A recent challenge lodged by the Shop, Distributive and Allied Employees’ Association (SDA) against Sephora’s proposed overtime agreement has reignited important questions around genuine agreement, voting transparency, and regulatory oversight in enterprise bargaining.
Although 53% of employees voted to approve the agreement, the SDA claims the process did not meet the Fair Work Act’s requirements for a truly informed and voluntary vote. The Fair Work Commission (FWC), under its expanded powers from the Secure Jobs, Better Pay reforms, now has the ability to step in and amend enterprise agreements that fall short of legal standards.
The Background
The SDA’s objection centres around changes to overtime calculations in the proposed agreement. Specifically, Sephora’s new model replaces percentage-based penalty rates with a fixed dollar value. According to the union, this change amounts to a pay freeze, which was not properly explained to employees ahead of the vote.
The union further argues:
- The proposed overtime rates fall below the General Retail Industry Award 2020 (Retail Award)—for example, a Level 1 casual working after 6pm would earn $33.75 under the agreement, compared to $38.48 under the Award.
- Employees were not made sufficiently aware of the significance of the change, which raises concerns under Section 186(2) of the Fair Work Act.
- The agreement’s flexibility terms may blur the line between part-time and casual roles, potentially undermining established Award protections.
The FWC’s Growing Role in Enterprise Agreement Review
While a majority vote (53%) was achieved, the FWC’s oversight doesn’t stop there.
Under Section 191A of the Fair Work Act, the Commission can now amend agreements that fail the Better Off Overall Test (BOOT) or lack evidence of a genuine agreement. Employers may be required to provide undertakings—or face the risk of the Commission rewriting parts of the agreement.
This increased scrutiny raises the stakes not only for agreement content but for the balloting process itself, particularly how employers communicate material changes before employees cast their vote.
Lessons for Employers Running EA Ballots
The Sephora case serves as a key reminder: a slim majority vote is not always the end of the story. Employers must ensure their agreements can withstand post-vote scrutiny by both unions and the FWC.
Here’s what to keep in mind:
- Clarity is critical: When agreements propose changes to core entitlements like overtime, employers must clearly communicate the impact, especially when comparisons to award conditions show significant variation.
- Transparency supports legitimacy: Voting materials and explanatory statements should be detailed, plain-language, and consistent with the final agreement.
- Document the process: Keep a thorough record of all communications and documents provided during the access period. This can be critical in defending the vote outcome if challenged.
Final Thoughts
The Sephora case highlights a growing reality in enterprise agreement voting: a simple majority isn’t always enough. Where significant changes to conditions like overtime are involved, the clarity and transparency of the process will be just as important as the outcome of the vote itself.
Employers must not only ensure that agreements meet legislative and award standards, but that employees are fully informed when casting their vote. The FWC’s increased oversight powers mean that even approved agreements may face challenge if they don’t meet the full requirements for genuine agreement.
At IRBLOTS, we support employers by providing secure, independent voting processes that help reinforce transparency, minimise risk, and ensure every agreement is backed by a vote that stands up to scrutiny. If you’re preparing for your next enterprise agreement ballot, contact our team for assistance.
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