Fair Work Amendment (Variation of Enterprise Agreements) Regulations 2020 [F2020l00432] [2020] AUPJCHR 106 (1 July 2020)

• Fair Work Amendment (Variation of Enterprise Agreements) Regulations 2020 [F2020L00432]1
• Reduction in access period for variation of an enterprise agreement
• Summary of initial assessment
• Preliminary international human rights legal advice
• Rights to just and favourable conditions of work and freedom of association
• Committee's initial view
• Minister's response7
• Concluding comments
• International human rights legal advice
• Committee view

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Fair Work Amendment (Variation of Enterprise Agreements) Regulations 2020 [F2020L00432]^[1]

Purpose	This instrument temporarily reduces the period of time during which employees must have access to a copy of a proposed variation of an enterprise agreement, and before which employees must be notified of the details of the vote on the variation, from seven calendar days to one calendar day. The instrument commenced on 17 April 2020 and is repealed at the end of six months (unless a later time is prescribed)
Portfolio	Industrial Relations
Authorising legislation	Fair Work Act 2009
Disallowance	15 sitting days after tabling (tabled in the House of Representatives and the Senate on 12 May 2020). Notice of motion to disallow must be given by 12 August 2020 in the House of Representatives and the Senate[2]
Right	Work, freedom of association
Status	Concluded examination

1.24 The committee requested a response from the minister in relation to the instrument in Report 5 of 2020.^[3]

Reduction in access period for variation of an enterprise agreement

1.25 This instrument reduces the period of time during which employees must have access to a copy of a proposed variation of an enterprise agreement, and before which employees must be notified of the details of the vote on the variation, from seven calendar days to one calendar day before the vote. This amendment will be effective for six months after commencement (or for a later time if otherwise prescribed).

Summary of initial assessment
Preliminary international human rights legal advice

Rights to just and favourable conditions of work and freedom of association

1.26 By reducing the period of time during which employees must have access to, and be notified of a vote on, a proposed variation to an enterprise agreement, this instrument engages and may limit the right to freedom of association and just and favourable conditions of work.

1.27 The right to freedom of association includes the right to collectively bargain without unreasonable and disproportionate interference from the state. The right to just and favourable conditions of work includes the right to adequate and fair remuneration, reasonable working hours, leave, safe working conditions, and the right to join trade unions. These rights are protected by the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR).^[4]

1.28 As recognised in the statement of compatibility, the interpretation of these rights is informed by International Labour Organization (ILO) treaties, including the ILO Convention of 1948 concerning Freedom of Association and Protection of the Right to Organize (ILO Convention No. 87) and the ILO Convention of 1949 concerning the Right to Organise and Collective Bargaining (ILO Convention No. 98), which protects the right of employees to collectively bargain for terms and conditions of employment.^[5] The Human Rights (Parliamentary Scrutiny) Act 2011 does not include the International Labour Organization (ILO) Constitution or ILO conventions on freedom of association and the right to bargain collectively in the list of treaties against which the human rights compatibility of legislation is to be assessed. Nonetheless, these ILO standards and jurisprudence are relevant to the mandate of the committee as they are the practice of the international organisation with recognised and long-established expertise in the interpretation and implementation of these rights. It is a specialised body of law which can inform the general guarantees set out in the human rights treaties. In the current case, ILO Convention No. 87 is directly relevant, in that both article 22(3) of the ICCPR and article 8(3) of the ICESCR expressly state that measures which are inconsistent with the guarantees provided for in ILO Convention No. 87 will not be consistent with the right to freedom of association. The UN Committee on Economic, Social and Cultural Rights has also considered ILO Conventions No.87 and 89 when assessing Australia's compliance with Article 8 of the ICESCR.^[6]

1.29 The initial analysis considered that further information was required to assess the compatibility of this measure with the rights to freedom of association and just and favourable conditions of work.

Committee's initial view

1.30 The committee noted that this measure engages and may limit the right to freedom of association and just and favourable conditions of work. These rights may be subject to permissible limitations if they are shown to be reasonable, necessary and proportionate.

1.31 The committee sought the minister's advice as to the compatibility of this measure with the right to freedom of association and just and favourable conditions of work.

Minister's response^[7]

1.32 The minister advised:

In response to the Committee's concerns, I note that there are a range of safeguards in the Fair Work Act 2009. The Fair Work Commission must be satisfied when approving a variation that the employees have genuinely agreed to the variation and that other important safeguards have been observed, including that the employer has taken all reasonable steps to explain the terms of the variation and their effect to employees. This explanation must be provided in an appropriate manner taking into account the employees' particular circumstances and needs. These requirements operate alongside a number of other existing protections, including that a variation passes the Better Off Overall Test and does not contravene the National Employment Standards.
When the economic effects of the pandemic became clear, urgent industry wide award changes were made by the Fair Work Commission within days of applications for variations being made. I considered it important that those covered by enterprise agreements should also not be subject to unnecessary delays.
The Regulations recognise that the seven day access period before employees may vote on a proposed variation could present a barrier to employers and employees agreeing to implement changes quickly in response to the impacts of the COVID-19 pandemic, with a view to preserving business viability and jobs.
The Regulations recognise that in the very challenging circumstances arising because of the pandemic, a lesser access period can suffice. I note in this regard that employees can continue to seek and receive advice from their union (or other representative) during the period which must include a minimum of one clear calendar day, disregarding the day of the notification and the vote. If notice is given on one day, the earliest a vote could be taken is the day following the next day, if only the minimum period is used.
I note also that agreement variations commonly arise out of prior discussions between employers and employees before commencement of the formal statutory process. Of course, employers must make the case for change, and employees must still vote to agree. In many instances periods of notice can, and have continued to, be given beyond one day, and voting has occurred over a period of days.
The reduced access period set by the Regulations operates as a minimum (so more than one day's notice can be provided), and this is a temporary, time-limited measure. To the extent that the Regulations may limit the right to right to freedom of association, or the right to just and favourable conditions of work, they are reasonable, necessary and proportionate to provide employers and employees with the flexibility to implement agreed workplace changes quickly for the purpose of the legitimate objective of keeping businesses operating and saving jobs in the context of the pandemic.
Arising from discussions with various stakeholders and the Senate cross bench I have indicated that changes to the regulation are appropriate, especially in relation to the length of time variations approved after a reduced access period can extend. I am also reviewing the operation of the regulation generally as I indicated I would when the regulation was made.

Concluding comments

International human rights legal advice

1.33 The minister has advised that the objective of reducing the minimum access period from seven days to one, is to provide employees and employers with the flexibility to implement agreed workplace changes quickly, in order to be able to keep businesses operating and to save jobs in the context of the pandemic. The minister has explained that the seven day access period could present a barrier to employers and employees agreeing to implement changes quickly. Preserving business viability and jobs is likely to constitute a legitimate objective for the purposes of international human rights law, and if the seven day period worked as a barrier to making swift changes that could affect business viability during this time, reducing this time may be rationally connected to that objective.

1.34 In relation to the proportionality of the measure, the minister has advised that this is a temporary change, operating only for six months, and the reduced access period operates only as a minimum, so a workplace can still choose to give more than one day's notice. The minister also notes that during the reduced access period employees can still continue to seek and receive advice from their unions or other representative. In addition, the minister advises that there are a range of safeguards in the Fair Work Act 2009 (Fair Work Act) which requires that any variations made to an enterprise agreement must be approved by the Fair Work Commission. In approving a variation the Fair Work Commission needs to be satisfied of a number of matters, including that employees have genuinely agreed to the variation, the employer has taken reasonable steps to explain the terms of the variation and their effect to employees, and that the variation passes the Better Off Overall Test and does not contravene the National Employment Standards.

1.35 The existing protections in the Fair Work Act constitute important safeguards and assist in protecting the rights of employees to just and favourable conditions of work. Of particular importance is that the Fair Work Commission cannot generally agree to the variation of an enterprise agreement unless it passes the Better Off Overall Test, which requires that the changes must result in employees being better off than if the changes weren't applied.^[8] However, the Fair Work Commission may still approve an agreement that does not pass the Better Off Overall Test if the Commission is satisfied 'that, because of exceptional circumstances, the approval of the agreement would not be contrary to the public interest'.^[9] The Fair Work Act gives an example of this as being 'where the agreement is part of a reasonable strategy to deal with a short-term crisis in, and to assist in the revival of, the enterprise of an employer covered by the agreement'.^[10] As such, it would appear that in the context of the COVID-19 pandemic, the Better Off Overall Test may not operate to specifically safeguard employees' rights.

1.36 In addition, while it is correct that the amendments only affect the minimum time required for the access period, and in many instances employers may choose to provide a longer period of time, in assessing the regulations for compatibility with human rights it is necessary to consider what they empower, noting that while many employers may choose to give a longer access period, the law now provides it is sufficient for the employer to give one calendar day's notice. It is relevant to proportionality that these changes are time-limited, applying only for six months (from 17 April 2020 to 17 October 2020). However, it would appear that any changes made to an enterprise agreement following these revised processes, would continue for the life of the agreement, which may last a number of years. As such, while these amending regulations are temporary, any changes made as a result of them could have ongoing effects. In this respect, it is significant that the minister has indicated that changes may be made to the length of time variations approved after a reduced access period can extend. Such changes would assist with the proportionality of the measure.

1.37 In assessing proportionality it is also important to consider whether the measures are sufficiently circumscribed. In this respect, it is noted that the changes made by the regulations apply to all workplaces, including those which have not experienced a downturn in business as a result of the pandemic. Noting that the measure is designed to keep businesses operating and saving jobs in the context of the pandemic, it would appear that the measure as it currently applies may not be sufficiently circumscribed.

1.38 Finally, in relation to the impact of the measure on the ability of workers to collectively bargain (and therefore their right to freedom of association), the minister's response only states that during the reduced access period employees can still continue to seek and receive advice from their unions or other representative. However, it remains unclear that the provision of a minimum one calendar day for review and notification of a vote on a proposed variation to an enterprise agreement would constitute a sufficient period of time for employees to exercise their right to bargain collectively. It is noted that one calendar day would include weekends and public holidays, and could result in employees being required to vote on an agreement that affects their working conditions without having had an opportunity to fully understand the proposal, discuss it with other employees or their union, or to negotiate. For example, were an employee to be notified of a proposed variation on a Saturday evening and that a required vote is scheduled for the following Monday morning, it is unclear how they could seek advice from their union or discuss the matter with other employee during the intervening period, particularly if they were not working on the Sunday.

1.39 In conclusion, reducing the access period for employees from seven calendar days to one calendar day engages and limits the right to freedom of association and just and favourable conditions of work. The rights may be subject to permissible limitations where the limitation pursues a legitimate objective, is rationally connected to that objective and is a proportionate means of achieving that objective. In the context of the COVID-19 pandemic, the measure seeks to achieve the legitimate objective of keeping businesses operating and saving jobs. Giving employers and employees the flexibility to implement agreed workplace changes quickly may also be rationally connected (that is, effective to achieve) this objective. However, as the regulations are drafted, it is not clear that the measure is proportionate to the stated objective. This is on the basis of the potentially significant limitation on the right of employees to collectively bargain; the fact that the Fair Work Commission is not required to apply the Better Off Overall Test during short-term crises; the fact that any changes made to an enterprise agreement under a reduced access period could last for longer than the changes made to the access period itself; and the fact that these changes apply in relation to all workplaces and not only those employers experiencing a downturn in their revenue as a result of the pandemic. Therefore, on the basis that the measure does not appear to be sufficiently circumscribed or contain sufficient safeguards, there is a risk that these amending regulations impermissibly limit the rights of employees to freedom of association and just and favourable conditions of work.

Committee view

1.40 The committee thanks the minister for this response. The committee notes that this instrument temporarily reduced the period of time during which employees must have access to a copy of a proposed variation of an enterprise agreement, and before which employees must be notified of the details of the vote on the variation, from seven calendar days to one calendar day.

1.41 The committee considers that this measure seeks to achieve the vitally important and legitimate objective of keeping businesses operating and saving jobs during the COVID-19 pandemic; giving employers and employees the flexibility to quickly implement agreed workplace changes. The committee also considers that important safeguards apply that assist with the proportionality of this measure, including that the measure is temporary and the existing protections in the Fair Work Act 2009 continue to apply. However, the committee notes that, as drafted, there would be some risk that the measure may not be sufficiently circumscribed or contain sufficient safeguards to adequately protect the right to freedom of association and just and favourable conditions of work.

1.42 However, the committee notes that this temporary measure was repealed on 12 June 2020, with the registration of the Fair Work Amendment (Variation of Enterprise Agreements No. 2) Regulations 2020 [F2020L00702], meaning that the seven-day variation access period has now been restored. As such, the committee makes no further comment.

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[1] This entry can be cited as: Parliamentary Joint Committee on Human Rights, Fair Work Amendment (Variation of Enterprise Agreements) Regulations 2020 [F2020L00432], Report 8 of 2020; [2020] AUPJCHR 106.

[2] In the event of any change to the Senate or House's sitting days, the last day for the notice would change accordingly.

[3] Parliamentary Joint Committee on Human Rights, Report 5 of 2020 (29 April 2020), pp. 38-41.

[4] International Covenant on Civil and Political Rights, article 22; International Covenant on Economic, Social and Cultural Rights, articles 7 and 8.

[5] The Freedom of Association and Protection of the Right to Organize (ILO Convention No. 87) is expressly referred to in article 22(3) of the International Covenant on Civil and Political Rights and article 8(3) of the International Covenant on Economic, Social and Cultural Rights.

[6] See, UN Committee on Economic Social and Cultural Rights (UNCESCR), Concluding Observations on Australia, E/C.12/AUS/CO/5 (2017), [29]-[30].

[7] The minister's response to the committee's inquiries was received on 10 June 2020. This is an extract of the response. The response is available in full on the committee's website at: https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Human_Rights/Scrutiny_reports.

[8] Fair Work Act 2009, section 193.

[9] Fair Work Act 2009, subsection 189(2).

[10] Fair Work Act 2009, subsection 189(3).