The Fair Work Commission plays a crucial role in approving enterprise agreements in Australia. An enterprise agreement is a legally binding agreement between an employer and its employees that sets out the terms and conditions of employment. It covers things like pay rates, leave entitlements, working hours, and other conditions of employment.

When an employer and its employees negotiate an enterprise agreement, they must submit the agreement to the Fair Work Commission for approval. The Commission considers a range of factors when determining whether to approve an enterprise agreement, including the following:

1. Compliance with the law

The enterprise agreement must comply with Australian law, including the Fair Work Act 2009, which sets out the minimum standards for employment in Australia. The Commission will not approve an enterprise agreement that does not comply with these standards.

2. Genuine agreement

The enterprise agreement must be a genuine agreement between the employer and its employees. The Commission will consider whether the agreement was made without coercion, undue influence, or pressure on the employees.

3. Better off overall test

The enterprise agreement must pass the Better Off Overall Test (BOOT), which means that the employees covered by the agreement must be better off overall than they would be under the relevant modern award. The Commission will compare the pay rates, leave entitlements, and other conditions of employment in the enterprise agreement with those in the relevant modern award.

4. Public interest

The Commission will consider whether the enterprise agreement is in the public interest. This includes considering the impact of the agreement on the broader community and the economy.

5. Good faith bargaining

The employer and its employees must have engaged in good faith bargaining when negotiating the enterprise agreement. This means that both parties must have been willing to negotiate and make reasonable efforts to reach an agreement.

6. Procedural fairness

The enterprise agreement must have been made in accordance with the procedural requirements set out in the Fair Work Act. This includes requirements for notice and voting procedures.

In conclusion, the Fair Work Commission considers a range of factors when approving an enterprise agreement, including compliance with the law, genuine agreement, the Better Off Overall Test, public interest, good faith bargaining, and procedural fairness. Employers and employees should ensure that their enterprise agreement meets these requirements to increase their chances of approval by the Commission.