Enterprise agreements are legally binding agreements about employment terms made between employers and employees at the enterprise level.
Legislation: Fair Work Act 2009 Part 2-4 | Category: Industrial Instruments
What are Enterprise Agreements?
Enterprise agreements can be single-enterprise agreements (one employer), multi-enterprise agreements (multiple employers), or greenfields agreements (new enterprises with no employees yet, which are not as common). They must be genuinely agreed to by employees through a vote and must pass the Better Off Overall Test (BOOT), while still upholding National Employment Standards (NES).
Enterprise agreements can be single-enterprise agreements (one employer), multi-enterprise agreements (multiple employers), or greenfields agreements (new enterprises with no employees yet). They must be genuinely agreed to by employees through a vote and must pass the Better Off Overall Test.
Key Compliance Points for Employers
- Agreements operate for a maximum of 4 years (depending on the text of the agreement) but continue to operate after expiry until replaced or terminated
- The bargaining process must be conducted in good faith and comply with notification requirements under the Fair Work Act 2009.
- Agreements must include certain mandatory content including a flexibility clause and consultation clause
- Changes under the Secure Jobs, Better Pay Act amendments to the Fair Work Act have increased multi-employer bargaining options and strengthened the BOOT
- Employees must have access to the agreement and be given time to consider it before voting
Frequently Asked Questions
What are Enterprise Agreements?
Enterprise agreements are legally binding agreements about employment terms made between employers and employees at the enterprise level.
Why are Enterprise Agreements important for employers?
Understanding enterprise agreements helps employers comply with Australian employment law, avoid penalties, and maintain fair workplace practices.
