Fair Work Amendment (State Referrals and Other Measures) Act 2009 (124 of 2009)

Schedule 2   Transitional matters related to State referrals under Division 2B of Part 1-3 of the Fair Work Act 2009

Part 1   Amendment of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

68   After Part 4 of Schedule 7

Insert:

Part 4A - Transitional provisions to apply the better off overall test to enterprise agreements that cover Division 2B State award covered employees

20A Application of better off overall test to making of enterprise agreements that cover Division 2B State award covered employees

(1) This item applies in relation to an enterprise agreement made on or after the Division 2B referral commencement, if one or more of the employees covered by the agreement is a Division 2B State award covered employee.

Non-greenfields agreements

(2) Despite section 193 of the FW Act, if the enterprise agreement is not a greenfields agreement, the agreement passes the better off overall test under that section only if:

(a) FWA is satisfied as referred to in subsection (1) of that section, and paragraph (2)(b) of item 18 of this Schedule, in relation to the agreement (to the extent that those provisions are applicable); and

(b) FWA is satisfied, as at the test time, that each Division 2B State award covered employee, and each prospective Division 2B State award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant Division 2B State award applied to the employee.

Note: Section 193 of the FW Act and item 18 of this Schedule deal with testing enterprise agreements against other instruments (such as modern awards). An enterprise agreement to which this subitem applies will not be tested against one or more such other instruments in relation to Division 2B State award covered employees.

Greenfields agreements

(3) Despite section 193 of the FW Act, if the enterprise agreement is a greenfields agreement, the agreement passes the better off overall test under that section only if:

(a) FWA is satisfied as referred to in subsection (3) of that section and paragraph (3)(b) of item 18 of this Schedule in relation to the agreement (to the extent that those provisions are applicable); and

(b) FWA is satisfied, as at the test time, that each prospective Division 2B State award covered employee for the agreement would be better off overall if the agreement applied to the employee than if the relevant Division 2B State award applied to the employee.

Note: Section 193 of the FW Act and item 18 of this Schedule deal with testing enterprise agreements against other instruments (such as modern awards). An enterprise agreement to which this subitem applies will not be tested against one or more such other instruments in relation to prospective Division 2B State award covered employees.

FWA may assume employee better off overall in certain circumstances

(4) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant Division 2B State award applied to that class, FWA is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.

20B Application of better off overall test to variation of enterprise agreements that cover Division 2B State award covered employees

(1) This item applies in relation to a variation of an enterprise agreement if:

(a) the variation is made on or after the Division 2B referral commencement; and

(b) one or more of the employees covered by the agreement is a Division 2B State award covered employee.

(2) Despite subsections 211(4) and (5) of the FW Act, subitems (3) and (4) apply in relation to the variation for the purposes of FWA being satisfied that the agreement as proposed to be varied passes the better off overall test.

Modification of the better off overall test

(3) An enterprise agreement as proposed to be varied passes the better off overall test only if:

(a) FWA is satisfied, as at the test time, as mentioned in subitem 19(3) of this Schedule in relation to the agreement as proposed to be varied (to the extent that subitem 19(3) is applicable); and

(b) FWA is satisfied, as at the test time, that each Division 2B State award covered employee, and each prospective Division 2B State award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant Division 2B State award applied to the employee.

Note: Item 19 of this Schedule deals with testing enterprise agreements as proposed to be varied against other instruments (such as modern awards). A variation to which this subitem applies will not be tested against one or more such other instruments in relation to Division 2B State award covered employees.

FWA may assume employee better off overall in certain circumstances

(4) For the purposes of determining whether the enterprise agreement as proposed to be varied passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant Division 2B State award applied to that class, FWA is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.

FWA must disregard individual flexibility arrangement

(5) For the purposes of determining whether an enterprise agreement as proposed to be varied passes the better off overall test, FWA must disregard any individual flexibility arrangement that has been agreed to by a Division 2B State award covered employee and his or her employer under the flexibility term in the agreement.

20C Definitions

In this Part:

Division 2B State award covered employee , for an enterprise agreement, means an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a Division 2B State award (the relevant Division 2B State award ) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

prospective Division 2B State award covered employee , for an enterprise agreement, means a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a Division 2B State award (the relevant Division 2B State award ) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

test time :

(a) for the purposes of item 20A - means the time the application for approval of the enterprise agreement by FWA was made under section 185 of the FW Act; and

(b) for the purposes of item 20B - means the time the application for approval of the variation of the enterprise agreement by FWA was made under section 210 of that Act.

68A At the end of Schedule 7

Add:

Part 7 - Transitional provision about the operation of the better off overall test if a transitional pay equity order applies

28 Operation of better off overall test if a transitional pay equity order applies to employer

(1) This item applies to an enterprise agreement, or a variation of an enterprise agreement, if:

(a) an application for approval of the agreement or variation has been made under the FW Act; and

(b) FWA must decide whether the agreement, or the agreement as proposed to be varied, passes the better off overall test; and

(c) an employer covered by the agreement, or the agreement as proposed to be varied, is an employer to which a transitional pay equity order applies; and

(d) an employee covered by the agreement, or the agreement as proposed to be varied, is an affected employee of the employer referred to in paragraph (c).

(2) For the purposes of determining whether the affected employee would be better off overall if the agreement, or the agreement as proposed to be varied, applied to the employee than if the relevant modern award applied to the employee, the base rate of pay payable under the relevant modern award to the employee is taken to be increased so that it is equal to the amount payable to the employee under the transitional pay equity order.

Note: For the meanings of transitional pay equity order and affected employee , see item 2 of Schedule 2.