Enterprise agreements –
what are they?
Award or enterprise agreement?
Awards, which are also known as modern awards,
cover all private-sector workers within a particular
industry or occupation across Australia. Along
with the ten National Employment Standards, they
provide a safety net of minimum pay rates and
employment conditions which bosses must provide
to their employees.
As an alternative to using the award system, a
business also has the choice of using one or more
enterprise agreements to develop a tailored set of
employment conditions for their workers, which may
better cover the particular needs of the business.
Within any enterprise agreement, the employment
terms must meet the better off overall test to make
sure that workers who are covered by the enterprise
agreement do not receive fewer entitlements than
those that are set out in the National Employment
Standards and the applicable award.
The rate of pay a worker receives under
an enterprise agreement CAN’T be less
than the pay rate set out in the applicable
modern award or minimum wage order.
Types of enterprise agreements
There are three types of enterprise agreements:
• A single-enterprise agreement
Made between a single employer and a group
of workers. It can involve more than one
employer in some cases (e.g. where two or more
employers are engaged in a joint project).
• A multi-enterprise agreement
Made between two or more employers and
groups of their workers.
• A greenfields agreement
Single-enterprise and multi-enterprise
agreements to cover a new business which are
made before any workers are actually employed.
Greenfields agreements are made with the
participation of one or more relevant unions.
What must be included in an enterprise
agreement?
All enterprise agreements must be approved by Fair
Work Australia and must show:
• who is covered by the agreement
• any deductions of wages for any purpose as
agreed to by the worker
• how the agreement will operate
• the date the agreement will expire – this can’t
be longer than four years after the date on which
Fair Work Australia approved the agreement
• a dispute settlement procedure – allowing Fair
Work Australia or another independent person to
settle disputes about the terms of an award or
the NES in relation to the enterprise agreement
• flexibility arrangements around who can cancel
the agreement
• a consultation term, which makes sure that the
employer talks to their workers about any major
change or changes that will affect them.
So, how is an enterprise agreement made?
If an employer and the employer’s workers decide
they want to negotiate an enterprise agreement
in their workplace, the employer must give all the
workers who will be covered by the agreement a
copy of the Notice of Employee Representational
Rights.
This notice must be given to the workers as soon as
possible and no later than 14 days after deciding to
negotiate.
Once bargaining has finished and a draft agreement
has been made, it must be given to the employees
for a vote. The employer must make sure that the
terms outlined in the agreement are explained
clearly and that all employees are notified of the
time and date of the vote.
To find out more about voting on an enterprise
agreement – call Chris and Rae on 1300 361 968.
Lodging an application
• carefully consider the proposals
An enterprise agreement is not enforceable unless
it has been approved by Fair Work Australia and will
not take effect for at least seven days after being
approved.
• provide clear responses to proposals made by
other bargaining representatives
Once lodged, an agreement will only be approved if:
Call Chris and Rae on 1300 361 968 to find out
more on who is able to become a bargaining
representative.
• it complies with all relevant legal requirements
• it passes the ‘better off overall test’
• it is voted for by a majority of workers, which for
a multi-enterprise agreement requires a separate
vote at each enterprise
• all parties to the agreement understand the
effect of the agreement
• the parties are entering into the agreement of
their free will
• the agreement does not unfairly exclude some
workers.
The application must be lodged with Fair Work
Australia within 14 days of the agreement being
made.
Call Chris and Rae on 1300 361 968 for the
forms you need, or to talk through the steps for
lodging an enterprise agreement application in
your workplace.
Can’t reach an agreement?
If employers and workers aren’t able to reach an
agreement, a bargaining representative can assist
them to work things out and make an application to
Fair Work Australia.
What is a bargaining representative?
A person or an organisation that the employer
and employees in the business both agree should
represent them throughout the negotiation process.
Bargaining representatives are supposed to act in
good faith when negotiating a proposed enterprise
agreement. This means they must:
• go to meetings at reasonable times
• share all important information in a timely manner
• behave in a fair way that doesn’t undermine
freedom of association or collective bargaining.
Case study
Brian, who owns a refrigeration repair company
that employs three workers, was having a yarn
with some mates about work at a footy match.
Brian’s friend mentioned that his company was
about to enter into an enterprise agreement,
that covered things such as flexibility
arrangements around working hours, personal
carers leave, redundancy payments and the
conversion of regular casuals to permanent
employment in the business he worked for.
Brian liked the sound of how an enterprise
agreement could help work out some special
arrangements with his workers that would help
them and make his business work better.
He decided to give Chris and Rae at NSW IR
a call on 1300 361 968 to talk about what
was involved, how to start the process of
negotiating an enterprise agreement and the
important things he needed to be aware of to
make sure the arrangements were legal
and fair.
Brian’s workers really liked the idea because
it meant they could put some arrangements
in place that suited them better, like shorter
working days for those with child care
responsibilities. Now the company has entered
into the bargaining process and will prepare
their application for approval.