Bargaining Agreements (EBA’s)

Enterprise bargaining is the process of negotiation generally between the employer, employees and their bargaining representatives with the goal of making an enterprise agreement. The Fair Work Act 2009 establishes a set of clear rules and obligations about how this process is to occur, including rules about bargaining, the content of enterprise agreements, and how an agreement is made and approved.

What is an agreement?

A registered agreement sets out the terms and conditions of employment between an employee or group of employees and one or more employers.

Under the Fair Work Act 2009, the following new enterprise agreements can be made:

Single-enterprise agreement

A single-enterprise agreement is made between a single employer (or two or more single interest employers) and employees employed at the time the agreement is made, and who will be covered by the agreement. Single interest employers are employers that are in a joint venture or common enterprise or are related corporations. They can also be employers authorised as single interest employers by the Fair Work Commission, which may be either franchisees or other employers where the Minister for Employment has made a declaration.

Multi-enterprise agreement

A multi-enterprise agreement is made between two or more employers (that are not all single interest employers) and employees employed at the time the agreement is made and who will be covered by the agreement.

Greenfields agreement

A greenfields agreement is an enterprise agreement that is made in relation to a new enterprise of the employer or employers before any employees are employed. This can either be a single enterprise agreement or a multi-enterprise agreement. The parties to a greenfields agreement are the employer (or employers in a multi-enterprise greenfields agreement) and one or more relevant employee associations (usually a trade union).

What terms must be included in an enterprise agreement?

An enterprise agreement is an agreement about permitted matters which are:

• terms about the relationship between each employer and the employees covered by the agreement
• terms about the relationship between each employer and any employee organisations (e.g. a trade union) who will be covered by the agreement
• deductions from wages for any purpose authorised by an employee covered by the agreement
• how the agreement will operate.

An enterprise agreement must contain the following terms:

• a nominal expiry date for the agreement which is no longer than four years from the date the Fair Work Commission approves the agreement
• a dispute settlement procedure, which must authorise either the Fair Work Commission or someone else that is independent of those covered by the agreement to settle disputes about any matters under the agreement in relation to terms of a modern award or the National Employment Standards (‘NES’)
• a flexibility term that allows for the making of individual flexibility arrangements (IFAs) for the purpose of meeting the genuine needs of the employer and employees. These are arrangements between an employer and an individual employee that vary the operation of the enterprise agreement in relation to the employee (see What is an Individual Flexibility Arrangement? below)
• a consultation term, which requires the employer to consult their employees about any major workplace changes that are likely to have a significant effect on them and allows the employees to have representation in that consultation. If there is no such consultation term, the model consultation term will apply.

The rate of pay for an employee under an enterprise agreement cannot be less than the relevant rate of pay under the modern award that would apply to the employee or under a national minimum wage order.

What can’t be included in an enterprise agreement?

An enterprise agreement cannot include any unlawful content.

This includes:

• a discriminatory term
• an objectionable term (which are terms that require or allow payment of a bargaining services fee, or a contravention of the general protections provisions of the Fair Work Act 2009)
• a term that confers an entitlement or remedy in relation to unfair dismissal before the employee has completed the minimum employment period
• a term that excludes, or modifies, the application of unfair dismissal provisions in a way that is detrimental to, or in relation to, a person
• a term that is inconsistent with the industrial action provisions
• a term that provides for an entitlement to right of entry
• a term that allows for the exercise of any State or Territory OHS legislative right of entry in a manner different to the rights set out in the right of entry provisions of the Fair Work Act 2009.

The Fair Work Commission will review enterprise agreements for any unlawful content. The Fair Work Commission cannot approve an enterprise agreement that contains unlawful content.

Terms in an enterprise agreement and modern awards cannot exclude the NES, and those that do will have no effect.

If you have any questions or would like to speak with one of our solicitors, please contact us.