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Enterprise agreements come unstuck

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By David Bates

Phew, it’s been quite a week in the world of HR and Fair Work.

Let’s start with the latest developments in the ongoing saga of the Enterprise Agreement (EA) which covers tens of thousands of workers at Coles.

EAs are, of course, those legally-binding documents containing the minimum terms and conditions which apply to employees in a specific workplace.

They’re traditionally negotiated directly between the employer and a union.

EAs must be lodged with the Fair Work Commission (FWC) for formal approval. The FWC can only approve an EA – and it can therefore only have legal effect – if it passes the ‘Better Off Overall Test’ (BOOT) (by now you’re probably starting to wonder why anyone goes through this tortuous process!).

The BOOT is where all of the problems for Coles and the relevant union – the SDA – began. You see, it turns out the last EA should never have been approved because it left lots (read: thousands) of employees worse off and didn’t pass the BOOT.

You might think the union was thrilled to have an EA which underpaid workers thrown out. They weren’t. In fact, they opposed the application made by the worker who had been short-changed and wanted the whole thing undone. Go figure.

As a result, Coles (and the SDA) had to begin complying with their previous EA. However, it now looks like that one should have failed the BOOT too. Oh dear.

The FWC will shortly determine whether that old EA also needs to be quashed. If it is (and I certainly hope it is), the entire EA-making system will begin to fall apart. Hundreds of other ‘dodgy’ EAs will be put under the microscope, and potentially hundreds of thousands of employees will become entitled to back payments.

Just don’t hold your breath waiting for a union to step in and help them. After all, it’s the unions which negotiated these EAs in the first place.

Before I sign off this week, I also wanted to mention a recent FWC decision which will be of interest to employers everywhere.

The FWC has awarded $6,000 compensation to an employee who was fired after he posted a number of incredibly offensive comments on Facebook about a person employed at his mother’s business.

According to the employer, LED Technologies, the posts breached the company’s social media policy and justified instant dismissal. The Commission disagreed, finding the posts were sent while the employee was on a break and, besides, he’d never even seen the policy in question.

Furthermore, the FWC found the dismissal was also unfair because offensive language was often heard in the employee’s workplace, and the employer failed to provide the employee with an opportunity to explain why he shouldn’t be sacked before the final decision was made.

Moral of this story: communicate your policies, watch your language, and follow a formal process when dismissing an employee.

Published: Wednesday, April 12, 2017


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