A Victorian water authority was found to have contravened the no extra claims clause in its enterprise agreement, in a decision handed down by the Fair Work Commission (FWC) last week. The authority made changes to a vehicle policy which provided some employees with limited private use of work vehicles. The enterprise agreement itself contained no provisions dealing directly with the provision or private use of motor vehicles.
The policy change came about due to recent changes to fringe benefits tax, which nearly tripled the cost to the employer wanting to provide private use of its vehicles to employees. The employer sought to remove the entitlement, and offered affected employees a one-off payment in place of the entitlement. This in turn was rejected by the employees.
Following an application by the Australian Services Union to deal with the dispute under the enterprise agreement's dispute resolution clause, the FWC found that under the circumstances, the withdrawal of the benefit for personal vehicle changed the employees' conditions of employment, and a "further claim" within the meaning of the no extra claims clause of the enterprise agreement.
The FWC held that in the absence of agreement to change conditions of employment through variation of the enterprise agreement, bargaining for a new one, or settlement of the dispute through other means, the enterprise agreement did not authorise the water authority to implement the change.
Changes to policies will not necessarily breach a no extra claims clause. This depends on the wording and effect of relevant policies, enterprise agreements and the circumstances of the case. Consideration should be given to the outcome of this decision when employers make enterprise agreements and when setting or varying policies or other conditions of employment, particularly where the effect of the variation will be to remove a benefit previously enjoyed by employees.
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