Lots has been said recently in the press about enterprise agreement making and the approval process by the Fair Work Commission (FWC). In short, the numbers of agreements being made is down and approval times are “long”. The graph below, recently cited in an AFR article, demonstrates a possible link between approval times slowing and a Full Bench decision involving Coles. But the numbers are turning.
It’s not the only decision at play and it’s far from the whole story.
A steady stream of Federal Court decisions has effectively set the level of scrutiny that the FWC must apply – scrutiny which puts high demands on the FWC and in-turn those seeking approvals. Delays are inevitable, particularly given the FWC works with the parties on curing approval defects where possible. In effect, the FWC often does the work of the parties to ensure the approval requirements are met. Bear in mind that there are between 3,000-5,000 agreements to approve each year. Each approval requires over 30 requirements to be met, necessitating more than simply a “tick box” to deliver on the legislative charter. To suggest that this is a simple “rubber-stamping” process is wrong. There are 43 Fair Work Commission members who are charged with this.
We recently prophesied that the numbers would turn. Recent statistics from the FWC bear this out. A legislative change late last year enabling the FWC to approve agreements in a way that overlooks “minor procedural or technical errors” is enabling faster approval times. The corollary of this is that the FWC must still identify but, can overlook, errors made by parties who file agreements that do not meet the legal requirements.
In time this will probably see many an employer becoming even more blasé about the agreement-making requirements, because the FWC can more readily come to the rescue. But with all the criticism levelled at the FWC at approval delays, its patience and willingness to work with the parties to ensure approval might be tested. In other words, will we see non-compliant agreements more readily rejected, rather than time taken to clarify certain facts or fixing application errors?