Public interest test satisfied if certified agreement limited to short-term

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Public interest test satisfied if certified agreement limited to short-term

See: http://www.airc.gov.au/alldocuments/PR930120.htmThe Bakers Delight Certified Agreement (WA) 2003 AIRC (Guidice P, McCarthy DP, Simmonds C) – PR930120 – 8 April 2003.

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The Full Bench of the AIRC has indicated that it will certify a multi-business Agreement on a short-term basis despite it failing the no-disadvantage test. 

Provided the parties can come up with a mechanism to ensure that the Agreement would safeguard the workers’ full award entitlements after 12 months, then the public interest test would be satisfied.

The concern expressed by the Bench stemmed from the fact that not only would the employees be receiving lower benefits than under the relevant state awards, but also there was ‘potential for the agreement to continue in force indefinitely’.

Background

Changes to relevant Western Australian legislation in September 2002 meant that Western Australian Workplace Agreements (WAWAs) ceased to have effect from 15 March, 2003. All new employees must be covered under Federal or State awards or agreements. Three awards are applicable to employees of Bakers Delight franchises.

The multiple-business Agreement before the Full Bench would result in an estimated increase in labour costs for the applicants of 11%. If the agreement were not certified, there would be an estimated increase in the order of 22% as a result of the reversion to the relevant award.

Decision

The Commission did not think it would be unreasonable to use an agreement as a ‘mechanism for cushioning the impact of the legislative changes’, especially where, as in this case, a failure to certify would result in economic hardship, reductions in employment and threaten the viability of some franchises. 

The Full Bench however, considered that it would not be in the public interest to approve the agreement in its current form. The employer was invited to relist the matter with an amended agreement that provided some legal certainty as to its expiry after 12 months.

See: The Bakers Delight Certified Agreement (WA) 2003 AIRC (Guidice P, McCarthy DP, Simmonds C) – PR930120 – 8 April 2003.

 

 

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