An Enterprise Agreement refers to the terms and conditions of employment between an employer and their employees. The process for introducing an agreement can be initiated by either the employer or their employees through the collective bargaining process. The Fair Work Act 2009 (Cth) introduced various types of agreements relating to a number of enterprises. An enterprise is defined as a business, project or activity.
Single Enterprise Agreement
A Single Enterprise Agreement can be created by two or more employers who may have a single interest. To create a Single Enterprise Agreement, employers need to receive a determination from the Fair Work Commission that they are single interest employers. This can include employers who may be related corporations or who are involved in a joint venture. 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, and this could lead to the negotiation of a Single Enterprise Agreement. Another way to determine if employers have a ‘single interest’ is if they receive the same source of funding.
A multi-enterprise agreement can also be created by two or more employers. These agreements differ however as 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.
Generally multi-enterprise agreements are not all single interest employers. Moreover, employees employed at the time the multi-enterprise agreement is made will be covered by the agreement.
A Greenfields Agreement is a specific category of enterprise agreement. This is because a Greenfields Agreement can only be made when a new enterprise is created. In practice, this means that the employer needs to make the enterprise agreement before employees are officially employed. A Greenfields Agreement can simultaneously also be a Single Enterprise Agreement or Multi-Enterprise Agreement. The usual parties who participate in the bargaining process for a Greenfields Agreement are the employer and an employee association such as a trade union.
These are the three types of enterprise agreements that can be made under the Fair Work Act 2009.
As all enterprise agreements are public documents you can access it through the Fair Work Commission website. If you are an employee, you may want to check to see if you will be covered by an existing enterprise agreement. If you are an employer looking to introduce or commence the bargaining process for establishing an enterprise agreement, our team of specialist employment lawyers can assist in determining the most appropriate agreement for you and your enterprise. It is important to note that if you are an employer who has decided to use an enterprise agreement, the agreement will need to be approved by the Fair Work Commission before your employees can begin work.