A yes vote wasn't enough - here's the step that sank this first-time agreement
A small firm's first enterprise agreement collapsed at the Fair Work Commission - not over pay, but over what the company didn't explain.
The Fair Work Commission has refused to approve an enterprise agreement for a high-voltage and switchboards business, and the reason should give every HR and industrial relations team pause: the company couldn't show it had properly explained the deal to its own staff.
On May 26, 2026, Commissioner Simpson dismissed the application to approve the P.H.E HV and Switchboards Pty Ltd Enterprise Agreement 2026.
The setup was modest. Phe Hv And Switchboards applied on March 20, 2026 to have its first enterprise agreement approved. Nine employees were covered, all under the Electrical, Electronic and Communications Contracting Award 2020. Eight voted. Five voted in favour.
The CEPU union stepped in with objections, even though it accepted it didn't represent any of the workers. The Commissioner heard it out anyway. The union ran a wide set of arguments: that the employee group wasn't fairly chosen, that the voters had no real stake, that they weren't representative enough, and that the employer hadn't explained the agreement properly.
Most of that didn't stick. The Commissioner found the group was fairly chosen. He found the voters had sufficient interest and were sufficiently representative, pointing out that all nine award-covered employees would fall under the agreement and that eight of them turned out to vote.
One objection, though, decided the case.
This was a first-generation agreement - the company's first - and it would displace the award that otherwise sets the floor on pay and conditions. According to the union, the agreement appeared to fold a number of separate award entitlements into a single base rate, including a tool allowance, an electrical licence margin, an industry allowance, a site allowance, multi-storey allowances, special allowances and casual loadings. The union also pointed to wording it said let "the Employer shall be the sole determinant of when and where these allowances apply."
The company argued the agreement didn't differ much from the award, that the award was freely available online, and that meetings and presentations between February 4 and March 2, 2026 had explained the terms. Its record was a Form F17B, the employer's declaration filed with the Commission.
The Commissioner wasn't satisfied. He accepted the union's point that employees "could not reasonably be expected to understand the practical effect of the Agreement on their employment conditions, given the Agreement included rolled up rates, and the absorbing of Award entitlements." Pointing workers to the award and leaving them to sort it out wasn't enough. For a first agreement, he said, the employer had to spell out how the deal compared to the award and how minimum entitlements would change.
The law is firm here. Section 180(5) of the Fair Work Act says an employer must take "all reasonable steps" to explain an agreement's terms and effect before the vote. If that step isn't met, the Commission can't be satisfied the agreement was genuinely agreed to - and can't approve it. The Commissioner also declined to treat the gap as a minor procedural or technical error that a written undertaking (a promise to fix a defect) could cure.
So the application was dismissed.
The lesson for HR and IR teams is plain. A yes vote won't rescue an agreement if you can't show you explained it. The danger zone is first agreements and any deal that rolls allowances into a single composite rate - the very structure that makes it hard for staff to see what they're trading away. Record how you explained it. Lay the agreement next to the award in language people can follow. Show your working. The Commission will look past the vote count and ask one question: did the people who voted actually understand what they were signing up for?
