Enterprise agreements

17.2 The law of employment, as it relates to the relationship between an individual employer and employee, has its basis in the common law, specifically the law of contract. The rights and obligations of an employer and an employee are generally governed by, and arise from, the terms of a contract of employment.

17.3 However, rights and obligations also arise from a range of other sources, including under legislation, the terms of which may prevail over the contract of employment. One such source is the Fair Work Act, which provides that there are several types of agreements, referred to as enterprise agreements, that can prevail over contracts of employment. ^[1]

17.4 The objects of Part 2–4 of the Fair Work Act which deals with enterprise agreements are to:

provide a simple, flexible and fair framework that enable collective bargaining in good faith, particularly at an enterprise level, for enterprise agreements that deliver productivity benefits; and to enable [Fair Work Australia] to facilitate good faith bargaining and the making of enterprise agreements.^[2]

17.5 There are three types of enterprise agreements:

• single-enterprise agreements, involving a single employer or one or more employers cooperating in what is essentially a single enterprise;

• multi-enterprise agreements, involving two or more employers that are not all single-interest employers; and

• greenfields agreements, involving a genuinely new enterprise that has not yet employed employees.^[3]

17.6 Enterprise agreements govern the terms and conditions of employment and can be made between one or more employers and either their employees, or one or more employee organisations. However, a large proportion of the workforce in Australia is not covered by an enterprise agreement.^[4]

17.7 The Fair Work Act lists several categories of matters that may, must, or must not, be included in enterprise agreements:

• ‘permitted’ matters that may be included in an enterprise agreement—for example, terms about matters pertaining to the relationship between an employer and their employees or employee organisation, as well as deductions from wages and the operation of the agreement;^[5]

• ‘mandatory’ terms that must be included in an agreement—for example, terms in relation to individual flexibility and consultation;^[6] and

• ‘unlawful terms’ that cannot be included in an agreement or that are of no effect, such as terms that are discriminatory.^[7]

17.8 There are a number of requirements in order for an enterprise agreement to be approved by Fair Work Australia (FWA), one of which is that it must pass the ‘better off overall’ test (BOOT). That is, FWA must be satisfied that employees are better off overall under the enterprise agreement as opposed to the conditions under the relevant modern award.^[8]

17.9 The Fair Work Act also contains a range of requirements with respect to the enterprise agreement bargaining process, for example, a requirement that parties bargain in good faith, as well as detailed provisions in relation to representation during bargaining.^[9]

Individual flexibility arrangements

17.10 Section 202 of the Fair Work Act requires that an enterprise agreement must include a ‘flexibility term’. A flexibility term allows an employer and an employee to make a specific ‘individual flexibility arrangement’ (IFA) that would vary the effect of the enterprise agreement to account for the employee’s particular circumstances in order to meet the genuine needs of the employee and employer.^[10]

17.11 An IFA must meet a range of requirements. In particular, the IFA must be genuinely agreed to by the employer and the employee and there is a requirement that the employee be better off overall than if no IFA had been agreed to.^[11]

17.12 If an enterprise agreement does not include a flexibility term, the model flexibility term (prescribed under the Fair Work Regulations 2009 (Cth)) is taken to be a term of the agreement.^[12]

17.13 As a result, there is provision for employees who are covered by an enterprise agreement and who are experiencing family violence to negotiate an IFA with their employer, for example, to vary work arrangements to account for their experiences of family violence.

17.14 In Family Violence—Employment and Superannuation Law, Issues Paper 36 (2010) (Employment Law Issues Paper), the ALRC asked what steps could be taken to ensure that employees who are experiencing family violence are better able to access IFAs made under s 202 of the Fair Work Act.

17.15 However, the ALRC also outlined concerns expressed in relation to flexibility terms in the context of family violence. In particular, the ALRC noted that as IFAs are negotiated on an individual basis, some victims of family violence may not be in a position to negotiate an effective or useful IFA, specifically where victims fear disclosure of family violence or where their experiences have undermined their independence and confidence.

Submissions and consultations

17.16 Stakeholders expressed divergent views on the role and appropriateness of IFAs in the context of family violence.

17.17 The submission from the Australian Chamber of Commerce and Industry (ACCI) expressed support for IFAs as an instrument able to

deliver a level of individual flexibility [which] could accommodate employees with tailored conditions. IFAs have sufficient safeguards, can be terminated at short notice and an employer cannot force an employee to sign one or make it a condition of employment.^[13]

17.18 Other stakeholders expressed the view that IFAs are not appropriate to deal with family violence and emphasised that the introduction of other measures, such as family violence clauses in enterprise agreements, was preferable.^[14]

17.19 Stakeholders also emphasised that if family violence clauses were included in enterprise agreements, it would supplant the need to negotiate an IFA to deal with circumstances arising from an employee’s experience of family violence.^[15] For example, the Australian Council of Trade Unions (ACTU) stated:

The ACTU has consistently voiced concerns over IFAs in relation to the inherent unequal bargaining power between an individual employee and their employer. We have concerns that employees in vulnerable situations, such as those relating to domestic violence, may be placed in an even more unequal and unfair negotiating position if IFAs are the only mechanism for entitlements to leave or flexible work arrangements in family or domestic violence situations.^[16]

17.20 Many stakeholders reiterated concerns about bargaining power and the limited likelihood of victims of family violence negotiating IFAs.^[17] For example, the Australian Human Rights Commission (AHRC) submitted that:

research has shown that generally women are less likely than male employees to engage in individual negotiations with an employer. Low paid, low skilled employees, and those employed part-time or casually—all characteristics of women’s employment—have been found to have less bargaining power compared to full-time, higher paid, higher skilled employees.^[18]

17.21 In addition to general opposition to the use of IFAs in the context of family violence, stakeholders voiced specific concerns, including that:

• many employees are ‘unaware of what regulates the terms and conditions of their employment’ and ‘the level of knowledge and negotiation skills required to access IFAs is high’;^[19]

• ‘for many employees, the prospect of negotiating an IFA could be daunting as it is likely to involve some degree of disclosure of their changed circumstances, with no guarantee of a positive outcome’;^[20]

• employees experiencing family violence often require immediate flexibility or altered arrangements in order to deal with unforeseen circumstances arising from family violence and ‘IFAs do not really take these emergencies that require flexibility into account’ even where employers may be willing to negotiate an IFA;^[21]

• the process for the application and determination of the BOOT is ‘vague, entered into privately between the employer and employee and such agreements do not need pre-approval by Fair Work Australia’;^[22]

• difficulty in monitoring and enforcing IFAs; ^[23] and

• the scope of an IFA is limited by the flexibility term in the enterprise agreement itself.^[24]

17.22 Stakeholders also noted that IFAs must meet the genuine needs of both the employee and the employer. The National Network of Working Women’s Centres (NNWWC) indicated that, in their experience, ‘most employers … [do not] see an employee’s need to attend to anything to do with family violence as their issue’.^[25] The Australian Domestic and Family Violence Clearinghouse (ADFVC) agreed, commenting that in practice,

employers are unlikely to consent to an IFA unless it offers some operational benefit, limiting their practical usefulness to employees with greater bargaining power, those employees whose skills are in demand or harder to replace.^[26]

17.23 Few stakeholders favoured the use of IFAs as the most appropriate mechanism through which to address family violence. However some stakeholders expressed support for access to IFAs, in workplaces not covered by an enterprise agreement containing a family violence clause.^[27] For example, the ADFVC suggested:

Where a workplace is not covered by an enterprise agreement containing a specific family violence clause, an IFA may be negotiated in order to seek temporary changes to working patterns, such as shorter or alternative hours or the ability to work from home to care for children.^[28]

17.24 The AHRC considered that IFAs may be useful for employees who are in a position to negotiate and who ‘recognise the value of negotiating domestic violence provisions to vary their terms and conditions of employment’.^[29]

17.25 ACCI expressed concerns in relation to the current use and limitations on use of IFAs by unions. In particular, ACCI emphasised that female employees may be prejudiced by ‘industrial tactics’ such as limiting the use of IFAs, and utilising union IFA clauses that ‘require a majority of the workforce to agree to changing the application of certain conditions in an agreement’. ACCI submitted:

It is not fair or equitable for female workers in a workplace dominated by male workers to be locked out of agreeing with their employer on individual matters such as leave and when work is performed. In relation to this issue, female workers may need to start or finish work at different times, in order to deal with personal matters, such as attend counselling, seek advice from advisors, pick up a child from school. There may be reasons associated with relevant court orders regarding them or their children. These are sensitive matters best dealt with through individual mechanisms and not, on a collective basis.^[30]

17.26 Consequently, ACCI suggested amendments to the Fair Work Act to require, at a minimum, ‘that the terms in an IFA are no less favourable as compared to the model modern award clause/regulation’. ACCI emphasised that ‘this is not creating a new right, but is giving effect to an existing law which is not working as the Government, nor Parliament, had intended’.^[31]

Education and awareness

17.27 A number of stakeholders also emphasised that, while IFAs are not preferable, there may nonetheless be a need for an awareness-raising campaign to draw attention to the fact that IFAs may be negotiated to accommodate the needs of employees experiencing family violence. Women’s Health Victoria noted an education campaign should draw attention to the possible use of IFAs and be directed at both employees and employers.^[32]

17.28 Submissions also emphasised the need for the provision of information about negotiating IFAs. For example, Domestic Violence Victoria (DV Victoria) and the Domestic Violence Resource Centre Victoria (DVRC Victoria) emphasised the role for unions, employer organisations and FWA in ‘promoting and informing employees about their rights to negotiate individual flexibility arrangements in order to ensure equitable access’.^[33]

17.29 Similarly, the AHRC recommended that ‘information be produced to raise awareness … about how individual flexibility arrangements can be used to assist employees affected by domestic violence’.^[34]

17.30 Some stakeholders also supported the development and availability of sample or model IFAs. Women’s Health Victoria suggested such model IFAs could ‘show both employers and employees what an individual flexibility arrangement looks like, and could act as a template’.^[35]

17.31 The ADFVC indicated that FWA and the Fair Work InfoLine could provide resources and information, suggesting the development of ‘a Guide for Employees Experiencing Family Violence, including a section on IFAs that could be downloaded from the FWA (and/or FWO) website or distributed in hardcopy form via other services would potentially be useful’.^[36]

17.32 Similarly, ACCI noted that the Fair Work Ombudsman publishes

Best Practice Guides (and often consults with industry and unions) on various topics and could include information on types of clauses which may be considered by employers and employees. Whilst no one-size fits all clause is appropriate, ACCI would support additional information to be published by the FWO for the benefit of employers and employees when considering bargaining or formulating policies.^[37]

17.33 Finally, Women Everywhere Advocating Violence Elimination (WEAVE) suggested that there

should be a vulnerable employees advocacy service as part of the Fair Work Office in every state whereby vulnerable employees (these might include domestic violence targets, people with disabilities or chronic illness, people with a first language other than English) could apply for support in negotiating flexibility arrangements with their employer appropriate to their circumstances.^[38]

ALRC’s views

17.34 The ALRC notes comments made by unions and employer organisations with respect to the approaches taken to IFAs by the other, and in relation to the differing views expressed on the merits of collective as opposed to individual bargaining. In addition, the ALRC recognises that there are differing views held by stakeholders as to the usefulness and appropriateness of IFAs in the context of family violence.

17.35 The ALRC considers that there is a need to ensure that workplace responses to family violence are consistent, but also sufficiently flexible to allow an employee and employer the opportunity to tailor specific working arrangements to meet the needs of both parties. As a result, the ALRC acknowledges the potential role IFAs may play in the context of family violence.

17.36 However, the ALRC also notes potential limitations on the usability and effectiveness of IFAs in cases involving family violence. For example, the ALRC is concerned that many employees, including those experiencing family violence, may not have the level of confidence, knowledge or skill required to negotiate an effective IFA. In addition, given the nature of family violence, an employee’s circumstances may change abruptly and frequently. Therefore the ALRC considers that the circumstances in which IFAs could help protect employees experiencing family violence may be limited.

17.37 Overall, the ALRC considers that while IFAs may act as one mechanism through which the Fair Work Act could account for the needs of employees experiencing family violence, they may not necessarily be the most appropriate in the family violence context. In any event, the ALRC does not consider that any changes could usefully be made to the legislation with respect to IFAs to protect the safety of employees experiencing family violence.

17.38 However, the ALRC does consider that the FWO should develop a guide to negotiating IFAs to respond to the needs of employees experiencing family violence, in consultation with unions and employer organisations. The guide should include information on IFAs tailored to meet the needs of particular employees experiencing family violence and examples of IFA clauses which can be adapted for these purposes.

Family violence clauses

17.39 Increasingly there have been moves—led by bodies such as the ADFVC and unions—to include family violence clauses in enterprise agreements. There are currently a range of family violence clauses that are either included, or are being negotiated for inclusion, in enterprise agreements around Australia.^[39] Such clauses are intended to recognise and address the impact of family violence on employees and workplaces, to provide a flexible way employees and employers can negotiate workplace responses to family violence, and to provide enforceable entitlements.

17.40 Key concerns about the inclusion of family violence clauses in enterprise agreements largely mirror the concerns raised in relation to the inclusion of other statutory or workplace entitlements. In addition, as noted above, enterprise agreements do not apply to a large proportion of the Australian workforce and may be insufficient to respond to the needs of employees experiencing family violence. To support the effective operation of such clauses, there may be a need for a range of complementary workplace policies and procedures.

Existing clauses

17.41 There are currently a range of family violence clauses that have either been included, or are being negotiated for inclusion, in enterprise agreements around Australia.

17.42 In 2010 the first family violence clauses were included in the enterprise agreements for the Surf Coast Shire and the University of New South Wales (UNSW) professional staff. Both agreements were subsequently approved by FWA.^[40] The Australian Services Union (ASU) clause was included in the Surf Coast Shire, agreement and is reproduced below.^[41]

17.43 The UNSW clause is more limited, providing a right to request:

• access to sick, carer’s and compassionate leave for family violence-related purposes;

• flexible working arrangements, including changes to working hours consistent with the needs of the work unit; and

• changes to work location, telephone number or email address.^[42]

17.44 The clause also states that ‘proof’ of domestic violence may be required in the form of an agreed document issued by the police service, a court, a medical practitioner, a domestic violence support service or lawyer, or a counselling professional.^[43]

17.45 While enterprise agreements covering Commonwealth agencies do not currently include family violence clauses, the Government has expressed support for enterprise bargaining on family violence clauses in Commonwealth agency agreements. The Hon Kate Ellis, Minister for the Status of Women stated:

The government supports enterprise bargaining on domestic violence clauses in Commonwealth Government agency agreements. The Australian Government Bargaining Framework (AGEBF) sets out Australian Government policy as it applies to workplace relations arrangements in Australian Government employment consistent with legislative requirements. Australian Public Service (APS) agencies are required to apply the AGEBF when bargaining and non-APS bodies are encouraged to apply the AGEBF. While there are no specific provisions outlining a relationship between personal leave and its utilisation for domestic violence, Section 4.1 of the AGEBF states that workplace agreements are to include terms and conditions which assist employees in maintaining a healthy work-life balance. In that regard, at the agency level, employers and employees are allowed to bargain on a wide range of matters and develop specific policies including on the use of personal/miscellaneous leave provisions above the statutory minimums.^[44]

Submissions and consultations

17.46 In the Employment Law Issues Paper, the ALRC asked whether the inclusion of family violence clauses in enterprise agreements should be encouraged and if so, what provisions such clauses should contain.

17.47 Many stakeholders supported the inclusion of family violence clauses in enterprise agreements.^[45] However, many indicated that other approaches, such as amendment of the NES, are preferable.

17.48 Stakeholders also emphasised that, at times, bargaining items that benefit vulnerable employees, such as family violence leave, may be excluded from mainstream bargaining processes. For example, the AHRC submitted that:

Competing needs of different workplace constituencies can result in bargaining items which specifically benefit women being excluded from bargaining agendas, or if they are included, being traded off for wages or conditions which benefit both male and female employees. Academics have examined bargaining outcomes and concluded that the interests of the majority, based on a male, full-time breadwinner ideal, are often negotiated instead of entitlements which meet women’s industrial needs.

Leaving the provision of domestic violence leave to enterprise bargaining runs the risk that this issue will be slow to be negotiated, and where it is, that only higher paid workforces which have more bargaining power will be able to negotiate this provision.^[46]

17.49 Similarly, the ACTU highlighted:

The considerable differences in bargaining power of groups of employees limits the capacity to deliver entitlements equally to workers through workplace bargaining alone. Women generally, and in particular, those employed in low paid sectors and those employed on a part-time or casual basis have the lowest bargaining power. It is for this reason that the Government has legislated a paid parental scheme. Victims of family violence are likely to have a history of disrupted work patterns, be on lower incomes and more often be employed in casual and part-time employment and therefore least likely to have access to domestic violence related provisions delivered through the bargaining process.^[47]

17.50 Despite these concerns, as outlined above, many stakeholders expressed the view that the inclusion of family violence clauses in enterprise agreements is a ‘positive move to protect the safety and industrial rights of women who have experienced family violence, which has resulted in a negative impact on their work entitlements’.^[48]

17.51 Overall, there was a general consensus amongst most stakeholders about the nature and content of the family violence clauses. In particular, many supported the adoption of the provisions included in the ASU family violence clause outlined above as a model,^[49] noting that the clause is ‘seen as best practice and world leading at this stage’.^[50]

17.52 Women’s Health Victoria noted that family violence clauses may serve a ‘dual purpose of acting as a support mechanism for employees experiencing violence, and an educative tool for the organisation as a whole’.^[51]

17.53 The ACTU submitted that:

workplaces and workplace bargaining priorities vary, and that individual unions are best placed to determine the extent to which provisions designed to protect and support employees who are victims of domestic violence are appropriate and / or achievable in particular workplace bargaining situations.^[52]

17.54 Similarly, ACCI submitted that ‘whilst not discounting the importance of such clauses, it must be acknowledged that they have not been seen as a priority for the majority of workplaces in Australia’.^[53]

17.55 ACCI emphasised that ‘one-size does not fit all’ and that ‘these types of clauses are negotiated with employees on a voluntary basis’ and ‘where an employer agrees to such clauses, it is because it meets the specific needs of its staff, which may not be true for other workplaces’.^[54] Accordingly, ACCI stated that it would not support a mandatory family violence clause in enterprise agreements providing a ‘suite of new entitlements that was not negotiated between employers and employees in a particular workplace’.^[55]

17.56 ACCI also commented that neither the Surf Coast Shire nor the UNSW family violence clauses should be considered ‘a “model clause” for inclusion in all agreements’.^[56]

17.57 ACCI suggested that the most appropriate approach to addressing family violence in this context is through workplace policies and practices, rather than through mandatory inclusion of family violence clauses in formalised enterprise agreements.

17.58 The Queensland Law Society opposed the inclusion of family violence clauses in enterprise agreements on the basis that ‘the relevant legislation is sufficient to protect these rights’. ^[57]

Education, training and awareness raising

17.59 Most stakeholders also emphasised the need for family violence clauses to be underpinned by an education campaign.^[58] For example, Women’s Health Victoria expressed the view that:

Education should include training and awareness raising about the reasons for including a family violence clause, how a workplace can support employees who might be experiencing family violence, and how employees can support their colleagues that are experiencing family violence.

Without a wider training and awareness raising program, the inclusion of family violence clauses in enterprise agreements has the potential to do harm, particularly in workplaces that are not safe, respectful or supportive of gender equity.^[59]

17.60 Several stakeholders supported the development of complementary policies, guidelines and other material.^[60] For example, both ACCI and the AHRC suggested the development of a guide in relation to family violence clauses in enterprise agreements. ACCI noted that:

The Fair Work Ombudsman (FWO) publishes Best Practice Guides (and often consults with industry and unions) on various topics and could include information on types of clauses which may be considered by employers and employees. Whilst no one-size fits all clause is appropriate, ACCI would support additional information to be published by the FWO for the benefit of employers and employees when considering bargaining or formulating policies.^[61]

17.61 Similarly, the AHRC recommended that such a guide could include existing and model clauses and could be drafted by FWA, in consultation with the ACTU, peak employer bodies, and experts in the field of family violence.^[62]

17.62 In consultations, the ADFVC indicated that as part of the Domestic Violence Workplace Rights and Entitlements Project it is developing, with unions and employer organisations, a set of model workplace information and training resources for staff, human resources personnel, union delegates and supervisors.

ALRC’s views

17.63 The ALRC expressed its view in relation to the appropriateness of amending the NES to provide for minimum statutory entitlements in Chapter 16. The ALRC’s reasoning with respect to amendments to the NES was reinforced by several of the submissions made in response to the issue of family violence clauses in enterprise agreements, in particular those noting the effect of leaving the provision of family violence-related entitlements to enterprise bargaining.

17.64 In addition, in light of the relatively low proportion of the workforce covered by enterprise agreements, the ALRC notes the limited effect family violence clauses in enterprise agreements may have on a substantial number of employees.

17.65 However, in addition to amendments to the NES, or in the event that the NES are not amended to provide for flexible working arrangements and family violence leave, the ALRC considers that family violence clauses in enterprise agreements are likely to serve an important function and to increase the safety of employees experiencing family violence. Including family violence clauses in enterprise agreements would recognise and address the impact of family violence on employees and workplaces, provide a basis upon which employer and employees can work together and provide enforceable entitlements.

17.66 While the ALRC recognises the potential limits of leaving the negotiation of family violence clauses to enterprise bargaining, the ALRC also acknowledges the benefits of such agreements as, given they are negotiated at an individual workplace level, the inclusion of a family violence clause will necessarily be the product of agreement between the employer and employees (or employee organisations) as to the nature and content of the clause, in light of the specific circumstances of the workplace.

Minimum requirements

17.67 The ALRC considers that there are several basic requirements family violence clauses should contain but considers other matters may be more appropriately decided by the Government, unions, employer organisations and employees/employers. The basic requirements should include provisions in relation to:

• verification of family violence;

• confidentiality;

• reporting, roles and responsibilities;

• flexible work arrangements; and

• some form of paid leave.

17.68 The ALRC does not consider that the Fair Work Act should be amended to provide that it is mandatory for a family violence clause to be included in enterprise agreements. However, the ALRC does consider that the Government, unions and employer organisations should encourage the inclusion of family violence clauses in enterprise agreements and that agreements should, at a minimum, provide for the requirements outlined above.

Education, awareness and guidance

17.69 The ALRC acknowledges that no one family violence clause will be appropriate to suit all workplaces. While such entitlements need to be clear and enforceable, clauses must also be sufficiently flexible to allow businesses to meet their particular needs. Therefore the ALRC suggests the development of a number of model family violence clauses.

17.70 The ALRC also suggests that the Government should provide ongoing funding to bodies such as the ADFVC to continue to improve the knowledge and capacity of unions and employer organisations to support employees experiencing family violence, including through provision of training and resources as well as the development of model family violence clauses appropriate in a range of businesses and industries.

17.71 In addition, the ALRC proposes that the FWO should develop a guide to negotiating family violence clauses in enterprise agreements, in consultation with the ADFVC, the ACTU and employer organisations. The guide should include information about where and how a clause could be included in an enterprise agreement, what it could encompass and how it could interact with existing workplace policies and initiatives. Importantly, education and training with respect to family violence clauses in enterprise agreements should form part of the national education campaign recommended in Chapter 14.