There was a recommendation that bargaining and flexibility negotiations at the enterprise level return to the concept of a ‘No Disadvantage Test’, both for collective enterprise agreements and individual flexibility arrangements. This would be significant, as the current ‘Better off Overall Test’ is a higher standard to meet, and more difficult to assess. The purpose of the change would be to encourage the use of these types of arrangements, especially in smaller businesses, with the potential for outcomes that meet the needs of both employers and employees. Ultimately, the Australian economy would benefit from parties’ needs being more closely aligned.

The Commission also suggested the concept of the ‘enterprise contract’, an agreement that would fall between an individual flexibility arrangement and a full-blown enterprise agreement. This has partly come about because of stringent procedures required for both current types of agreements that permit departure from the modern award. The strict procedural requirements have meant that small business owners have either exposed themselves to prosecution by unintentional misuse of the agreements, or they have decided that the requirements are too cumbersome, meaning that potential flexibilities are foregone.

The full report is available here –

None of these recommendations are currently enforceable. In order for any of the suggested changes to become law, the government would need to adopt them as policy, draft legislation, and shepherd it through both federal Houses of Parliament.

So this is, potentially, a glimpse at the future of workplace relations in Australia.


Emma Watt is an independent industrial relations consultant with almost 20 years’ experience in the timber industry.

Phone: 0411 708 073 or Email: