The Fair Work Commission (FWC) has declined to approve an enterprise agreement, despite the Employer conducting multiple roadshows, sending individualised letters with each employee’s new classification under the proposed agreement, and holding multiple meetings and discussion with employees.
What more could they have done to satisfy the requirement to explain the terms and effect of changes to the classification structure? The FWC put this down to a failure to provide a chart or table explaining how existing classifications mapped against new ones proposed in the agreement and an overly positive framing of the changes to the agreement.
Background
I-MED Regional Pty Ltd, which provides diagnostic radiology services across regional Victoria, sought approval of an agreement covering around 201 clerical and health professional employees across Gippsland, Sunraysia/Mildura and Goulburn Valley. The agreement consolidated two existing enterprise agreements and the Health Professionals and Support Services Award 2020.
While the Health Workers Union supported approval, the Victorian Allied Health Professionals Association (VAHPA) opposed it, arguing that employees had not genuinely agreed to the agreement.
Key Issues: Explaining Classifications
The Commissioner found that although I-MED undertook substantial consultation — including roadshows, explanatory materials, and personalised letters — the steps fell short of meeting the statutory obligation under s 180(5) of the *Fair Work Act 2009.
Importantly, the Commission pointed to the following failures:
- Lack of detailed comparison: I-MED prepared comparison documents for other terms of the agreement but failed to prepare similar materials for the new classification structure. A side-by-side table may have allowed employees to properly assess how the changes differed from existing instruments.
- Overly positive framing: By presenting the new classifications as opportunities for “career and pay progression,” I-MED risked misleading employees into believing there were no negative impacts. In reality, some duties, such as tutoring and teaching, shifted to lower classifications — a material change that should have been clearly explained.
- Insufficient explanation of the whole agreement: While individual letters showed how the new structure affected pay and classification on a personal level, this was not enough. The Commission stressed that employees must be able to understand the agreement in its entirety, not just the parts most directly relevant to them.
- Failure to take all reasonable steps: Given that classification changes were a significant part of bargaining and involved aligning three predecessor instruments, I-MED was required to go further than it did to ensure employees understood the consequences.
- Union explanations not sufficient: Although VAHPA circulated material critical of the classification structure, it reached less than half of the workforce and lacked the necessary detail to meet the statutory standard. The employer could not rely on this to fill the explanatory gap.
- Evidentiary shortcomings: The Commission noted there were no notes of roadshows or individual conversations with managers that could demonstrate what was actually explained. Limited evidence of informal discussions could not establish compliance with the Act.
Taken together, these findings underline that the obligation under s 180(5) is a substantive one: employers must provide employees with the tools to make an informed choice, not just general assurances or positive messaging. The absence of detailed, transparent comparisons left the Commission unsatisfied that the agreement had been genuinely agreed to.
Implications
This case highlights the Commission’s close scrutiny of whether employers meet their obligation to ensure employees can make an informed choice*when voting on an agreement. It reinforces that:
- Comparison materials are essential when consolidating classification structures.
- Employers must present both positive and potentially adverse changes.
- Individualised letters are useful but not sufficient to discharge the statutory obligation.
- Record-keeping of explanatory sessions is critical.
Final Thoughts
This decision reinforces that genuine agreement requires more than positive messaging—it requires clear, balanced explanations backed by evidence. Employers must provide comparison tools and document their efforts to meet their obligations under the Fair Work Act.
At IRiQ Law, we assist employers with developing enterprise agreements that meet both legal and practical expectations. From mapping classification structures to preparing compliant communications, we ensure your processes withstand scrutiny. Contact us today if you’re planning or reviewing an enterprise agreement.
Latest News
Posted in News