Which enterprise agreement prevails?


Which enterprise agreement prevails?

Negotiation and interpretation of enterprise agreements can be fraught with problems, as these three cases illustrate.


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Enterprise agreement disputes often need to be resolved in the Federal Court, as these three cases illustrate.

Agreement signed by agent stands

A full Federal Court has ruled that enterprise agreements covering three private hospitals were properly approved by the Fair Work Commission, even though the hospitals’ agent made and signed them without actual authority.

The full court said it was sufficiently clear, on the evidence, that the hospitals were involved in negotiating the terms of enterprise agreements. 

It was also obvious that the union, and the employees who voted, relied upon the circumstance that the relevant employer, by its various employees and agents, was engaged in bargaining and had proposed specific written terms for acceptance.

It was not open to the hospitals to now seek to frustrate the statutory scheme by failing to make the application and also denying the effectiveness of a manager's signature on their behalf.

Federation v K Hospitals Pty Ltd [2015] FCAFC 23 (5 March 2015)

Agreement with few voters still an agreement

A full Federal Court ruled that where there was no existing agreement, there was nothing to stop an agreement being made before work on a project began.

This is the case with greenfields agreements – as soon as a small number of employees have been engaged, an agreement can be made. 

Justice Buchanan noted it was not relevant to an assessment of the question posed by s186(3) (relating to when the FWC must approve an enterprise agreement) that the full bench did not know how many employees would, or might, in future be covered by site-specific agreements and hence excluded from the operation of the enterprise agreement. 

The possibility the agreement might not apply to unknown future employees on unknown future sites did not alter the coverage of the agreement, even though it might have an effect on whether the agreement applied to particular employees at particular sites.

Union v JH [2015] FCAFC 16 (24 February 2015)

Contest over which agreement prevails

A full Federal Court has ruled that a company had failed to show a FWC full bench had made a jurisdictional error in finding mistakes in the original single member decision of the FWC that had approved a meat industry agreement.

Justice Buchanan, in the full court, said the deputy president's principal conclusion was that the employees in the disputed roles were production workers covered by the proposed agreement. Justice Buchanan said he may disagree with the FWC full bench that the deputy president's analysis was based on an apparent error of construction, but he did not conclude the full bench had made a jurisdictional error in the performance of its appeal functions.

This litigation is mixed in with a number of other matters of agreement coverage and is continuing, with the company and the union asserting that different agreements were the appropriate and relevant instrument at different times. Backpay issues would be involved if the union position prevails.

TA v Union [2015] FCAFC 11 (12 February 2015)

The bottom line: The Federal Court has jurisdiction to interpret agreements made under the Fair Work legislation to resolve matters of law.

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