Removing an employer and employees from multi-enterprise agreements from 6 June 2023

From 6 June, the Fair Work Act is amended to include new provisions on how and when a multi-enterprise agreement can be varied to remove an employer and their employees from coverage.

These changes apply in relation to multi-enterprise agreements with 2 or more employers who are covered (that are not greenfields agreements) made on or after 6 June 2023. The changes apply to all 3 types of multi-enterprise agreements:

• supported bargaining agreements
• single interest employer agreements, and
• cooperative workplace agreements.

Under the new provisions, an employer and affected employees may jointly make a variation to a multi-enterprise agreement to cease being covered by the agreement. The affected employees are ‘the employees employed at the time who will cease to be covered’ if the Commission approves the variation.

The variation has no effect unless it is approved by the Commission.

Note that there are specified processes to vary a multi-enterprise agreement to add employers and their employees, for each type of multi-enterprise agreement.

An employer and their employees can only be removed from the coverage of a multi-enterprise agreement, by agreement.

Step 1: A vote must be held

First, a vote must be held for the employees who would be removed.

The employer may request the affected employees to approve the proposed variation by voting on it, and the variation is made when a majority of the affected employees who cast a valid vote approve the variation.

This vote can be by ballot or by an electronic method.

Before making the request, the employer must:

• take all reasonable steps to notify the employees of the time, place and method of the vote, and
• give the employees a reasonable opportunity to decide whether they want to approve the proposed variation (to be removed from the coverage of the multi-enterprise agreement).

Step 2: An application to approve the variation must be made to the Commission

If the variation is made, the employer, an affected employee or an employee organisation that is covered by the agreement that is entitled to represent the industrial interests of an affected employee must apply to the Commission to approve the variation.

An application must be made within 14 days after the variation is made, or such further time as the Commission considers fair.

Step 3: The application must be approved by the Commission

A variation has no effect unless it is approved by the Commission.

The Commission must approve the variation of the agreement if it is satisfied that:

• the employer took all reasonable steps to notify the employees of the time, place and method of the vote and gave the employees a reasonable opportunity to decide whether they wanted to approve the proposed variation
• the affected employees have voted, by ballot or electronic method, on whether to approve the variation, and the majority of those who cast a valid vote approved the variation
• there are no other reasonable grounds for believing that a majority of the affected employees who cast a valid vote did not approve the variation, and
• each employee organisation covered by the agreement, that is entitled to represent the industrial interests of one or more affected employees, agrees to the variation.

A variation that is approved operates from the day specified by the Commission. The employer and affected employees will no longer by covered by the agreement after that time.

An agreement that has been varied remains a multi-enterprise agreement, despite the variation.