Fair Work Act requirements: Content of agreements


Section 205 of the Fair Work Act 2009 (FW Act) provides that enterprise agreements must contain a consultation term. There is a new requirement to include a consultation term which deals with changes to regular rosters or ordinary hours of work (see section 205(1)(a)(ii) of the FW Act). A model consultation term is included in Schedule 2.3 of the Fair Work Regulations 2009 (FW Regulations).

The Government has also developed its own consultation model term that is recommended to be used by departments and agencies. The purpose of the model clause is to provide clarity and guidance to departments and agencies about what is required in a public sector enterprise agreement to satisfy both Government policy and the requirements of the FW Act. The model clause can be found at Attachment 1: Consultation Model Clause.

Further guidance on consultation can be found in the chapter on Redundancy and Other Matters.

Flexible working arrangements

Under section 65 of the FW Act certain employees have the right to request from their employers flexible working arrangements, such as changes to start and finish times and working from home. This right forms a part of the National Employment Standards (NES). Employers can refuse these requests only on reasonable business grounds.

The FW Act does not provide an exhaustive list of circumstances when an employee can request flexible working arrangements and how they are facilitated. Therefore, departments and agencies may wish to consider other circumstances when flexible working arrangements can be requested and forms of their implementation. Some examples of such arrangements are job sharing, compressed work weeks, make up for time taken for parental and carer reasons and provisions of purchased leave.

Individual flexibility term

Under Division 5 of Part 2 – 4 of the FW Act all enterprise agreements are required to include an individual flexibility term.

If the parties do not reach agreement about the content of the term then the flexibility term as provided in Schedule 2.2 of the FW Regulations will apply. The individual flexibility term allows an employer and employee to come to an individual flexibility arrangement (IFA) to vary the effect of terms of an agreement dealing with arrangements about when work is performed, overtime rates, penalty rates, allowances or leave loading.

The whole enterprise agreement cannot be subject to variations through individual flexibility arrangements.

IFAs can be initiated by the employee or the employer. They must be genuinely agreed to in writing and signed by both the employee and employer. Section 202 of the FW Act provides that if an enterprise agreement does not include a flexibility term, the model flexibility term in Schedule 2.2 of the FW Regulations is taken to be a term of the agreement.

IFAs must not undermine minimum employee entitlements, and as such, employers must ensure every employee covered by an IFA is better off overall under the IFA as compared to the modern award or enterprise agreement the IFA varies.

Victorian public sector family provisions standard

As a minimum, departments and agencies must abide by the parental leave, carer’s leave and compassionate leave provisions provided for as part of the NES under the FW Act and also take into account leave provisions included in the relevant modern awards. However, departments and agencies are encouraged to consider inclusion in enterprise agreements leave provisions superior to the NES and the relevant award(s). If included, these provisions would apply.

The CBU has developed draft parental leave, personal/carer’s leave and compassionate leave model clauses for use by departments and agencies in new agreements. Model clauses provide guidance as to what is required to be included in a public sector enterprise agreement under the FW Act and the Government’s policies. See Attachment 3: Work and Family Model Clauses.

Departments and agencies may also wish to develop their own leave provisions, but must ensure that all legal and policy requirements are appropriately reflected and met.

Public holidays

The Public Holidays Act 1993 (PH Act) sets out the public holiday entitlements of Victorian employees.

In addition, the FW Act provides for minimum standards relating to public holidays as part of the NES. Public sector employers are required to comply with both Acts as well as any applicable public holiday provisions in modern awards or enterprise agreements that cover their employees.

Dispute resolution

While the Government promotes the resolution of workplace disputes at the workplace level it acknowledges that not all disputes can be resolved without some external assistance. Accordingly, departments and agencies must provide for dispute resolution procedures in each enterprise agreement which enable the FWC to resolve disputes, including by arbitration where the matter cannot be resolved through conciliation.

Overview of dispute resolution requirements under the FW Act

While the FW Act requires all enterprise agreements to include procedures for settling disputes about matters arising under an agreement and in relation to the NES, these procedures (as distinct from the policy position set out below) do not mandate the involvement of the FWC.

In order to access conciliation and arbitration by the FWC, the parties to an agreement must confer these powers by making specific provision for this in the dispute resolution clause of their enterprise agreements.

Action required by departments and agencies

Departments and agencies must include in their enterprise agreements dispute resolution processes that are fair and transparent and which confer powers of conciliation and arbitration on the FWC in the event that a dispute (including a dispute relating to the NES) cannot be resolved at the workplace level. Departments and agencies are free to tailor their dispute resolution clause to suit their own requirements; however, the clause must clearly specify the internal and external processes including the role of the FWC. The following principles must be reflected in dispute resolution processes in enterprise agreements:

  • the process must be clear and concise
  • the parties must genuinely attempt to resolve the dispute at the workplace level
  • if a dispute cannot be resolved at the workplace level the parties must genuinely attempt to resolve it at each further stage of the dispute resolution process
  • the parties must cooperate to ensure that dispute resolution processes are carried out expeditiously
  • work should continue in accordance with usual practice while the dispute resolution processes are being followed. If an employee has a reasonable concern about an imminent risk to his or her health or safety, the employee must advise the employer and not unreasonably fail to comply with a direction by his or her employer to perform other available work that is safe and appropriate

To be effective the clause must clearly specify the role of the FWC during conciliation and arbitration and provide that:

  • during the conciliation stage the FWC has discretion on how the conciliation will be conducted and has authority to make recommendations to the parties
  • if the dispute cannot be resolved through conciliation, the matter can be arbitrated at the request of either party
  • during arbitration the FWC has discretion as to how it conducts the arbitration, as well as authority to make determinations that the parties are committed to accepting

A model dispute resolution clause incorporating the key aspects of the Government’s policy can be found in Attachment 2: Dispute Resolution Model Clause.

If a particular dispute could have a broader implication, departments and agencies must at earliest opportunity contact the CBU to discuss it further before seeking resolution by the FWC.