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Many businesses are facing a significant downturn in business and cashflow as a result of the COVID-19 pandemic and may be asking what options there are for varying their enterprise agreement. In this Q&A we answer your frequently asked questions about enterprise agreements during the current crisis and discuss the recent changes to legislation. 

What are the recent legislative changes relating to enterprise agreements and COVID-19?

Prior to voting on a variation, an employer must ensure that an access period occurs. During the access period, the employer is required to take all reasonable steps to circulate the proposed variation, and explain the changes and the effect of those changes.

Previously the access period was seven days long. The Fair Work Amendment (Variation of Enterprise Agreements) Regulations 2020 shortens the access period from one week to one day. Importantly, employees are still required to have genuinely agreed to the proposed variation.

Please watch our Variations to your Enterprise Agreement – Responding to COVID-19 webinar for further information on this topic and much more. 

How long will the changes last?

The Regulations operate for six months from 17 April 2020 and are automatically repealed at that time.

What changes can be made to an enterprise agreement by a variation?

Workplaces may wish to implement particular flexibilities aimed at preserving the ongoing viability of businesses and preserving jobs during the COVID-19 pandemic.

Examples of enterprise agreement variations that may be agreed upon between employers and employees include:

  • delaying or cancelling future wage increases that are scheduled to be paid under the terms of the agreement;
  • implementing less onerous consultation requirements for workplace changes;
  • implementing more flexible working hours arrangements;
  • removing restrictions on part-time employment;
  • implementing more flexible leave arrangements; and
  • giving the employer more rights to direct employees to take accrued leave.

An employer and its employees covered by an enterprise agreement may wish to consider varying the agreement to include a COVID-19 schedule that overrides any inconsistent provisions in the agreement.

Can I use Individual Flexibility Arrangements instead of varying my agreement?

An Individual Flexibility Arrangement (IFA) is a written agreement that allows an employee and employer to agree to an arrangement that varies the effect of some terms of an award or agreement that suit the needs of both the employer and employee. Common variations include when work can be performed and the overtime rates payable.

Any agreed variation must be agreed individually, and must leave the employee ‘better off overall’, so it is most likely that an IFA will not be as effective as varying an enterprise agreement to address the impact of the COVID-19 pandemic in the workplace.

I have already lodged an application to approve a new agreement but do not want to proceed. What can I do?

If an application for approval of a new enterprise agreement has been lodged, but not yet approved, may be withdrawn. The applicant should get in contact with the FWC or contact Ai Group Workplace Lawyers or call the Workplace Advice Line on 1300 55 66 77.

The same process applies if wanting to cancel a lodged variation to an enterprise agreement with the Fair Work Commission (FWC). 

Who has to agree to a variation made due to COVID-19 ?

The employer and the majority of employees who are covered by the enterprise agreement must agree to any variation. A vote is to be undertaken to gain approval.

What pre-approval steps must be taken for any variation?

Before employees vote on a variation to their agreement, the employer must take the same steps as required to make a new enterprise agreement including:

  • Notifying employees of the ballot (included when and how the vote will be conducted;
  • Providing a clear access period, where the variation is circulated and explained. Note – during COVID-19, the access period is only 1 day, not 7 days.

When must the application for approval be made?

An application to approve the variation of an agreement must be lodged within 14 days of the successful vote using the relevant forms provided by the FWC.

During the COVID-19 pandemic, the FWC may consider waiving the requirement for an application to be accompanied by a witnessed statutory declaration.

What does the FWC consider when approving a variation?

The requirements for varying an agreement are similar to those for approving a new agreement.

Any variation to an enterprise agreement needs to pass the Better Off Overall Test (BOOT), which involves a comparison between the terms of the enterprise agreement and the terms of the relevant award/s, and meet various other requirements set out in the Fair Work Act 2009.

This means that businesses may be required to provide undertakings or submissions in the event that the FWC is concerned the agreement does not pass the BOOT.

Please contact Ai Group Workplace Lawyers or call the Workplace Advice Line on 1300 55 66 77 for any assistance.

How long will it take to get a variation approved?

The FWC has implemented a fast-track process for urgent applications to vary enterprise agreements to deal with the impacts of COVID-19. Applications can be filed by emailing COVID-19Applications@fwc.gov.au.

Please contact Ai Group Workplace Lawyers or call the Workplace Advice Line on 1300 55 66 77 for any assistance.

Further information

Please watch our Variations to your Enterprise Agreement – Responding to COVID-19 webinar for further information on this topic and much more. 

Our Member Advice NAT 036/20: New regulation to streamline enterprise agreement variations during the COVID-19 crisis can also be accessed for information about the recent changes to enterprise agreement legislation. 

In addition to the above, Ai Group Members can contact us or call the Workplace Advice Line on 1300 55 66 77 for assistance with enterprise agreements and other workplace matters. 

Coronavirus (COVID-19) advice and resources

Ai Group is continually publishing new COVID-19 advice and resources for employers:

  • Specific HR Resource Centre and Health & Safety Resource Centre content to assist members during the COVID-19 pandemic can be found here.
  • Dedicated COVID-19 member advice, industry news, resources and latest information can be found here
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