The Full Bench concluded that registering the Agreement, including Clause 5, which asserted the Agreement's superiority over inconsistent award terms, aligns with legislative intent; while Clause 6, allowing Individual Flexibility Arrangements, would be inconsistent with the Industrial Relations Act, rendering it invalid if registered. Additionally, the Full Bench found that the Commission's power to require variation of an agreement is limited to section 41(3).

Background:

The City of Cockburn Enterprise Agreement 2019 – 2022, initially registered under the Fair Work Act 2009 (Cth), became a new State instrument on 1 January 2023, on the transfer of local government from the federal to the State industrial relations system.  Section 80BB(2) of the Industrial Relations Act 1979 (WA) treats the Agreement as registered under section 41 of the Act. The City of Cockburn negotiated the City of Cockburn Enterprise Agreement 2022 (Agreement) to replace the existing instrument, seeking registration under section 41 of the Act. The Agreement, under consideration for registration, faced questions over two clauses.

Clause 5 of the Agreement aimed to establish a comprehensive framework, excluding certain awards and intending to govern all employee terms and conditions. The specific issue concerned clause 5.2, which asserted the Agreement's superiority over inconsistent award terms. The question is whether the registration of the Agreement, including clause 5, would be inconsistent with the Act.

Clause 6 introduced Individual Flexibility Arrangements, allowing employers and employees to mutually vary specific terms of the Agreement. The central issue was whether the registration of the Agreement, including clause 6, would be inconsistent with the Act.

With the Chief Commissioner's consent, the following questions of law regarding these clauses were referred to the Full Bench under section 27(1)(u) of the Act.

Question 1: Clause 5 – Operation of the Agreement

The City of Cockburn argued that clause 5 aligned with the Act's goal of promoting collective bargaining, emphasising its comprehensive coverage of employee terms and conditions without relying on other industrial instruments. The Full Bench concluded that registering the Agreement, including Clause 5, would not be contrary to the Act.  Section 41(9) underscores the equal standing of awards and industrial agreements, with no hierarchical relationship. The legislative intent supports parties' autonomy in crafting enterprise-level agreements.

Question 2: Clause 6 – Individual Flexibility Arrangements (IFA)

The City of Cockburn argued that clause 6 was consistent with the Act. Others, including the Minister, contended that the IFA clause undermined the statutory scheme by allowing individual agreements without adequate protection, potentially circumventing fairness standards. The Full Bench determined that the IFA clause, as proposed, was inconsistent with the Act's scheme, purporting to enable individuals not party to the industrial agreement to vary its terms, contrary to the legislative scheme. Registering the Agreement with clause 6 would be inconsistent with the Act.

Question 3: Validity of Clauses if Registered

WASU, LGRCEU, and CFMEUW asserted that clause 6 would be invalid if registered, with the Minister contending it could also be void under section 114 of the Act. The Full Bench concluded that if clause 6 was included for registration, it would be invalid and have no effect.

Question 4: Commission's Power to Require Variation

The City of Cockburn, WASU, LGRCEU, and CFMEUW presented arguments on the Commission's power to require variation to an agreement under the Act. The Minister argued against the Commission's authority beyond section 41(3). The Full Bench determined that the Commission cannot require variation beyond the requirements of section 41(3), aligning with the legislative history, which supports the Commission’s minimal role in registration of industrial agreements. The Full Bench noted that provisions like those in clause 6 could result in contraventions of the Act, exposing employers to enforcement action.

The decision can be read here.