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December 2020

Hearing disputes about inoperative enterprise agreements

Hearing disputes about inoperative enterprise agreements

The Case

Simplot Australia Pty Ltd v AMWU (2020)

In 2014, Simplot Australia Pty Ltd (Simplot) entered into an enterprise agreement (2014 agreement) with its employees. The 2014 agreement contained a clause allowing the Fair Work Commission (FWC) to conciliate and arbitrate disputes arising under the agreement.

In October 2018, the Australian Manufacturing Workers’ Union (AMWU) filed an application in the FWC to deal with a dispute under the 2014 agreement.

On 10 December 2018, a new enterprise agreement replaced the 2014 agreement. Thereafter, Simplot argued the FWC no longer had jurisdiction to hear a dispute under the 2014 agreement.

At first instance, the FWC found that, given the dispute was lodged when the 2014 agreement was still in operation, the FWC could hear the dispute.

Simplot appealed to the Full Bench of the FWC.

The Verdict

The Full Bench of the FWC held it could not hear the dispute because:

  • the Fair Work Act 2009 (Cth) (FW Act) does not provide authority to the FWC to deal with disputes over agreements that are no longer operating;
  • section 51 of the FW Act provides that an enterprise agreement does not impose an obligation, nor provide an entitlement, unless the agreement applies to the person;
  • no accrued right arises under an enterprise agreement that no longer operates; and
  • section 58(1) of the FW Act provides that only one enterprise agreement can apply to an employee at any particular time.

When the first instance decision was made by the FWC, the 2014 agreement did not operate; the 2018 agreement was in operation.

The Lessons

The FWC can only hear disputes relating to an enterprise agreement that is in operation at the time the matter is heard. The only exception is if the new agreement preserves the FWC’s ability to deal with a dispute arising under an earlier agreement.

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