Under s40B of the Industrial Relations Act, the Commission can review an award’s provisions if they are “obsolete or in need of updating.”  The Commission initiated proceedings under this section to review clauses in 2 local government awards, headed “Enterprise Flexibility” and “Facilitative Provisions.” The Commission considered whether the clauses were invalid, and so should be removed.

The parties to the proceedings agreed that the Enterprise Flexibility clauses of the awards were invalid. Those clauses purported to permit an agreement to be made with employees at the enterprise level to vary the awards’ provisions, without a mechanism for either the union to be party to such an agreement, or the Commission to register it. Accordingly, the agreement contemplated by the clause was outside the scheme of the Industrial Relations Act. Under the IRA, awards can only be varied by application to the Commission to which a union is party.

Turning to the facilitative provisions in the award, Senior Commissioner Cosentino observed that facilitative provisions are features in many awards, and have been since the 1980s. The purpose of facilitative provisions is not to enable avoidance of award obligations, but rather to allow for a departure from a default or standard method of satisfying an award obligation. Accordingly, a true facilitative provision was not contrary to the Act’s scheme, as it did not involve permitting agreement to vary a provision in the award having the effect of altering award obligations.

Having found that the concept of facilitative provisions in a general sense was not inconsistent with the scheme of the IR Act, the Senior Commissioner went on to consider whether particular provisions of the awards were true facilitative provisions or whether they did more than a facilitative provision, to have the effect of varying award obligations. The Senior Commission found that some of the clauses of the awards did go beyond the limits of a permissible facilitative provision. The Senior Commissioner therefore varied the awards, to remove both the enterprise flexibility clauses and the impermissible facilitative provisions.

In the course of the hearing, the unions argued that the facilitative provisions were obsolete and should be removed because they were rarely if ever used. However, the Senior Commissioner was not persuaded that this was a proper basis to remove the clauses under s40B.

Decision APPL 26/2023 can be read here and decision APPL 27/2023 can be read here.