Government and Australian Industry Group to appeal Fair Work decision on flexibility agreements

The Rudd Government and the Australian Industry Group will again both seek to intervene in yet another Fair Work Australia decision, this time over the issue of individual flexibility agreements.

The latest case involves a decision by Commissioner John Ryan to reject a workplace agreement between manufacturer TriMas Corporation and the Australian Manufacturing Workers Union over the inclusion of an individual flexibility agreement.

These IFAs were introduced into the Fair Work Act by Workplace Minister Julia Gillard, as a way of reassuring employers that they would be allowed some flexibility around hours and conditions after the Howard Government’s Australian Workplace Agreements were abolished.

In his latest controversial decision, Ryan rejected the workplace agreement originally made between the employer and the union, as it included a clause that said the IFA could vary the terms of the workplace agreement.

Ryan the IFA was not valid. He said an IFA may not vary the terms of a workplace agreement and could only vary the “effect of the terms of an agreement”.

Has those two words – that is, “the effect” – being inserted, Ryan said the agreement would have been allowed through.

However, Ryan does not have the power to insert those words himself and instead can only insert into an agreement the standard (or model) IFA specified by the Fair Work Act.

But AIG is unimpressed with the decision and says Ryan’s “vague and uncertain” decision “would result in it being almost impossible for anyone to work out whether a proposed IFA is lawful or unlawful”.

AIG chief Heather Ridout said her group would appeal Ryan’s decision in order to clear up with IFA uncertainty.

“IFAs were devised by the Federal Government to provide flexibility for employers and individual employees to agree to vary the terms of an enterprise agreement, as it relates to an employee, provided that the employee is better off overall, and subject to a set of safeguards.

“In his TriMas decision, Commissioner Ryan has decided that IFA’s cannot vary the terms of an agreement but rather only the effect of “the terms of agreement. The decision creates a great deal of uncertainty and threatens the validity of a large proportion of the IFAs already made.”

IR expert Peter Vitale of CCI Lawyers says the decision does little to promote the underlying philosophy of enterprise bargaining “which is for the parties to reach agreement and get on with it.”

“This may be a very technically correct reading of the legislation but it’s an extraordinarily narrow reading of the agreement and the intention of the parties entering an agreement.”

He says AIG and the Government will need to argue in an appeal that Ryan’s reading of the workplace agreement between the two parties was too narrow.

The appeal to the Full Bench of Fair Work Australia is due to be heard on April 21, the same day as an appeal against Ryan’s decision in the case involving Dunlop Foams, where the Government and the AIG are intervening over the issue of entry rights for union officials.