The Government’s Workplace Bargaining Policy 2018 (the policy) provides agencies the flexibility to choose employment arrangements that best suit their employees and business needs. One such option is for an agency head to make a determination to provide pay increases on top of an enterprise agreement past its nominal expiry date.
- Determinations providing pay increases on top of enterprise agreements past their nominal expiry date are in lieu of bargaining for a new enterprise agreement.
- Determinations may offer increases to pay up to 2% per annum and may not change other terms of the enterprise agreement.
- Enterprise agreements past their nominal expiry date continue to exist, providing employees with their terms and conditions of employment.
- Determinations can made quickly and the first pay increase can commence as early as the first day following the nominal expiry date of the current enterprise agreement.
- Determinations have the same approval requirements under the Government’s bargaining policy as enterprise agreements.
- Employee rights to collective bargaining are provided for in the Fair Work Act 2009.
Considering an alternative to bargaining
Agencies in consultation with staff have a number of options when approaching the nominal expiry date of their current enterprise agreement.
One option is for the Agency Head to make a determination providing pay increases, which sits on top of a nominally expired enterprise agreement. Existing terms and conditions of employment remain unchanged in the nominally expired enterprise agreement.
Choosing to introduce a determination will always depend on each agency’s specific context and circumstances.
The determination option would be unsuitable where the agency needs to change the enterprise agreement or where the majority of employees have indicated a desire to bargain for a new enterprise agreement. However, if both the agency and its employees are comfortable and support using a determination to make pay increases, it is a viable option.
What is a determination?
A determination is a decision made by an agency head. In the Australian Public Service (APS), such determinations are made under section 24(1) of the Public Service Act 1999. In non-APS agencies, their enabling legislation may provide a similar authority. The determinations apply in addition to enterprise agreements past their nominal expiry dates.
Similar to an enterprise agreement, a determination may provide up to three consecutive annual pay increases of up to 2% per annum, consistent with the policy. The determination may also provide increases to salary related allowances.
Other terms and conditions of employment
Employee terms and conditions of employment remain in the agency’s enterprise agreement. Determinations that increase pay may not reduce the terms and conditions of employment contained in the enterprise agreement. In the case of APS agencies which make determinations through section 24(1) of the Public Service Act 1999, the law does not allow reductions.
Timeliness of making a determination
A determination can provide employees with certainty regarding their pay increases, with the first pay increase occurring as early as the day immediately after the nominal expiry date of the underlying enterprise agreement. Subsequent pay increases would follow the anniversaries of this date and continue to operate until the determination is replaced or revoked by the agency head.
The underlying enterprise agreement
Where an agency makes a determination providing pay increases on top of an enterprise agreement past its nominal expiry date, the agreement continues to exist and apply to employees. The determination operates alongside the enterprise agreement only providing higher salary rates or scales.
The enterprise agreement would continue to provide, for example: leave entitlements, allowances, hours of work, flexible working arrangements, provisions for consultation and dispute resolution, and all other entitlements contained the agreement.
Consulting with employees
Before making a determination, the agency must consult with its employees. Consultation is essential to ensure any determination made has the support of staff. The agency must assure itself that its employees consider the proposed determination to be the preferred option.
Consultation allows agencies to determine whether staff are comfortable with the terms of their current enterprise agreement and to identify if employees would prefer to bargain a new enterprise agreement.
Agencies need to closely consider the results of feedback received from its employees before choosing to progress with making a determination.
If employees indicate a preference for bargaining a new enterprise agreement, then the determination option will not be pursued and bargaining can be undertaken.
Employee industrial rights
The Fair Work Act 2009 (the Act) provides employees with rights to freedom of association, workplace representation and collective bargaining.
Under the Act, employees have a right at any time to seek a majority support determination, which is separate from a determination providing pay increases. If successful and approved by the Fair Work Commission, a majority support determination would commence enterprise bargaining.
If a determination providing remuneration increases was in operation while this occurred, the agency would halt any further remuneration increases, not yet delivered. Any further remuneration increases would form part of what is negotiated through enterprise bargaining.
Requirements under the Bargaining Policy
The same requirements under the policy that apply to enterprise agreements also apply to determinations providing pay increases. However, a determination must be in lieu of bargaining a new enterprise agreement.
The APS Commissioner must also approve the proposed determination before it is signed by the agency head.
Once agencies have commenced bargaining for a new enterprise agreement the determination option is no longer available, so this needs to be considered before a decision is made.