Enterprise Agreements
An enterprise agreement is a collective agreement negotiated between an employer and its employees about the conditions of employment at their workplace. Enterprise bargaining is the process of negotiating that agreement and despite being a key element of the Australian employment and workplace relations system, is also one of the hardest to navigate successfully.
The enterprise bargaining process is highly regulated, and employers must comply with these regulations before an enterprise agreement can be approved by the Fair Work Commission.
If you are an employer currently bargaining for an enterprise agreement, or considering entering the bargaining process, our experienced workplace relations team can provide expert guidance on the entire enterprise bargaining framework and how an enterprise agreement may impact your business operations. We customise our support to suit your specific needs and budget—from offering expert advice on the bargaining process, to drafting the enterprise agreement and facilitating negotiations with your employees, all the way through to managing the approval application with the Fair Work Commission.
Additionally, once your enterprise agreement is approved and in effect, we can assist you in managing and resolving any disputes that arise under its terms, ensuring your business remains compliant and well-positioned to maintain productive workplace relations.
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An enterprise agreement is a contract between a business and its employees that collectively governs the employees’ terms and conditions of employment. It is agreed by both the employer and the employees by a strictly regulated process under the Fair Work Act 2009 (Cth) and once in place, replaces any modern award that would otherwise have applied to the employees.
Not all businesses need an enterprise agreement. Your employees may be covered by an award that suits the purposes of your business, or your business may not be large enough to warrant entering into an enterprise agreement, in which case you may simply enter into individual employment contracts with each employee.
There is a very strict process under the Fair Work Act 2009 (Cth) that an employer must follow to negotiate an enterprise agreement with its employees. It includes notifying the Employees that bargaining has commenced and of their rights to be represented in the bargaining process, negotiating the terms of the enterprise agreement with the employees in good faith and in accordance with the Statement of Principles for Genuine Agreement, facilitating an employee vote on the proposed terms of the agreement and if that vote is successful, applying to the Fair Work Commission to have the enterprise agreement approved.
The employer must follow the process under the Fair Work Act 2009 (Cth) and ensure that the bargaining process is conducted in accordance with the statement of Principles for Genuine Agreement. The bargaining process must meet the strict legislated timelines and the resulting enterprise agreement must be such that the employees are better off overall than if they were employed under the relevant award.
When negotiating an enterprise agreement, there is a minimum amount of time that an employer and its employees must ‘bargain’, which is 21 days from when the employer provides the last requisite notice to the employees that bargaining has commenced. Then, following a successful vote by the employees, the employer has 14 days to apply to the Fair Work Commission for approval of the enterprise agreement. This means that the process to make an enterprise agreement can take over a month at a minimum, but often is more protracted, particularly if the proposed enterprise agreement includes any controversial elements or if there is union involvement in the process.
Yes. There are mechanisms for an enterprise agreement to be amended, terminated and replaced via separate applications to the Fair Work Commission.
Under the Fair Work Act 2009 (Cth), a single-enterprise agreement can only be made if a majority of the employees who will be covered by the agreement, and who cast a valid vote, approve the agreement. If a majority does not vote in favour, the enterprise agreement fails at this stage and cannot proceed further in the approval process.
An employer may need assistance at various points throughout the process to have an enterprise agreement approved, including to draft the proposed enterprise agreement, assist with bargaining, including to conduct the Better Off Overall Test (‘Boot’) and explain the terms and conditions of the agreement to the employees, draft the application for approval to the Fair Work Commission, and, if necessary, represent the Employer before the Commission.
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