In a decision handed down by the Fair Work Commission this week, a Victorian water authority was found to have contravened the "no extra claims" clause in its enterprise agreement by changing a vehicle policy which had provided some employees with limited private use of work vehicles.  The enterprise agreement itself contained no provisions dealing directly with the provision or private use of motor vehicles.

The policy change came about due to recent changes to fringe benefits tax, which nearly tripled the cost to the employer of providing private use of its vehicles to employees.  The employer, thinking that it had the prerogative to change its policy, sought to remove the entitlement, and offered affected employees a one-off payment in place of the entitlement, which was rejected by the employees. 

Following an application by the ASU to deal with the dispute under the enterprise agreement's dispute resolution clause, the Fair Work Commission found that in the circumstances, the withdrawal of the benefit of personal use of vehicles was a change to employees' conditions of employment and a "further claim" within the meaning of the no extra claims clause of the enterprise agreement.

The Commission held that in the absence of agreement to change conditions of employment through variation of the enterprise agreement, bargaining for a new one, or settlement of the dispute through other means, the enterprise agreement did not authorise the water authority to implement the change.

Changes to policies will not necessarily breach a no extra claims clause. This will depend on the wording and effect of relevant policies, enterprise agreements and the circumstances of the case. Consideration should be given to the impact of this decision when making enterprise agreements and when setting or varying policies or other conditions of employment, particularly where the effect of the variation will be to remove a benefit previously enjoyed by employees. 

For more information on how this issue affects you, please contact:

Jim Rutherford
Principal
Harwood Andrews
T: 03 5226 8579
E: jrutherford@harwoodandrews.com.au

Sonia McCabe
Associate
Harwood Andrews
T: 03 5226 8558
E: smccabe@harwoodandrews.com.au