Before an enterprise agreement can be approved, the Better Off Overall Test (BOOT) must be satisfied. This is not just a legal formality – it’s a critical step that determines whether your agreement will be accepted by the Fair Work Commission (FWC) or sent back for costly revisions.
Put simply, the BOOT ensures that every employee covered by the agreement is better off overall than they would be under the relevant modern award. If even one employee falls short, the FWC may refuse approval – delaying implementation and potentially disrupting your business.
This guide, by our employment law team, breaks down the BOOT, recent FWC decisions, and practical steps employers can take to navigate the process with confidence and clarity.
Key Takeaways
- BOOT is a statutory test in s 193 of the Fair Work Act 2009 (Cth)
- The FWC applies a line-by-line comparison between the enterprise agreement and the underpinning award
- Common failure points include penalty rates, allowances, and rostering flexibility
- Proactive modelling and employee engagement are critical to passing the BOOT
- Applying a BOOT-style test to annualised salaries helps prevent underpayments and supports compliance, even outside enterprise agreements.
Why the BOOT matters to Employers
Failing the BOOT doesn’t just delay agreement approval. It can:
Lead to unexpected costs through back pay or increased entitlements.
Create conflict with employees or unions, damaging industrial relations.
Require re-drafting or re-balloting, wasting time and resources.
A proactive, informed approach can help you avoid these outcomes and achieve smoother, faster approval.
The BOOT: Key Concepts
Under section 193 of the Fair Work Act 2009 (Cth), the BOOT is applied by the FWC to ensure that each award-covered employee is better off overall under the proposed enterprise agreement than under the modern award.
This test:
Applies to each individual employee, not just to groups or classifications.
Looks at the agreement as a whole – not every clause needs to be better, but the overall package must provide a net benefit.
Is typically focused on monetary entitlements, though non-monetary benefits may be considered where they add genuine value.
If the agreement falls short, the FWC can accept formal undertakings from the employer to address deficiencies. However, it’s best to address BOOT risks upfront.
Learn more in our Fair Work Act Guide for Employers.
Recent BOOT Cases: What Employers Can Learn
Understanding recent decisions helps identify common BOOT failure points:
Case | Key Issue | Outcome | Lesson for Employers |
Coles Store Team Enterprise Agreement 2014–17 | Penalty rates below award | BOOT failed | Late-night and weekend penalties must equal or exceed award unless offset by demonstrable benefits |
Aldi Foods Pty Ltd 2017 | Flat hourly rate | Approved with undertakings | Comprehensive modelling and transparent undertakings can rescue agreements |
Re Powerlink Queensland 2023 | Non-monetary benefits argument | BOOT failed | Work-life balance clauses are insufficient to offset financial shortfalls |
How to prepare a BOOT-Compliant Agreement
1. Identify Applicable Awards
Start by identifying the correct modern award for each employee or classification. Misclassifying employees is a common – and avoidable – error that can cause major setbacks.
Also check for any transitional instruments or state-specific awards that may still apply in limited situations.
Learn more about interpreting coverage clauses in Modern Awards in our article.
2. Conduct Detailed Remuneration Modelling
Thorough comparison is essential. This means:
Breaking down every monetary component – base pay, overtime, penalty rates, allowances, and loadings.
Modelling both typical and worst-case rosters, especially for shift workers.
Recalculating whenever award rates change during bargaining (which they often do).
A spreadsheet comparison attached to your F17 form is expected by the FWC – and helps you defend your position if questions arise.
3. Manage Non-Monetary Benefits
Non-monetary benefits (like flexible work arrangements, extra leave, or better rostering practices) may be considered under the BOOT. But they must be meaningful and valued by employees, not just aspirational.
Where possible:
- Quantify the benefit (e.g. an extra five days of leave equals X in value).
- Document feedback from employees supporting the benefit’s value.
4. Draft Clear, Unambiguous Clauses
Avoid vague or generic “all-inclusive” pay clauses unless you’re certain that the total exceeds award entitlements in every possible circumstance.
Instead, be explicit:
- Spell out exactly how each allowance is calculated.
- State whether allowances will be indexed with inflation or award changes.
- Use examples or tables where needed to clarify entitlements.
5. Engage Employees Early
Start engaging your workforce before the vote:
Share side-by-side comparisons between award and agreement terms in plain English.
Encourage questions and record employee feedback as evidence of informed consent.
If you’re offering trade-offs (e.g. higher base pay in exchange for fewer penalty rates), explain this clearly.
Early engagement can also help identify areas where employees feel worse off – allowing you to fix issues before they reach the FWC.
6. Prepare Possible Undertakings
If your agreement is borderline, be ready to offer undertakings that:
Are precise, enforceable, and require no re-vote.
Address specific issues identified by the FWC (e.g. a penalty rate top-up clause).
Can be implemented quickly without undermining the rest of the agreement.
Having fallback clauses prepared in advance can avoid costly delays later.
Navigating the FWC Approval Process
Lodgement Checklist
Once your agreement is ready to lodge, ensure the following are in place:
A signed explanatory memorandum outlining key terms and changes.
A completed Form F17 with detailed pay comparison tables.
A statutory declaration confirming that the agreement was genuinely agreed to.
Responding to FWC Queries
When responding to FWC queries:
Appoint a single contact person within your organisation to deal with the Commission.
Provide updated modelling or clarification promptly.
If needed, submit formal undertakings that are consistent with the agreement and clearly understood by employees.
Post-Approval Obligations
Passing the BOOT isn’t the end of the story. As an employer, you must:
Publish the agreement on your intranet or in a location accessible to all employees.
Provide each employee with a copy.
Monitor any award increases during the life of the agreement. If your rates fall below the award, you may face underpayment claims – even if the agreement is still in effect.
Be prepared for BOOT reconsideration if workplace circumstances change materially.
Common Pitfalls for Employers to Avoid
Avoid these common traps that frequently cause agreements to fail the BOOT:
Relying on a flat rate without checking it against all relevant penalties and overtime rates.
Omitting comparisons for casual loading or specific allowances (e.g. first-aid, remote work).
Assuming that flexibility or extra leave automatically offsets pay shortfalls.
Neglecting to track award increases during drawn-out bargaining processes.
Need expert help with enterprise agreements or salary compliance? Prosper Law offers fixed fees and a free initial consultation to give you certainty from the start. Get in touch today to speak with our employment law team.
The BOOT and Annualised Salaries
Even if you’re not entering an enterprise agreement, using a BOOT-style analysis for annualised salary arrangements is a smart compliance tool. It helps you:
Avoid underpayment risks by comparing the salary against award entitlements like overtime, penalties, loadings, and allowances.
Show due diligence in audits or disputes by demonstrating a clear, structured approach to pay compliance.
Design smarter salaries that are fairer, more sustainable, and easier to adjust as award rates change.
Meet FWC expectations for transparency – even outside formal agreement processes.
In short, applying the BOOT internally protects your business and your people.
Frequently Asked Questions
Does the BOOT apply to non-award employees?
No. The BOOT is only applied to employees who would otherwise be covered by a modern award.
Can a single financial shortfall fail the entire agreement?
Yes. The BOOT is applied individually – if even one employee is worse off, the FWC cannot approve the agreement without undertakings or amendments.
How often does the FWC reconsider an approved agreement?
Reconsideration can occur on application by an interested party or on the FWC’s own motion if circumstances materially change
Is a side letter sufficient to fix BOOT issues?
Undertakings must be formally accepted by the FWC and incorporated; informal side letters are not binding.
Do I have to increase pay if award rates change after approval?
Yes – if your agreement no longer meets award minimums, you risk breaching workplace laws. Schedule regular reviews to stay compliant.
