Do Enterprise Agreements Expire

An IFA can be terminated either by a written agreement between the employer and the worker, or by the employer or worker by written notification. Modern rewards require 13 weeks` notice, but this may be different in an enterprise contract (but no more than 28 days). Once the negotiations are over and a draft enterprise agreement is completed, it must be voted on by the workers covered by the agreement. In this case, the parties had negotiated for several months without reaching an agreement. The union parties argued that the denunciation of the agreements would jeopardize the negotiation process and give Aurizon an advantage in the negotiations. Full Bench found that nothing was inherently inconsistent with the termination of an enterprise contract that had exceeded its nominal expiry date and the continuation of collective bargaining in good faith. While an enterprise agreement may be technically “outdated” after the expiry of the nominal expiry date, under the FW Act, an enterprise agreement ceases to exist and regulate the working relationship between the parties until it has been amended, terminated or replaced. A new enterprise agreement can only enter into force when the previous agreement has exceeded its nominal expiration date. For more information on how to negotiate in good faith and in companies that have proven themselves, see the Ombudsman`s Guide to Good Practice for Fair Work – improving productivity at work in negotiations. Before approving an enterprise agreement, the Fair Work Commission must ensure that approval of the agreement would not jeopardize the negotiations of one or more negotiators on a proposed enterprise agreement. However, an enterprise agreement also has several potential drawbacks: the rate of pay of a worker under an enterprise agreement must not be lower than the corresponding rate of pay under the modern bonus that would apply to the worker or to a national minimum wage scale. The trade union parties argued that the workers covered by the agreements objected to the termination of these agreements, as this would result in a reduction in the conditions of employment. Full Bench was not persuaded by this opinion that the Fair Work Act did not guarantee the terms of an expired contract in nominal terms.

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