Industrial Relations Commission of New South Wales CITATION : Review of the Principles for Approval of Enterprise Agreements 2002, Re [2002] NSWIRComm 342 Labor Council of New South Wales Australian Business Industrial Employers First PARTIES : Electrical Contractors' Association of New South Wales Public Employment Office Minister for Industrial Relations Local Government and Shires Association of New South Wales Anti-Discrimination Board FILE NUMBER: IRC 1782 of 2002 CORAM: Wright J President; Walton J Vice-President; Marks J; Bishop C Enterprise Agreements - Review of Principles of Enterprise Agreements - Substantial agreement on form of principles - Disagreement limited to issue of agency/union bargaining fees - Jurisdictional issues - Application for establishment of new principle re agency/union bargaining fees - Form of possible principle - Principles reviewed - New principles issued with additional principle as to bargaining fees CATCHWORDS : Words and phrases - "Conditions of employment" - "Industrial matters". Anti-Discrimination (Carers' Responsibilities) Act 2000 LEGISLATION CITED : Industrial Relations Act 1996 s 3 s 6 s 29 s 33 s 35 s 38 s 118 s 119 s 209 s 210 Occupational Health and Safety Act 2000 Truck Act 1900 Australian Tramway Employees Association v Prahran and Malvern Tramway Trust (1913) 17 CLR 680 Campbells Cash and Carry Pty Ltd v National Union of Workers, NSW Branch (No 2) (2001) 53 NSWLR 393, (2001) 106 IR 429 Max Cooper & Sons Pty Ltd v The Council of the City of Sydney (1980) 54 ALJR) 234 (Privy Council) R v Booth, Ex parte Administrative & Clerical Officers' Association (1978) 141 CLR 257 CASES CITED : Re Principles for Approval of Enterprise Agreements (1996) 94 IR 98 Re Principles for Approval of Enterprise Agreements 2000 (2000) 101 IR 332 Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 (No 2) (2001) 104 IR 385 T C Whittle Pty Ltd v T & G Mutual Life Society Ltd (1978) 52 ALJR 173 Westwood v Lightly (1984) 2 FCR 41, (1984) 7 IR 104 HEARING DATES: 11/01/2002; 11/22/2002 DATE OF JUDGMENT: 12/19/2002 Mr P M Kite SC and Mr P J Newall of counsel - Australian Business Industrial, Employers First and Electrical Contractors' Association of New South Wales The Honourable J W Shaw QC and Mr A A Hatcher of counsel - Labor Council of New South Wales LEGAL REPRESENTATIVES: Mr J V Murphy - Minister for Industrial Relations and Public Employment Office Ms A Falk - President, Anti-Discrimination Board Mr A Dansie - Local Government and Shires Associations of New South Wales JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WRIGHT J, President WALTON J, Vice-President MARKS J BISHOP C Thursday 19 December 2002 Matter No IRC 1782 of 2002 Re REVIEW OF THE PRINCIPLES FOR APPROVAL OF ENTERPRISE AGREEMENTS 2002 Summons to Show Cause - Commission on its own initiative pursuant to Section 33(4) of the Industrial Relations Act 1996 DECISION OF THE COMMISSION [2002] NSWIRComm 342 1 These proceedings were initiated by summons to show cause issued by the Commission on its own initiative pursuant to s 33(4) of the Industrial Relations Act 1996 (the Act). Section 33 of that statute is in the following terms: 33 Principles for approval of enterprise agreements (1) A Full Bench of the Commission is required to set principles to be followed by the Commission in determining whether to approve enterprise agreements. (2) In determining those principles, the Full Bench is to have regard, in particular, to the following: (a) the objects of this Act and the public interest, (b) the relevant criteria for approval imposed by this Part, (c) the need for an appropriate process for approving agreements to be followed by the Commission, (d) the need for an appropriate process for ensuring sufficient information about the effect of the agreement is provided to employees who are to be covered by the agreement, (e) the need for an appropriate negotiating process for the agreement. (3) A Full Bench of the Commission is to review the principles for approval at least once every 3 years. (4) Principles for approval may be set or reviewed on the application of any party that can apply for approval of an enterprise agreement or on the Commission's own initiative. (5) Industrial organisations are entitled to be notified of any proceedings of a Full Bench under this section and to make submissions on the setting or review of the principles for approval. (6) The Industrial Registrar is to publish the principles for approval in the Industrial Gazette. (7) Principles for approval are to be set and published under this section within 6 months after the commencement of this Act. 2 The principles for the approval of enterprise agreements were initially established by a Full Bench of the Commission by decision dated 19 December 1996: Re Principles for Approval of Enterprise Agreements (1996) 94 IR 98. Those principles were reviewed by a Full Bench of the Commission by decision dated 22 December 2000: Re Principles for Approval of Enterprise Agreements 2000 (2000) 101 IR 332. Those reported decisions set out the statutory matrix against which the review of the relevant principles takes place and the approach to be adopted in undertaking that review. No party contended that we should not accept the approach to the principles and their review stated in those decisions. We therefore propose to adopt and apply the principles established by those decisions without repeating them. 3 The parties to these proceedings were able to reach agreement about a number of proposed changes to the principles, the effect being to update reference to legislation and, in the case of the anti-discrimination legislation, by including a reference to carers. Specifically, a reference has been inserted to the provisions of the Occupational Health and Safety Act 2000 and the anti-discrimination clause is now found in the form of an attachment to the principles which, as we have said, includes a reference to carers' responsibilities. This becomes a relevant matter consequent upon the commencement of the Anti-Discrimination (Carers' Responsibilities) Act 2000 on 1 March 2001. We consider that these proposed changes are appropriate to be included within the principles and we shall amend them accordingly. 4 There was, however, one contentious matter which was the subject of marked polarisation between the parties to these proceedings. Employers First, Australian Business Industrial and The Electrical Contractors Association of New South Wales sought the inclusion of the following additional clause in the principles namely: The Commission will not approve applications for provisions in enterprise agreements which provide for any obligation to be placed on employers or employees relating to payments to bargaining agents or in respect of service fees, whether such agency or service is provided to employers or employees. Provisions having this effect do not fall within the definition of 'Industrial matter' contained in s 6 of the Act. 5 Evidentiary material was tendered by the parties contending for and resisting the insertion of this clause into the principles. The factual background revolves around a campaign by a number of trade unions and, in particular, the Electrical Trades Union of Australia, New South Wales Branch for the insertion of clauses providing for bargaining agents fees into enterprise agreements being negotiated by them. It was said that, as at 16 September 2002, twenty-five enterprise agreements which had been approved by this Commission contained clauses providing for bargaining agents fees. The Electrical Trades Union of Australia, New South Wales Branch was the relevant union party to each of these enterprise agreements. 6 The form of the clause contained within these enterprise agreements appears to have altered over time. For example, clause 29 of the Action Civil Pty Ltd Enterprise Agreement 2000 states that "employees who benefit from the wage rate contained in this agreement that are not members of the Electrical Trades Union shall have a service fee of $8 per week deducted from their wages." 7 In Asplundh Tree Expert (Aust) Pty Ltd Enterprise Agreement 2002-2004 clause 28 entitled "Bargaining Agents Fee" is in the following terms: The company shall advise all current and existing employees that a "Bargaining Agents" fee of $500 per annum is payable to the ETU on or prior to 16th December. The company shall further advise all current and existing employees that the first payment shall be paid to the ETU within one month of certification of the agreement on a pro-rata basis up to 16th December. Thereafter the bargaining agents fee shall then be paid annually, and in advance, on 16th December. The company shall also advise all new employees prior to commencing work for the company that a "Bargaining Agents" fee of $500 per annum is payable to the ETU on or prior to the 16th December each year. The employer shall advise the employee that the first payment shall be payable is pro-rata from the time of commencing until 16th December. Thereafter the bargaining agents fee shall then be paid annually, and in advance, on 16th December. The relevant employee to which this clause shall apply shall pay the "Bargaining Agents Fee" to the ETU on a pro-rata basis for any time which the employee is employed by the company. By arrangement with the ETU this can be done in two instalments throughout the year. If an employee can demonstrate to the ETU that they are no longer employed by the company then they are entitled to apply to have such fees reimbursed on a pro-rata basis. 8 A third variation appears in the Limbers Electrical Services Construction Enterprise Agreement 2001-2002. Clause 35 is in the following terms: The company shall advise all employees prior to commencing work for the company that a "Bargaining Agents" fee of 1% of the employees gross annual income or $500 per annum which ever is greater is payable to the ETU on or prior to the 31st December each year. The relevant employee to which this clause shall apply shall pay the Bargaining Agents Fee to the ETU in advance on a pro-rata basis for any time which the employee is employed by the company. By arrangement with the ETU this can be done in two instalments throughout the year. 9 It was asserted on behalf of the employer associations that the $8 per week or $500 per annum fee exceeded the annual cost of membership of the ETU. Relying on other evidence tendered in the proceedings it was further asserted that the purpose of the fee was to encourage or coerce employees to join the union and constituted an attack on non-union members. 10 The employer associations emphasised the following characteristics of the bargaining agents fee in support of the application for the insertion of a provision in the principles which would have the effect of outlawing such a provision: 1. The fee is a sum of money which, calculated on an annual basis, exceeds the annual cost of membership of the union seeking the establishment of the fee. 2. Under some fee provisions the employer acquires an obligation to inform employees that such a fee is due and payable as a condition of employment. 3. An employee of an employer party to an instrument containing a fee clause is said to have an obligation arising from the enterprise agreement to pay moneys to the relevant union. 4. The fee clause operates independently of the wishes of particular employees. 5. The fee is, rather than being paid by individual employees, to be deducted by employers of the employees concerned from those employees' wages and remitted to the union concerned. 6. The individual employees from whose wages the fee is to be deducted do not give personal approval for the deduction of the fee. 7. While the terms providing for the fee may provide, on their face, for deductions to be made from the wages of all employees, it is clear that the fee will be waived in the case of members of the union. 11 The employer associations supported these submissions by contending firstly that it was beyond jurisdiction of the Commission to approve an industrial instrument containing a provision for a bargaining agents fee. Such a provision was not an industrial matter as defined in s 6 of the Act and, it was said, was beyond the jurisdiction of the Commission accordingly. Secondly it was submitted that such a fee offended s 119 of the Industrial Relations Act which, in turn, reflected the provisions of the Truck Act 1900. Section 119 prohibits an employer from directly or indirectly imposing "as a condition of the employment of an employee any terms as to the place where or the manner in which or the person with whom any remuneration paid to the employee is to be spent." In addition, it was submitted that such a provision offended s 210 of the Industrial Relations Act which provides, relevantly, that an employer or an industrial organisation must not victimise an employee or prospective employee because the person does not belong to an industrial organisation of employees. 12 The following additional arguments were also relied on by the employer associations: 1. There was no agency established between an employee or prospective employee of an employer and the union, in the absence of any union membership. 2. There was, in effect, a common law conspiracy between the employer and the union to injure third party non-union member employees. 3. The Electrical Trades Union, NSW Branch had no capacity under its rules to seek funds from non-members. 13 The insertion of a provision in this form was resisted by the Labor Council of New South Wales. The submissions made by the Labor Council were supported by the Minister for Industrial Relations and the Public Employment Office. 14 The Labor Council submitted that much of the evidentiary material advanced by the employer associations had no or little probative effect. It was submitted that the majority of the enterprise agreements required both union members and non-union members to pay the same fee and that the purpose of the fee "is to have all employees pay their fair share of the cost of obtaining pay rises and other benefits from which all employees benefit." Also, it was contended: There is no evidence at all about what attitude non-union members covered by the relevant agreements have towards bargaining fee clauses. The Employers do not represent or speak for such non-union members. What is known is that the relevant enterprise agreements have been agreed to and approved in accordance with the requirements of the Act. The bargaining fee clauses apply to employees covered by those agreements in the same way that any other condition of employment contained in those agreements does. The Labor Council also pointed to the "superior outcomes" gained by employees under the enterprise agreements namely higher average annual wage increases, more beneficial hours clauses, retention of overtime and the inclusion of provisions relating to redundancy, occupational health and safety, consultation and training. It was said "non-union members receive a clear benefit when a union negotiates an agreement that is to apply to them compared to when they have to negotiate an agreement for themselves." 15 Counsel representing the Labor Council of New South Wales, the Honourable J W Shaw QC and Mr A A Hatcher submitted that this Commission did have jurisdiction to approve enterprise agreements containing such a provision and rejected all of the other submissions upon which the employer associations relied. 16 This is not the first occasion upon which a bargaining agents fee clause contained within an enterprise agreement has been considered by an industrial tribunal. There are a number of decisions of the Australian Industrial Relations Commission, the Federal Court of Australia and the Industrial Relations Commission of Queensland which have considered the jurisdictional basis and desirability of the insertion of such a provision in enterprise agreements, albeit against the backdrop of different statutory regimes. 17 We are not persuaded that these proceedings represent an appropriate vehicle in which to determine these issues in a definitive manner. The review of the principles must be conducted within the context of the provisions of the Act. Accordingly it is necessary to justify the inclusion of any principle by reference to a provision of the Act and the general thrust of the legislation, or as a means of facilitating the approval process. Whether or not a bargaining fee clause ought to be the subject of approval when contained within an enterprise agreement is a matter which, of necessity, must take into account the prevailing and relevant factual circumstances applying to the enterprise agreement. Whether such a provision offends either the statutory provisions or the principles relied upon by the employer associations will, in turn, need to be determined by reference to the relevant factual circumstances. Obviously, each application for approval will need to be determined on its merits having regard to the factual circumstances which apply. 18 However it is necessary to consider submissions made by the employer associations that the jurisdictional issues may be dealt with in the abstract, and without regard to the relevant factual circumstances. It was submitted that as a matter of law provisions for agents bargaining fees cannot be contained within enterprise agreements because such provisions do not come within the definition of "industrial matters" in s 6 of the Act and therefore enterprise agreements cannot include provisions unless those provisions are or relate to "industrial matters". These submissions were rejected by the Labor Council because it was submitted that whether or not a provision was an industrial matter was, in essence, irrelevant. The debate between the parties requires a consideration of the relevant provisions of the Act. Section 29 provides that "an enterprise agreement may be made in accordance with this Act setting conditions of employment for employees." The reference to conditions of employment is repeated in s 38(2)(b). Section 38 is as follows: 38 Form and content of enterprise agreement (1) An enterprise agreement is required to be in writing and signed by or on behalf of the parties to it. (2) An enterprise agreement must: (a) identify the parties to the agreement and describe the employees for whom it is made, and (b) set all or some conditions of employment for those employees. (3) If an enterprise agreement does not specify the place or places of employment to which it applies, the agreement applies: (a) to any place of employment at which those employees were employed at the time the agreement was made, and (b) to any other place at which those employees could reasonably be expected to be employed during the currency of the agreement. 19 The employer associations directed attention to the Dictionary to the Act which states that "conditions of employment includes any provisions about an industrial matter". "Industrial matters" is in turn defined in s 6. Sub-section (1) provides that industrial matters "means matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry." Sub-section (2) sets out a number of examples of industrial matters lettered (a) to (j). Within Para (c) of sub-s (2) an example of an industrial matter is said to be "the conditions of employment in any industry (including hours of employment, qualifications of employees, manner of work and quantity of work to be done)." 20 Thus, there is some circuitousness revealed in examining the inter-relationship between conditions of employment and industrial matters where contained within the Act, for the purpose of this discussion. As against this, however, we note that, unlike the majority of definitions contained within the Dictionary to the Industrial Relations Act, the definition of conditions of employment is an inclusive one rather than exclusive and that s 6(2) provides examples only of industrial matters. All of this leads on a prima facie basis to a conclusion that the expression "conditions of employment" should be construed according to its ordinary meaning within the context of legislation which is directed in general terms to providing a framework for the conduct of industrial relations and to enhance, in general terms industrial relations throughout New South Wales. This much is clear from s 3 of the Act which sets out its objects. These observations which are made in general terms are consistent with the approach adopted by Wright J, President in Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 (No 2) (2001) 104 IR 385. At paras [19] and [20] his Honour said: [19] I consider that the legislature in enacting s 6 intended, by the structure of the section, to provide a general definition in sub-section (1) but to include in sub-section (2), by reference to "examples of industrial matters", matters which fell within that description either by elaboration of the general words in sub-section (1) or by an extension of those words. That is, the legislature, although using the word 'examples', approached the matter in a way which might have earlier occurred by use of the word 'includes'. The usual construction of the word 'includes' or the word 'including' is that it is intended to be read as a word of extension (compare R v Holmes; Ex parte Public Service Association of New South Wales (1977) 140 CLR 63 at 72) but that does not necessarily mean that all of the areas or concepts following the use of the word 'includes' must involve an extension in meaning. Some of the relevant words may be mere examples. However, the usual approach adopted when the word 'includes', or one of its variants, is used, is that amongst the words following it are words which extend the meaning of the term or terms defined. [20] That is the way in which the sub-section 6(2) should be interpreted ... 21 These observations of his Honour were approved by a Full Bench of the Commission in Campbells Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No 2) (2001) 53 NSWLR 393; (2001) 106 IR 429. 22 Of course, the expression "conditions of employment" may convey different meanings depending upon the context in which it is used. An example of an expansive approach to its interpretation is provided by the decision of the High Court of Australia in R v Booth; Ex parte Administrative & Clerical Officers' Association (1978) 141 CLR 257, and the cases cited therein. Whilst there are cases where a narrow or narrower approach to construction of this expression has been adopted, this is because of the particular context in which the expression has occurred. See for example, Max Cooper & Sons Pty Ltd v The Council of the City of Sydney (1980) 54 ALJR 234 (Privy Council), T C Whittle Pty Ltd v T & G Mutual Life Society Ltd (1978) 52 ALJR 173 and Westwood v Lightly (1984) 2 FCR 41; (1984) 7 IR 104. 23 It is not necessary for present purposes that we deal with the nature and extent of the meaning of the expression "conditions of employment" in a determinative manner. Nor should we do so, in the absence of a relevant factual matrix. The consideration does, however, enable us to conclude in a general way that a determination of whether or not an agent's bargaining fee provision is an "industrial matter" within the meaning of s 6 of the Act is not determinative of the jurisdictional issue. It is necessary, given the provisions of the Act, that this matter be tested against whether or not the enterprise agreement falls within ss 29 and 38(2) which in turn requires that attention be focused on the expression "conditions of employment". 24 The breadth of the meaning of the expression "conditions of employment" may be gauged by the decision of the High Court of Australia in R v Booth previously referred to. The matter at issue in those proceedings was whether or not an order granting a right of appeal against the appointment of outsiders to positions in the public service was beyond jurisdiction, and this in turn depended upon whether such an order would be one "relating to conditions of employment" of the officers concerned. The joint judgment of the Court approved observations made by Issacs and Rich JJ in Australian Tramway Employees Association v Prahran and Malvern Tramway Trust (1913) 17 CLR 680 at 693 where their Honours said: The "terms" of employment are the stipulations agreed to or otherwise existing on both sides upon which the service is performed. The 'conditions' of employment include all the elements that constitute the necessary requisites, attributes, qualifications, environment or other circumstances affecting the employment. The Court in R v Booth concluded that: The fact that an employee has, or has not, a right of appeal against the appointment of an outsider to a position the filling of which would affect his seniority is a circumstance affecting his employment. ... A right of appeal against the appointment of an outsider to a vacant office, whether granted by statute, award or agreement, might be made a term of the employment of an employee who might be affected by the appointment, and if granted would at least be a condition of the employment of such employee. (at 263) 25 Whilst, as we have said, it is neither necessary or appropriate that we determine this matter definitively, we observe that a provision requiring an employee to pay a bargaining agents fee may, in appropriate factual circumstances, be a condition of employment. If such circumstances exist and a relevant provision is included in an enterprise agreement approved under the Act, such payments may be made notwithstanding the "Truck Act" provisions of s 119 of the Act, since s 118(2)(b) permits an employer to deduct and pay from remuneration payable to an employee any payments which are so authorised by an industrial instrument. The term "industrial instrument" is defined as including an enterprise agreement. 26 We do not consider therefore that there is any provision of the Industrial Relations Act or principle of law which, per se, would prohibit the inclusion of a provision in an enterprise agreement which would permit the payment of a fee by employees to a third party involved in the negotiating of or maintenance of an enterprise agreement. There are obviously statutory provisions such as s 35(1)(d) and ss 209 and 210 of the Act which must be taken into account. However, whether the exclusion of such a provision is or is not appropriate must be determined by reference to the particular circumstances applying to the particular enterprise agreement. There may be circumstances where the inclusion of such a provision is entirely appropriate and others where it should definitely be excluded. However, there is no jurisdictional impediment per se to the approval of such a provision. A provision in the form pressed by the employer associations should therefore not be inserted in the principles to be laid down in these proceedings. 27 However, having regard to the matters raised during the course of these proceedings we consider it appropriate to insert a provision, in relatively general terms, which will require consideration of whether there is an appropriate and available basis for a bargaining agent fee to be included in a registered enterprise agreement where the document submitted for consideration by the Commission contains such a provision. The principle we propose to insert is: Where the proposed enterprise agreement includes a provision as to payment of an agency or union bargaining fee, the Commission shall consider whether the proposed provision is consistent with the provisions of the Industrial Relations Act 1996, and, where applicable, the rules of any relevant registered organisation. 28 Some of the matters which may need to be considered under the Act in determining whether or not to approve an enterprise agreement containing a bargaining fee provision may include a consideration of the following questions: 1. Is the provision a condition of employment? 2. Whether questions arise under s 209 and s 210 of the Act? 3. For the purposes of s 35(1)(b) and principle 4, what was the nature and extent of the involvement of non-member employees in the process of bargaining and ratification of the provision and what information was provided to those persons as to the bargaining agent and the nature and extent of the fee charged? 4. For the purposes of s 35(1)(d) and principle 4, what is the relationship between the bargaining agent and the persons affected by the fee and what was the nature of any consultative process with such persons? 29 We should add that the form of the provision which we have determined to insert in the principles was circulated to the parties who were asked to make submissions about it. The Minister for Industrial Relations and the Public Employment Office supported the inclusion of the principle without qualification. The Labor Council of New South Wales said that it was not strongly opposed to the insertion of such a principle although it had reservations because the principle required the Commission to be satisfied inter alia about matters which were already the subject of statutory requirements. The Labor Council also raised reservations concerning the reference to the rules of a registered organisation which might deflect parties from a consideration of enterprise agreements and focus attention on matters which were said to be irrelevant to the statutory requirements for approval. The employer associations stated that they found it difficult to make submissions on the proposed principle "without the benefit of the Commission's articulated views on the matters argued". They pressed for the insertion of a principle in the form originally proposed. We are not dissuaded by these further submissions from the insertion into the principles of the provision we now determine. 30 Notwithstanding its broad terms, we are satisfied that, at least for the life of the present principles, which s 33(3) of the Act requires to be reconsidered in three years time, the new principle provides a basis for this issue to be considered and appropriately dealt with by Members of the Commission in the course of considering applications for the approval and registration of enterprise agreements. 31 The principles to be laid down for the purposes of s 33 of the Act shall be those agreed by the parties (see paragraph [2]) together with the new principle as to agency or union bargaining fees. The Full Bench accordingly makes the following orders: 1. Pursuant to s 33(1) of the Industrial Relations Act 1996, the Full Bench sets the principles contained in the Annexure to this Decision as the principles to be followed by the Commission in determining whether to approve enterprise agreements. 2. The principles determined shall operate on and from 19 December 2002 and remain in force until further order of the Commission. _______________________ ANNEXURE Re Review of the Principles for Approval of Enterprise Agreements 2002 [2002] NSWIRComm 342 PRINCIPLES 1. Preamble 1.1 The following principles are to be applied by the Commission pursuant to s 33(1) of the Industrial Relations Act 1996 (the Act), in determining whether to approve enterprise agreements unless it is satisfied, in accordance with s 35(3) that any departure from these principles would not prejudice the interest of any parties to the agreement. 1.2 These Principles take effect from the date of this decision and remain in force until varied by the Commission in accordance with the Act. 1.3 In deciding whether to approve an enterprise agreement, the Commission, in accordance with s 146(2) of the Act, must take into account the objects of the Act, including whether the enterprise agreement provides equal remuneration for men and women doing work of equal or comparable value under the agreement. 1.4 The Principles embody matters related to the negotiation and processing of agreements, criteria for approval and seek to ensure that agreements and the processes which lead to agreements are appropriate and, having regard to the particular circumstances and needs of the employees to be covered by the agreement, the agreement complies with the Anti-Discrimination Act 1977. 1.5 In particular, the terms and conditions of employment in a proposed agreement must not unlawfully discriminate, either directly or indirectly, on the grounds of sex, race, marital status, homosexuality, age, disability, transgender identity or responsibilities as a carer. 2. Criteria for approval of enterprise agreements 2.1 Parties must demonstrate to the satisfaction of the Commission that they have followed all the requirements for approval, including: (a) involvement of the parties and/or their representatives in negotiation processes; (b) the parties understand the nature and effect of the agreement; (c) the parties did not enter the agreement under duress; (d) that all relevant employees are covered by the agreement; and (e) that the agreement does not breach relevant statutory requirements, including the requirements of Ch 2, Pt 2 (Enterprise Agreements) of the Act and the Anti-Discrimination Act 1977. 2.2 When the Commission is considering an enterprise agreement under s 35(2) of the Act, the Commission may also have regard to: (a) the wishes of the parties; (b) the award coverage of employees not covered by the proposed agreement; (c) the history of industrial regulation at the enterprise or workplace; and (d) other matters the Commission considers relevant. 2.3 Where a secret ballot is required pursuant to s 36(4) of the Act, the conditions of the ballot shall require that: (a) a returning officer be a person who is not the employer or a person selected by the employer; (b) to be eligible to vote, the person must be an employee who is to be covered by the agreement at the time the ballot is conducted; (c) each eligible employee is able to vote only once in a ballot; (d) the employees were able to vote in secret; (e) time/times were fixed for the ballot which enabled all eligible employees the opportunity to vote where practicable; (f) the ballots were secure until counting commenced; (g) the returning officer count and declare the result of the ballot; and (h) ballots be retained until after the agreement is processed by the Commission. The conditions of the ballot should usually include that: (a) each ballot form be initialled by the returning officer; (b) counting not commence until the ballot closed; and (c) scrutineers may observe the count of the ballot papers. In addition, the Commission may inspect the ballot papers. 2.4 The Commission, in accordance with s 35(1) of the Act, is to satisfy itself that: (a) in the case of an agreement that covers employees to whom State awards would otherwise apply the agreement does not, on balance, provide a net detriment to the employees when compared with the aggregate package of conditions of employment under the State awards, and (b) in the case of an agreement that covers employees to whom federal awards would otherwise apply the employees are not disadvantaged in comparison to their entitlements under the federal awards, and (c) in the case of an agreement that covers employees to whom no State or federal award would otherwise apply the agreement does not, on balance, provide a net detriment to the employees when compared with the aggregate package of conditions of employment under a State or federal award that covers employees performing similar work to that performed by the employees covered by the agreement. 2.5 In determining the "no net detriment" test, in accordance with s 35(1)(b), the Commission should have regard to: (a) the benefits and conditions applying under the proposed enterprise agreement in comparison to those applying under the relevant award/s; (b) the conditions in the proposed enterprise agreement being considered as an aggregate package; (c) provisions in the Occupational Health and Safety Act 2000 and regulations directly relevant to the change in work patterns to be performed under the agreement; (d) the needs and circumstances of the enterprise; (e) the wishes of the parties to the agreement; (f) any other matters the Commission considers relevant. Furthermore, in determining the "no net detriment" test, in accordance with s 35(1)(b), and without derogating from the above, the Commission shall have special regard to: (g) test case decisions of the NSW Industrial Relations Commission; (h) State decisions setting principles or provisions pursuant to s 51 of the Act; (i) minimum sick leave provisions for awards as prescribed under s 26 of the Act; where such provisions or principles are found in the relevant award/s or which apply to awards generally. 2.6 An enterprise agreement should, where appropriate, facilitate the establishment of consultative mechanisms and procedures appropriate to the size, structure and needs of the enterprise for consultation on matters affecting their efficiency and productivity. 2.7 In accordance with s 39 of the Act, an enterprise agreement may be required to contain dispute resolution procedures. The Commission is to have regard to whether those dispute resolution procedures facilitate the resolution of industrial disputes concerning discrimination in employment on a ground to which the Anti-Discrimination Act 1977 applies. 2.8 (a) Where the relevant award contains provisions for competency based vocational training, and vocational training is provided for in an enterprise agreement, it shall be in accordance with those provisions. (b) Notwithstanding the terms of Principle 2.7(a), the Commission may approve training provisions which do not accord with the award provisions to meet the operational requirements of the enterprise or for any other good reason. 2.9 Where the proposed enterprise agreement includes a provision as to payment of an agency or union bargaining fee, the Commission shall consider whether the proposed provision is consistent with the provisions of the Industrial Relations Act 1996, and, where applicable, the rules of any relevant registered organisation. 3. Process for approving agreements to be followed by the Commission 3.1 The Commission, in accordance with s 169(1) of the Act, must take into account the principles of the Anti-Discrimination Act 1977 when exercising its functions under these Principles including having regard to whether the enterprise agreement contains an anti-discrimination clause in the form of Attachment 1 to these Principles. 3.2 In approving enterprise agreements in accordance with the Act and Principles, the Commission may approve an agreement by way of an informal process. However, parties may be required to address the Commission on all matters required under the Act and Principles. 3.3 For the purpose of s 38(1) of the Act, where an enterprise agreement has been approved by a secret ballot pursuant to s 36(4) of the Act, one or more employees may be nominated by the employees to sign the agreement on behalf of all the employees to be covered by the agreement. 3.4 The responsibility for lodging the Comparison and Compliance Statement, pursuant to r 41 of the Industrial Relations Commission Rules 1996, rests with the applicant, provided that where individual employees are the applicant, it shall be sufficient that a selected representative of the employees files the required statement. 4. Process ensuring sufficient information 4.1 During the negotiation of the agreement, consultative processes should be structured such that they encourage participation of all groups and categories of employees, which may include part-time and casual employees. 4.2 The negotiation process should therefore ensure that: (a) reasonable steps are taken to consult all employees who are to be covered by the agreement about the agreement; (b) reasonable steps are taken so that employees who are to be covered by the agreement have an understanding of the agreement and its effect; (c) employees are informed of the intention to have the agreement approved by the Commission and the consequences of the Commission's approval; (d) employees have access to the proposed agreement and the relevant award/s; and (e) employees have had reasonable time to seek advice independent from the employer; for example, including relevant industrial organisations of employees. 5. Appropriate negotiating process 5.1 Where the parties have agreed to negotiate an agreement, they should attend meetings they have agreed to attend, provide documentation they have agreed to provide, and comply with agreed or reasonable negotiating procedures. 5.2 In negotiations for a proposed enterprise agreement, the parties will consider matters such as workplace reform, productivity and efficiency. ATTACHMENT 1 - ANTI-DISCRIMINATION 1. It is the intention of the parties to this agreement to seek to achieve the object in s 3(f) of the Industrial Relations Act 1996 to prevent and eliminate discrimination in the workplace. This includes discrimination on the grounds of race, sex, marital status, disability, homosexuality, transgender identity, age and responsibilities as a carer. 2. It follows that in fulfilling their obligations under the dispute resolution procedure prescribed by this agreement the parties have obligations to take all reasonable steps to ensure that the operation of the provisions of this agreement are not directly or indirectly discriminatory in their effects. It will be consistent with the fulfilment of these obligations for the parties to make application to vary any provision of the agreement which, by its terms or operation, has a direct or indirect discriminatory effect. 3. Under the Anti-Discrimination Act 1977, it is unlawful to victimise an employee because the employee has made or may make or has been involved in a complaint of unlawful discrimination or harassment. 4. Nothing in this clause is to be taken to affect: (a) any conduct or act which is specifically exempted from anti-discrimination legislation; (b) offering or providing junior rates of pay to persons under 21 years of age; (c) any act or practice of a body established to propagate religion which is exempted under s 56(d) of the Anti-Discrimination Act 1977; (d) a party to this agreement from pursuing matters of unlawful discrimination in any State or federal jurisdiction. 5. This clause does not create legal rights or obligations in addition to those imposed upon the parties by the legislation referred to in this clause. NOTES (a) Employers and employees may also be subject to Commonwealth anti-discrimination legislation. (b) Section 56(d) of the Anti-Discrimination Act 1977 provides: "Nothing in the Act affects … any other act or practice of a body established to propagate religion that conforms to the doctrines of that religion or is necessary to avoid injury to the religious susceptibilities of the adherents of that religion." _____________________________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.