SAIn ForceAct
Fair Work Act 1994
1However, the provision must be consistent with section 116(1).
Start here
Get a plain-English read of 1
Turn the raw legal text into a practical explanation grounded in Fair Work Act 1994.
1 However, the provision must be consistent with section 116(1).
78—Enterprise agreement has no force or effect without approval
An enterprise agreement has no force or effect unless approved by SAET.
79—Approval of enterprise agreement
(1) Except as otherwise provided, SAET must approve an enterprise agreement if, and must not approve an enterprise agreement unless, it is satisfied that—
(a) before the application for approval was made, reasonable steps were taken—
(i) to inform the employees who are covered by the agreement about the terms of the agreement and the intention to apply to SAET for approval of the agreement; and
(ii) to explain to those employees, the effect the agreement will have if approved and, in particular—
• to identify the terms of an industrial instrument (if any) that currently apply to the employees and will, if the agreement is approved, be excluded by the agreement; and
• if the agreement supersedes an earlier enterprise agreement, to identify the differences in the terms of the agreements; and
• to explain the procedures for preventing and settling industrial disputes as prescribed by the agreement; and
• to inform the employees of their right to representation in the negotiation, and proceedings for approval, of the agreement and, in particular, that an employee may be represented by an agent of an employee's choice, or an association of employees; and
(b) the agreement has been negotiated without coercion and a majority of the employees covered by the agreement have genuinely agreed to be bound by it; and
(c) if the agreement is entered into by a registered association as representative of 1 or more employees bound by the agreement—SAET is satisfied (in such manner as it thinks fit) that the association is authorised to act in accordance with the provisions of this Act; and
(d) the agreement provides for consultation between the employer and the employees bound by the agreement about changes to the organisation and performance of work or the parties have agreed that it is not appropriate for the agreement to contain provision for such consultation; and
(e) the agreement—
(i) is, on balance, in the best interests of the employees covered by the agreement (taking into account the interests of all employees); and
(ii) does not provide for remuneration or other conditions of employment that are inferior to the standards that apply under Part 1 Division 2; and
(iii) does not provide for remuneration or conditions of employment that are (considered as a whole) inferior to remuneration or conditions of employment (considered as a whole) prescribed by an award under this Act that applies to the employees at the time of the application for approval; and
(f) the agreement is consistent with the objects of this Part; and
(g) the agreement complies with the other requirements of this Act.
(1a) The agreement of employees to be bound by a proposed enterprise agreement may be indicated by ballot or in some other way.
(1b) If a ballot of employees is taken—
(a) SAET must be satisfied that—
(i) all employees were given a reasonable opportunity to participate in the ballot; and
(ii) the ballot was conducted in accordance with the rules for the conduct of ballots (if any) laid down by regulation; and
(iii) a majority of the employees casting valid votes at the ballot voted in favour of the proposal; and
(b) if SAET is so satisfied, it will be presumed that a majority of the total number of the employees (including those who did not vote at the ballot) is in favour of the proposal.
(1c) In deciding whether an agreement is in the best interests of an employee with a disability, SAET must have regard to the Supported Wage System of the Commonwealth (or any system that replaces it), and any other relevant national disability standard identified by or under the regulations.
(2) SAET must refuse to approve an enterprise agreement if a provision of the agreement discriminates against an employee because of, or for reasons including, race, colour, sex, sexual preference, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
(3) SAET must not approve an enterprise agreement if the agreement applies to part of a single business or a distinct operational or organisational part of a business and SAET considers that—
(a) the agreement does not cover employees who should be covered having regard to—
(i) the nature of the work performed by the employees whom the agreement does cover; and
(ii) the relationship between that part of the business and the rest of the business; and
(b) it is unfair that the agreement does not cover those employees.
(4) In deciding whether to approve an enterprise agreement, SAET must identify the employees (if any) who are covered by the agreement but whose interests may not have been sufficiently taken into account in the course of negotiations and must do whatever is necessary to ensure that those employees understand the effect of the agreement and their interests are properly taken into account.
(5) Despite subsection (1)(e)(ii) and (iii), a Full Bench of SAET may, on referral of an enterprise agreement by a member of SAET who considered the agreement in the first instance, approve the agreement if SAET is satisfied that—
(a) a majority of at least two-thirds of the total number of employees to be covered by the agreement is in favour of making the agreement; and
(b) the enterprise is suffering significant economic difficulties; and
(c) the agreement would make a material contribution to the alleviation of those difficulties; and
(d) there are reasonable prospects of the economic circumstances of the enterprise improving within the term of the agreement; and
(e) having regard to any relevant award under this Act (which should be considered as a whole) the agreement does not substantially disadvantage the employees covered by the agreement.
(6) An enterprise agreement may be referred to a Full Bench of SAET for approval if the member of SAET before whom the question of approval comes in the first instance is in serious doubt about whether the agreement should be approved.
(7) If an enterprise agreement is to be entered into on a provisional basis—
(a) the prescribed provisions do not apply to its approval under this section; but
(b) the agreement may only be approved on condition that—
(i) the agreement is to be renegotiated between the employer and the group of employees within a period (not exceeding 6 months) SAET considers appropriate in the circumstances and fixes on approving it; and
(ii) if, in the course of the renegotiation, the employer and the group1 reach agreement (either in the same or on different terms), the agreement is, on its approval under this Part, to take the place of the provisional agreement and, if agreement is not reached, the provisional agreement lapses at the end of the period fixed for its renegotiation.
Explanatory note—
The prescribed provisions are subsection (1)(a), (b), (c) and subsections (4) and (5).
(9) If SAET is of the opinion that grounds may exist for withholding approval of an enterprise agreement but—
(a) an undertaking is given to SAET by one or more of the persons who are to be bound by the agreement (or by a duly authorised representative on their behalf) about how the agreement is to be interpreted or applied; and
(b) SAET is satisfied that the undertaking adequately deals with the aspects of the agreement that might otherwise lead SAET to withhold its approval,
SAET may incorporate the undertaking as part of the agreement, or amend the agreement to conform with the undertaking, and approve the agreement in its modified form.
(10) Before SAET rejects an application for approval for an enterprise agreement on the ground that its provisions do not meet the criteria for approval, it should identify the aspects of the agreement that are of concern to SAET and allow a reasonable opportunity for the renegotiation of those aspects of the agreement.
(11) SAET may approve an enterprise agreement without proceeding to a formal hearing if SAET—
(a) is satisfied on the basis of documentary material submitted in support of the application that the agreement should be approved; and
(b) has given public notice of its intention to approve the agreement in accordance with the rules.
1 The group may, if the appropriate authorisation exists, be represented in the negotiations by an association or associations of employees—See section 75.
80—Extent to which aspects of negotiations and terms of the agreement are to be kept confidential
(1) An association that enters into an enterprise agreement as representative of a group of employees, must not disclose to the employer which employees authorised the association to act on their behalf.
(a) an association, if authorised in writing by an employee, may disclose to an employer that the association is authorised to act on behalf of the employee; and
(b) an association may be authorised by SAET to disclose to an employer the identity of employees who authorised the association to act on their behalf and may be required by SAET to disclose the identity of those employees to SAET.
(3) An enterprise agreement, once approved, must be lodged in the Registrar's office and must, subject to an order under subsection (4), be available for public inspection.
(4) SAET may, if satisfied that an order under this subsection is justified by the exceptional nature or circumstances of the case, declare that an enterprise agreement or a particular part of an enterprise agreement is to be kept confidential to the persons bound by it, and make an order suppressing public disclosure of the agreement or the relevant part of the agreement.
(5) A person must not contravene an order of SAET under subsection (4).
81—Effect of enterprise agreement
(1) An enterprise agreement prevails over a contract of employment to the extent the agreement is inconsistent with the contract.
(2) However, if an employer and employee agree, at or after the time of entering into an enterprise agreement, that a term of a contract of employment that is more beneficial to an employee than the corresponding provision of the enterprise agreement is to prevail despite the enterprise agreement, the contractual term prevails over the corresponding provision of the enterprise agreement.
(3) An enterprise agreement operates to exclude the application of an award only to the extent of inconsistency with the award.
(4) Subject to subsection (5), if—
(a) an enterprise agreement applies to the employees or a particular class of employees engaged in a particular business or undertaking; and
(b) a new employer becomes the successor, transmittee or assignee of the whole or part of the business or undertaking,
the new employer succeeds to the rights and obligations of the employer under the enterprise agreement.
(5) If—
(a) an employer is bound by an enterprise agreement (the outgoing employer); and
(b) another employer (the incoming employer) then becomes, or is likely to become at a later time, the successor, transmittee or assignee of the whole or part of the business or undertaking of the outgoing employer,
SAET may, on application under this subsection, by order—
(c) vary the enterprise agreement; or
(d) rescind the enterprise agreement.
(6) An application under subsection (5) may be made—
(a) by the outgoing employer (including such an employer who was previously an incoming employer), while he or she is still the employer under the enterprise agreement; or
(b) by the incoming employer after he or she takes over the whole or a part of the business or undertaking of the outgoing employer; or
(c) by an employee bound by the enterprise agreement (or a group of such employees) after the incoming employer takes over the whole or a part of the business or undertaking of the outgoing employer; or
(d) by a registered association acting on behalf of an employee or a group of employees bound by the enterprise agreement after the incoming employer takes over the whole or a part of the business or undertaking of the outgoing employer.
(7) SAET may make an order on application under subsection (5) if (and only if)—
(a) the order only relates to provisions that regulate the performance of duties by employees or that relate to the remuneration of employees; and
(b) SAET is satisfied that exceptional circumstances exist justifying the making of the order; and
(c) SAET is satisfied—
(i) that the order will not disadvantage employees in relation to their terms and conditions of employment; or
(ii) that the order will assist in a reasonable strategy on the part of the employer to deal with a short-term crisis in, and to assist in the revival of, the relevant business or undertaking.
(8) For the purposes of subsection (7), an order disadvantages an employee or employees in relation to their terms and conditions of employment if, on balance, its making would result in a reduction in the overall terms and conditions of employment of that employee or those employees.
(9) SAET must, in making an order under subsection (5), take into account the length of time remaining until the end of the term of the enterprise agreement.
(10) An order under subsection (5)—
(a) must not take effect before the transfer of the relevant business or undertaking to the incoming employer;
(b) may be made on the basis that the incoming employer will only be bound by the enterprise agreement for a limited period of time (and then the enterprise agreement will be taken to be rescinded);
(c) may be made on the basis that any variation to the enterprise agreement will only have effect for a limited period of time.
(11) Nothing in this section limits the ability to vary or rescind an enterprise agreement under another provision.
82—SAET's jurisdiction to act in disputes under an enterprise agreement
(1) An enterprise agreement cannot limit—
(a) SAET's powers of conciliation; or
(b) SAET's powers to settle industrial disputes between the employer and the employees bound by the agreement.
(a) before SAET intervenes in an industrial dispute between an employer and employees bound by an enterprise agreement, SAET should ensure that the procedures laid down in the agreement for settling industrial disputes have been followed and have failed to resolve the dispute; and
(b) a determination made by SAET in settlement of such a dispute—
(i) must not be made in relation to a condition of employment that is a subject matter of the agreement (unless the determination is to correct an ambiguity or uncertainty in the agreement); and
(ii) must be consistent with the agreement.
(3) SAET may, in acting under this section, settle a dispute over the application of an enterprise agreement.
83—Duration of enterprise agreement
(1) An enterprise agreement is to be made for a term (not exceeding 4 years) stated in the agreement.
(2) At least 28 days before the end of the term of an enterprise agreement, SAET must give written notice to the parties to the agreement advising them that the term of the agreement is about to end.
(3) After giving the notice, SAET may, on its own initiative or on the application of a party, invite the parties to an enterprise agreement to a conference to explore the possibility of renegotiating the agreement.
(4) Despite the expiration of the term stated in the enterprise agreement, the agreement continues in force until superseded or rescinded.
84—Power of SAET to vary or rescind an enterprise agreement
(1) SAET may vary an enterprise agreement—
(a) to give effect to an amendment agreed between the employer and a majority of the employees currently bound by the agreement; or
(b) to correct an ambiguity or uncertainty in the agreement; or
(c) to bring the agreement into conformity with an undertaking on the basis of which the agreement was approved.
(2) In deciding whether to vary an enterprise agreement, SAET must (unless the variation is merely to correct an ambiguity or uncertainty) apply the same tests as apply to the approval of an enterprise agreement.
(3) SAET may rescind an enterprise agreement during its term if satisfied that the employer and a majority of the employees currently bound by the agreement want it rescinded.
(4) A party to an enterprise agreement, an employee bound by the agreement, or a registered association with at least 1 member who is bound by the agreement, may apply to SAET for an order rescinding the agreement after the end of the term of the agreement.
(5) On receiving an application for rescission under subsection (4), SAET must take such steps as it considers appropriate to obtain the views of the persons bound by the agreement about whether the agreement should be rescinded.
(6) If on an application under subsection (4) SAET is satisfied—
(a) that the employer or a majority of the employees bound by the agreement want it rescinded; and
(b) that the rescission of the agreement will not unfairly advance the bargaining position of a particular person or group in the circumstances of the particular case,
SAET may rescind the agreement.
85—SAET may release party from obligation to comply with enterprise agreement
(1) If an employer or employee bound by an enterprise agreement engages in industrial action in relation to a matter dealt with in the agreement, SAET may, on application by another person bound by the agreement who is affected by the industrial action, order that the applicant be released from the agreement or that the terms of the agreement be varied in a specified way.
(2) Subject to the terms of an enterprise agreement, SAET may, on application by a person bound by the agreement, include, omit or vary a term authorising the employer to stand down an employee.
(3) SAET may only make an order under this section if satisfied it is fair and reasonable to do so.
86—Limitation on SAET's powers
SAET has no power to vary or rescind an enterprise agreement apart from the powers expressly conferred on SAET by this Part.
87—Representation
An association of employers or employees may, subject to the provisions of any relevant enterprise agreement1, represent members of the association in negotiations and proceedings under this Part.
1 See section 77(1)(d).
88—Confidentiality
(1) If an enterprise agreement prohibits the disclosure of information of a confidential nature, a person who discloses the information contrary to the agreement is guilty of an offence.
(2) However, an enterprise agreement cannot prohibit the disclosure of information of a statistical nature to the Minister.
Part 3—Regulation of industrial matters by award
Division 1—Awards generally
90—Power to regulate industrial matters by award
(1) SAET may make or vary an award about remuneration and other industrial matters.
(a) SAET cannot regulate the composition of an employer's workforce except in relation to the employment of juniors and apprentices; and
(b) if there is an inconsistency between an award and an enterprise agreement, then, while the agreement continues in force, the agreement prevails to the extent of the inconsistency.
(3) SAET may provide in an award for remuneration, leave or other conditions of employment that are more favourable to employees than the standards that apply under Part 1 Division 2.
(4) SAET may refrain from hearing, further hearing, or determining an application for an award binding only one employer or two or more employers who together carry on a single business or for variation of such an award for so long as SAET—
(a) considers that, in all the circumstances, the parties concerned should try to negotiate an enterprise agreement to deal with the subject matter of the application; and
(b) is not satisfied that there is no reasonable prospect of the parties making such an agreement.
(5) An award may be made or varied on a provisional or interim basis.
(6) In making or varying an award, SAET is not restricted to the specific relief claimed by the parties, but may include in the award provisions SAET considers necessary or appropriate.
(7) Before SAET makes or varies an award, it must take reasonable steps to ensure that all persons who are to be bound by the award have been given a reasonable opportunity to appear and be heard before SAET.
90A—Equity in remuneration
In making an award regulating remuneration, SAET must take all reasonable steps to ensure that the principle of equal remuneration for men and women doing work of equal or comparable value is applied (insofar as may be relevant).
91—Who is bound by award
(1) An award of SAET is binding on all persons expressed to be bound by the award.
(2) If—
(a) an award is expressed to apply to a particular employer, or to an employer engaged in a particular business or undertaking (the outgoing employer); and
(b) another employer (the incoming employer) becomes the successor, transmittee or assignee of the whole or part of the business or undertaking of the outgoing employer,
the incoming employer succeeds to rights and obligations of the outgoing employer under the award.
(3) Subsection (2) operates subject to any provision made by SAET (on application under this Act) to vary or rescind the relevant award.
92—Retrospectivity
(1) An award of SAET has, if it so provides, retrospective operation.
(2) However, an award cannot operate retrospectively from a day antecedent to the day on which the application for the award was lodged with SAET unless—
(a) the date of operation is fixed by consent of all parties to the proceedings; or
(b) there is a nexus between the award and—
(i) another award of SAET; or
(ii) a fair work instrument under the Commonwealth Act,
and, in view of the nexus, it is imperative that there should be common dates of operation; or
(c) the award gives effect, in whole or part and with or without modification, to principles, guidelines or conditions relating to remuneration enunciated or laid down in, or attached to, a relevant decision or determination of the Fair Work Commission and there are reasons of exceptional cogency for giving it a retrospective operation.
93—Form of awards
(1) An award must be expressed in plain English and must avoid unnecessary technicality and excessive detail.
(2) An award must be settled and sealed by the Registrar.
94—Effect of awards on contracts
An award prevails over a contract of employment to the extent the award is more beneficial to the employee than the contract.
95—Effect of multiple award provisions on remuneration
(a) an employee is engaged in work of different classes; and
(b) an award or awards fix different rates of remuneration for the different classes of work,
the remuneration of the employee is to be calculated by reference to the time spent in, and the rate of remuneration for, each class of work.
(2) However, an award may fix a special rate of remuneration for an employee engaged in work of different classes.
96—Duration of award
An award continues in operation, subject to its terms, and subject to amendment or revocation, until superseded by a later award.
97—Effect of amendment or rescission of award
The variation or rescission of an award does not affect—
(a) legal proceedings previously commenced under or in relation to the award; or
(b) rights existing at the time of the variation or rescission.
98—Consolidation or correction of awards
(1) The Registrar must ensure that the text of any award that has been amended by another award is consolidated to include the amendments at least once in each period of 12 months.
(2) The Registrar may, at any time, correct clerical or other errors in an award.