There\nare two steps to obtaining approval for a new enterprise agreement. The first\nstep is for employees to vote on whether they approve of the proposed\nenterprise agreement. If the majority of employees vote in favour of the new\nenterprise agreement the agreement progresses to the second step.<\/p>\n\n\n\n
The second step in approving a new enterprise agreement is obtaining approval from the Fair Work Commission (the FWC<\/strong>). One of the key factors that the FWC needs to be satisfied of before approving a proposed enterprise agreement is whether the enterprise agreement passes the Better Off Overall Test (the BOOT<\/strong>). <\/p>\n\n\n\n So what is the BOOT? What does better off overall mean? Who must be better off? <\/p>\n\n\n\n Legislative\nAuthority<\/strong><\/p>\n\n\n\n The BOOT is outlined in section 193 of the Fair Work Act 2009<\/em> (Cth) (the FW<\/em><\/strong> Act<\/strong><\/em>). To pass the BOOT employees and prospective employees covered by the proposed enterprise agreement need to be better off overall when compared to the relevant award\/s. It is a consideration of the terms of the enterprise agreement that are more and less beneficial to employees compared to similar terms in the relevant award\/s to determine if employees are better off overall. When undertaking the BOOT the FWC ignores any individual flexibility arrangements that the employer may have with any employees covered by the proposed enterprise agreement. The time for determining if employees are better off is the time the application is made with the FWC, known as the test time.<\/p>\n\n\n\n What\nis Better Off Overall?<\/strong><\/p>\n\n\n\n Recently the FWC has provided additional clarification on the BOOT in BOC Limited (Gas & Gear \u2013 Victoria) Certified Agreement 2019<\/em> [2019] FWCA 5544<\/a>. Deputy President Colman reviewed the application by BOC Limited to approve the proposed enterprise agreement. The National Union of Workers (the NUW<\/strong>) argued that the enterprise agreement did not pass the BOOT for prospective employees. Under the proposed enterprise agreement future employees were unable to accrue rostered days off for overtime worked. The FWC provided calculations that the higher rate of pay offered to employees meant that prospective employees were better off financially under the proposed enterprise agreement. The NUW further argued that future employees were unable to have the \u2018intangible\u2019 or \u2018lifestyle\u2019 benefits that came with taking RDOs or accruing time off in lieu for overtime worked and that this loss of \u2018intangible\u2019 or \u2018lifestyle\u2019 benefits should be taken into consideration when conducting the BOOT. Deputy President Colman stated that it was not inherently more beneficial to take RDOs and time off in lieu compared to receiving overtime payments. This was a subjective consideration. Individual employees would have different views on whether RDOs and time off in lieu compared to a higher rate of pay was more beneficial. <\/p>\n\n\n\n Deputy President Colman further stated that the BOOT focuses on objective and verifiable considerations. The assessment of whether an employee is better off under the proposed agreement is not a line by line comparison. Nor is it against the FW Act<\/em> for an enterprise agreement to trade off conditions. The test is whether employees are better off overall<\/em> under the enterprise agreement as a whole<\/em>. The BOOT does not take into account the personal preferences of each individual employee. Deputy President Colman held that under the proposed enterprise agreement current and prospective employees were better off. The higher rate of pay outweighed the loss of ability to accrue RDOs and take days off in lieu of overtime. <\/p>\n\n\n\n Who\nhas to be Better off Overall?<\/strong><\/p>\n\n\n\n Section\n193 of the FW Act<\/em> sets out that to pass the BOOT the enterprise\nagreement is to be better off overall for \u2018each award covered employee<\/em>,\nand each prospective award covered employee<\/em>\u2019. FW Act<\/em> sections\n193(4) and (5) define who is an award covered employee and who is a prospective\naward covered employee. An award covered employee is an employee that is both\ncovered by the proposed enterprise agreement and who at the test time is\ncovered by a current modern award, the award covers the employee\u2019s duties and\nthe award covers their employer. A prospective award covered employee is a\nperson if at the test time could have been employed by the employer and meets\nthe requirements of an award covered employee. Use of the word \u2018each\u2019 means\nthat all award covered employees and prospective award covered employees must\nbe better off under the new enterprise agreement.<\/p>\n\n\n\n