Enterprise Agreement Bargaining – “Agreement in Writing” Clarified

| February 18, 2025

When Is an Agreement to Bargain Legally Binding?

Enterprise agreement bargaining can be a complex legal process, and a recent Full Bench decision of the Fair Work Commission (FWC) has clarified what it means for an employer to “agree in writing” to bargain for a proposed single-enterprise agreement.

In Australian Municipal, Administrative, Clerical and Services Union v Central Goldfields Shire Council and Ararat Rural City Council [2024], the FWC ruled that a general willingness to negotiate does not constitute a binding agreement. Instead, written agreement must be explicit and clearly indicate commitment to bargaining for a specific single-enterprise agreement.

This decision reinforces the need for precise language and clear documentation when employers engage in enterprise bargaining discussions.

Background of the Case

The Australian Municipal, Administrative, Clerical and Services Union (ASU) sought a single-interest employer authorisation to enable multi-employer bargaining between Central Goldfields Shire Council (Goldfields Council) and Ararat Rural City Council.

While Ararat Council did not oppose the application, Goldfields Council contested it, arguing that:

• It had already “agreed in writing” with the Australian Nurses and Midwives’ Federation (ANMF) to bargain for a single-enterprise agreement.
• The authorisation would be contrary to the public interest.

The ASU’s application followed the expiry of both councils’ existing enterprise agreements.

FWC Findings: Why the Agreement Was Approved

After reviewing the arguments, the FWC granted the authorisation and dismissed Goldfields Council’s objections.

1. Written Agreements Must Be Clear and Specific

Goldfields Council claimed that an email from the ANMF expressing willingness to meet, along with a preamble in the ANMF’s log of claims, amounted to an “agreement in writing” to bargain.

The FWC rejected this argument, ruling that:

• General discussions or expressions of interest do not meet the legal threshold for an agreement in writing.
• The ANMF’s communication lacked specificity and was conditional on further developments.
• A valid written agreement to bargain must be explicit, clear, and reflect a final decision.

2. Multi-Employer Bargaining Was in the Public Interest

Goldfields Council further contended that multi-employer bargaining was inconsistent with the Fair Work Act’s emphasis on enterprise-level bargaining and would undermine harmonious workplace relations.

The FWC dismissed this argument, stating:

• Multi-employer bargaining is contemplated under the Act where specific requirements are satisfied. 
• The councils had “clearly identifiable common interests” and “reasonably comparable operations,” as evidenced by shared regulatory frameworks and service delivery models. 
• The public interest is presumed satisfied under section 249(3AB) unless proven otherwise, which Goldfields Council failed to establish. 

Key Takeaways for Employers

✔ Use Explicit and Unambiguous Language

A general willingness to meet or negotiate is not enough to establish a binding agreement to bargain. Employers must ensure that any commitment to bargaining is clearly expressed in writing, the specific type of agreement being negotiated is explicitly stated, and the language used is final and conclusive, not conditional.

✔ Properly Document All Steps in the Bargaining Process

Employers should maintain comprehensive records of all bargaining discussions to prevent disputes over whether an agreement was reached. This includes clearly documented agreements with bargaining representatives, detailed meeting records showing the status of negotiations, and confirmation of final decisions in writing to avoid ambiguity.

At IRiQ Law, we assist businesses in navigating bargaining processes, ensuring legislative compliance. Contact us today.