Recent Decisions
Two recent Fair Work Commission decisions have provided insight as to how applications for approval of enterprise agreements made with a small voting cohort (including casuals), can still be approved in light of the recent legislative changes (usually in circumstances where there is no union involvement in bargaining).
Previously, applications for approval had been struck down by the Commission where the voting cohort didn’t have ‘sufficient interest’ or weren’t ‘sufficiently representative’ of the agreement. Under section 188(2) of the Fair Work Act 2009 (Cth), the Commission has considered whether such cohorts have a ‘sufficient interest’ or were ‘sufficiently representative’. If these two requirements cannot be met then the Commission usually cannot be satisfied that the agreement had been ‘genuinely agreed’ to and must dismiss the application for approval.
The first case involves a labour hire company, Innovative Asset Solutions Pty Ltd, that services a variety of industries both offshore and onshore.[1] At first instance, Commissioner Lim found that the voting cohort (46) was not sufficiently representative due to the being all casual, despite the agreement also covering permanent classifications.[2] This was successfully appealed and the Full Bench redetermined the application and approved the agreement.
A month later, a Full Bench of the Commission dismissed an appeal by the Australian Workers’ Union against a decision approving an agreement where the voting cohort (128) were all casual employees, despite the agreement also covering permanent classifications.[3] The employer, Skout Solutions Pty Ltd, is a labour hire firm that works across a number of industries such as construction, electrical, manufacturing, oil and gas.
In both cases, it was found that the small all-casual or all casual voting cohorts were sufficiently representative, for the agreement to be approved. Helpfully, the Commission has highlighted the factors that may be relevant when determining if a cohort has a ‘sufficient interest’ and is ‘sufficiently representative’ for the purpose of making an agreement (that also covers permanent classifications).
Casuals
In both cases, the key argument against approval was that casual voting cohorts are not sufficiently representative to vote on the agreement as the agreement also covered full-time and part-time employees. In IAS, the Commission found that the inclusion of casual conversion terms showed sufficient interest in the terms applying to permanent employees.[4] The fact that employees were engaged as casuals and not permanent was not a reason to find that the agreement was ingenuine.[5]
Additionally, in industries undertaking project work, it is unremarkable that employers will undergo significant peaks and troughs in business as they win and lose project contracts. As such, those employers tend to have a large, if not exclusive, casual cohort.[6]
Award/Industry Coverage
Often agreements are objected on the basis that they seek to cover industries that the employer doesn’t currently operate in.
The Full Bench in IAS found that there can be intelligible and legitimate business reason for an employer who operates in one industry to make an agreement with a small cohort to allow for expanding their operations into further industries or sectors it doesn’t operate in.
This is distinct from an employer purporting to cover diverse industry sectors on a hypothetical basis. As such, a voting cohort covering only a fraction of the purported industries does not necessarily mean that there is not a genuine agreement.[7]
In Skout, particular attention was drawn to the fact that as a labour hire firm, they may engage one employee as an electrician but due to the nature of the industry, that employee may perform work across numerous modern awards (onshore and offshore application), depending on client needs.[8]
Classification
To be sufficiently representative requires a “sufficient appreciation of the appropriateness of the terms and conditions proposed”.[9] Previously, sufficient representation required the cohort to work in the classifications they were voting on, however, IAS and Skout provide that employees’ work history is a relevant consideration in determining if they are sufficiently representative. Previous experience, even with different employers gives the cohort sufficient capacity to understand the terms and conditions proposed classifications.
Method of Remuneration
In Skout, it was argued that the cohort did not have sufficient interest as only 14 of 128 employees were paid at the rates provided for in the agreement. However, that does not mean that the bargaining process involved some “contrived exercise” to vote up an agreement by employees who had no interest.[10] The Full Bench found it relevant that in some industries it may be common that employees are paid above the agreement rate. Specifically, in Skout, as a labour hire firm, it was made clear that in between projects, employees may revert to agreement rates.[11] As such, the voting cohort has sufficient interest.
Authenticity
Overall, the Commission is concerned about the ‘authenticity’ of an agreement and that an agreement hasn’t been made in the form of a “instrumental Trojan horse“.[12] Section 188 of the Act requires the Commission to focus its attention on the capacity of the voting cohort of employees, to speak for the agreement, not only their own behalf but on the behalf of other future employees in other classifications in the agreement.[13]
This allows for a wide scope of arguments to be made before the Commission with reference to nature of the employer’s business/enterprise, the nature of their business cycle, industry standards or future plans for expansion. Additionally, an employer may rely on their employee’s experience, skills or qualifications in satisfaction of proving they are sufficiently representative for the purpose of authentic bargaining.
Further, the history of bargaining (formal or informal) and whether the employer operates a genuine and well-established business enterprise are some other matters where the Commission may assess authenticity.
Take Aways
Both cases concerned labour hire firms, which arguably requires greater level of flexibility than other industries. However, employers should feel a sense of confidence as the Commission pivots to consider practical and commercial realities of employers when approving enterprise agreements. This creates greater flexibility and scope for the Commission to consider individual business needs and concerns.
If considering making an enterprise agreement with a small cohort of workers, employers should practically consider (for example):
- Whether employees are working on a legitimate scope of work during the agreement-making process and will continue to work under the terms and of the agreement once it commences in operation.
- Expressly providing for casual conversion clause within the proposed agreement to demonstrate that casuals can convert and have a ‘stake’ in permanent terms and conditions in the agreement.
- Whether a legitimate business reason has been made (e.g. at a C-suite level or Board resolution) to expand into further industries or sectors as opposed to just a hypothetical expansion.
- The experience, qualifications and skills of voting employees and whether they could work across all classifications set out in the agreement. This could be initially assessed by considering employee CVs which would helpfully include past employer experience.
- Whether employees currently paid at above agreement rates, would work at different locations over time, and be paid agreement rates. If paid above agreement rates, do any other agreement terms and conditions have material impact on them (for example, higher superannuation on actual rates received).
- Whether to engage in consultation with relevant union/s regarding agreement terms and obtaining endorsement. Particularly, so where an employer is simply seeking an agreement with industry standard terms.
Mills Oakley has successfully assisted and represented a range of companies across Australia validly make enterprise agreements, in similar circumstances (including when facing union objection on approval.
[1] Innovative Asset Solutions Pty Ltd Trading AS IAS v The Australian Workers’ Union, The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union Of Australia (Electrical Division, Western Australia) and Others [2025] FWCFB 250 (IAS).
[2] IAS at [20].
[3] Australian Workers’ Union v Skout Solutions Pty Ltd [2026] FWCFB 14 (Skout).
[4] IAS at [109].
[5] IAS at [106].
[6] IAS at [50].
[7] IAS at [49].
[8] Skout at [35].
[9] IAS at [54].
[10] Skout at [52].
[11] Ibid.
[12] IAS at [64].
[13] IAS at [59].