Fair Work Amendment (Terminating Enterprise Agreements) Bill 2017 [2017] AUSStaCSBSD 335 (18 October 2017)

• Fair Work Amendment (Terminating Enterprise Agreements) Bill 2017
• Retrospective application 45

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Fair Work Amendment (Terminating Enterprise Agreements) Bill 2017

Purpose	This bill seeks to amend the Fair Work Act 2009 to narrow the circumstances under which an enterprise agreement that has passed its nominal expiry date can be terminated
Sponsor	Mr Andrew Wilkie MP
Introduced	House of Representatives on 11 September 2017
Scrutiny principle	Standing Order 24(1)(a)(i)

Retrospective application ^[45]

1.56 Proposed subsection 226(2) would prevent the Fair Work Commission (FWC) terminating an enterprise agreement if the terms and conditions of employment of any employee covered by the agreement would, immediately after termination, be less favourable. Proposed subsection 226(3) has the effect of invalidating any decision of the FWC to terminate an agreement if taken after 22 April 2015 and the termination decision could not have been made had the proposed substantive amendment in subsection 226(2) been in force at that time.

1.57 The committee has a long-standing scrutiny concern about provisions that have the effect of applying retrospectively, as it challenges a basic value of the rule of law that, in general, laws should only operate prospectively (not retrospectively). The committee has a particular concern if the legislation will, or might, have a detrimental effect on individuals.

1.58 The committee notes that the retrospective application of this law could operate beneficially (in relation to employees who may as a result of the provisions in the bill be retrospectively entitled to more favourable terms and conditions of employment). However, it could also have a detrimental effect on others, such as employers. Generally, where proposed legislation will have a retrospective effect the committee expects the explanatory materials should set out the reasons why retrospectivity is sought, and whether any persons are likely to be adversely affected and the extent to which their interests are likely to be affected.

1.59 In this instance, the explanatory memorandum states that '[r]etrospectivity is sought in this way because there are likely to be many employees whose interests are affected, particularly those who were covered by agreements that had been terminated under the current provisions in section 226'. The explanatory memorandum also notes that the bill responds to concerns about expired agreements being terminated by employers in order to force employees onto lower wages and conditions, a practice that emerged after a FWC decision on 22 April 2015.

1.60 The committee notes that, in general, it considers laws should only operate prospectively (not retrospectively). In this case the legislation would have a retrospective beneficial effect on certain employees; however, it may also have a retrospective detrimental effect on employers. The committee draws its scrutiny concerns to the attention of Senators and leaves to the Senate as a whole the appropriateness of applying the proposed amendments retrospectively.

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[45] Item 2, proposed section 226(3). The committee draws Senators’ attention to this provision pursuant to principle 1(a)(1) of the committee’s terms of reference.