Major Fair Work decision
What it means for Early Childhood employers
On 28 January 2025, Commissioner Hampton of the Fair Work Commission approved a variation to the Early Childhood Education and Care Multi-Employer Agreement (Agreement) allowing a further 33 Employers, covering an additional 20,000 employees to join the Agreement. Commissioner Hampton’s decision follows a decision of the Fair Work Commission Full Bench on 10 December 2024, in which they approved the Agreement. While multi-employer agreements are not a new concept, this Agreement is a new form of multi-enterprise agreement called a “supported bargaining agreement” (SBA) which was introduced in amendments to the Fair Work Act 2009 from 6 June 2023.
The decision to approve the Agreement on 10 December 2024 was the first time that a supported multi-employer agreement had been negotiated and approved by the Fair Work Commission. The Agreement set a precedent for bargaining with 60 employers (represented by one agent) bargaining collectively for the conditions in the Agreement covering approximately 12,000 employees in the early childhood education sector.
The decision was also the first of its kind. Commissioner Hampton commented, that while he had heard all the applications together for convenience, each application was considered on its own merits having regard to the relevant supporting evidence and materials. He also confirmed that each applicant employer brought the application on the basis that it has been agreed with their relevant employees that they should be covered by the Agreement.
What is an SBA?
SBAs were introduced to encourage bargaining in sectors which would not usually have the resources or ability to bargain. The aim is to:
assist and encourage employers and their employees who require support, to make enterprise agreements that meet their needs;
address constraints on the ability of the parties to bargain at the enterprise level such as lack of skills, resources, bargaining strength or previous experience; and
enable the FWC to facilitate bargaining.
SBAs requires a supported bargaining authorisation (Authorisation) to be made by the FWC before bargaining. In approving an Authorisation, the FWC must be satisfied that certain conditions are met, which include:
pay and conditions within the industry;
whether low pay rates prevail in that industry;
whether the employers have common interests, including government funding;
whether they can manage bargaining with a large number of representatives; and
any other matters the FWC considers appropriate.
The FWC must also be satisfied that at least some of the employees who will be covered by the agreement are represented by an employee organisation.
The authorisation in this case was approved by the FWC on 23 September 2024. Once approved, SBAs allow other employers (and employees) to join as parties to the agreement after the agreement is made by making an application to vary the agreement.
Suitability for an SBA
The Early Childhood Education and Care (ECEC) sector is a not-for-profit sector and includes a number of smaller employers, many of which are run by parent volunteers elected annually to manage the preschool service. Of the employers who participated in this process, many were managed by volunteer parent management committees, and most operated one preschool service.
Conditions for approval
In making the original Authorisation to allow the parties to bargain, Deputy President Wright of the Fair Work Commission said that she was satisfied:
the authorisation was supported by employers and employees;
there had been a relatively low uptake in bargaining in the Early Childhood sector and no history of bargaining with any of the employers. She considered that this type of bargaining would give them the support that would not otherwise be available to allow them to bargain.
they would be funded and regulated by the NSW government; and
the ECEC is made up of 92.1% women; and
the sector had significant challenges attracting and retaining employees and this was a way of addressing these issues.
Is it likely that SBAs could be used more generally for your sector?
SBAs are less likely to be used in primary and secondary schools because teachers are generally covered by existing enterprise agreements. However, they may be used more generally for other sectors which receive state or commonwealth funding, which have lower prevailing rates of pay. For example, the aged care and social services.
The contents of this article are for informational purposes only and are current as at the date of publishing. They do not constitute legal advice and should not be relied upon as such. You may need to seek legal advice about your organisation’s specific circumstances. If you have any questions regarding the Early Childhood Education and Care Multi-Employer Agreement (Agreement), please contact us by email to enquiry@cer.catholic.org.au or by phone on 02 9189 5999.