Application for variation of the Rainbow Children's Centre Inc. Enterprise Agreement

[1] On 15 March 2021, I approved the Rainbow Children's Centre Inc. Enterprise Agreement (Agreement).

[2] The Agreement has a nominal expiry date of 14 March 2025.

[3] The Agreement covers children's services employees employed under the classifications contained in clause 13 of the Agreement.

[4] On 22 December 2025, The Rainbow Children's Centre Inc (Rainbow Children's Centre) filed an application under section 210 of the _Fair Work Act 20_09 (Cth) (Act) to vary the Agreement.

[5] At the time of the vote on the proposed variation to the Agreement, 37 employees were covered by the Agreement. 37 employees cast a valid vote and voted to approve the variation.

[6] There are no employee bargaining organisations covered by the Agreement.

[7] The scope of employees covered by the Agreement has not changed as a result of the variation of the Agreement.

[8] The variation modifies the employment classifications under clause 13 of the Agreement and additionally provides for a director allowance at clause 15 of the Agreement.

[9] The Commission must approve a variation of an enterprise agreement made under s 210 of the Act if:

• (a) the Commission is satisfied that had an application been made under s 182(4) or s 185 for the approval of the agreement as proposed to be varied, the Commission would have been required to approve the agreement under s 186; and

• (b) the Commission is satisfied that the agreement as proposed to be varied would not specify a date as the nominal expiry date which is more than 4 years after the day on which the Commission approved the agreement;

unless the Commission is satisfied that there are serious public interest grounds for not approving the variation.[1]

[10] The requirements for approval of an enterprise agreement under s 186 of the Act relevantly include satisfaction by the Commission that:

• (a) the agreement has been genuinely agreed to by the employees covered by the agreement;

• (b) the terms of the agreement do not contravene s 55 of the Act (which deals with the interaction between the National Employment Standards and enterprise agreements); and

• (c) the agreement passes the better off overall test (BOOT).

[11] The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Amending Act) made a number of changes to enterprise agreement approval processes in Part 2-4 of the Act, that commenced operation on 6 June 2023.

[12] Under transitional arrangements, amendments made by Part 16 of Schedule 1 to the Amending Act in relation to the BOOT requirements for agreement approval applications apply where the agreement was made on or after 6 June 2023. The better off overall test provisions in Part 2-4 of the Act, as it was just before 6 June 2023, continue to apply in relation to agreement approval applications where the agreement was made before 6 June 2023. The variation to the Agreement was made on 9 October 2024.

[13] Section 193(1) of the Act provides that an enterprise agreement passes the BOOT if the Commission is satisfied, as at the test time, that each award covered employee, and each reasonably foreseeable employee, for the enterprise agreement would be better off overall if the enterprise agreement applied to the employee than if the relevant modern award applied to the employee. The "test time" is when the application for approval of the enterprise agreement is made.[2]

[14] In Armacell Australia Pty and Others the application of the BOOT was explained by the Full Bench in the following manner:[3]

"The BOOT, as the name implies, requires an overall assessment to be made. This requires identification of terms which are more beneficial for an employee, terms which are less beneficial and an overall assessment of whether an employee would be better off under the agreement."

[15] This principle is now enshrined in s 193A(2) of the Act.

[16] The BOOT is not applied as a line-by-line analysis. It is a global test requiring consideration of advantages and disadvantages to relevant employees.[4] An enterprise agreement may pass the test even if some award benefits have been reduced, as long as overall, those reductions are more than offset by the benefits of the enterprise agreement.[5]

[17] Ultimately the application of the BOOT is a matter that involves the exercise of discretion, and it involves a degree of subjectivity or value judgement.[6]

[18] It is clear from the references to "each ... employee" in section 193(1) of the Act that every employee to whom the enterprise agreement will apply, if approved, must be better off overall than if the relevant modern award applied to the employee. It is not enough that a majority or most of the employees to whom the enterprise agreement will apply, if approved, will be better off overall than if the relevant modern award applied.[7]

[19] The Commission must give consideration to any views relating to whether an enterprise agreement passes the BOOT that have been expressed by any of the following:

• (a) the employer or employers covered by the agreement;

• (b) the award covered employees for the agreement; and

(c) a bargaining representative for the agreement.[8]

[20] Further, the Commission must give primary consideration to a common view (if any) relating to whether the agreement passes the BOOT expressed by all of the following:

• (a) the bargaining representative(s) of the employer; and

(b) the bargaining representative(s) of award covered employees for the agreement (other than a bargaining representative that is not an employee organisation).[9]

[21] In considering whether or not an agreement passes the BOOT, the Commission may only have regard to patterns or kinds of work, or types of employment, if they are reasonably foreseeable at the test time. In considering what is reasonably foreseeable, the Commission must have regard to the nature of the enterprise to which the agreement relates.[10]

[22] The Commission must determine whether a particular pattern or kind of work, or type of employment, is reasonably foreseeable for the purposes of s 193A(6) if a view is expressed by any of the following that it is, or is not, reasonably foreseeable:

• (a) the employer covered by the agreement;

• (b) the award covered employees for the agreement;

(c) a bargaining representative for the agreement.[11]

[23] Section 186(2)(a) of the Act requires that the Commission be satisfied that the variation to the Agreement was genuinely agreed. Section 188 goes on to set out certain matters that the Commission must take into account or be satisfied of in determining whether an agreement has been genuinely agreed. Relevantly for present purposes, s 188(1) of the Act requires the Commission to take into account the Statement of Principles made under section 188B in determining whether it is satisfied that the agreement was genuinely agreed.

[24] On 12 May 2023, the Commission issued the Statement of Principles pursuant to s 188B of the Act. I have taken those principles into account in deciding the application to vary the Agreement.

[25] Further, s 188(4A) of the Act states the Commission cannot be satisfied that an agreement was genuinely agreed unless it is satisfied that the employer complied with s 180(5) of the Act. Section 180(5) requires an employer to take all reasonable steps to explain the terms of an enterprise agreement and the effect of those terms and ensure that the explanation is provided in an appropriate manner taking into the particular circumstances of the employees who will be covered by the agreement.

[26] The purpose of the requirement in s 180(5) is to "enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement".[12]

[27] The employer has provided written undertakings (Undertakings). A copy of the Undertakings is attached in Annexure A to this decision. I am satisfied that the effect of accepting the Undertakings is not likely to:

(a) cause financial detriment to any employee covered by the Agreement; or

(b) result in substantial changes to the Agreement.

[28] Pursuant to subsection 212(3) of the Act, I accept the Undertakings. The Undertakings are taken to be a term of the Agreement.

[29] Having regard to all the benefits and detriments in the Agreement compared to the relevant awards, I am comfortably satisfied that, as at the 'test time', each award covered employee, and reasonably foreseeable employee, for the Agreement would be better off overall if the Agreement, as varied, applied to the employee than if the relevant award applied to the employee. The Agreement passed the BOOT when it was approved in 2021. The variations made to the Agreement make it more beneficial relative to the relevant awards.

[30] The material before the Commission establishes to my satisfaction that Rainbow Children's Centre took all reasonable steps to explain the terms of the varied Agreement, and the effect of those terms, to employees and ensured that the explanation was provided in an appropriate manner taking into the particular circumstances of the employees covered by the Agreement. The balance of the pre-approval requirements in s 180 of the Act were also met.

[31] There are no serious public interest grounds for not approving the variation.

[32] I am satisfied that each of the requirements of ss 186, 187, 188, 210 and 211 of the Act as are relevant to this application for approval of the variation to the Agreement have been met.

[33] For the reasons given, I approve Rainbow Children's Centre's proposed variation of the Agreement.

[34] Pursuant to s 216 of the Act, this variation will operate from 7 January 2026.

[1] Fair Work Act 2009 (Cth) s 211

[2] Fair Work Act 2009 (Cth) s 193(6)

[3] [2010] FWAFB 9985 at [41]

[4] SDA v Beechworth Bakery Employee Co Pty Ltd [2017] FWCFB 1664 at [12]; s 193A(2) of the Act

[5] Re Australia Western Railroad Pty Ltd T/A ARG - A QR Company [2011] FWAA 8555 at [8]; NTEIU v University of New South Wales [2011] FWAFB 5163 at [47]

[6] TWU v Jarman Ace Pty Ltd [2014] FWCFB 7097 at [28]

[7] Loaded Rates Agreements [2018] FWCFB 3610 at [100]

[8] Fair Work Act 2009 (Cth) s 193A(3)

[9] Fair Work Act 2009 (Cth) s 193A(4)

[10] Fair Work Act 2009 (Cth) s 193A(6)

[11] Fair Work Act 2009 (Cth) s 193A(6A)

[12] CFMMEU v Ditchfield Mining Services Pty Ltd [2019] FWCFB 4022 at [69], applying One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77 at [115]

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