Workplace Relations Insights

17 March 2006

Multi-employer agreement certified

By Hedy Cray.

Key Points:
A Full Bench of the AIRC recently outlined the factors relevant to certification of a multi-business agreement.

On 17 February 2006, the Australian Industrial Relations Commission (AIRC) full bench (Watson SDP, Hamilton DP and Smith C) decided that the collective agreement between the Australian Education Union and various employers, the Early Childhood Teachers Multi-Employer Certified Agreement 2005, met the criteria for certification under the Workplace Relations Act 1996 (Cth) (PR968801).

Agreement's coverage of preschools

The Early Childhood Teachers Multi-Employer Certified Agreement 2005 covered preschools. Each preschool, which engaged a small number of employees, was usually governed by a voluntary committee of management elected each year from the parents. The preschools were regarded as small workplaces.

Framework of legislation for multi-business agreement

The Workplace Relations Act encourages enterprise-based agreements or individual agreements. Multi-business agreements can be certified only by a full bench of the AIRC when it is satisfied that the public interest test, as outlined in section 170LC(4), is met.

Section 170LC(4) provides:

"A Full Bench … must not certify a multi-business agreement unless it is satisfied that it is in the public interest to certify the agreement, having regard to:

(a)  whether the matters dealt with by the agreement could be more appropriately dealt with by an agreement, other than a multi-business agreement, under the Part; and

(b)  any other matter that the Full Bench considers relevant."

What is the "public interest"?

The Commission, in deciding that the public interest warranted the certification of the Early Childhood Teachers Multi-Employer Certified Agreement 2005, took into account the factors identified by the parties as reasons for entering into a multi-business agreement as the appropriate agreement.

The factors were:

  • the particular governance structure of preschools (outlined above)
  • the nature of preschools with their small number of employees and the fact that they are small workplaces
  • a critical shortage of qualified preschool teachers, making it difficult for young children in Victoria to participate in such education
  • provision in the agreement for better remuneration in order to retain and attract teachers to benefit both the children and the community; and
  • the assistance that the agreement would provide to the management committees in terms of greater certainty in administration.

Implications for employers after the WorkChoices Act 2005

The amendments to the Workplace Relations Act brought by the Workplace Relations Amendment (WorkChoices) Act 2005 retain the opportunity to make multiple business agreements under section 96F in accordance with the same public interest test outlined above.

The main change brought about by the WorkChoices Act is that approval of those multiple-business agreements is no longer in the hands of a full bench of the AIRC. It will be the Employment Advocate which will grant authorisation of the making or the variation of multiple business agreements. Application for authorisation then should be made to the Employment Advocate once the legislation is operative.

Although the Workplace Relations Act will still promote enterprise-based agreements, multiple employer agreements may be made and approved where the public interest test is met. Such agreements may be appropriate where they aid employers in staffing matters, and generally assist in administration, particularly where there are many small workplaces and benefits can be shown in terms of staff recruitment and retention, business administration and advantages to particular groups.

 

Thanks to Marilyn Pittard for her help in writing this article.

For further information, please contact Hedy Cray.

Disclaimer
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states or territories.