Enterprise Agreements | Newcastle & Central Coast Lawyers

What is an enterprise agreement?

An enterprise agreement is a legal document that covers employers and employees to set out the minimum terms and conditions of employment. This provides both parties with the freedom to bargain for better wages, greater flexibility and working conditions to suit individual needs, which is beyond the scope of a modern award or the National Employment Standards (NES). 

What are the different types of enterprise agreements?

There are three types of enterprise agreements, these include: 

• Single-Enterprise Agreement.
• Multi-Enterprise Agreement.
• Greenfields Agreement. 

Why should employers have an enterprise agreement?

An enterprise agreement provides benefits to employers as it allows employers to negotiate for more flexible working conditions, provided that their employees are better off overall. This provides a benefit to employers as the agreement can be tailor-made to their business to cater to their individual circumstances and needs. The agreement can be approved by providing higher wages to employees, additional benefits such as more annual leave or a work-from-home allowance, or more flexible hours of work. 

What can be included in an enterprise agreement?

Under the Fair Work Act 2009  (the Act), an Enterprise Agreement may include terms that relate to the following conditions and entitlements: 

• Rates of pay, 
• Penalty rates and payment for overtime, 
• Allowances and other work-related payments, 
• Hours of work (including start and finish times), 
• Annual and personal leave provisions, and
• Any additional terms relevant to the operation of the agreement. 

Some key terms that are to be included under the Act for enterprise agreements include: 

• A coverage term that explains who is covered under the enterprise agreement, 
• A dispute resolution procedure that empowers the FWC, or an independent third party, to settle any disputes relating to the NES or terms of a modern award, 
• An expiry date no longer than four years from the date the FWC approved the enterprise agreement, 
• A term that requires employers to consult their employees in the event of any significant changes to the workplace and provides employees with the ability to seek representation in this consultation process, and
• A term allowing an employee to enter into an Individual Flexibility Agreement with their employer. 

As per the Act, an employer is prohibited from the inclusion of the following terms in an enterprise agreement: 

• Discriminatory terms, 
• Objectionable terms, such as a term that requires or permits a breach of the general protections, 
• Terms that are inconsistent with the unfair dismissal provisions of the Act, 
• Terms that are inconsistent with the industrial action provisions of the Act, and
• Terms that are inconsistent with the right of entry provisions of the Act. 

What is the BOOT test?

The Better Off Overall Test (BOOT) is a test that is employed by the Fair Work Commission to assess potential agreements against the current awards. This is implemented to ensure that an employee is better off overall under the enterprise agreement for the agreement to be approved by the Commission. 

What is a multi-enterprise agreement? 

A multi-enterprise agreement is made between two or more employers to be issued to the collective employees of their individual businesses. This agreement will only apply to the employees who are: 

• Employees at the time the agreement is made, and 
• Employees who will be covered by the agreement. 

A multi-enterprise agreement requires all employees to voluntarily agree to bargain together in the making of the agreement. 

A special method of bargaining for multi-enterprise agreements is available to enable low-paid employees who have not historically participated in enterprise-level collective bargaining to make a multi-enterprise agreement. 

What is a Greenfields Agreement? 

A Greenfields Agreement is an enterprise agreement that relates to a genuinely new enterprise currently being established or proposed to be established. This includes a new business, activity, project, or undertaking. The agreement is made when the employer, or employers, have not yet employed any person who will be necessary for the everyday capabilities of the enterprise and will be covered by the agreement. A key advantage of the Greenfield Agreement for employers is that it will not require the approval of employees whose employment would be subject to the agreement. However, negotiation will need to take place with the relevant union that is entitled to represent the interests of future employees. 

How can we help?

Fourtree Lawyers specialise in employment law and represent clients throughout the Hunter, Newcastle, Sydney and across the Central Coast. We have experience in drafting enterprise agreements and assisting with bargaining. 

If you require an enterprise agreement, call one of our Employment law specialists on 1300 529 444 or submit a contact form to arrange a case assessment with one of our solicitors today.