Enterprise Agreements are agreements made at enterprise level which contain terms and conditions for those national system employees to whom it applies.
Enterprise Agreements can apply to one business, a group of business or, in some circumstances, an individual employee. Where a registered Enterprise Agreement has been implemented in an enterprise it supersedes any applicable Modern Award.
Enterprise Agreements will often contain notice terms. Notice terms set out the minimum periods of notice or payment in lieu thereof payable to the employee in the event of the termination of an employment contract. Notice terms are rarely more generous than the National Employment Standards contained in the Fair Work Act 2009 (Cth). Oftentimes the maximum total notice period available upon termination of an employment contract will be five weeks, with the minimum being one week.
As notice terms in Enterprise Agreements are often ungenerous our clients regularly ask us “am I entitled to more than is set out in the Enterprise Agreement”. Unfortunately, the answer would appear to be ‘no’.
In Byrne and Frew v Australian Airlines Ltd (1995) 185 CLR 410 their Honours Brennan CJ, Dawson and Toohey JJ stated “in the absence of any provision in the Award and any express provision in the contract of employment the law would regard it as a legal incident of the contract that it should be terminable upon reasonable notice or summarily for serious breach”. Similarly, in Elliot v Kodak Australasia Pty Limited (2001) 108 IR 23 the Australian Industrial Relations Commission found that a notice term contained in an Award usurped the implication of any term providing for a greater period of notice into the employee’s contract of employment.
The two decisions listed above deal with Awards rather than Enterprise Agreements. And while the issue has not been litigated in respect of an Enterprise Agreement, it is highly likely that the principles enunciated in respect of Awards would also be held to apply to Enterprise Agreements. It would therefore appear that a notice term contained in an Enterprise Agreement prevents the implication of a term providing for a greater period of notice into the employee’s contract of employment.