Enterprise Agreements

This article offers a guide to Enterprise Agreements in Australia, unpacking what they are, the bargaining process, and their relationship with awards and employment standards.

An Enterprise Agreement (EA) is a negotiation between employers, employees, and their representatives to set fair working wages and employment conditions. The term Enterprise Bargaining Agreement (EBA) was used before the Fair Work Commission (FWC) updated the terminology to Enterprise Agreement, succeeding the older Collective Agreements from the pre-Fair Work Act 2009 era.

An Enterprise Agreement in Australia allows employers and employees to negotiate wages, flexibility, and working conditions beyond what is provided in a Modern Award or the National Employment Standards (NES). The Fair Work Act 2009 prescribes specific rules and guidelines to ensure fairness in these negotiations, including mandatory terms and criteria to gain approval from the Fair Work Commission (FWC).

What is an Enterprise Agreement?

An Enterprise Agreement outlines the minimum employment terms between one or more employers and their employees or a group of employees. It can replace applicable modern awards, setting the base employment terms and conditions for those covered by the EA. Alternatively, it might incorporate certain terms from the relevant parent award. This flexibility allows for tailored employment terms suited to specific workplace requirements.

Enterprise Agreements offer flexibility for employers to negotiate working conditions, ensuring employees are better off overall. Employees benefit too, as they can bargain for higher wages and additional benefits not covered by the applicable Modern Award. This arrangement creates a mutually beneficial environment where both parties can agree on terms that exceed standard awards.

There are three types of Enterprise Agreements:

  1. Single-Enterprise Agreement: Between one or more single interest employers (e.g., those in a common enterprise or joint venture) and the employees covered by the agreement.
  2. Multi-Enterprise Agreement: Involves one or more employers without a single interest and the employees covered.
  3. Greenfields Agreement: For a new enterprise before hiring employees, either a single or multi-enterprise agreement, between employers and employee associations (usually a union).

An Enterprise Agreement must not offer lesser terms than the Modern Award or national minimum standard.

Topics EAs Cover

An Enterprise Agreement covers various topics, including pay rates and employment conditions. Under the Fair Work Act 2009, it must include a coverage term specifying who it covers, a flexibility term for individual agreements, a consultation term for major workplace changes, a dispute resolution term involving the FWC or another party, and a nominal expiry date, not exceeding four years from approval. These terms ensure clarity, adaptability, and a framework for resolving disputes.

An Enterprise Agreement (EA) can include 'permitted matters' like pay rates, overtime, allowances, and leave terms. However, it must not contain discriminatory terms, objectionable terms, or terms inconsistent with various provisions of the Fair Work Act, such as those relating to unfair dismissal, industrial action, and right of entry. These restrictions ensure the EA aligns with broader employment law principles and protections.

What Is The Difference Between A Modern Award And An EA?

The key difference between a Modern Award and an Enterprise Agreement is that while awards set industry or occupation-wide minimum entitlements, an Enterprise Agreement is specific to one or more businesses and negotiated internally. Once negotiated, it requires Fair Work Commission approval. Generally, an EA replaces the relevant award, though some may refer to or incorporate award provisions. This allows for more tailored employment conditions within a specific business environment.

Enterprise Agreements can be customised to meet the specific needs of businesses, covering aspects like pay rates, employment conditions, and dispute resolution. These agreements must be lawful, non-discriminatory, and ensure the minimum pay is not less than the award's base rate. They also need to comply with the National Employment Standards (NES). For approval by the Fair Work Commission, employees must be 'better off overall' than they would be under the applicable award.

Enterprise Bargaining Process

The Enterprise Bargaining Process involves employers, employees, and their representatives engaging in good faith negotiations for an Enterprise Agreement. The process begins when employers notify employees of their representational rights. The four key steps are

  1. Issuing a Notice of Representational Rights
  2. Commencing Good Faith Bargaining
  3. Allowing for Voting and Access Period to the finalised EA
  4. Seeking Approval from the Fair Work Commission.

This structured approach ensures fair and transparent negotiations for all parties involved.

Frequently Asked Questions

What Is In An Enterprise Agreement?

It includes negotiated terms on wages, working conditions, and other employment aspects.

Is An Enterprise Agreement A Contract?

It's a legally binding agreement but distinct from an individual employment contract.

Does An Enterprise Agreement Replace An Award?

Generally, it supersedes relevant awards, offering tailored workplace terms.

Do You Have To Have An Enterprise Agreement?

It's optional and depends on the employer's and employees' mutual decision.

Why Would An Employee Agree To An Enterprise Agreement?

For potentially better terms than the relevant award or standard.

Who Is Covered By An Enterprise Agreement?

Employees and employers who negotiated and agreed upon the EA's terms.

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