Ai Group lodges appeals to preserve workplace flexibility

Three appeals that were recently lodged with Fair Work Australia by the Australian Industry Group (Ai Group) in an endeavour to preserve workplace flexibility will be an important test of the Fair Work Act.

Commenting on the decision to appeal, Ai Group Chief Executive Heather Ridout said: “It is vital that the three decisions are overturned to ensure that Australian employers and employees remain free to decide what lawful workplace arrangements suit their needs.

“In late October, Commissioner John Ryan of Fair Work Australia rejected three enterprise agreements which included clauses permitting the cashing-out of annual leave within the limits permitted under the Fair Work Act.

“Under section 93 of the Act, each individual employee has the right to decide whether they want to cash out any annual leave providing they retain at least four weeks of accrued leave and there is a clause in an enterprise agreement covering the employee which allows for cashing out.

“Despite the employers and employees in each of the three cases including a cashing-out clause in their enterprise agreement and complying with all the requirements of the Fair Work Act, Commissioner Ryan decided that:

• Even though the clauses in the agreements met the requirements of section 93 of the Act, they did not pass the Better Off Overall Test (BOOT) under the Act;
• Cashing out of annual leave operates to the significant disadvantage of employees.

“In each case, there was strong support amongst the employees for the cashing-out clause.

“In addition to the cashing-out issue, a number of other important matters will be dealt with in the appeals. These include the ‘line-by-line’ approach which Commissioner Ryan took in applying the BOOT, the large number of undertakings which he required from each company, and his insistence on an undertaking from two of the companies that FWA be given compulsory arbitration powers if a dispute arises, in apparent conflict with the Full Bench’s Woolworths decision.

“Ai Group’s decision to appeal followed discussions with the three Ai Group member companies concerned: Armacell Australia, Direct Paper Supplies and Downer EDI Works.

“These latest appeals follow many other Full Bench cases dealing with critical principles, in which Ai Group has pursued successful appeals or intervened to ensure that the Fair Work bargaining laws work effectively including, for example, cases involving Woolworths, Dunlop Foams, McDonald’s, TriMas, Airport Fuel Services and Metropolitan Fire and Emergency Services Board.”