Enterprise agreements are employment agreements which are specific to a certain business, employer, enterprise or group of companies. Federal enterprise agreements will always displace existing award conditions. Enterprise agreements cannot be made if they are against public policy.
Enterprise agreements contain provisions regarding:
- Matters pertaining to the relationship between an employer and their employees
- Matters pertaining to the relationship between an employer and the employee organisation
- Deductions from wages authorised by any employee
- How the agreement will operate
There are three types of enterprise agreement- the single enterprise agreement which applies to employers who are related bodies or in a joint venture (single-interest employers), the multi-enterprise agreement, for employers who are not single interest employers and the Greenfields agreement, which deals with employee organisations. In the initial stages of the drafting of an enterprise agreement, it must first be established that employees covered will be ‘better off overall’ if covered by an enterprise agreement as opposed to a modern award.
Enterprise agreements create avenues for wage bargaining. Employees involved in the bargaining process are able to be represented by an employee organisation or any other nominated person. There is a major focus on wage bargaining in the Fair Work Act 2009 (Cth).
An enterprise agreement is approved if employees vote on the agreement. Employees may be asked by their employer to approve an agreement, which comes into effect once the majority of employees has voted for it.
The Fair Work Act indicates that an enterprise agreement to be approved, it must meet the following requirements:
- Inclusion of a safety net for employees
- The group of employees covered is fairly chosen
- There must be no unlawful terms
- There must be no designated outworker terms
- There must be a nominal expiry date (whichever comes first, either the date specified or 2 years after the FWA approves the agreement).
- The agreement must include dispute resolution provisions
- The agreement must not be inconsistent with good faith bargaining
- There must be a provision requiring notice of variation of agreement
- Greenfields agreement: industrial interests must be represented and be in the public’s interest to approve.
- Agreements must include flexibility terms: flexibility of work hours (mandatory term).
- Agreements must include consultation terms: employer must consult the employee if there are any changes which may have any significant effect on the employee (mandatory term).
In order to vary an enterprise agreement, the majority of employees must vote for the variation. To terminate an enterprise agreement, both the employer and employees must agree on the termination, and it must be voted for by a majority of employees.
How can Prime Lawyers help you?
At Prime Lawyers we have acted for many satisfied employers and employees in recent times. Our employment lawyers keep up-to-date with this rapidly changing area of law. If you feel that your enterprise agreement has been breached or there are inconsistencies between it and what is specified within the Fair Work Act 2009, feel free to contact us on (02) 9521 2222 to speak to one of our experienced employment lawyers. You can also send your enquiry online now and we will contact you shortly.