EMPLOYERS can be buoyed by a positive outcome after the release of the Final Report into the Greenfields Agreement Review.

The report follows the independent review of the greenfields provisions of the Fair Work Act 2009 (FW Act) which were the subject of legislative amendments in 2015. This review was conducted late last year by former Fair Work Commission (FWC) Senior Deputy President Matthew O’Callaghan.

During this process AREEA members provided valuable feedback which informed our submission to the review (see related article).

The review makes 10 recommendations about greenfields agreement making, many of which reflect the views put forward in AREEA’s submission. The key recommendations are as follows:

• the inclusion of good faith bargaining obligations remains appropriate and should be retained
• the capacity for an employer to seek approval of a greenfields agreement at the expiry of the notified negotiation period be retained
• the six-month notified negotiation period should be reduced to three months
• the test for an approval of an agreement at the end of this time should remain unchanged (the ‘prevailing pay and conditions’ test)
• a number of initiatives should be implemented to expedite the approval of the greenfields agreements.

The full list of recommendations can be found throughout the Final Report.

Three month notified negotiation period

AREEA welcomes the recommendation that the Government reduce the notified negotiation period from six months, and that a three-month period is more appropriate.

The views of AREEA members were instrumental in assisting the reviewer reach this conclusion, with AREEA’s submission, including the de-identified views of our members, extracted in the report.

Prevailing pay and conditions test

Unfortunately, the review recommended that the test the FWC is required to apply in circumstances where no agreement has been reached after the notified negotiation period, and where the employer applies to the FWC for approval, remain. That is, the ‘prevailing pay and conditions’ test.

AREEA expressed concerns that in the event a ‘circuit breaker’ is needed, the ‘prevailing pay and conditions’ test does little to militate against unsustainable terms and conditions being decided by the FWC. However, AREEA suggested that if this test is retained (despite the concerns expressed by AREEA) industry should be provided with some guidance of how the FWC will make this assessment. This is particularly so considering the provision is untested.

In this regard, the review recommended the FWC develop and publish principles which detail the approach the FWC will apply when considering this test, in consultation with key stakeholders.

Initiatives to expedite greenfields agreement approval

The review recognised that potential consequences of a delay in agreement approval by the FWC from a project wide perspective are substantial. AREEA welcomes the recommendation that the approval of greenfields agreements by the FWC should be generally expedited.

Next steps

The Report has been provided to the Australian Government for consideration.

It has been a long standing policy position of AREEA that greenfield provisions introduced in 2009 needed revision to generate investor confidence and ensure certainty in critical phases of project development.

While it is AREEA’s position that the greenfields agreement provisions remain in need of further amendment, we are of the view that the outcome of this review can generally be viewed as positive for AREEA members. This is particularly so given the limited scope of the review, and the very short timeframe in which the review occurred.

AREEA will be reviewing the report and recommendations in detail, and will formulate a position to put to the Government in response to the recommendations in the report.

To provide your feedback in relation to the recommendations, or the greenfields agreement making provisions more generally, contact [email protected].