HR Q&A - What's the BOOT?

Q. We were recently asked by a client what the "BOOT Test" is all about. The question arose in a discussion regarding the potential development of a workplace agreement.

A. "BOOT" is an acronym for the Better Off Overall Test, a test applied by the Fair Work Commission (FWC) when considering whether to formally register a workplace agreement proposed by an employer and their employees and representatives.

Essentially, in applying the BOOT test the FWC is seeking to establish that employees to be engaged under the proposed workplace agreement are going to be "better off overall" under the terms and conditions of the workplace agreement, than they would be if that agreement did not exist.

For example, an employee might receive a higher rate of pay under the workplace agreement than provided for in the relevant modern award. This may be "traded off" for things the award contains, like leave loading or overtime. As long as each employee is considered to be better off overall, the workplace agreement should be approved.

If pay and conditions for employees under a workplace agreement need to be "better off overall" then, it's logical from an employer's point of view to question their value. Common motivations for employers to put a workplace agreement in place are to improve the flexibility/organisation of work (eg. days and times of work), to pursue process efficiencies in return for agreed employee incentives, to streamline administration (eg. through the absorption of allowances into hourly or annual pay), and/or to formalise over-award pay and conditions so as to support staff recruitment and retention.

The information in this article is general in nature and should not be relied upon as legal advice. Business owners and managers are advised to seek specific advice based on their individual circumstances.

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