WR 2009/6: Termination of individual agreement-based transitional instruments (Australian Workplace Agreements)
The purpose of this advice is to provide:
- agencies and authorities with information about the termination and conditional termination of Australian Workplace Agreements (AWAs); and
- parties to an AWA with forms/templates they may wish to use when terminating an AWA.
2. AWAs in place on 1 July 2009 are now known as ‘individual agreement-based transitional instruments’. These transitional instruments cease to operate when they are terminated.
3. The Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (FW Transitional Act) provides termination provisions for AWAs (Schedule 3, Part 3, items 17, 18 and 19).
Termination of AWAs
AWAs may be terminated by agreement, or unilaterally (after the nominal expiry date). AWAs may also be terminated on the condition that a new enterprise agreement comes into operation which covers their employment.
Termination by agreement – where the AWA has not passed its nominal expiry date
4. Item 17 of Schedule 3 to the FW Transitional Act enables the employee and employer covered by an AWA to make a written agreement, known as a termination agreement, to terminate the AWA. The termination agreement must be signed by the employee and the employer. If the employee is under 18 the termination agreement must also be signed by a parent or guardian. The signatures must be witnessed. A suggested template is at Attachment A. (RTF 72.5KB )
5. Either party may apply to Fair Work Australia (FWA) for approval of the termination agreement. The application must be lodged within 14 days after the termination agreement was made, unless FWA considers it fair to extend that period.
6. The termination has no effect unless it has been approved by FWA.
7. FWA must approve the termination agreement if it is satisfied that the agreement has been signed by both the employer and employee (and parent or guardian if the employee is under 18), the signatures have been witnessed and that there are no other reasonable grounds for believing that the employee has not agreed to the termination.
8. The termination of the AWA takes effect from the day specified in FWA’s decision to approve the termination.
Unilateral termination - where the nominal expiry date of the AWA has passed
9. Item 19 of Schedule 3 to the Transitional Act enables the employee or the employer covered by an AWA that has passed its nominal expiry date to apply to FWA to unilaterally terminate the agreement.
10. The employee or employer will need to make a written declaration that identifies the AWA and states that the employee or employer wants to terminate the AWA, and apply to FWA for approval of the termination. A suggested template for the required written declaration is at Attachment B (RTF 69.5KB).
11. At least 14 days before making an application for FWA approval of the termination, the employee or employer is required to give the other party a notice complying with the following requirements:
- the notice must identify the AWA;
- the notice must state that the employer or employee intends to apply to FWA for approval of the termination of the AWA;
- the notice must state that, if FWA approves the termination, the AWA will terminate on the 90th day after the day on which FWA makes the approval decision;
- if the notice is given by the employer and the AWA terminates during the bridging period (effectively between 1 July and 31 December 2009) the notice must include details of any applicable redundancy provisions. Redundancy provisions contained in the AWA continue to apply until the earliest of 24 months from the date of terminating the AWA, the date of the employee ceases to be employed by the employer (other than in circumstances covered by the redundancy provision) or when an enterprise agreement or workplace determination comes into operation in relation to the employee.
A suggested template for this notice is at Attachment C (RTF 61.3KB).
12. The termination has no effect unless it has been approved by FWA. If the termination is approved, the AWA terminates on the 90th day after the day on which FWA makes the approval decision.
13. The Application for Termination of Individual Agreement‐Based Transitional Instrument by Agreement Form (Form 29) is to be used for terminations under item 17 and item 19 of Schedule 3 to the FW Transitional Act. It can be found on Fair Work Australia’s website under ‘Forms’.
14. In relation to an application for termination by agreement under item 17, Schedule 3, a copy of a termination agreement (template at Attachment A) should accompany the application (Form 29).
15. In relation to an application for unilateral termination under item 19, Schedule 3, the application (Form 29) must be accompanied by a copy of the written declaration (template at Attachment B) described at paragraph 10 and a statutory declaration made by either the employer or employee. The statutory declaration must indicate the facts establishing a basis for FWA to be satisfied that the requirements of item 19(2) (outlined at paragraph 10 above) and item 19(3) (outlined at paragraph 11 above) have been complied with.
Multiple approvals via a single application form
16. An employer may use FWA’s Form 29 to make an application for the approval of the termination of multiple agreements under items 17 and 19 of Schedule 3. If an employer wishes to terminate multiple agreements, an electronic schedule setting out the relevant details should be provided at the time the application is lodged. The standard form spreadsheet can be found at http://www.fwa.gov.au/documents/forms/form_f29.xls.
17. If the application is made under item 17 of Schedule 3 (ie, a termination by agreement where the AWA has not passed its nominal expiry date), a copy of each of the relevant termination agreements must still accompany the application.
Effect of termination of an AWA
18. Where FWA has approved the termination of an AWA under items 17 or 19 of Schedule 3 as described above, the employee will subsequently be covered by a transitional instrument that would otherwise apply to the employee (ie a collective agreement made under the Workplace Relations Act 1996), or an enterprise agreement that is in operation.
19. Where an employer applies to unilaterally terminate an AWA (under item 19) during the bridging period and FWA approves the termination, the redundancy provisions in the terminated AWA continue to apply under item 38 of Schedule 3. The redundancy provisions continue to apply until:
- the end of the period of 24 months from the time the termination took effect;
- the time when the employee ceases to be employed by the employer; or
- the time when an enterprise agreement starts to apply to the employee.
Conditional termination of AWAs
20. The FW Transitional Act contains special provisions for the conditional termination of AWAs (Schedule 3, Part 3, item 18). Employees covered by AWAs are able to agree to terminate their AWAs on the condition that a new enterprise agreement comes into operation which covers their employment. If a new enterprise agreement does not come into operation, the AWA will not be terminated and will continue to apply as before.
21. The termination of the AWA would take effect at the same time that the enterprise agreement comes into operation, ensuring that the employee is covered by an industrial instrument at all times.
22. Employees who are covered by an AWA are able to fully participate in bargaining for the new enterprise agreement if their AWA has passed its nominal expiry date or they and their employer agree to make a conditional termination. Those employees are entitled to:
- appoint a person of their choice as their bargaining representative for a proposed agreement;
- vote on the proposed agreement; and
- be in a group of employees covered by a protected action ballot order.
23. The conditional termination must be in writing. The employer must give the employee a copy of the document, unless the AWA has passed its nominal expiry date and the employee has signed the document.
24. If the AWA has not passed its nominal expiry date, the conditional termination must be a written agreement signed by the employer and the employee. The signatures must be witnessed. A suggested template is at Attachment D (RTF 71KB).
25. If the AWA has passed its nominal expiry date, the conditional termination must be in writing and signed either by the employee or the employer. The signature must be witnessed. A suggested template is at Attachment E (RTF 69.2KB).
26. If the conditional termination is signed by an employee under 18 years of age, it must also be signed by a parent or guardian of the employee.
27. When applying to Fair Work Australia for approval of the proposed enterprise agreement under section 185 of the Fair Work Act 2009, the bargaining representative must also provide Fair Work Australia with all the conditional termination agreements that have been made. This ensures the relevant AWAs are terminated when the enterprise agreement comes into operation, as outlined at paragraph 17.
Further information and advice
28. Should you require any further information or assistance on this matter, please contact your APSC Client Contact directly, email firstname.lastname@example.org.
Public Sector Branch