Can an agreement cover different awards?


Can an agreement cover different awards?

Is it possible for more than one modern award to underpin an enterprise agreement, or does one award take primacy?


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Our workforce is covered by two existing agreements. Can we have a single agreement that encompasses workers on different awards? 

This question was recently sent to our Ask an Expert service.

Our company is in the process of negotiating an enterprise agreement which, hopefully, will replace two existing agreements that pass their nominal expiry date at the end of October. The company is hoping to merge the two agreements into one agreement. The reason there are two agreements is they cover two different parts of our workforce, who are covered under two different modern awards.

Due to changes in the business since the existing agreements were approved, the two are not operationally distinct and the existing conditions of the two agreements are almost identical, with the exception of the span of ordinary hours and shift work.  Is it possible for more than one modern award to underpin an enterprise agreement, or does one award take primacy?
A An enterprise agreement can cover employees who are employed under different modern awards – indeed, this is considered to be a potential benefit for having an enterprise agreement. Among other qualifications, the proposed agreement must pass the Better Off Overall Test (BOOT) before approval by the Fair Work Commission (FWC).

This test is based on the relevant modern award that covers any employees covered by the proposed enterprise agreement. It requires that each ‘award-covered’ employee and each prospective award-covered employee must be better off under the agreement than they would if the relevant modern award applied to them. Although the BOOT requires each award-covered employee to be better off, the FWC may ‘assume’ that each employee within a designated class of employees are better off if the agreement passes the BOOT when applied to that class.
The BOOT allows award conditions (but not conditions prescribed under the National Employment Standards) to be traded off or excluded provided the total remuneration and/or benefits received by the employee leave them better off than if the conditions remained the same.
In the case of the two existing agreements, if an agreement has passed its nominal expiry date it will cease to have effect once the new agreement comes into operation.

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