Approval times blow out, general protections claims soar: FWC report

Approval times blow out, general protections claims soar: FWC report

By Amber Jacobs on 18 October 2018 The total number of applications to the Fair Work Commission fell slightly in the past year, however dismissal-related general protections claims were up 26% from 2015-16, according to the latest FWC annual report

In 2017-18 there were 31,554 applications lodged, a 5% decrease from 33,071 in 2016-17.

The commission held 11,196 hearings and conferences around Australia, a reduction of 29 per cent compared with a total of 15,804 in 2016-17. Decisions, and orders published, were down 12 per cent from 11,103 last year.

In 2017-18, 32 per cent of all hearings and conferences were conducted by telephone or video conference, up from 27 per cent in 2016-17.

Conducting hearings and conferences using telephone or video conference reduces parties’ travel time and costs. Twenty-one per cent of matters were decided by a member on the papers, without the need for a hearing or conference.

Unfair dismissal claims decline as adverse action claims climb

Unfair dismissal claims have decreased 7.5 per cent since 2015-16, however this still remains the most common claim at 43 per cent. 

Dismissal-related general protections claims, however, have increased by 26 per cent over the past two years, with 4117 claims made. This was a 14 per cent increase since last year. 

The median time from lodgment of a general protections application involving dismissal to a conciliation conference was 40 days in 2017–18, a 31 per cen improvement from the 58 days in 2016–17. 

Applications for approval of an enterprise agreement were the second most common, making up 17 per cent of total applications. Applications for general protections involving dismissal made up 13 per cent, while applications to vary and terminate enterprise agreements and transitional individual agreements were 6 per cent.

The lowest number of applications related to registered organisations, with only 163 applications.

This was a notable but expected drop of 87 per cent from the previous year. This relates to the commencement of the Registered Organisations Commission in the previous reporting period. Most of the general manager’s powers and functions concerning registered organisations transferred to the Registered Organisations Commission on 1 May 2017.

While the number of lodgments was virtually unchanged between 2014-15 and 2015-16, in each of the last two reporting periods there has been a modest decrease of 4 per cent in the number of unfair dismissal applications lodged.

Consistent with results in previous years, most unfair dismissal applications were finalised without a formal hearing. Eighteen per cent were either resolved or discontinued before staff conciliation, 62 per cent were resolved at conciliation and 14 per cent were resolved after conciliation but before a formal hearing.

Compensation orders for unfair dismissal

Of the total unfair dismissal applications finalised in 2017-18, only 1 per cent (159) were resolved by a decision of a member that the dismissal was harsh, unjust or unreasonable.

Overall, only 6 per cent of unfair dismissal matters were finalised by a decision or order issued by a member in 2017-18. In those 779 matters, the dismissal was found to be harsh, unjust or unreasonable in 20 per cent of cases, compared with 18 per cent in 2016-17.

In 2017-18, 62 per cent of conciliation resolutions involved both monetary and non-monetary items. In 84 per cent of matters the payments were for less than $10,000. The median amount awarded as compensation was $6971, which was the equivalent of 4.3 weeks’ pay.

Eleven per cent of applications resulted in reinstatement plus compensation, and 4 per cent resulted in reinstatement only.

Process time for enterprise agreements more than doubles

When it came to unfair dismissal claims 50 per cent were finalised within 31 days and 90 per cent within 90 days. Ninety-nine per cent of unfair dismissal applications were finalised within the year.

However, in 2017-18, the commission took significantly longer to deal with applications for approval of agreements than in previous years.

The median time to finalise all agreement approvals was 76 days, a far cry from the commission’s portfolio budget statement target of a median of 32 days. This was also over double that of the previous 32 days in 2016-17 and over four times the median 18 days it took in 2015-26.

For agreement approval without undertaking the median time was 32 days. This increased to 115 days those with undertakings.

The commission also had a benchmark to finalise 50 per cent of agreements in the first three weeks. This was not met with only 13 per cent finalised within that period in 2017-18. This was significantly lower than the 37 per cent in 2016-17.

In 2017-18, 94 per cent of applications to vary agreements were made under s210 of the Fair Work Act. This was significantly higher than in previous years, increasing by 174 per cent to 564 from 206 in 2016-17. The increase was mainly due to a large number of applications to vary agreements in the construction sector in order to comply with the Code for the Tendering and Performance of Building Work 2016.

The number of applications to terminate an agreement in 2017-18 was about 30 per cent higher than in 2016-17 and 2015-16 and more than double the number in 2014–15.

Delays in agreement approvals explained

Justice Iain Ross, in his introduction to the annual report, explained why the agreement approval targets hadn't been met.

He said: "Since we introduced a triage process in 2015–16, there has been a significant increase in the proportion of applications identified as not meeting all of the statutory requirements at the time of lodgment. Dealing with non‑compliant applications tends to be more time‑consuming and complex than dealing with compliant applications.

"Rather than dismissing such applications, members seek to assist the parties to agreements to address concerns through written undertakings. Extra time is required to approve agreements with written undertakings, because the commission must seek the views of all bargaining representatives before accepting an undertaking and granting approval.

"Those factors have negatively impacted on the overall timeliness of the commission’s agreement approvals over the past 18 months."

Significant decisions: Does your enterprise agreement meet the BOOT test?

The report also referred to significant decisions made in 2017-18.

In a June 2018 case, it was decided that every employee covered by a proposed enterprise agreement must meet the ‘better off overall test’ (BOOT) under the proposed agreement compared with what they would receive under the relevant modern award. The proposed agreement will fail the BOOT if any current or prospective employee would not be better off overall.

In a proposed agreement containing loaded rates, it was not sufficient that the large majority of employees were better off.

It was decided in another case that for an agreement to be approved under the Fair Work Act, the commission must be satisfied that the group of employees covered by the agreement was ‘fairly chosen’ and that it was ‘genuinely agreed’ to by employees ‘covered by the agreement’.

A full bench decided that merely because the employer only had a small number of employees at the time the agreement was made, and the negotiated agreement subsequently covered a much wider range of employees, it did not follow that the process was manipulated or that the employees were not ‘fairly chosen.’



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