As an employer, you may consider putting an enterprise agreement in place. However, doing so is more complex than writing up your own agreement. Instead, enterprise agreements require negotiations between the company, employees and bargaining agents in what is called ‘enterprise bargaining’. The Fair Work Act (‘FWA’) outlines explicit regulations and requirements about how enterprise bargaining should occur. This includes regulations for collective bargaining, the substance of enterprise agreements, and how an agreement is established and authorised. This article explains what enterprise bargaining is in Australia.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
What is an Enterprise Agreement?
An enterprise agreement is a contract between one or more national system employers and their employees. Enterprise agreements are negotiated in good faith by the parties through collective bargaining, typically at the enterprise level. The FWA defines an enterprise as any type of company, activity, initiative, or effort.
What Terms Are Negotiated During Enterprise Bargaining?
An enterprise agreement is a contract that should cover:
- conditions governing each employer’s relationship with the employees;
- rules governing each employer’s connection with any employee organisations (such as a trade union) that the agreement will cover;
- pay deductions for any reason authorised by an employee covered by the agreement; and
- how the agreement will work.
Additionally, an enterprise agreement can include causes that cover:
- a dispute resolution procedure, which must authorise either the Fair Work Commission or an independent person to settle disputes about any matters under the agreement;
- a nominal expiry date for the agreement that is no longer than four years from the date the Fair Work Commission approves the agreement;
- a flexibility provision that enables the creation of individual flexibility arrangements which essentially alter the enterprise agreement’s operation; and
- a consultation provision which requires you to engage with employees about any essential workplace changes that are likely to significantly impact them and allow them to participate in such consultation.
Unsurprisingly, any illegal content cannot be included in an enterprise agreement. This might include a:
- discriminatory clause;
- objection clause, which allows payment of a bargaining services fee or a contravention of the FWA’s general protections provisions;
- provision that gives an entitlement or remedy in the case of unfair dismissal before the minimum employment time has expired; and
- provision that excludes or alters the applicability of unfair dismissal laws to or concerning a person.
How Do I Get an Enterprise Agreement Approved?
After the negotiation and a proposed enterprise agreement are created, the employees who the agreement will cover must vote on it. Before an employee approval vote may take place, you must verify that:
- the employees received a copy of the agreement and any other integrated information within seven days before voting;
- you told the employees about the vote’s time, location and mechanism; and
- you took all reasonable means to explain the contents of the enterprise agreement and its impact to your employees clearly and concisely.
Once voting has occurred, you can lodge the agreement with the FWC. Then, the FWC must approve your agreement.
Key Takeaways
Enterprise bargaining refers to the negotiations between the company, employees and bargaining agents when forming enterprise agreements. When undertaking enterprise bargaining, you should focus on key areas of the employment relationship, ranging from rules governing employer connections to employee organisations to pay deductions.
If you are considering enterprise bargaining, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
An enterprise agreement is a contract between one or more national system employers and their employees. Enterprise agreements are negotiated in good faith by the parties through collective bargaining, typically at the enterprise level.
An enterprise agreement should cover conditions governing each employer’s relationship with the employees. Additionally, you should negotiate the rules governing each employer’s connection with any employee organisations, pay deductions for any reason authorised by an employee covered by the agreement, and how the agreement will work.
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