All Providers: Changes to Enterprise Bargaining Agreement Model Terms to Come into Effect from 26 February 2025

What’s Happened? 

As part of the Closing Loopholes Legislation, the Fair Work Act 2009 has undergone changes, requiring updates to model terms for enterprise bargaining agreements (EBA) and a new dispute resolution term for employees transferring under copied State instruments. These model terms, which are currently set out in the Fair Work Regulations 2009, will soon be determined by the Fair Work Commission (FWC). The changes will come into effect either at time of proclamation or no later than 26 February 2025. At the time of publication, proclamation has yet to be made. 

What Does This Mean? 

The new model terms will cover flexibility, consultation, and dispute resolution in enterprise agreements. Additionally, there will be a term to address disputes related to matters arising under copied State instruments for employees transferring between employers. These terms aim to standardise provisions across enterprise agreements, ensuring consistent workplace practices and dispute resolution procedures. 

The FWC now has the power to determine model terms within an EBA, replacing the previous system where the terms were prescribed by the Fair Work Regulations. While businesses can still include their own flexibility and consultation terms, or use the FWC’s model clauses, if an agreement is silent or non-compliant, the model terms will be inserted during the approval process. This procedural change means that employers cannot be forced to adopt these model terms but will need to ensure their agreements meet the requirements of the Fair Work Act 

Though these changes are not prescriptive, they are significant. The FWC’s approach could shift towards best practices that favour employees, potentially influencing future agreements in favour of workers’ rights. This change also reflects a move towards greater public participation in shaping workplace terms, empowering employees and other stakeholders to contribute to the development of relevant and up-to-date conditions. 

Keeping Up To Date 

At the time of publication, the consultation process for the draft model terms is nearing completion. The Full Bench of the FWC has already considered submissions and held a public session on 3 December 2024. Draft terms were published for further comment on 20 December 2024, and employers have until 31 January 2025 to submit their feedback to the FWC. 

Providers should stay informed about these developments, as the updated model terms could impact how flexibility, consultation, and dispute resolution are handled within enterprise agreements. Providers should also ensure their enterprise agreements comply with the new standards and consider participating in the consultation process to ensure their views are considered.