Enterprise agreements are negotiated agreements between employers, employees and unions or bargaining representatives about minimum terms and conditions of employment. They can cover a range of matters, including fair wages, hours of work, meal breaks, overtime, flexible working conditions and consultation and dispute resolution processes.
Importantly, enterprise agreements must leave award-covered employees "better off overall" than the relevant modern award and cannot offer less than what is contained in the minimum standards provided by the National Employment Standards (NES).
From the date of approval, enterprise agreements can cover a period of up to four years but continue to operate after any nominal expiry date until they are either replaced by a new enterprise agreement or terminated by the Fair Work Commission.
In contrast to Awards, which cover minimum pay and conditions for a specified industry, enterprise agreements can cover specific arrangements for a particular company.
Three types of enterprise agreements can be made under the Fair Work Act.
Agreements made between an employer or two or more employers that are single interest employers and a group of employees. Employers are single interest employers when they have shared interests, i.e., they are a joint venture, in a common enterprise, or are related corporations. A determination by the Fair Work Commission is required for single-enterprise agreements to confirm that the entities are single interest employers.
These agreements can be between two or more employers who may not have a single interest and the employees covered by the agreement. Multi-enterprise agreement bargaining can only occur when two or more employers voluntarily agree to bargain together.
A new enterprise may make a Greenfields Agreement before any employees have been hired. Greenfields agreements can be either single or multi-enterprise and are generally negotiated between the new enterprise and employee associations or representatives, such as a union.
What cannot be in an enterprise agreement?
Enterprise agreements cannot contain discriminatory or objectionable terms that breach an employee's general protections under the Fair Work Act. They also cannot contain terms inconsistent with unfair dismissal provisions, industrial relations provisions or right of entry provisions of the Fair Work Act.