Teachers Not Employed at the time of the Approval of an Enterprise Agreement are entitled to Backpay
The High Court has, in refusing to hear an appeal from a decision of the Full Court of the Federal Court, confirmed that an enterprise agreement with retrospective application may apply to employees who were not employed when the agreement commenced.
Agreement Context
In November 2020, the Fair Work Commission approved The Catholic Employing Authorities Single Enterprise Collective Agreement – Diocesan Schools of Queensland 2019–2023 and The Catholic Employing Authorities Single Enterprise Collective Agreement – Religious Institutes Schools of Queensland 2019–2023.
Both agreements stated that, “Where this Collective Enterprise Agreement specifies an earlier operative date in relation to a particular provision, then that provision shall operate from that date for all applicable employees employed at that earlier date”, and provided for salary increases effective from 1 July 2019 and 1 July 2020.
Proceedings before the Court
Two teachers, one who resigned on 6 December 2019 and the other who resigned on 31 December 2019, sought back pay from their former employers under the new agreements.
After both employers refused the claim, the teachers with the support of the Independent Education Union of Australia brought proceedings in the Federal Court.
The Full Court of the Federal Court found that:
- On the date of the commencement of the agreements, the whole of those agreements come into operation;
- The salary increase provisions of the agreements had retrospective effect from 1 July 2019 for applicable employees;
- The agreements did not exclude employees who were not employed at the time of approval from being applicable employees;
- The teachers were applicable employees covered by the agreements as at 1 July 2019 because they were employed at that time; and
- The teachers were consequently entitled to the applicable salary increase from 1 July 2019 until their respective resignation dates.
Consideration for Employers
The Full Court decision concerned the meaning of “applicable employee” within the context of the agreements, and it found that the term included employees who were employed as at 1 July 2019.
The decision does not create a general obligation upon employers to provide backpay to past employees where wage increases are backdated and the employees are not employed when the agreement commences operation.
The retrospective application of each agreement must be considered on its own wording, but the decision highlights that careful consideration needs to be given to the scope and application clauses of any proposed enterprise agreement and the drafting of such clauses.
Connect with us…
If you have any concerns regarding the application of your enterprise agreement, we encourage you to speak with your Mapien consultant, or please contact us and one of our Workplace Strategists will be in touch within 24 hours.