We can assist your business with the process of making a new or existing enterprise agreement, including drafting the agreement and complying with the pre-approval steps. We can assist with negotiating agreements on your behalf and corresponding with the union. We can assist with Building Code compliance, and making applications to vary and terminate enterprise agreements.
Whether it be reviewing, developing or negotiating your enterprise agreement, we can help.
Contact our Industrial Relations Team on 8122 4990 or IR@mbasa.com.au
What is an enterprise agreement?
An enterprise agreement is an agreement between an employer and its employees containing the terms of employment that will apply to all employees who are covered by the agreement. A registered enterprise agreement that has been made under the Fair Work Act 2009 will apply to employees who are covered by the agreement, to the exclusion of any modern award.
Enterprise agreements are negotiated between the employer and its employees and any representatives of the employees (i.e. a union). The Fair Work Act 2009 sets out strict requirements relating to the process for making and approving enterprise agreements. The Fair Work Commission will only approve an enterprise agreement if each of the requirements have been met, including that employees will be “better off overall” under the agreement, compared to the relevant modern award.
Types of enterprise agreements
The most common type of enterprise agreements that are made under the Fair Work Act 2009 are single-enterprise agreements. Single-enterprise agreements are made by a single employer, or multiple employers who conduct a joint venture or common enterprise. The other types of agreements that can be made are multi-enterprise agreements (multiple employers who do not share a common interest), or greenfields agreements (in relation to a new enterprise that an employer is proposing to establish).
Employees have the right to appoint a bargaining representative to bargain on their behalf in respect of a proposed enterprise agreement. At the commencement of the bargaining process, the employer must provide each employee who will be covered by the enterprise agreement with a Notice of Employee Representational Rights. The Notice must be in the exact form that is contained in the Fair Work Regulations (see Schedule 2.1).
Good faith bargaining
It is a requirement of the Fair Work Act 2009 that all bargaining representatives bargain in good faith in respect of a proposed enterprise agreement. This generally requires each party to: attend and participate in meetings; disclose relevant information; respond to requests for information and consider proposals from the other party; and not engage in unfair or unreasonable behaviour. If a party is not bargaining in good faith, the other party can apply to the Fair Work Commission for a “bargaining order”, which may require the party to do certain things.
Balloting of employees
Once a draft agreement has been finalised through the negotiation process, the employer must provide the agreement to employees and conduct a vote. The vote cannot occur until at least 21 days after the last Notice of Employee Representational Rights has been issued. Only employees who are to be covered by the agreement will be eligible to vote. All employees who are eligible to vote must have, or have access to, a copy of the final draft of the agreement for at least 7 days prior to the vote. The employer must also take steps to explain the terms of the agreement to employees, particularly those from non-English speaking backgrounds or younger employees.
Before the ballot takes place, the employer must inform employees of the time, date, place and method of voting. There is no prescribed method for voting, which may occur over more than one day if necessary. The agreement will be “made” if there is a majority of employees who vote in favour of the agreement.
Approval by Fair Work Commission
Once the agreement is made, the employer can apply to the Fair Work Commission for the agreement to be approved, no later than 14 days after the vote. The Fair Work Commission will only approve the agreement if it is satisfied that the agreement has been “genuinely agreed to”, including that the pre-approval steps have been satisfied. The Commission will also need to be satisfied that: the group of employees who are to be covered by the agreement was “fairly chosen”; the agreement does not contain “unlawful terms” or terms that are inconsistent with the National Employment Standards; and the agreement passes the better off overall test.
Once approved, the terms of employment contained in the enterprise agreement will apply to employees who are covered by the agreement for a period of up to 4 years. Enterprise agreements will continue to operate after the agreement’s nominal expiry date, until replaced by a new enterprise agreement or terminated by the Fair Work Commission.
Whether it be reviewing, developing or negotiating your enterprise agreement we can help.
We offer a free evaluations to members to assist your business to comply with workplace laws.