Enterprise agreements are legally binding agreements that are negotiated between employers and employees, or their representatives, to establish the terms and conditions of employment. These agreements are required to be approved by the Fair Work Commission (FWC) before taking effect. However, there are certain circumstances under which the FWC may not approve an enterprise agreement. In this article, we will explore those circumstances.

1. Non-compliance with the National Employment Standards (NES)

The NES outlines the minimum employment standards that employees are entitled to, including maximum weekly working hours, minimum rates of pay, leave entitlements, and more. Any enterprise agreement that does not meet the requirements of the NES will not be approved by the FWC.

2. All employees` needs are not met

Enterprise agreements must be negotiated in good faith, and all employee groups must have the opportunity to participate in the negotiation process. If the agreement only benefits some employees and not others, it may not be approved, as it does not satisfy the “better off overall test” (BOOT).

3. Incomplete documentation

The documentation submitted for the enterprise agreement must be complete and accurate. Failure to provide the necessary information and supporting documentation will result in the proposal being rejected by the FWC.

4. Unlawful provisions

Any enterprise agreement that includes provisions that are unlawful or in breach of other legislation will not be approved. For instance, clauses that discriminate against certain employees or allow for the payment of below the minimum wage rate will not receive FWC approval.

5. Contravening public policy

If the enterprise agreement contravenes public policy principles, then it will not be approved by FWC. For instance, agreements that seek to undermine anti-discrimination laws, workplace safety, or environmental protection may not pass the public policy test.

6. Inadequate employee consultation

Employee consultation is a critical factor in the approval process, and an enterprise agreement must demonstrate that the employees have been adequately consulted. Any agreements that do not meet these consultation standards may not be approved by the FWC.

In conclusion, enterprise agreements provide a useful opportunity for employers and employees to come to an agreement on their workplace’s terms and conditions. However, agreements must comply with various legal requirements to be approved by the Fair Work Commission. Non-compliance with these requirements can lead to an agreement being rejected. It is therefore important for employers to ensure that all documentation is complete and accurate, and that all employees are adequately consulted before submitting the enterprise agreement for review.