Unlawful Term Potentially Thwarts Agreement Approval

A company has had to give an undertaking not to enforce a term of its agreement, after Fair Work Commission found it contravened a state law. Under the legislation, a term like this is called “objectionable” and is not allowed.

The employer, an industrial mining and explosives products company, included a provision in its agreement that employees pay for their own medical assessments and like fees. The union attended the approval application hearing and argued that this requirement contravened the Queensland Mining and Coal Mining Safety and Health Regulation 2001.

Even though the agreement approval process is conducted under federal law, which usually supersedes state/territory laws, the Fair Work Act provides for cases like this, that a state law (or regulation) cannot be overridden in agreements.

The commission agreed with the union’s submission and required the employer to give an undertaking not to enforce the provisions that were contradictory to the Queensland regulations.

This case highlights the necessity of checking for state/territory statutes that encroach on the employment relationship when negotiating. If this employer had hoped for a productivity dividend from the provisions, then they were to be disappointed, and it’s better to know that before the approval stage.

Dyno Nobel Asia Pacific Pty Ltd [2012] FWA 10497 (13 December 2012)

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