"Opt-out" clauses – dead and buried

On 3 September 2012, a five member Full Bench of Fair Work Australia (FWA) quashed a decision made by Deputy President Sams on 8 June 2012 approving an enterprise agreement containing an "opt-out" clause. The clause enabled employees to opt-out and no longer be covered by the agreement. The Full Bench held that as the group of employees to be covered by the agreement was not geographically or operationally or organisationally distinct and the opt-out clause is "inimical" to the purpose and policy of the Fair Work Act (Fair Work), it quashed DP Sams' decision.

The Full Bench decision follows a series of FWA decisions, including Full Bench decisions, where opinion has been divided as to whether opt-out clauses can be included in enterprise agreements. The Full Bench held that under Fair Work, in approving an enterprise agreement FWA must establish whether the agreement covers all of the employees of the employer and if all the employees are not covered, FWA must make a