As an employer, you may have heard of Enterprise Bargaining Agreements (EBAs) and are wondering if they are right for your business. An EBA is an agreement between employers and employees to vary the terms of an industry employment award.

Industry employment awards outline the rights and responsibilities of employers and employees for the particular industry it covers.

Both employees and employers can begin the process of introducing an EBA through collective bargaining. There are three key types of EBAs:

  • single enterprise agreements;
  • multiple enterprise agreements; and
  • greenfields agreements.

In this article, we will outline the key features of each type of agreement.

Why Enterprise Agreements?

There are several advantages for employers and employees looking to enter into an EBA:

  • employers can spend less time and energy interpreting and applying complex industry awards; and
  • employees are, overall, better off than they would be under the relevant award.

Single Enterprise Agreement

A single enterprise agreement can be created by two or more employers who share a single interest. To create a single enterprise agreement, all the employers wishing to join the agreement need to receive a determination from the Fair Work Commission that they are single interest employers. For example, this could be employers in related corporations or who are involved in a joint venture. A joint venture is where two or more parties work together to accomplish a task or project. These employers can come together to negotiate an agreement with their collective employees.

For example, although franchisees may operate as separate businesses, they may have a common interest when dealing with their employees. A well-performing franchise will ensure that franchisees are not in competition with each other. To achieve this, the franchise could negotiate a single enterprise agreement. Another way to determine if employers have a ‘single interest’ is if they receive the same source of funding.

Multi-Enterprise Agreement

A multi-enterprise agreement is created by two or more employers as well as the employees of those different enterprises. These agreements differ from single enterprise agreements in that the employers do not need to prove that they have a single interest in the bargaining process. Employers will, however, need to agree to bargain together. This can be common for projects where multiple organisations are involved, for example, in construction.

Greenfields Agreements

A greenfields agreement is a specific category of enterprise agreement that is only available to a genuine new enterprise. This could be, for example, a new business or project. The key feature of a greenfields agreement is that the employer needs to make the enterprise agreement with a specific union before any employees are officially employed. You, as an employer, need to make the application before any work (beyond any preparatory work) has begun.

A greenfields agreement can simultaneously be a single enterprise agreement and a multi-enterprise agreement. The usual parties who participate in the bargaining process for a greenfields agreement are the employer(s) and an employee association such as a trade union.

Key Terms in an EBA

You must include four key terms in your EBA. These are:

  • an expiry date for the EBA no longer than four years from the date the Fair Work Commission approves the EBA;
  • a dispute resolution procedure that allows for either the Fair Work Commission or an independent third party, to settle disputes relating to the terms of a modern award or National Employment Standards;
  • a term to allow individual employees to make an individual flexibility agreement (IFA) with their employer. An IFA varies the terms of the EBA according to that single employee’s specific needs;
  • a consultation term that requires that employers consult employees regarding any major workplace changes and employees have representation in that consultation process.

Key Takeaways

The three key types of enterprise bargaining agreements are:

  • single enterprise agreements;
  • multi-enterprise agreements; and
  • greenfield agreements.

Before establishing an enterprise agreement, you will need to determine which type of enterprise agreement is most suitable for you. It is important to note that the Fair Work Commission needs to approve the agreement before it can commence operation. If you have any questions about enterprise bargaining agreements, get in touch with LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
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