After completing their compulsory four-yearly review of modern awards, the Fair Work Commission handed down a decision on 23rd February 2017 to reduce Sunday, public holiday and late night/early morning penalty rates in various modern awards, with most changes taking effect from 1st July. For some employers, this will impact their enterprise bargaining agreement (EBA).
Modern awards are industry based minimum employment standards which apply to all employers and employees in that sector. A collective EBA between an employer and its employees can be a handy umbrella to cover multiple modern awards created by the Fair Work Act 2009. When EBA’s are used to set out conditions of employment for a group of employees, these contracts replace the use of a modern award. However, the pay rate in an EBA cannot be less than the pay rate in the relevant modern award.
With penalty rates about to change in the hospitality, retail and fast food industries, those with EBA’s cannot instantly reduce the “after hours” wages of their employees. Instead, they will need to review and renegotiate their enterprise bargaining agreement.
The Fair Work Commission’s review of modern awards highlights the importance for all employers to stay informed of legislative changes and review their employer obligations, regardless of their industry.
5 tips to revising your enterprise agreement:
1. Pass the Better Off Overall Test. The Fair Work Commission will assess your EBA against comparable modern awards to decide whether it passes the Better Off Overall Test. Which modern awards are relevant to your EBA? Have they been altered by recent legislative reform?
2. List your issues. Make sure your EBA covers all of the issues you want to address, paying close attention to any recent legislative changes that may affect your employer obligations. Where do you stand on these issues?
3. Consider your employees. Try to anticipate the issues that your employees will want to address. Also, consider what forms of industrial action they might take. How will you prepare for this?
4. Follow the correct paperwork, timeframe and voting requirements. Be prepared to hand your employees a notice of representational rights form. Follow the correct voting process and know the documentation and timeframes required for submitting your approved EBA to the Fair Work Commission.
5. Engage an experienced Industrial Relations expert. A professional IR expert can make sure you adhere to your good faith bargaining obligations, help you to deal appropriately with union representatives and offer a sensible strategy to successfully navigating the EBA revision process.
When reviewing your enterprise bargaining agreement, make sure you get it right. If your EBA is rejected by the Fair Work Commission due to procedural mistakes or non-compliance with updated modern awards, you may have to repeat the bargaining and voting process. This can be expensive, disruptive and damaging to your reputation.
For expert industrial relations support and practical assistance with enterprise bargaining, please contact us today.
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