendment Act”) has amended the Fair Work Act 2009 (“the FW Act”) to require the Commission to make new model terms for enterprise agreements and a new model disputes resolution term for copied State instrument. In particular, the legislation requires the Commission to make the following new model terms:
(a) a flexibility term for enterprise agreements;
(b) a consultation term for enterprise agreements;
(c) a term about dealing with disputes for enterprise agreements; and
(d) a term for settling disputes about matters arising under a copied State instrument for a transferring employee.
The model terms are currently prescribed in the Fair Work Regulations 2009 (“the FW Regulations”). However, pursuant to Part 5 of Schedule 1 to the Amendment Act those terms will be replaced by the Commission’s new model terms on 26 February 2025, or an earlier date fixed by proclamation.
The changes are significant in three ways. Firstly, they appointed a new decision maker to determine the content of the model terms. Secondly, they require that decision making to consult before making the decision. Thirdly, they provide specific legislative guidance with respect to the content of the model terms. The intended approach is described in the Explanatory Memorandum to the Fair Work Legislation Amendment (Closing Loopholes) Bill:
70. The amendments in Part 5 of Schedule 1 would be compatible with and promote the right to just and favourable working conditions of work and collective bargaining. The model terms act as a safety net ensuring that compliant terms dealing with consultation, flexibility and dispute resolution are included in all enterprise agreements, and a compliant term dealing with dispute settlement is included in copied State instruments. The model terms would not override terms agreed to between the parties to an agreement or instrument where the terms meet the requirements of the FW Act, minimising any concern that the model terms would limit the capacity of employees to determine just and favourable conditions.
71. The amendments empowering the FWC to determine the model terms for enterprise agreements and copied State instruments require the FWC to consider best practice’ workplace relations and whether all persons and bodies have had a reasonable opportunity to be heard and make submissions before making the determinations. It is intended that this would ensure the ongoing relevancy of the model terms as well as facilitating greater public consultation in the determination of the model terms.
7.2 In mandating considerations of best practice workplace relations and public participation in the process of determining model terms, individuals are empowered to participate in the determination of up-to-date and relevant terms that may form part of the terms and conditions of their employment. In doing so, the amendments support the right to just and favourable conditions of work.…
524. Part 5 would require the FWC to determine model flexibility, consultation and dispute resolution terms for enterprise agreements, and the model dispute settlement term for copied State instruments. As Australia’s independent workplace relations tribunal, with responsibility for setting and reviewing the equivalent clauses in the award safety net, it is appropriate that the FWC perform this function. The Bill prescribes the matters the FWC must take into account when determining each model term.
525. Part 5 would commence by Proclamation or the day after a 12-month period commencing on the day the Bill receives Royal Assent. A maximum period of 12 months would allow sufficient time to constitute a Full Bench (or Full Benches) to determine the model terms, hear and consider submissions made in relation to the model terms as would be required by Part 5, and make the determinations. It is intended that the FWC would undertake detailed consultation, including with (but not limited to) national peak councils, during this period.
526. The FWC would have the power to vary its determinations. Responsibility for maintaining the currency of the model terms will be vested in the FWC and the ability to vary the terms in line with developments in workplace relations will ensure their ongoing relevancy.
On 17 September 2024, the President issued a statement concerning how the Commission intended to conduct its determinative process with respect to the new model terms. The statement included a proposed timetable and invited comments on the timetable to be made by 23 September 2024. A copy of a background paper produced by staff of the Fair Work Commission titled “Background Paper: Model Terms for Enterprise Agreements” (“the Background Paper”) was released on the same day.
On 26 September 2024, the President issued a further statement confirming the timetable. The timetable provides for submission to be made by 1 November 2024. This submission is made pursuant to that timetable.
A public consultation for interested parties is listed before a Full Bench on 3 December 2024.
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