The Fair Work Commission has struck down the approval of more enterprise agreements because of non-compliant notices of employee representational rights (NERR) in a recent Full Bench decision that has led to calls for legislative change and a response from Minister Cash vowing to make such change. This case highlights the need for absolute compliance with the content and form requirements for NERRs’ to ensure approval of your enterprise agreement.
In a recent decision of the Full Bench of the Fair Work Commission dealing with appeals against the approval of three enterprise agreements, the Commission made an important ruling concerning the content of the mandatory notice of employee representational rights. The Commission overturned the approval of two enterprise agreements because of what has been widely considered a trivial, inadvertent departure from NERR content requirements – a failure to include the Commission’s correct phone number.
What this means for you
Until the foreshadowed amendments are introduced, employers must ensure any NERR issued complies in its entirety with the prescribed form and content set out in the Fair Work Act 2009. A failure to do so will result in the enterprise agreement not being approved.
If you have already commenced bargaining, you will need to review the NERR to ensure strict compliance has been carried out. If you notice any departure from the requirements, you will need to issue a new NERR. As a result of an earlier Full Bench decision from August 2016, you will need to take care if you need to issue a new NERR and we suggest you contact a member of our Employment, Safety & People team to assist you.
Under the Act, employers must issue a NERR to employees to be covered by a proposed enterprise agreement within 14 days of bargaining commencing. The purpose of the NERR is to inform employees they have the right to appoint a bargaining representative for the purposes of bargaining. The Act sets out the content and form of the NERR and the final sentence of the NERR encourages employees to contact the Fair Work Commission Infoline if they have any questions.
The model form in the Act does not include the relevant phone number and employers must insert that phone number, along with a number of other matters that need to be populated. In this case, the employers inserted the Fair Work Ombudsman’s telephone number, rather than the Commission’s Infoline number.
This issue was not raised by the MUA at the initial approval stage, nor was it raised by the MUA in its appeal. Rather, a member of the Full Bench raised the issue with the parties at the commencement of the appeal hearing and queried whether the enterprise agreements could be approved given the inclusion of the wrong phone number, despite the MUA’s other grounds of appeal. Because of the importance of the issue, the Full Bench allowed the MUA to amend its appeal to include this issue.
After rejecting a range of arguments raised by the MUA, including that the enterprise agreements had not been genuinely agreed because the employees who voted to approve the enterprise agreements had only been employed for a number of days before bargaining commenced, the Full Bench turned to the NERR issue.
The employers argued the NERRs issued were valid because the prescribed form had been followed completely and the failure to include the correct phone number did not undermine the NERRs’ purpose. That is, fundamentally, employees were informed they could appoint a bargaining representative. Further, the Infoline was only one of four contact points for more information and if an employee did telephone the Ombudsman, their enquiry could have been addressed or referred to the Commission Infoline.
The Full Bench looked at a number of other decisions from the Commission, and the Federal Court, that had considered this issue and formed the view that one of the NERR’s statutory purposes would be frustrated if the wrong phone number was included and that such a mistake was not a trivial error. The Full Bench ultimately decided the enterprise agreements should not have been approved on the basis of the employers’ departure from the Act’s requirements.
The Full Bench echoed other decisions and stated that strict compliance with the content and form of a NERR is absolutely necessary until either the Minister for Employment amended the requirements of the form or the employers sought a review of the Full Bench’s decision.
Following this decision, Employment Minister Michaelia Cash released a statement that legislation will be introduced to ‘enable common sense to prevail’. We welcome this statement and proposed amendments. As things stand at the moment, the most trivial and inadvertent departure from the form will result in an enterprise agreement not being approved, potentially undermining an employer’s bargaining strategy (and potentially the wishes of the majority of employees). Such a strict approach further undermines the Act’s intentions of providing a simple, fair and flexible agreement making framework.
On 3 April 2017, the Fair Work Regulations 2009 will be amended by the Fair Work Amendment (Notice of Employee Representational Rights) Regulations 2017 to change the prescribed content for NERRs by eliminating the need for employers to insert a telephone number for the Fair Work Commission Infoline. The amending regulations directly address the source of the non-compliance in the decision discussed above.
From 3 April 2017, instead of referring to the Fair Work Commission’s website and Infoline in its last paragraph, the NERR form will say:
If you have any questions about this notice or about enterprise bargaining, please speak to your employer or bargaining representative, or contact the Fair Work Ombudsman or the Fair Work Commission.
The amendments will also correct references to the relevant section of the Fair Work Act.
Employers should ensure that a NERR form issued on or after 3 April 2017 is in the amended prescribed form. Non-compliance with the amended prescribed form will mean the Commission cannot approve the related enterprise agreement. NERR forms issued before 3 April 2017 must continue to comply with the pre-amendment prescribed form for NERRs (and include the correct telephone number for the Fair Work Commission Infoline).
|Michael Nicolazzo | Senior Associate
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