Reading time: 4 minutes

A greenfields agreement is an enterprise agreement that an employer and a union negotiate. Unlike other enterprise agreements, a greenfields agreement relates to new projects. Generally, the negotiation will occur before the employer appoints employees to conduct work for their project. This article will outline some of the fundamental features of a greenfield agreement.

Guide to Protecting Your Brand

Your business’ brand represents your values, identity and reputation. Learn how to create a successful brand and protect it.

Download Now

What is a Greenfields Agreement?

A greenfields agreement is an enterprise agreement that centres around developing a new operation. This typically includes starting a new business or project. A greenfields agreement comes from the negotiation between you and a union as an employer. Moreover, the negotiation occurs this way since, at this stage, you will not yet have employed your workers. Additionally, a greenfields agreement will cover the employees who will later become necessary to perform work on your project.

Consider a business that has not yet become active in the market. It has no warehouse or a shopfront. Instead, there is a vacant space where the business has yet to conduct its activity. This vacancy is known as a ‘greenfield.’

Furthermore, the Fair Work Act outlines a greenfields agreement as an enterprise agreement between an employer and one or more relevant employee organisations or unions. However, this is only the case if:

  • the agreement relates to a genuine new enterprise that you are establishing or propose to establish;
  • you have not employed any workers who will be necessary for the normal conduct of your new enterprise; and
  • the agreement will cover these workers.

There are a few characteristics that constitute a greenfields agreement. You must adhere to them if you wish to qualify for a single or multi-enterprise agreement. These characteristics are outlined below.

1. A Genuinely New Enterprise

Firstly, a greenfields agreement must involve a genuinely new enterprise. Essentially, this means that you cannot initiate a new project on the sole basis of negotiating a greenfield agreement.

2. Work Beyond Preparatory Work

When negotiating a greenfield, you must not complete any work for your new enterprise that is beyond the preparation stage. Consequently, if this is the case, then it is likely that you will not satisfy the Fair Work Commission that you are establishing a genuinely new enterprise.

3. You Have Not Employed Any Persons

You may only make a greenfields agreement if you have not employed any workers who will be necessary to operate the new enterprise. Furthermore, it is essential to adhere to this component as your negotiation with the relevant union will encompass the working conditions which will later cover your employees.

4. You Negotiate With the Relevant Union

Above all, when negotiating the terms of a greenfields agreement, you must stay in touch with the union or unions that are relevant to your industry. Essentially, a relevant union refers to one that is entitled to represent your employees’ interests that the enterprise agreement will later cover.

What is a Notified Negotiation Period?

A notified negotiation period is the six month period in which you and the relevant unions will bargain. The Fair Work Amendment Bill extends the deadline for negotiation from the proposed three-month period to six months.

If the single-enterprise agreement that you propose is a greenfields agreement, you must:

  • give written notice to each union that is a bargaining representative in the agreement; and
  • state the negotiation period for the agreement. Typically, this is a specified day that begins the six-month negotiation period.

If you cannot agree at the end of the notified negotiation period, you may apply to the Fair Work Commission to approve the enterprise agreement. However, the Fair Work Commission must approve your agreement before you can move forward. Additionally, the Commission must be satisfied that:

  • the relevant union from your negotiation is entitled to represent the interests of the majority of your employees who the agreement will cover; and
  • it is in the overall public interest that the Commission approves the enterprise agreement.

Key Takeaways

In short, a greenfields agreement is an enterprise agreement that:

  • you, as an employer, will negotiate with a union;
  • relates to a new project; and 
  • you complete before you hire employees necessary for the regular operation of the new project. 

If you want to learn more about enterprise agreements, 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

What is an enterprise agreement?

An enterprise agreement is a legal contract that sets out the conditions on which an employee or group of employees will work for you.

How long are greenfield agreements in place? 

A greenfields agreement exists for a maximum of four years.

Webinars

What to Consider When Buying a Tech or Online Business

Wednesday 13 April | 11:00 - 11:45am

Online
Learn how to get the best deal when buying a tech or online business. Register for our free webinar today.
Register Now

Corporate Governance 101: Responsibilities for New Directors

Wednesday 27 April | 11:00 - 11:45am

Online
If you are a new company director, join our free webinar to understand your legal compliance obligations. Register today.
Register Now

Rogue Directors and Business Divorces: How to Remove a Director

Thursday 28 April | 11:00 - 11:45am

Online
Removing a board director is not simple. Join our free webinar to learn how to handle rogue directors. Register today.
Register Now

Employment Essentials for Tech Businesses

Thursday 5 May | 11:00 - 11:45am

Online
Protect your tech business and your employees by understanding your employment legal obligations. Register for our free webinar today.
Register Now

How to Protect and Enforce Your Trade Mark

Wednesday 11 May | 11:00 - 11:45am

Online
Protect your business’ brand from copycats and competitors. Register for this free webinar to learn how.
Register Now

How Franchisors Can Avoid Misleading and Deceptive Conduct

Wednesday 18 May | 11:00 - 11:45am

Online
Ensure your franchise is not accused of misleading and deceptive conduct. Register for our free webinar today.
Register Now

New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects

Wednesday 25 May | 10:00 - 10:45am

Online
If you operate in the crypto space, ensure you understand the Federal Government’s proposed licensing and regulation changes. Register today for our free webinar.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Online
Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Online
Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer