No ‘actual’ employees, so FWA rejects agreement

Cases

No ‘actual’ employees, so FWA rejects agreement

FWA has refused to ratify a single-enterprise agreement because it has ruled the workers to be covered were not yet actually employees of the company.

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FWA has refused to ratify a single-enterprise agreement because it has ruled the workers to be covered were not yet actually employees of the company.
 
Caravan Park Management Services (SA) Pty Ltd (CPMS) was seeking approval of its agreement with three workers it intended to hire as casual workers. The workers themselves had co-signed the agreement.
 
Senior Deputy President Matthew O'Callaghan said CPMS had advised him that the three nominated ‘employees’ were persons with whom it had reached an agreement to offer casual employment consequent upon the approval of this agreement, but that these people had not, at this time, yet commenced work.
 
Fundamental issue
 
He said this issue was ‘fundamental’ to the application.
 
SDP O’Callaghan said s172(2)9b) of the Fair Work Act 2009, which dealt with ‘genuine new enterprises, represents the only specific capacity for an entity that is not currently an employer, to enter into a collective agreement at a time before employees are actually engaged.
 
‘Such a Greenfields agreement option specified in this section represents a particular type of agreement made between an entity which is yet to employ, and one or more unions,’ he said.
 
‘Clearly, the agreement at issue here is not a Greenfields agreement.’
 
SDP O’Callaghan said CPMS asserts that, notwithstanding that it has not yet actually engaged any of the three nominated ‘employees’, it has entered into an employment relationship with those persons, conditional upon this agreement being approved.
 
Not actually employed
 
‘I have no doubt that CPMS intends to employ these three persons on a regular casual basis at some stage in the future, but I am unable to conclude that, at the present time, they are actually employed, or that they were employees at the time at which they endorsed the agreement proposal,’ he said.
 
‘Accordingly, there is no capacity for CPMS or the three nominated persons to reach an agreement of this nature until, or unless, there is an actual employment relationship. In this respect, the Act is quite different to the Australian Workplace Agreement provisions applicable in earlier legislation.’
 
‘Given this conclusion, the application must be refused.’
 
Meet BOOT requirements
 
SDP O’Callaghan said as a final comment that, if CPMS actually engages employees, and then seeks to enter into a new agreement, care should be taken to ensure that the agreement put to its employees meets the requirements of the BOOT.
 
‘The fact that multiple undertakings were proposed relative to this agreement diminishes the extent to which it could truly be regarded as a document which was agreed between the parties,’ he said.
 
 
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