Once you have made it through the Good Faith Bargaining process and have a proposed agreement which has been negotiated, the next step is to ask employees to vote on it. This sounds rather simple, however even simple questions can be become quite procedurally complex. This article will guide you through the requirements prior to and when conducting vote to ensure that you are compliant.
Legislative requirements
Before you can get employees to vote, you need to ensure you have complied with several steps with are set out under the Fair Work Act 2009 (Cth) (FW Act).
1. Disclosure of beneficial terms
As part of the bargaining process, if an employer will, or can reasonably be expected to receive or obtain a benefit due (either directly or indirectly) to the operation of one or more terms of the agreement, this must be disclosed. Likewise, bargaining representatives must also disclose any beneficial terms under the proposed agreement which they will receive.
A benefit for the purpose of this requirement is defined as "any financial benefit other than a financial benefit that is received or obtained in the course of the employer's business; or prescribed by the Regulations". This includes directors' fees, commissions or share distributions.
If there are benefits which must be disclosed, the employer must prepare a Disclosure Document, in accordance with the form at Schedule 2.1.A of the Fair Work Act Regulations which:
- identifies the beneficial term in the agreement;
- names each beneficiary;
- describes the nature and amount of each benefit in relation to each beneficiary; and
- includes any other relevant requirement prescribed by the Regulations (eg. the name of the person who will or can reasonably be expected to provide the benefit (if known by the employer)).
If a Disclosure Document is required, the employer (and if applicable, the bargaining representative organisation) must take all reasonable steps to ensure that the employees employed, who at the time will be covered by the agreement, are given a copy of the Disclosure Document a reasonable time before the voting process commences or at minimum are given access to a copy of the document a reasonable time before the voting process starts and have access to that copy until the voting process starts.
Although this requirement is a civil penalty provisions and there are consequences for failure to comply, a contravention of the disclosure requirements will not prohibit the approval of a proposed agreement by the Fair Work Commission (FWC).
2. Reasonable steps to explain terms
In addition to issuing any Disclosure Document, an employer must take all reasonable steps to ensure that:
- the terms of the agreement, and the effect of those terms, are explained to the employees employed at the time who will be covered by the agreement; and
- the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of those employees.
Enterprise Agreements can be lengthy and complicated. The vast majority of employees will have no background in IR law and may have never previously been involved in bargaining. Even where employees have active bargaining representatives, an employer may collaborate with the bargaining representative on the provision of information, but the onus remains on the employer to ensure that the terms of the agreement are explained. This includes consideration of barriers which may exist for some employees to properly understand the terms and conditions that will apply to them, for example employees from culturally and linguistically divers backgrounds, young employees, or employees who did not have a bargaining representative.
Whether employees have understood the terms of an agreement will be a relevant consideration for the Fair Work Commission, as to whether the agreement has been genuinely agreed.
A good way to ensure this material is accessible and meet the requirement for "all reasonable steps" to be taken, is to provide links on the company intranet, email material directly to employees, and/or print copies of relevant documents which can be collected in the office. The most efficient method will depend on the size and makeup of your organisation.
An employer must not knowingly or recklessly make a false or misleading representation in the document that employees are given a copy of or access to. This includes if you have accidentally made false representations due to a lack of understanding and subsequently become aware, you should clarify this.
3. Additional requirements
The FW Act prescribes a few additional requirements Under section 180A of the FW Act, there are additional requirements for a proposed multi-enterprise agreement. In these circumstances, an employer must not request that employees approve the agreement by vote unless
- each bargaining representative for the enterprise agreement that is an employee organisation has provided written agreement to the request being made; or
- a voting request order from the FWC permits the employer to make the request.
It may be appropriate to seek a voting request order where one or more of the employ organisations or bargaining representatives have failed to provide written agreement which is unreasonable in the circumstances.
Voting
Once these steps have been taken, it's time to vote!
To commence a vote, the first step is for the employer to make a request for the employees to approve the agreement by voting for it, subject to the requirement that a request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) was given.
How do we vote?
There is no prescriptive method for how a vote should be held. This is at the discretion of the employer and will likely depend on the composition of your workforce. Voting could be done by postal vote, online or even by a show of hands if an in-person vote is practical. What is important is that employees know the time, place and method of the vote (i.e. any information they need to cast an effective ballot).
Prior to recent amendments to the FW Act under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, a seven calendar day "access period" was required immediately before the vote commenced.
All the information required to be provided to employees must have at least must be accessible to employees by the start of the access period, as well as any incorporated material (policies or Awards referred to in the Agreement). No further changes to terms and conditions were permitted during access period.
Although the access period has been removed, there is little practical difference between the requirements employers must meet now. The Statement of Principles of Genuine Agreement (the Statement) set out matters to be taken into account by the FWC when determining whether an enterprise agreement as been "genuinely agreed".
The Statement specifies that employers "should provide employees with a reasonable opportunity to consider a proposed enterprise agreement before voting on it", which is satisfied by the provision of a full copy of the agreement and a full copy of any other material incorporated by reference in the agreement. at least 7 full calendar days before the day on which voting starts OR such other reasonable time period as is agreed with one or more employee organisation(s) acting as bargaining representative(s) for a significant proportion of the employees to be covered by the agreement.
An agreement is made when a majority of those employees who cast a valid vote approve the agreement. The vote is a yes or no vote, which means that employees vote for the agreement as a whole, not only terms which apply to them. Any discussion on specific terms is to occur in the bargaining stage, not at the voting stage. The practical effect of this is that many employees will vote up (or down) terms that don't apply to them.
Who gets to vote?
At a high-level, employees who are employed at the time of the request and who will be covered by the agreement are permitted to vote.
There has been some Commission and judicial consideration of how this applies to casual employees. Casuals are certainly contemplated by the Fair Work Act with respect to bargaining, as evidenced by section 216DC(3AC). A causal employee by definition has no firm advance commitment to ongoing work. Many industries and sectors routinely engage employees in casual positions for significant periods of time and therefore despite being a casual, they may continue to be affected by the terms and conditions of an agreement for years to come. In particular, this has been a matter of consideration for the university sector which typically engage casual sessional employees across semesters.
In the FWCFB matter of Kmart Australia Ltd v RFFWUI [2019] FWCFV 7599 it was determined that in order for a casual employee to be entitled to vote upon an enterprise agreement, the casual employee must have performed work for the employer during the seven-day access period. The voting cohort does not crystallise until the end of the access period.
These matters continue to be a question in front of the Commission, most recently in Southern Cross University's application for approval of its enterprise agreement. Approval of the agreement was opposed by the NTEU on several grounds, including the argument that casuals who had voted were not employed at the relevant time, being the access period. The NTEU submitted that the relevant casuals were employed by the hour and could not be described as ongoing or "employed at the time" as required by the legislation.
Southern Cross University argued that it was not necessary to prove "in respect of each casual employee that they worked at the relevant times. [It] submitted that it is sufficient to demonstrate that the terms of employment of the casual employees subsist across the relevant periods."
The Commissioner determined that the relevant casuals had been "offered and accepted ongoing employment for the duration of a ‘project’ or ‘assignment’ being in this case the relevant term/s, session/s, or other defined period set out in the contract" and therefore they were "employed at the time" for the purposes of section 181. This decision seemingly expands the cohort beyond Kmart and an appeal has been lodged against this decision which is yet to be heard.
There are differences in this process for multi-employer bargaining to be aware. For multi-employer bargaining, an agreement is made where the majority of the employees, of at least one of the employers who will be covered by the agreement, who cast a valid vote have approved the agreement (the agreement can then be varied to expressly cover only the employer/employees who approved the agreement).
A Greenfields agreement is made when it has been signed by each employer and each employee organisation that the agreement is expressed to cover.
If the majority vote up an enterprise agreement, the next step is to apply to the Commission for approval, which must be done within 14 days. If the majority vote no, bargaining will continue. There is no maximum number of votes which can be held.
Our next article will consider the approval process by the Commission and the relevant considerations and criteria to be approved, including what constitutes genuine agreement and the BOOT test.
This article has been updated to reflect recent amendments to the Fair Work Act under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022.