A Single Enterprise Agreement is a negotiated agreement between an employer and two or more employees. The Fair Work Commission must approve the Agreement before it comes into effect as it usually alters the terms and conditions from the applicable Award. We explain below the six steps an employer must take to create a Single Enterprise Agreement.
Step 1 – Before You Start Bargaining
Consider the individual needs and circumstances of your employees (especially those who are young or vulnerable) before you begin the bargaining process. You should then communicate with your employees in an appropriate manner to satisfy the Fair Work Commission that you have acted fairly.
Step 2 – Start Bargaining
You may begin the bargaining process by drafting the terms of the Agreement or by appointing a representative (such as an Industrial Officer) to assist.
You are then required to notify all the relevant employees within 14 days that bargaining has begun by providing a Notice of Employee Representational Rights. The purpose of this Notice is to tell your employees that a bargaining representative can represent them. If you fail to provide this notice in its proper form or to all employees within 14 days, the Fair Work Commission cannot approve your Agreement.
You and your employees (or your bargaining representatives if either of you chooses to appoint one) must bargain in good faith. This may involve meeting to discuss the proposed terms and genuinely considering and responding to the proposal presented by the other party.
Step 3 – Draft the Terms
You must ensure that the terms are not to the detriment of the employee when compared to the NES and the terms will make the employee better off under your Agreement than they would be under their applicable Award.
Several terms must be drafted into the Agreement by law, including:
- Coverage which sets out the name of the employer and employee, the work that the employee will perform and the work location;
- Consultation which sets out the requirement to consult with employees about major workplace changes and change to their ordinary hours of work;
- Disputes which sets out the procedure for settling disputes;
- Flexibility which sets out your ability to make individual flexibility arrangements with an employee to vary the Agreement; and
- Nominal expiry date which must be no more than four years after the date the Agreement has been approved.
The following terms may be drafted into the Agreement:
- Hours of work
- Classification structure
- Rates of pay
- Penalty and overtime rates
- Breaks; and
- Deductions authorised by an employee.
Step 4 – Vote on the Agreement
After the terms are drafted, your employees may vote on the Agreement. However, the following actions must be taken at least seven days before the voting takes place:
- Notify your employees of where and when the vote will be;
- Notify your employees of how they can vote;
- Ensure you give your employees a copy of the Agreement;
- Ensure you give your employees any other material the Agreement references (such an OH&S policy, for example); and
- Ensure you explain the terms of the Agreement to your employees.
You can proceed to lodge the Agreement with the Commission for approval if the majority of your employees vote in its favour.
Step 5 – Lodge the Agreement
You need to lodge the Agreement within 14 days of the majority of your employees voting to approve the Agreement along with the following documents:
- Application for approval of an Enterprise Agreement (Form F16);
- Statutory Declaration from you as the employer in support of an application for approval of an Enterprise Agreement (Form F17); and
- A copy of the Agreement signed by you and your employee representative including the signature page which must include the name, address and explanation of the authority of each person signing the Agreement.
Step 6 – Approval of your Agreement
Your Agreement will be allocated to a Member of the Fair Work Commission once it has been lodged so it can be assessed against the requirements of the Fair Work Act.
The Member must be satisfied with the following:
- The above requirements have been met;
- Your employees have openly accepted the Agreement;
- The terms of the Agreement do not go against the NES;
- Your employees will be “better off” under your Agreement compared to their applicable Award;
- The Agreement does not include any unlawful or designated outworker terms;
- The nominal expiry date is no more than four years after the date of approval;
- The bargaining occurred with good faith; and
- The Agreement includes disputes, flexibility and consultation terms.
The Member may require more information or may seek to clarify certain points of the application or the Agreement by way of an undertaking by you. If this undertaking is approved and if there are no objections to the approval of the Agreement, a copy of the Member’s approval decision will be posted on the Fair Work Commission website and emailed to the parties.
The Agreement will come into effect seven days after approval.
As you can see, making a Single Enterprise Agreement can be complicated and there are many steps that must be taken to secure the Fair Work Commission’s approval. If you have any questions or need assistance, get in touch with our employment lawyers on 1300 544 755.