101 IR 332
Review of Principles for Approval of Enterprise Agreements 2002 [2002] NSWIRComm 342
Source
Original judgment source is linked above.
Catchwords
101 IR 332
Review of Principles for Approval of Enterprise Agreements 2002 [2002] NSWIRComm 342
Judgment (5 paragraphs)
[1]
DECISION
On 9 November 2021, the Acting Industrial Registrar, Ms I Hoskinson, notified all industrial parties registered under Ch 5, Pt 3 of the Industrial Relations Act 1996 (NSW) ("Act") ("Registered Organisations") that the Commission intended to undertake the three-yearly review of the Principles for Approval of Enterprise Agreements ("Principles") made pursuant to s 33 of Act. The current Principles ("2018 Principles") are set out in Annexure "A" to Review Of the Principles for Approval of Enterprise Agreements 2018 [2018] NSWIRComm 1064 ("2018 Review Decision").
[2]
History of the Principles and the Review
The Principles were originally established by a Full Bench on 19 December 1996 in Re Principles for Approval of Enterprise Agreements (1996) 94 IR 98 and were subsequently reviewed and amended pursuant to s 33(3) of the Act in four Full Bench decisions: Review of the Principles for Approval of Enterprise Agreements [2000] NSWIRComm 250 101 IR 332 ("2000 Review Decision"); Review of Principles for Approval of Enterprise Agreements 2002 [2002] NSWIRComm 342; 121 IR 144 ("2002 Review Decision"); Review of the Principles for Approval of Enterprise Agreements 2015 [2015] NSWIRComm 24; and the 2018 Review Decision.
Section 33 of the Act is in the following terms:
33 Principles for approval of enterprise agreements
(1) A Full Bench of the Commission is required to set principles to be followed by the Commission in determining whether to approve enterprise agreements.
(2) In determining those principles, the Full Bench is to have regard, in particular, to the following:
(a) the objects of this Act and the public interest,
(b) the relevant criteria for approval imposed by this Part,
(c) the need for an appropriate process for approving agreements to be followed by the Commission,
(d) the need for an appropriate process for ensuring sufficient information about the effect of the agreement is provided to employees who are to be covered by the agreement,
(e) the need for an appropriate negotiating process for the agreement.
(3) A Full Bench of the Commission is to review the principles for approval at least once every 3 years.
(4) Principles for approval may be set or reviewed on the application of any party that can apply for approval of an enterprise agreement or on the Commission's own initiative.
(5) Industrial organisations are entitled to be notified of any proceedings of a Full Bench under this section and to make submissions on the setting or review of the principles for approval.
(6) The Industrial Registrar is to publish the principles for approval on the NSW industrial relations website.
(7) Principles for approval are to be set and published under this section within 6 months after the commencement of this Act.
The meaning of the expression "review" in s 33(3) was discussed by the Full Bench in the 2000 Review Decision as follows (at [52] and [53]):
"52 In our view, a review conducted pursuant to s 33(3) should not proceed upon a presumption that the existing principles are necessarily correct. A review requires the Commission to inquire into the principles in order to determine whether those principles are appropriate having regard to the requirements of the Act and, in particular, Pt 2 of Ch 2 of the Act. It is not necessary for the parties to such proceedings to demonstrate that special circumstances exist or that changes have occurred from the last established principles in order to demonstrate a basis for an alteration to the existing principles in a review (although such factors would, no doubt, be a relevant consideration in a review conducted pursuant to s 33(3)).
53 Rather, the Commission should consider whether a particular principle is sound having regard to the requirements of the statute and all other relevant circumstances. Hence, it may be demonstrated (by the calling of appropriate evidence) that a particular principle does not operate in the manner intended or creates adverse or inappropriate outcomes. Nothing in this approach, however, would prevent the Commission from re-adopting the principles earlier established where it is satisfied, on the materials before it and the submissions made by the parties, that the existing principles were appropriate."
[3]
2021/2022 Review of the Principles
The following parties filed notices of appearances in these proceedings:
1. Unions NSW;
2. Local Government NSW ("LGNSW");
3. Industrial Relations Secretary;
4. The NSW Chamber of Fruit and Vegetables Industries Incorporated;
5. The Master Builders Association of New South Wales;
6. Roofing Industry Association of NSW Incorporated; and
7. TAB Agents Association of NSW.
On 24 November 2021, the proceedings were listed for directions before Chief Commissioner Constant. The Chief Commissioner made directions including the following:
1. If any of the parties wishes to file submissions in relation to changes … to the principles of approval for enterprise agreements, then they should do so by filing and serving on the other parties for whom notices of appearances have been filed such submissions by 4pm on 17 December 2021.
2. …
3. The parties have until 24 December 2021 to notify the Commission and the other parties for whom a notice of appearance has been filed if they wish to make any further submissions in response to what was filed and served pursuant to direction 1.
4. If no party seeks to file additional submissions in response to the submissions filed and served in accordance with direction 1, then the Commission will notify the parties on 11 January 2022 when the parties should expect the Commission's draft position in respect of proposed changes to the draft Principles and a date for the hearing.
5. If any party does notify the Commission that it wishes to file additional submissions in response to the submissions filed and served in accordance with Direction 1 then the Commission will notify the parties of any additional directions made in chambers or will list the matter for further directions.
6. ...
On 20 December 2021, LGNSW, with leave, filed submissions proposing an amendment to sub-cl 2.7 of the 2018 Principles "to better reflect the mandatory requirement that an enterprise agreement either contain or reference dispute resolution procedures in another relevant agreement or award (see sections 39(1) and (2) of the Act). Additionally, principle 2.7 appears to limit the Commission's consideration of the dispute resolution procedures in an enterprise agreement to whether the procedures operate to resolve industrial disputes that pertain to or concern discrimination in employment."
No other party proposed any amendments in accordance with Direction 1 made on 24 November 2021.
The Full Bench then reviewed the 2018 Principles and the amendment proposed by LGNSW. On 9 February 2022, the Acting Industrial Registrar sent an email to each of the Registered Organisations which were originally notified of these proceedings attaching the amendments to the Principles proposed by the Full Bench ("Proposed Amended Principles"). The amendments proposed included the removal of sub-cl 2.8 of the 2018 Principles (competency-based training not in accordance with award provisions) and sub-cl 2.9 (agency or union bargaining fees).
On 21 February 2022, Unions NSW proposed in writing a further amendment to sub-cl 3.2 of the Proposed Amended Principles. The proposed further amendment sought "to strike the right balance between retention of the current informal process and the Commission's discretion to require parties to provide evidence of compliance in applicable circumstances."
On 22 February 2022, the matter was listed before the Full Bench for hearing of oral submissions. Only Unions NSW, LGNSW and Roofing Industry Association of NSW Incorporated were represented at the hearing. The Full Bench invited the parties to make submissions in respect of: LGNSW's proposed amendment, the Full Bench's Proposed Amended Principles, and Unions NSW's proposed amendment to sub-cl 3.2 of the Proposed Amended Principles.
Mr Yap, who appeared for Unions NSW and its affiliated unions, made submissions in support of its proposed change to sub-cl 3.2. Mr Yap responded to questions from the Full Bench as to how the Principles might provide for the Commission to be provided with evidence as to compliance with legislative requirements, without unduly formal or onerous requirements as to the form in which that evidence might be presented. Unions NSW indicated that it was otherwise content with the amendment proposed by LGNSW and all other changes in the Proposed Amended Principles.
LGNSW made only brief submissions, confining its observations to sub-cl 3.2 of the Proposed Amended Principles. Mr Nassif, who appeared for LGNSW, stated that LGNSW understood the concerns raised by Unions NSW, and that the proposed sub-cl 3.2 did appear to contemplate an informal process in approving enterprise agreements, but then permitted a formal approach to the taking of evidence. LGNSW otherwise indicated consent to the Proposed Amended Principles.
No other submissions were received.
In that light, it is useful to set out the further observations of the Full Bench in the 2000 Review Decision as to the significance of consent arrangements with respect to the setting or review of Principles under s 33 of the Act. The Full Bench stated:
"55 The consent of the parties to the proposed principles is nonetheless an important consideration in the review. Thus, the Commission will place substantial weight upon the agreement reached between the parties: Re Principles for Approval of Enterprise Agreements (at 115) and State Wage Case 1999 (at 394). However, the agreement of parties (even significant industrial parties) is not determinative of any application before the Commission: Re Equal Remuneration Principle (2000) 97 IR 177 at 195. This is particularly so in review proceedings where the Commission is required to consider the principles required to be established having regard to various statutory criteria: see s 33(2). We do not consider that the fact of the principles having been derived from the agreement of the parties at the time of the making of the principles necessarily has any significant bearing upon the review of the principles. That earlier consent of the parties may or may not have been well founded and would need to be considered in the light of all relevant circumstances, including the actual operation of the principles in the intervening period."
In response to the submissions of Unions NSW, the Full Bench has determined to amend cl 3.2 in a manner which provides that the Commission may determine in each case the form in which any evidence is to be presented. We consider that this adequately deals with the concern raised by Unions NSW. We otherwise make the 2021/2022 Principles in the form of the Proposed Amended Principles.
[4]
Order
The Full Bench orders:
1. Pursuant to s 33(1) of the Industrial Relations Act 1996, the Full Bench sets the Principles contained in Annexure A to this decision as the Principles to be followed by the Commission in determining whether to approve enterprise agreements;
2. The Principles will operate on and from the date of this decision and remain in force until further order of the Commission.
[5]
Annexure A
Principles for Approval of Enterprise Agreements
Preamble
1.1 The following principles are to be applied by the Industrial Relations Commission of New South Wales (Commission) pursuant to sub-s 33(1) of the Industrial Relations Act 1996 (NSW) (Act), in determining whether to approve enterprise agreements unless it is satisfied, in accordance with sub-s 35(3) of the Act that any departure from these principles would not prejudice the interest of any parties to the agreement.
1.2 These Principles take effect on and from 23 February 2022 and remain in force until varied by the Commission in accordance with the Act.
1.3 In deciding whether to approve an enterprise agreement, the Commission, in accordance with sub-s 146(2) of the Act, must take into account the objects of the Act, including whether the enterprise agreement provides equal remuneration for men and women doing work of equal or comparable value under the agreement.
1.4 The Principles:
(a) include matters related to the negotiation and processing of agreements, and criteria for approval; and
(b) seek to ensure that: agreements and the processes which lead to agreements are appropriate, and have regard to the particular circumstances and needs of the employees to be covered by the agreement; and agreements comply with the Anti-Discrimination Act 1977 (NSW).
1.5 The terms and conditions of employment in a proposed agreement must not unlawfully discriminate, either directly or indirectly, on the grounds of a person's sex (including pregnancy and breastfeeding), race, marital or domestic status, homosexuality, age, disability, transgender identity or responsibilities as a carer or because of the sex (including pregnancy and breastfeeding), race, marital or domestic status, homosexuality, age, disability or transgender identity of the person's relative or associate.
Criteria for approval of enterprise agreements
2.1 Parties must demonstrate to the satisfaction of the Commission that they have followed all the requirements for approval, including:
(a) involvement of the parties and/or their representatives in negotiation processes;
(b) the parties understand the nature and effect of the agreement;
(c) the parties did not enter the agreement under duress;
(d) that all relevant employees are covered by the agreement; and
(e) that the agreement does not breach relevant statutory requirements, including the requirements of Ch 2, Pt 2 (Enterprise Agreements) of the Act and the Anti-Discrimination Act 1977.
2.2 When the Commission is considering an enterprise agreement under sub-s 35(2) of the Act, the Commission may also have regard to:
(a) the wishes of the parties;
(b) the award coverage of employees not covered by the proposed agreement;
(c) the history of industrial regulation at the enterprise or workplace; and
(d) other matters the Commission considers relevant.
2.3 Where a secret ballot is required pursuant to sub-s 36(4) of the Act, the conditions of the ballot must require that:
(a) pursuant to sub-s 37(1) of the Act, a returning officer be a person who is not the employer or a person selected by the employer;
(b) to be eligible to vote, the person must be an employee who is to be covered by the agreement at the time the ballot is conducted;
(c) each eligible employee is able to vote only once in a ballot;
(d) the employees must be able to vote in secret;
(e) time/times fixed for the ballot will enable all eligible employees the opportunity to vote where practicable;
(f) the ballots must be secure until counting commences;
(g) the returning officer must count and declare the result of the ballot; and
(h) ballots must be retained until after the agreement is processed by the Commission.
Unless the Commission gives leave, the conditions of the ballot must include that:
(a) each ballot form must be initialled by the returning officer;
(b) counting must not commence until the ballot has closed; and
(c) scrutineers may observe the count of the ballot papers; and
(d) the Commission may inspect the ballot papers.
2.4 The Commission, in accordance with sub-s 35(1) of the Act, is to satisfy itself that:
(a) in the case of an agreement that covers employees to whom State awards would otherwise apply, that the agreement does not, on balance, provide a net detriment to the employees when compared with the aggregate package of conditions of employment under the State awards, and
(b) in the case of an agreement that covers employees to whom no award would otherwise apply, that the agreement does not, on balance, provide a net detriment to the employees when compared with the aggregate package of conditions of employment under an award that covers employees performing similar work to that performed by the employees covered by the agreement.
2.5 In determining the "no net detriment" test, in accordance with sub-ss 35(1)(b) and (b2), the Commission will have regard to:
(a) the benefits and conditions applying under the proposed enterprise agreement in comparison to those applying under the relevant award/s;
(b) the conditions in the proposed enterprise agreement being considered as an aggregate package;
(c) provisions in the Work Health and Safety Act 2011 (NSW) and regulations directly relevant to the change in work patterns to be performed under the agreement;
(d) the needs and circumstances of the enterprise;
(e) the wishes of the parties to the agreement;
(f) any other matters the Commission considers relevant;
(g) test case decisions of the Commission;
(h) State decisions setting principles or provisions pursuant to s 51 of the Act;
(i) minimum sick leave provisions for awards as prescribed under s 26 of the Act; where such provisions or principles are found in the relevant award/s or which apply to awards generally.
2.6 An enterprise agreement should, where appropriate, facilitate the establishment of consultative mechanisms and procedures appropriate to the size, structure and needs of the enterprise for consultation on matters affecting their efficiency and productivity.
2.7 In accordance with s 39 of the Act, an enterprise agreement must contain a dispute resolution procedure or the parties must satisfy the Commission pursuant to sub-s 39(2) of the Act that another relevant agreement or award already does so. The Commission is to have regard to whether those dispute resolution procedures facilitate the resolution of industrial disputes under the enterprise agreement in a manner that is consistent with sub-s 3(g) of the Act.
Process for approving agreements to be followed by the Commission
3.1 The Commission, in accordance with sub-s 169(1) of the Act, must take into account the principles of the Anti-Discrimination Act 1977 when exercising its functions under these Principles including having regard to whether the enterprise agreement contains an anti-discrimination clause in the form of Attachment 1 to these Principles.
3.2 In approving enterprise agreements in accordance with the Act and Principles, the Commission may approve an agreement by way of an informal process. However, parties may be required to address the Commission on all matters required under the Act and Principles. There must be evidence before the Commission of compliance with relevant mandatory provisions of the Act, including, where applicable, the special requirements set out in s 36 of the Act. The Commission will determine in each case the form in which the evidence is to be presented.
3.3 For the purpose of s 38(1) of the Act, where an enterprise agreement has been approved by a secret ballot pursuant to s 36(4) of the Act, one or more employees may be nominated by the employees to sign the agreement on behalf of all the employees to be covered by the agreement.
3.4 The responsibility for lodging the Comparison and Compliance Statement, pursuant to r 7.1 of the Industrial Relations Commission Rules 2009, rests with the applicant, provided that where individual employees are the applicant, it will be sufficient that a selected representative of the employees files the required statement.
Process ensuring sufficient information
4.1 During the negotiation of the agreement, consultative processes should be structured such that they encourage participation of all groups and categories of employees, which may include part-time and casual employees.
4.2 The negotiation process should therefore ensure that:
(a) reasonable steps are taken to consult all employees who are to be covered by the agreement about the agreement;
(b) reasonable steps are taken so that employees who are to be covered by the agreement have an understanding of the agreement and its effect;
(c) employees are informed of the intention to have the agreement approved by the Commission and the consequences of the Commission's approval;
(d) employees have access to the proposed agreement and the relevant award/s; and
(e) employees have had reasonable time to seek advice independent from the employer; for example, including relevant industrial organisations of employees.
Appropriate negotiating process
5.1 Where the parties have agreed to negotiate an agreement, they should attend meetings they have agreed to attend, provide documentation they have agreed to provide, and comply with agreed or reasonable negotiating procedures.
5.2 In negotiations for a proposed enterprise agreement, the parties will consider matters such as workplace reform, productivity and efficiency and acknowledge the availability of the Commission to assist in the facilitation of cooperative employment relations principles.
ATTACHMENT 1 - ANTI-DISCRIMINATION
It is the intention of the parties to this agreement to seek to achieve the object in sub-s 3(f) of the Industrial Relations Act 1996 (NSW) to prevent and eliminate discrimination in the workplace. This includes discrimination on the grounds of a person's sex (including pregnancy and breastfeeding), race, marital or domestic status, disability, homosexuality, transgender identity, age or responsibilities as a carer or because of the sex (including pregnancy and breastfeeding), race, marital or domestic status, disability, homosexuality, transgender identity, age or responsibilities as a carer of the person's relative or associate.
It follows that in fulfilling their obligations under the dispute resolution procedure prescribed by this agreement the parties have obligations to take all reasonable steps to ensure that the operation of the provisions of this agreement are not directly or indirectly discriminatory in their effects. It will be consistent with the fulfilment of these obligations for the parties to make application to vary any provision of the agreement which, by its terms or operation, has a direct or indirect discriminatory effect.
Under the Anti-Discrimination Act 1977 (NSW), it is unlawful to victimise an employee because the employee has made or may make or has been involved in a complaint of unlawful discrimination or harassment.
Nothing in this clause is to be taken to affect:
(a) any conduct or act which is specifically exempted from anti-discrimination legislation;
(b) offering or providing junior rates of pay to persons under 21 years of age;
(c) any act or practice of a body established to propagate religion which is exempted under s 56(d) of the Anti-Discrimination Act 1977 (NSW); and/or
(d) a party to this agreement from pursuing matters of unlawful discrimination in any State or federal court or tribunal.
This clause does not create legal rights or obligations in addition to those imposed upon the parties by the legislation referred to in this clause.
NOTES
(a) Employers and employees may also be subject to Commonwealth anti- discrimination legislation.
(b) Section 56 of the Anti-Discrimination Act 1977 (NSW) provides:
"Nothing in the Act affects -
…
(d) any other act or practice of a body established to propagate religion that conforms to the doctrines of that religion or is necessary to avoid injury to the religious susceptibilities of the adherents of that religion.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 23 February 2022