In order for an enterprise agreement to be approved, the Fair Work Commission must be satisfied that the group of employees to be covered by the agreement is fairly chosen. If an enterprise agreement does not cover all of the employees of the employer, the Commission must determine whether the chosen group of employees are fairly chosen.
A practice had developed after 2009 for some enterprise agreements to contain an opt-out clause which purported to allow an employee to choose not to be covered by an enterprise agreement and have his or her terms and conditions regulated by individual contracts. Opt-out clauses caused considerable controversy because they were a threat to collective bargaining.
Until Construction, Forestry, Mining and Energy Union v Queensland Bulk Handling Pty Ltd  FWAFB 7551, there had been conflicting Commission decisions as to whether an opt-out arrangement could satisfy the test whether the employees covered by the enterprise agreement were fairly chosen.
Those decisions which had approved opt-out clauses did so subject to an undertaking that the electing employee would receive which were better off overall than an applicable modern award and that the option to opt out was not provided as a condition of employment.
The practice has now been abandoned.