2 min read

FWC lifts its game finalising dismissal claims – but drops the ball on EBA approvals

By Charles Power

The 2017-2018 annual report of the Fair Work Commission (FWC) discloses the continuing effectiveness of the Fair Work Act unfair dismissal scheme in resolving claims.

Of the unfair dismissal applications made in 2017-2018, 84% were finalised without a formal hearing.

Most unfair dismissal claims settle by agreement providing for the payment of money by the employer to the employee.

In 84% of the settlements in 2017-2018, the payments were for less than $10,000.

Only one in five of the cases determined by the FWC resulted in a finding that the dismissal was unfair. The median amount awarded as compensation in 2017–18 was $6,971 (i.e. 4.3 weeks’ pay of the applicant).

However, the FWC is taking longer to finalise applications to approve enterprise agreements.

It attributes this to a significant increase in applications identified as potentially not meeting the statutory requirements.

In these cases, the employer is asked to give undertakings about how it will implement the agreement. This avoids the more costly and time-consuming process of recommencing bargaining.

However, the FWC will seek the views of each known bargaining representative for the agreement about the proposed undertaking and verify that it will not likely cause financial detriment to any employee covered by the agreement. This takes time!

The FWC cannot accept an undertaking unless the effect of accepting it is not likely to result in ‘substantial changes’ to the agreement.

The FWC also pointed to:

  • an unanticipated, and largely unprecedented, spike in applications to approve agreements (the number of applications lodged in December 2017 was 50% higher than the 2016–17 average);
  • an almost 300% increase in applications to vary agreements;
  • a 29% increase in the finalisation of applications to terminate agreements; and
  • “evolving case law” as to how the statutory requirements, including the BOOT and pre-approval steps, are to be applied.

The FWC President also extended some blame to the Federal Government in failing to enact the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017.

This legislation would end the requirement for four yearly reviews of modern awards by the FWC and enable the FWC to overlook minor procedural or technical errors when approving an enterprise agreement, if it is satisfied that those errors were not likely to have disadvantaged employee.

In its 2017-2018 report, the FWC referred to the diversion of administrative resources to keep more than 300 agreement applications in abeyance pending the enactment of this legislation, which is before a Senate Committee.

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