Awards and Enterprise agreements

Awards

The Industrial Relations Commission of New South Wales (Commission) may make new awards or vary existing awards for NSW public sector and local government employees in accordance with the Industrial Relations Act 1996 (NSW) (IR Act). 

An award sets fair and reasonable conditions of employment for employees in specific industries or occupations, including:

• dispute resolution procedures (s 14);
• ordinary hours of employment (s 22);
• equal remuneration (s 23);
• employment protection provisions (s 24);
• provisions relevant to technological change (s 25);
• sick leave (ss 26, 27);
• part-time work (s 21(f)); and
• casual work (s 21(g)).

Awards are legally binding on employers, employees and industrial organisations covered by the award.  The awards made by the Commission can be found here.  

Who can make an application for an award? 

The Commission may make an award on its own initiative, in the course of an arbitration to resolve an industrial dispute under Chapter 3 of the IR Act or by application.¹

An employer, industrial organisation or State peak council can make an application to create, vary or rescind an award.² The parties can also file an application to join proceedings before the Commission that are related to the creation, variation or recission of an award.³

Under both circumstances, the Commission must be satisfied that the applicant(s) or any one or more of its members has a sufficient interest in the matter.⁴

How to apply for a new award, variation or recission

The applicant must file an Application in respect to an industrial instrument through the NSW Online Registry to create an award.⁵ The same form should be used to apply for a variation or recission of an award.⁶

Applications can be sent by post, email or delivered in person to the Commission if the NSW Online Registry is experiencing technical difficulties. 

What is a consent award?

A consent award is an award made with the mutual consent of all parties to the proposed award, including a variation to an award made with the mutual consent of all parties to the original award.⁷An Application in respect to an industrial instrument for a consent award must be supported by an affidavit setting out the matters proscribed under rule 6.8 of the Industrial Relations Commission Rules 2022 (NSW).

The Commission has designed a template for a supporting affidavit, together with an explanatory note, to assist parties to comply with the various requirements for the approval of a consent award application.  The template can be found here.

Award reviews

The Commission is required to review awards at least once in every three years⁸ to modernise, consolidate or rescind awards.⁹ It makes such changes to awards as it considers necessary as a result of the review.

The Commission will consider the following matters when reviewing an award:

• any National or State decision adopted by the Commission under Chapter 2, Part 3 of the IR Act or any other test case decision of the Commission;
• rates of remuneration and other minimum conditions of employment;
• part-time work, casual work and job-sharing arrangements;
• dispute resolution procedures;
• issues related to discrimination, including pay equity;
• obsolete provisions or unnecessary technicalities and the ease of understanding of the awards;
• the effect of the awards on productivity and efficiency in the industry concerned; and
• any other matter relating to the objects of the IR Act that the Commission determines.¹⁰

Relevant industrial organisations and any other parties to the awards may make submissions on any of the matters under review.¹¹

Enterprise agreements

An enterprise agreement is a legally binding document that sets out the pay and conditions of employment for NSW public sector and local government employees. An enterprise agreement may be made between employees and their employer(s), or between the employees’ industrial organisations(s) and employer(s).¹²

The parties negotiate the terms of the enterprise agreement and, when finalised, the document is lodged with the Industrial Relations Commission of New South Wales (Commission) for approval.¹³

After the Commission approves the enterprise agreement, it will prevail over the provisions of a State award that deals with the same matters.  The enterprise agreements approved by the Commission can be found here. 

What are the requirements before lodging an enterprise agreement for approval?

A checklist of steps that parties need to take to have an enterprise agreement approved under the Industrial Relations Act 1996 (NSW) (IR Act) is outlined at [88] of State Super Enterprise Agreement 2024-2027 [2024] NSWIRComm 8.

An enterprise agreement which is not made with an industrial organisation will only be approved if the special requirements under s 36 of the Industrial Relations Act 1996 (NSW) have been fulfilled. 

Special requirements relating to enterprise agreements to which employees are parties

Before or at the time formal negotiations commence for an enterprise agreement to which employees are a party, the employer must advise the Industrial Registrar in writing of the following:

• that an enterprise agreement is proposed or under negotiation; and
• the State or Federal awards or enterprise agreements that apply to the employees at that time.¹⁴

The Industrial Registrar will notify the relevant parties as required under cl 4 of the Industrial Relations (General) Regulation 2020 (NSW).

The proposed enterprise agreement must be approved in a secret ballot by at least 65 percent of the employees who are to be covered by the agreement at the time.  The secret ballot must be executed in accordance with s 37 of the IR Act.

If approved in the secret ballot, the proposed enterprise agreement can be lodged at the Commission for approval.¹⁵

How should an enterprise agreement be lodged at the Commission?

The applicant must submit an Application in respect to an industrial instrument and the proposed enterprise agreement through the NSW Online Registry. Applications can be sent by post, email or delivered in-person at the Commission if the NSW Online Registry is experiencing technical difficulties.¹⁶

In accordance with r 6.9 of the Industrial Relations Commission Rules 2022 (NSW), an application must also be accompanied by an affidavit that:

• identifies the awards or contract determinations, if any, over which the agreement will prevail;
• identifies other enterprise agreements that will be rescinded or replaced if the agreement is approved;
• compares the conditions of employment or engagement under the agreement with the comparative conditions of employment;
• sets out why the comparative conditions of employment or engagement under the agreement, do not, when considered as a whole, result in a net detriment to the employees covered by the agreement;
• sets out why the agreement complies with relevant statutory requirements, including in the Anti-Discrimination Act 1977 (NSW);
• confirms the parties understand the effect of the agreement;
• confirms the parties did not enter into the agreement under duress;
• confirms the agreement complies with the principles set by the Commission under the IR Act or explains why any departure from the principles does not prejudice the interests of the parties to the agreement; and
• if the agreement does not cover all the employees of the employers to whom the agreement relates, sets out the basis on which it is contended the Commission is not prevented from approving the enterprise agreement under s 35(2) of the IR Act.

Applicants can download a template for a supporting affidavit, together with an explanatory note, which will assist parties to comply with the various requirements for the approval of an enterprise agreement.  The template is available here.

The Commission will deal with an application for approval within 28 days, unless it requires additional time to do so because of special circumstances.¹⁷

What will the Commission consider?

The Commission will consider whether:

• the agreement complies with all relevant statutory requirements;
• the agreement does not, on balance, provide a net detriment or disadvantage to the employees when compared with the aggregate package of conditions of employment under any relevant State or Federal awards that may apply;
• if no State or Federal award would otherwise apply—the proposed enterprise agreement, on balance, provides a net detriment or disadvantage compared with the aggregate package of conditions of employment under a State or Federal award that covers employees performing similar work;
• the parties understand the effect of the agreement; and
• the parties did not enter the agreement under duress.¹⁸

The Commission must also follow the principles set out by the Full Bench of the Commission under s 33 of the IR Act when deciding whether to approve an enterprise agreement, unless it is satisfied that any departure from those principles would not prejudice the interests of the parties to the agreement. See Review of the Principles for Approval of Enterprise Agreements 2021/2022 [2022] NSWIRComm 1005.

^{1 Industrial Relations Act 1996 (NSW) s 11(1).; 2 Ibid ss 11(2), 17(2).; 3 Ibid ss 11(3), 17(2).; 4 Ibid s 11(4).; 5 Ibid s 10.; 6 Ibid s 17.; 7 Industrial Relations Commission Rules 2022 (NSW) r 6.8(3).; 8 Industrial Relations Act 1996 (NSW) s 19(1).; 9 Ibid s 19(2).; 10 Ibid s 19(3)– (4).; 11 Ibid s 19(5).; 12 Industrial Relations Act 1996 (NSW) s 31.; 13 Ibid s 32.; 14 Ibid s 36(2).; 15 Ibid s 36(4).; 16 Ibid s 34.; 17 Ibid.; 18 Ibid s 35.}