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Fair Work Act 2009
192When the FWC may refuse to approve an enterprise agreement
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192 When the FWC may refuse to approve an enterprise agreement
(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC may refuse to approve the agreement if the FWC considers that compliance with the terms of the agreement may result in:
(2) Subsection (1) has effect despite sections 186 and 189 (which deal with the approval of enterprise agreements).
(3) If the FWC refuses to approve an enterprise agreement under this section, the FWC may refer the agreement to any person or body the FWC considers appropriate.
Subdivision C—Better off overall test
193 Passing the better off overall test
When a non‑greenfields agreement passes the better off overall test
(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that:
(a) each award covered employee, and each reasonably foreseeable employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee; and
(b) if the agreement is a single‑enterprise agreement that covers one or more employees (each of whom is an old agreement employee) to whom a supported bargaining agreement or a single interest employer agreement applies—each old agreement employee would be better off overall if the single‑enterprise agreement applied to the employee than if the supported bargaining agreement or single interest employer agreement (as the case requires) applied to the employee.
Note 1: Reasonably foreseeable employee is defined in subsection (5).
Note 2: Section 193A sets out rules for applying the better off overall test, including requiring the FWC to only have regard to patterns or kinds of work, or types of employment, that are reasonably foreseeable at the test time (see subsection 193A(6)).
(1A) If an employee is, at the test time, both an old agreement employee and an award covered employee, the FWC must undertake an assessment against only paragraph (1)(b) for that employee.
FWC must disregard individual flexibility arrangement
(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.
(2A) If, under the flexibility term in the supported bargaining agreement or single interest employer agreement, an individual flexibility arrangement has been agreed to by an old agreement employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the single‑enterprise agreement passes the better off overall test.
When a greenfields agreement passes the better off overall test
(3) A greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each reasonably foreseeable employee for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.
Award covered employee
(4) An award covered employee for an enterprise agreement is an employee who:
(a) is covered by the agreement; and
(b) at the test time, is covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and
(iii) covers his or her employer.
Reasonably foreseeable employee
(5) A reasonably foreseeable employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:
(a) would be covered by the agreement; and
(b) would be covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) would cover the person in relation to the work that he or she would perform under the agreement; and
(iii) covers the employer.
Test time
(6) The test time is the time the application for approval of the agreement by the FWC was made under subsection 182(4) or section 185.
193A Applying the better off overall test
(1) This section applies for the purposes of determining whether an enterprise agreement passes the better off overall test under section 193.
(2) To avoid doubt, the FWC must undertake a global assessment of whether each employee concerned would be better off having regard to:
(a) the terms of the agreement which would be more beneficial to the employee if the agreement applied to the employee than if the relevant modern award, supported bargaining agreement or single interest employer agreement (as the case requires) applied to the employee; and
(b) the terms of the agreement which would be less beneficial to the employee if the agreement applied to the employee than if the relevant modern award, supported bargaining agreement or single interest employer agreement (as the case requires) applied to the employee.
(3) The FWC must give consideration to any views relating to whether the agreement passes the better off overall test that have been expressed by any of the following:
(b) if the agreement is not a greenfields agreement:
(ii) if the agreement is a single‑enterprise agreement that covers one or more employees to whom a supported bargaining agreement or a single interest employer agreement applies—those employees;
(c) in any case—a bargaining representative for the agreement.
(4) The FWC must give primary consideration to a common view (if any) relating to whether the agreement passes the better off overall test expressed by all of the following:
(a) the bargaining representative or bargaining representatives of the employer or employers that are covered by the agreement;
(b) the bargaining representative or bargaining representatives of award covered employees for the agreement (other than a bargaining representative that is not an employee organisation);
(c) if the agreement is a single‑enterprise agreement that covers one or more employees to whom a supported bargaining agreement or a single interest employer agreement applies—the bargaining representative or bargaining representatives of those employees (other than a bargaining representative that is not an employee organisation).
(5) Subsection (4) does not apply if the agreement is a greenfields agreement.
(6) The FWC 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 FWC must have regard to the nature of the enterprise or enterprises to which the agreement relates.
(6A) The FWC must determine whether a particular pattern or kind of work, or type of employment, is reasonably foreseeable for the purposes of subsection (6) if a view is expressed by any of the following that it is, or is not, reasonably foreseeable:
(b) if the agreement is not a greenfields agreement:
(ii) if the agreement is a single‑enterprise agreement that covers one or more employees to whom a supported bargaining agreement or a single interest employer agreement applies—those employees;
(c) in any case—a bargaining representative for the agreement.
(7) If a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award, supported bargaining agreement or single interest employer agreement (as the case requires) applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.
Subdivision D—Unlawful terms