The Fair Work Act of 2009 governs the way in which employers and employees enter into an enterprise agreement, which is a legally binding agreement that sets out the terms and conditions of employment for a group of employees. In order for an enterprise agreement to be valid, it must be approved by the Fair Work Commission.
The approval process for an enterprise agreement is governed by a number of rules and regulations that are designed to ensure that the agreement is fair and reasonable for both the employer and the employees. One of the key requirements for approval is that the agreement must pass a “better off overall test,” which compares the terms and conditions of the agreement to the relevant award to ensure that employees are better off under the agreement.
Before an enterprise agreement can be approved, it must be lodged with the Fair Work Commission, along with a range of supporting documentation, including a bargaining representative declaration, a notice of employee representational rights, and a copy of the agreement itself. Once the agreement has been lodged, the Fair Work Commission will review the agreement and consider any objections or concerns that are raised by employees or other interested parties.
If the Fair Work Commission is satisfied that the agreement meets all of the requirements for approval, it will issue a decision approving the agreement. Once the agreement has been approved, it becomes legally binding and employers and employees are required to adhere to its terms and conditions.
It is important to note that the approval process for an enterprise agreement can be complex and time-consuming, and it is strongly recommended that employers seek expert advice and assistance in preparing and lodging an agreement. Failure to comply with the requirements of the Fair Work Act can result in serious consequences, including fines and legal action.
In summary, the Fair Work Act governs the way in which employers and employees enter into enterprise agreements, and the approval process for these agreements is designed to ensure that they are fair and reasonable for all parties involved. Employers should seek expert advice and assistance in preparing and lodging an enterprise agreement to ensure that it meets all of the requirements for approval and is legally binding.