Introduction
If an enterprise agreement does not meet the requirements in the Fair Work Act, the employer may need to write an ‘undertaking’ to fix the issue.
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Content
Introduction
Agreements must meet the requirements in the Fair Work Act 2009. If a Commission Member finds a small error or defect when they assess an agreement, they may ask for an undertaking to fix it.
An undertaking is a commitment in writing from the employer. The employer agrees to meet the undertaking as well as, or instead of, a term in the agreement. This becomes a part of the agreement and the employer must follow it by law.
This option means:
- we do not have to dismiss or reject as many applications
- the employer does not have to start the bargaining process again.
Common reasons for undertakings
An undertaking may be the right option for some errors such as:
- the agreement does not pass the Better Off Overall Test
- the nominal expiry date is more than 4 years after the approval date
- a benefit in the agreement is lower than in the National Employment Standards.
We do not accept undertakings if they will result in major ('substantial') changes to the agreement – see section 190(3(b)) of the Fair Work Act 2009.
The process to create and approve an undertaking
Employer writes the undertaking
Employers or their representatives write the undertaking. We have templates to help. The employer must sign the undertaking.
We also have information to help you avoid common errors that may need undertakings.
Representatives provide feedback
Before we approve an undertaking, we ask each bargaining representative for feedback. Employees voted on the agreement before the undertaking, so they need to know what effect it has.
We may ask for evidence that the representatives give their approval.
A Commission Member assesses the agreement again
A Member looks at the agreement with the undertaking.
They only accept an undertaking if it is not likely to cause:
- financial loss or harm to any employee who the agreement covers
- large ('substantial') changes to the agreement.
We publish the agreement and undertaking
After the Member approves the agreement, the undertaking appears:
- in the decision we publish on this website
- in the copy of the agreement we publish on this website
- in the communication we send the parties when we approve the agreement.
Note:
Every agreement is different. We may approve one agreement with undertakings but not a similar agreement.