Fair Work Act 2009

An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that:

each award covered employee, and each reasonably foreseeable employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee; and

if the agreement is a single‑enterprise agreement that covers one or more employees (each of whom is an old agreement employee) to whom a supported bargaining agreement or a single interest employer agreement applies—each old agreement employee would be better off overall if the single‑enterprise agreement applied to the employee than if the supported bargaining agreement or single interest employer agreement (as the case requires) applied to the employee.

Reasonably foreseeable employee is defined in subsection (5).

Section 193A sets out rules for applying the better off overall test, including requiring the FWC to only have regard to patterns or kinds of work, or types of employment, that are reasonably foreseeable at the test time (see subsection 193A(6)).

If an employee is, at the test time, both an old agreement employee and an award covered employee, the FWC must undertake an assessment against only paragraph (1)(b) for that employee.

If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.

If, under the flexibility term in the supported bargaining agreement or single interest employer agreement, an individual flexibility arrangement has been agreed to by an old agreement employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the single‑enterprise agreement passes the better off overall test.

A greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each reasonably foreseeable employee for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

An award covered employee for an enterprise agreement is an employee who:

is covered by the agreement; and

at the test time, is covered by a modern award (the relevant modern award) that:

is in operation; and

covers the employee in relation to the work that he or she is to perform under the agreement; and

covers his or her employer.

A reasonably foreseeable employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

would be covered by the agreement; and

would be covered by a modern award (the relevant modern award) that:

is in operation; and

would cover the person in relation to the work that he or she would perform under the agreement; and

covers the employer.

The test time is the time the application for approval of the agreement by the FWC was made under subsection 182(4) or section 185.