In a move welcomed by the employer community, the Fair Work Commission (FWC) yesterday (12 April 2021) announced sharper new timeliness benchmarks for its approval of enterprise agreement applications.

The statement issued by FWC President Justice Iain Ross announced the internal benchmarks would take effect from 1 May 2021.

For ‘simple applications’, meaning agreements that are largely compliant and require no undertakings or follow-ups, the new target is for 50% to be approved within 10 working days and 95% within 20 working days.

This is a sharper turnaround than the current benchmarks of 50% within three weeks and 100% within eight weeks.

For ‘complex applications’, meaning those that require undertakings and/or follow-ups to be approved, the new target will be for 50% completion within 20 working days and 95% within 45 working days.

This is a strong improvement on the current benchmarks of 50% completion within 10 weeks and 100% within 16 weeks.

President Ross said a number of changes to the Commission’s administrative processes were being implemented to assist in improving timeliness.

“Changes have been made to the Commission’s lodgment and processing practices,” he said.

“Copies of agreements lodged for approval will no longer be redacted before being published on the ‘agreements in progress’ page on the Commission’s website, and the separate lodgment email and subsequent email relating to service will be merged and sent as one email.

“Agreement approval applications will be given the highest priority for processing upon receipt.”

In addition, the Commission will host webinars to engage with parties and provide guidance on changes arising to processes for enterprise agreements and timeliness benchmarks, and detail practical changes that have been made to relevant processes.

Employer response – ‘Small step in right direction’

AREEA welcomed the acknowledgment by the FWC President that the administrative tribunal’s enterprise agreement approval processes need to be faster.

While the FWC has marginally improved its performance over the past two calendar years, as recently as 2019 the median approval time for enterprise agreement approvals was 79 days. The anecdotal experience of large employers with ‘complex applications’ is that approvals could often extend several months.

“Employers have been saying for years that the unpredictable and often unreasonable timeframes for getting new enterprise agreements approved by the FWC is the key reason behind the dramatic fall in the use of enterprise bargaining,” Steve Knott, AREEA Chief Executive said.

“In 2010, there were 24,400 in-term enterprise agreements in Australia; today less than 9,600. There are deeply engrained issues within Australia’s enterprise bargaining system and new benchmarks announced today are a small step in the right direction.”

While welcoming the initiative, Mr Knott expressed ongoing concerns about the categorising of agreement applications into two groups – ‘compliant’ and ‘complex’.

“Categorising some agreements as ‘complex’ effectively gives FWC members an avenue to treat union agreements differently to those reached without unions or challenged by unions, irrespective of whether they were parties to bargaining,” Mr Knott said.

“The current culture within the FWC appears to be one of finding technical reasons to reject agreements reached without unions instead of giving primacy to the wishes of the parties to be covered by it.

“The FWC should not be waving through union agreements whilst forensically tearing apart non-union agreements. All agreements must pass the same tests including the Better Off Overall Test (BOOT).

“So called ‘complex applications’ often cover thousands of employees. Protracted approval of these agreements delays those employees receiving wage increases agreed to in bargaining.”

IR Reform Bill ‘a more effective solution’

It has been widely noted that the FWC’s new timeliness benchmarks are closely aligned with the 21-day statutory timeframe included in the Morrison Government’s Industrial Relations Omnibus Bill – a reform proposal that failed to secure support of the Senate last month (related story).

“The new targets also appear to reflect a welcome change of heart from the FWC, after it told the Government in February the 21-day benchmark was ‘unnecessary’,” Mr Knott said.

“The requirement to approve all new enterprise agreements within 21 days was an initiative AREEA put forward in last year’s industrial relations working groups, and one supported by other employer groups.

“Even the ACTU supported a 14-day approval benchmark, albeit only for union-backed agreements.

“A more sensible and effective approach would be to legislate a 20 or 21-day benchmark for all new agreements, with no ‘pea and thimble’ sorting applications into ‘compliant’ and ‘complex’ categories, and a requirement to provide an explanation in cases where this timeframe was not able to be met.

“This was the proposal included in the IR Reform Bill and the FWC has made it clear with its new benchmarks that such a target would be well within its remit and capabilities.”

To share your experiences with the FWC’s EA approvals processes and/or discuss any of the matters within this article, contact [email protected].