Enterprise Agreements For Hospitality Groups

Are enterprise agreements worth it for a growing hospitality group? Often, yes, but only if you plan the bargaining process carefully and make sure your team is genuinely better off overall.

If you run several cafes, restaurants, bars or venues, you already know how messy award compliance can feel. Penalty rates, split shifts, late nights, weekend work, allowances and roster changes can make payroll harder than it needs to be.

An enterprise agreement can give your business a more practical framework for pay and rostering across multiple sites. The catch is that the Fair Work Commission will only approve it if you follow the rules under the Fair Work Act 2009 and pass the Better Off Overall Test, usually called the BOOT.

What Is An Enterprise Agreement In Hospitality?

An enterprise agreement is a workplace agreement between your business and your employees that sets employment conditions for a particular group of employees.

For hospitality groups, an enterprise agreement might cover employees across one venue, a group of venues, or particular classifications such as front of house staff, kitchen staff, supervisors and managers who are award covered.

Once approved by the Fair Work Commission, the agreement usually replaces the relevant modern award for the employees it covers. In hospitality, the relevant award might be the Hospitality Industry (General) Award 2020, the Restaurant Industry Award 2020, the Fast Food Industry Award 2020 or another award depending on what your business actually does.

The agreement can't undercut the National Employment Standards in the Fair Work Act 2009. That means minimum entitlements like annual leave, personal leave, unpaid parental leave, notice of termination and redundancy pay still sit underneath the agreement.

A hospitality enterprise agreement commonly deals with:

• base rates of pay and loaded rates
• penalty rates and overtime
• ordinary hours and span of hours
• rostering rules and roster change processes
• breaks, allowances and uniforms
• classifications and progression
• consultation, dispute resolution and flexibility terms
• casual, part time and full time arrangements

The aim isn't to pay less than the award. The aim is usually to create a clearer, more workable structure that still leaves employees better off overall.

Why Would A Hospitality Group Use An Enterprise Agreement?

You might use an enterprise agreement because your business has outgrown a site by site, award by award approach to payroll and rostering.

Hospitality groups often reach a point where the standard award framework becomes difficult to apply consistently. For example, you may have different venues with different opening hours, a mix of casual and part time employees, managers approving rosters in different ways, and payroll trying to interpret several allowances and penalty rules each week.

An enterprise agreement can help you:

• use loaded rates that bundle some award penalties and allowances into a higher hourly rate
• create consistent rostering rules across venues
• simplify payroll calculations
• set clearer expectations for managers and employees
• support growth into new locations without rebuilding your employment framework each time
• reduce the risk of underpayments caused by misunderstood award rules

Say you run three casual dining venues in Brisbane and the Gold Coast. Your employees regularly work Thursday nights, weekends and public holidays, but different venue managers interpret roster changes and meal breaks differently. A carefully drafted enterprise agreement could set one set of rules for the group, with rates modelled against the relevant award so employees are better off overall across the work patterns they actually perform.

That said, an enterprise agreement isn't always the right tool. If you only have a handful of employees, fairly predictable rosters and straightforward award coverage, strong employment contracts, policies and payroll systems may be enough for now.

Can An Enterprise Agreement Make Pay And Rostering Simpler?

Yes, an enterprise agreement can make pay and rostering simpler, but only if the drafting and pay modelling are done properly.

One of the biggest attractions for hospitality groups is the option to use loaded rates. Instead of applying a different rate for every evening, weekend, public holiday or overtime scenario, you may be able to set higher hourly rates that compensate employees for particular award entitlements.

For example, a loaded casual rate might be designed to absorb some weekend penalties, evening penalties and certain allowances. This can make payroll easier and help employees understand what they will be paid.

The risk is that a loaded rate can fail the BOOT if it doesn't properly cover the award entitlements employees would have received. This is especially common where employees work a lot of high penalty shifts, such as Sundays, public holidays, late nights or overtime.

What Good Modelling Looks Like

Good BOOT modelling usually looks at realistic roster patterns, not just a best case example. For a hospitality group, that often means modelling scenarios such as:

• a casual employee working mostly Friday and Saturday nights
• a part time employee working a mix of weekdays and Sundays
• a kitchen employee doing early starts and overtime
• a supervisor working closing shifts across several venues
• public holiday rosters during busy periods
• employees who work short shifts and employees who work longer shifts

The Fair Work Commission will look at whether each award covered employee, and each reasonably foreseeable employee, would be better off overall compared with the relevant modern award.

That doesn't mean every single term has to be better than the award. Some terms can be less favourable if other benefits make up for them. But the overall position needs to be better, and the modelling needs to support that.

How Does The BOOT Apply To Hospitality Enterprise Agreements?

The BOOT applies by comparing the enterprise agreement against the relevant modern award to check whether employees are better off overall.

For hospitality groups, the BOOT is often the main approval hurdle because hospitality work involves variable hours, penalties and allowances. A rate that works for weekday lunch shifts may not work for Sunday nights or public holidays.

The Fair Work Commission now takes a more practical, global approach to the BOOT than it did in the past, following changes to the Fair Work Act 2009. The Commission can consider reasonably foreseeable work patterns and the overall benefits under the agreement. It can also accept undertakings in some cases, which are written commitments you give to fix a concern so the agreement can be approved.

However, you shouldn't treat undertakings as a backup plan for poor drafting. If the agreement is unclear or the rates aren't properly modelled, approval can be delayed or refused. Even after approval, BOOT issues can come back if work patterns change in a way that affects whether employees are better off overall.

For hospitality groups, your BOOT work should usually cover:

• the correct award or awards for your operations
• the correct classifications for each role
• ordinary hours, overtime and penalty assumptions
• allowances, breaks and uniform obligations
• casual loading and part time entitlements
• public holiday work
• any higher rates, bonuses or other benefits you're relying on

If your business operates across different hospitality formats, such as a cafe, a catering arm and a bar, you may need to check whether more than one award is relevant. Getting this wrong can affect both approval and future award compliance.

What Is The Process For Making An Enterprise Agreement?

The process is formal, and you need to follow the steps carefully under the Fair Work Act 2009.

A simple way to think about it is: define who is covered, bargain properly, give employees the right documents and time, hold a valid vote, then apply to the Fair Work Commission for approval.

Step 1: Work Out Coverage And Strategy

Start by deciding which employees and roles the agreement will cover. For a hospitality group, you might cover all employees across named venues, or a defined group such as restaurant employees and supervisors.

You'll also need to decide whether one agreement is best, or whether different agreements make more sense for different parts of your business. The answer depends on your venues, awards, employee mix and growth plans.

Step 2: Start Bargaining Properly

Bargaining starts at a particular point called the notification time. From there, you generally need to give employees a Notice of Employee Representational Rights, often called a NERR, as soon as practicable and no later than 14 days after the notification time.

The NERR tells employees they can appoint a bargaining representative, which may be themselves, a union, or another person. You need to use the correct form and avoid adding extra content that could make the notice invalid.

During bargaining, you need to follow good faith bargaining requirements. In practical terms, that means you should:

• attend and participate in meetings at reasonable times
• respond to proposals in a timely way
• give genuine consideration to employee proposals
• explain your responses where appropriate
• not behave in a way that undermines bargaining

Step 3: Give Employees The Agreement And Explain It

Before employees vote, you need to give them the proposed agreement and any incorporated materials, or ready access to them, so they have a reasonable opportunity to consider what is being proposed.

You also need to take reasonable steps to explain the agreement and its effect in a way that suits your employees' circumstances. In hospitality, that may mean using plain English summaries, translated material if needed, manager briefings and opportunities for employees to ask questions.

Employees also need to be properly informed about the vote, including when and how it will happen. Where a NERR is required, you must not request employees to vote until at least 21 days after the last NERR is given.

Step 4: Hold The Vote

The agreement is made if a majority of employees who cast a valid vote approve it. This isn't a majority of all employees, but a majority of those who vote.

You can usually vote electronically or by ballot, as long as the process is fair and records are kept.

Step 5: Apply To The Fair Work Commission

After the agreement is made, you generally need to lodge the approval application with the Fair Work Commission within 14 days. The Commission will review the agreement, the process, the BOOT and the required forms.

If approved, the agreement starts operating 7 days after approval unless the agreement says it starts later. The nominal expiry date can't be more than 4 years after the date the Commission approves it.

What Terms Should A Hospitality Enterprise Agreement Include?

A hospitality enterprise agreement should include both the mandatory legal terms and the practical terms your venues need to run smoothly.

At a minimum, an enterprise agreement needs to include:

• a nominal expiry date
• a dispute resolution term
• a flexibility term allowing individual flexibility arrangements
• a consultation term for major workplace change and changes to regular rosters or ordinary hours
• workplace delegates rights terms where required

If a required term is missing or doesn't meet the legal standard, a model term may be taken to apply. It's usually better to draft these terms clearly from the start so managers know what to do.

For a hospitality group, the practical terms often matter just as much as the legal ones. You may want to include:

• clear classifications that match your actual roles
• rules for moving between levels, such as from team member to supervisor
• ordinary hours and maximum shift lengths
• when overtime applies
• break rules that managers can realistically follow
• how rosters are issued and changed
• minimum engagement periods for casual and part time employees
• uniform, laundry, meal and travel allowance rules
• public holiday arrangements
• work experience arrangements, training requirements and trial shifts

You should also make sure the agreement works neatly with your employment contracts and workplace policies. The enterprise agreement will sit above individual contracts for covered employees, so your contracts shouldn't promise something inconsistent or less favourable.

Templates often miss the details that matter in hospitality, especially around classifications, loaded rates and rostering. A tailored agreement is more likely to reflect how your venues actually operate.

What Can Go Wrong If You Rush The Agreement?

Plenty can go wrong if you rush, because the approval process is technical and hospitality pay is highly sensitive to roster patterns.

The most common issues we see aren't dramatic. They're usually process gaps, unclear drafting or pay assumptions that don't match real rosters.

Common mistakes include:

• using the wrong award as the comparison point
• missing a group of employees who should be covered
• giving the NERR late or changing its wording incorrectly
• asking employees to vote before they have had a reasonable opportunity to consider the agreement
• requesting a vote less than 21 days after the last NERR is given, where a NERR is required
• failing to properly explain the agreement and its effect
• assuming a loaded rate passes the BOOT without modelling Sundays, public holidays and overtime
• drafting rostering clauses that managers can't apply in practice
• forgetting to update employment contracts, policies and payroll rules after approval

The practical consequence is delay, extra cost and confusion. The Fair Work Commission may ask questions, require undertakings or refuse approval. If the agreement is approved but implemented poorly, you may still face underpayment issues later.

Implementation is where many hospitality groups need a second plan, not just a signed agreement. Before the agreement starts, you should brief your venue managers, update payroll settings, check your rostering software and give employees clear information about how their pay and hours will work.

Is An Enterprise Agreement Right For Your Hospitality Group?

It depends on your size, roster patterns, awards, payroll capacity and growth plans.

An enterprise agreement may be a good fit if your business:

• operates multiple venues or plans to expand
• has complex rosters with evenings, weekends and public holidays
• wants more consistent rules across sites
• has payroll systems capable of supporting the agreement
• is prepared to bargain properly with employees
• can invest in accurate BOOT modelling before asking employees to vote

It may not be the right move yet if your current award arrangements are simple, your team is small, or you don't have reliable roster and payroll data. In that case, you may be better off tightening your employment contracts, policies, award interpretation and payroll processes first.

There's no one size fits all answer for hospitality groups. A suburban cafe group with 25 employees will need a different approach from a national restaurant group with hundreds of employees across several award covered roles.

The best starting point is to map how your business actually operates now and how you expect it to operate over the next few years. From there, you can decide whether an enterprise agreement will reduce complexity or simply create a bigger compliance project than you need.

Key Takeaways

• Enterprise agreements can help growing hospitality groups simplify pay, rostering and workplace rules across venues.
• The agreement must comply with the Fair Work Act 2009, the National Employment Standards and the Fair Work Commission approval process.
• The BOOT is usually the biggest issue for hospitality because weekend work, public holidays, overtime and allowances can change the outcome.
• You need to follow technical steps, including NERR timing, giving employees a reasonable opportunity to consider the agreement, explaining its effect, waiting at least 21 days after the last NERR before requesting a vote where required, holding a valid employee vote and lodging with the Commission within 14 days after the agreement is made.
• A good agreement is only useful if your payroll, rostering systems, contracts and managers are ready to implement it properly.

If you'd like help with assessing whether an enterprise agreement is right for your venues, drafting the agreement, BOOT modelling and implementation planning, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.