Coles saga a timely reminder to get EA drafting right


Coles saga a timely reminder to get EA drafting right

The ongoing legal saga surrounding a Coles enterprise agreement offers valuable lessons for employers.

There are lessons to be learnt from the 2016 Fair Work Commission’s decision to terminate Coles' enterprise agreement.

As the retail giant faces a second application, this time to terminate their 2011 agreement, it is timely to remind employers to ensure enterprise agreements are well constructed to avoid lengthy and costly litigation.

Night fill Coles employee, Penny Vickers, was granted a five-week extension to file evidence by a Fair Work Commission bench last week, causing the final hearing to be pushed back to November.

She is seeking the retrospective termination of the 2011 enterprise agreement that employees are currently operate under, arguing they are underpaid compared to the award.

Coles employees reverted to the 2011 agreement after their 2014-17 agreement was quashed last year.

A Brisbane trolley operator successfully argued that the 2014 agreement did not pass the Better Off Overall Test (BOOT) and was leaving about 77,000 worse off than if they were being paid under award conditions.

The legal saga has dogged Coles for more than two years and has caused significant reputational damage and costs.

So, what is BOOT?

CCIWA Manager Workplace Consulting Ryan Martin says the BOOT is applied by the Fair Work Commission to ensure that any award provisions being traded off or excluded in an enterprise agreement leave the employees in a position that is better off overall than if the award provisions remained in place.

“This has traditionally been achieved by quite high rates of pay, however, with a declining economy we are seeing employers facing much more difficulty in satisfying the BOOT where they can no longer afford to pay such high rates,” he says.

Martin says poor drafting and ambiguous terminology in an enterprise agreement can lead to parties bringing disputes to the FWC and there are serious consequences.

“Things like increased disputes with employees and unions over interpretation issues, difficulty tendering for work, difficulty attracting and retaining good employees can all occur if an enterprise agreement is not drafted well,” he says.

This article reproduced with permission from the Chamber of Commerce and Industry WA.
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