FWA rejects agreement covering just one worker

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FWA rejects agreement covering just one worker

FWA has rejected a single-enterprise agreement that would have covered one worker who was not genuinely employed in work the agreement would cover.

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FWA has rejected a single-enterprise agreement that would have covered one worker who was not genuinely employed in work the agreement would cover.
 
However, the agreement was ultimately rejected because undertakings required of the employer would have the effect of substantially changing the terms of the agreement.
 
Commissioner Peter Hampton said there were reasonable grounds to consider that the Agreement had not been genuinely agreed to by the employees within the meaning of s188(c) of the Fair Work Act 2009.
 
Wine bar
 
The case centred on a new coffee and wine bar that Delcorp Pty Ltd wanted to set up in Adelaide.
 
The employer declaration filed with the agreement indicated that there was only one employee who was at the time to be subject to the agreement.
 
‘It was clear that the new coffee and wine bar would employ more than the single employee cited in the application,’ Cmr Hampton said.
 
‘It was also evident that the bar was not yet operational and this raised the question as to whether the agreement was validly made under the Act.’
 
Important question
 
Cmr Hampton said this is an important question given that considerable emphasis is placed by the Act upon the process leading to the agreement.
 
‘A process whereby [endorsement of an agreement] is made by a single employee on behalf of a group of employees who are yet to be employed must be carefully considered.’
 
‘Subsequent information provided to me has indicated that the employee in question does work for the employer. That is, the employee is employed by the employer in one of its related hospitality operations and has been requested to assist with the establishment of the new bar operation.’
 
Planning work
 
‘In that role, the employee in question has been assisting with planning and licensing approvals and various establishment functions but is not working in their capacity as a hospitality worker.’
 
‘I have been assured that the employee will be engaged under the Agreement, if it were to be approved, when the new operation commences. I have dealt with this matter on that basis.’
 
Cmr Hampton noted that a greenfields agreement could have been made at the point that this application was lodged.
 
‘In my view, references to those employees who are employed and who would be covered by the agreement in ss.181 and 186 of the Act, must mean employees of the employer who are genuinely employed within the enterprise that will be covered by the agreement if made and ultimately approved,’ he said.
 
Undermine intent
 
‘To apply the Act otherwise would in my view undermine the evident intent of the agreement making process.’
 
‘In this case, the employee who has agreed the instrument with the employer was not genuinely employed as part of the group of employees in the enterprise concerned.’
 
‘As a result, there are reasonable grounds to consider that the Agreement has not been genuinely agreed to by the employees within the meaning of s.188(c) of the Act.’
 
However, Cmr Hampton did not pursue this avenue as he said there were other concerns with the application that prevent its approval.
 
He said the Act provided that are not likely to cause financial detriment to the employees under the agreement or result in substantial changes to the agreed instrument.
 
Apply provisions beneficially
 
‘In my view these provisions should be applied beneficially and broadly, but not such as to re-write the proposed agreement,’ Cmr Hampton said.
 
He found that the required undertakings would have the effect of substantially changing the terms of the agreement and did not approve the agreement.
 
However he said the parties had not acted in a ‘male fide’ manner and the agreement was not without merit. He encouraged the parties to consider making a new agreement.
 
 
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