Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Fair Work Amendment (Terminating Enterprise Agreements) Bill 2017
EXPLANATORY MEMORANDUM
and
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Circulated by authority of
Andrew Wilkie MP
Fair Work Amendment (Terminating Enterprise Agreements) Bill 2017
OUTLINE
This bill seeks to amend the Fair Work Act 2009 to narrow the circumstances under which an
enterprise agreement that has passed its nominal expiry date can be terminated. Under the
current Act, an expired agreement can be terminated unilaterally by the employer if the Fair Work
Commission considers it appropriate and not contrary to the public interest. The bill would
prevent the Fair Work Commission from terminating an agreement if it would result in less
favourable terms and conditions for any employee covered by the agreement. It would also
invalidate any decision of the Fair Work Commission to terminate an agreement since 22 April
2015, if the decision would not have met the new requirements in the bill.
The bill responds to significant concern about expired agreements being terminated by employers,
in order to force employees on to lower wages and conditions. This practice has become more
common in recent years, particularly since the Fair Work Commission decision in Aurizon
Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd (AG2014/6009) on
22 April 2015.
FINANCIAL IMPACT
The bill will have no financial impact.
NOTES ON CLAUSES
Clause 1: Short Title
1. This clause is a formal provision and specifies the short title of the Bill as the Fair Work
Amendment (Terminating Enterprise Agreements) Bill 2017.
Clause 2: Commencement
2. This clause provides for the commencement of the Act on the day after it receives Royal
Assent.
Clause 3: Schedules
3. This clause establishes that, as the intent of the Bill is to be realised through amendments
to another Act, the Schedules of this Bill will amend that Act accordingly.
Schedule 1
Fair Work Act 2009
1. Schedule 1 inserts additional subsections into section 226 of the Fair Work Act 2009, which
deals with when the Fair Work Commission must terminate an expired agreement upon
application by an employer, employee or employee organisation,
2. Current subsection 226(b) (which will become 226(1)(b)) states that the Commission must
only terminate an agreement if it "considers it appropriate". New subsection 226(2) states
that the Commission must not consider it appropriate to terminate an agreement if it
would result in less favourable terms and conditions for any employee covered by the
agreement.
3. New subsection 226(3) states that any decision of the Commission to terminate an
agreement on or after 22 April 2015 has no effect if the decision could have been made
under the new law. In other words, any decisions made on or after 22 April 2015 will have
no effect if they would have resulted in less favourable terms and conditions for any
employee covered by the agreement.
4. Retrospectivity is sought in this way because there are likely to be many employees whose
interests are affected, particularly those who were covered by agreements that had been
terminated under the current provisions in section 226.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Fair Work Amendment (Terminating Enterprise Agreements) Bill 2017
This bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act
2011.
Overview of the bill
This bill seeks to amend the Fair Work Act 2009 to narrow the circumstances under which an
enterprise agreement that has passed its nominal expiry date can be terminated. Under the
current Act, an expired agreement can be terminated unilaterally by the employer if the Fair Work
Commission considers it appropriate and not contrary to the public interest. The bill would
prevent the Fair Work Commission from terminating an agreement if it would result in less
favourable terms and conditions for any employee covered by the agreement. It would also
invalidate any decision of the Fair Work Commission to terminate an agreement since 22 April
2015, if the decision would not have met the new requirements in the bill.
Human rights implications
This bill engages positively with Article 6 - the right to work - and Article 7 - the right to just and
favourable conditions of work - of the International Covenant on Economic, Social and Cultural
Rights.
Conclusion
This bill is compatible with human rights because it strengthens human rights in the manner
described above, and does not raise any other human rights issues.
Andrew Wilkie MP