No Extra Claims Clause Backfires – Again
When employers agree to put a No Extra Claims clause in their enterprise agreement (EA) they do so to make it act as a barrier to further matters being raised during the life of the EA. But, in another example of such a clause bringing an employer undone, the Fair Work Commission has ruled the curtailment of private motor vehicle use for some employees to be in breach of the clause.
The company argued it had a policy on private use of company cars and was entitled to change the policy. It also argued the EA made no reference to company policies, so the EA could not have any ’jurisdiction’ over company policy.
But the FWC disagreed. It said the evidence showed the provision of the car use was reward for the relevant employees taking on extra duties. Furthermore, the EA’s no extra claims clause was wide enough to include the issues because the clause used the term “conditions of employment” and clearly, the car use fell into that category.
The FWC explained that the no extra claims clause did not prevent the company from attempting to change the EA by consent and referred to the recent Toyota case. That was a case where a full bench of the Federal Court highlighted that nothing could be written into an EA that could prevent an EA being changed by consent, but did not rule “no extra claims” clauses invalid in themselves.
It remains to be seen if this decision is challenged. The distinction which does not appear to be drawn by this decision is that the no extra claims clause would generally be held to relate to matters contained in the enterprise agreement, not necessarily all conditions of employment. If the latter situation is intended, then a no extra claims clause written like this one, could prevent any policy changes or other operational changes during the life of an EBA, if the change impacted in any way on “conditions of employment”. That is a very broad definition.
In the meantime, this case is further evidence of the difficulty in justifying these clauses. It is a fact that during the life of an agreement, the parties can make changes (so long as they all agree), they can’t be forced to be make changes if they don’t agree, and neither side can take industrial action to support a change (unless they want to be sued and lose). So the question has to be asked; why bother?