Greenfields Agreements in Australia: Key Points for Employers

Planning a new venture where you need staff but haven’t hired anyone yet? If you want certainty over wages and conditions before recruitment starts, a Greenfields Agreement can be a powerful tool.

Greenfields Agreements are a specific type of enterprise agreement under the Fair Work Act designed for brand‑new enterprises, projects or business activities. They let you lock in employment terms upfront (by agreement with relevant unions), so you can budget, tender and hire with confidence.

In this guide, we’ll explain what a Greenfields Agreement is, when it makes sense for a small business, the approval process, the must‑have clauses, and how it compares to other options like relying on awards or using individual contracts. We’ll keep it practical, so you know exactly what to consider before you move ahead.

What Is A Greenfields Agreement?

A Greenfields Agreement is an enterprise agreement made between an employer (or group of employers) and one or more relevant unions for a genuinely new enterprise before any employees who will be covered by the agreement are hired.

In plain English: you’re setting up a new operation, you haven’t engaged the workforce yet, and you want to fix the pay and conditions in advance. Instead of bargaining with employees (there aren’t any yet), you bargain with the union(s) that would represent those employees.

Like other enterprise agreements, a Greenfields Agreement needs to be approved by the Fair Work Commission (FWC). The FWC checks that it meets legal requirements, doesn’t include unlawful terms, and leaves workers better off overall than the relevant modern award (often referred to as the BOOT - the “better off overall test”).

When Should A Small Business Consider A Greenfields Agreement?

A Greenfields Agreement can be a good fit if you’re launching a new project or business line and want certainty from day one. Common scenarios include:

• Setting up a new facility, site or business unit separate from your existing operations.
• Preparing to tender for work and needing known labour costs and conditions to bid competitively.
• Planning a time‑limited project (e.g. construction or fit‑out) where you’ll hire a new workforce for that project.

Advantages for small businesses include cost predictability, smoother hiring (you can be transparent about pay and conditions), and reduced risk of bargaining disruptions later.

However, Greenfields Agreements aren’t always the right choice. Consider the following before you proceed:

• Union bargaining: You must negotiate with one or more relevant unions. If you prefer to negotiate directly with employees, a standard enterprise agreement pathway (after hiring) may be more suitable.
• Scope and timing: Greenfields Agreements only apply to a “genuinely new enterprise.” If you’ve already hired people for the work, it’s too late to use this pathway.
• Flexibility: Enterprise agreements can offer stability but can also be less flexible than tailoring an Employment Contract for particular roles (noting any award obligations still apply).

How Do You Make A Greenfields Agreement?

Here’s a practical, high‑level process most employers follow. Exact steps can vary based on your industry and the relevant unions.

1) Define The New Enterprise And Coverage

Identify the new project or business activity the agreement will cover, the job classifications you’ll need, and which modern award(s) likely apply. This scope drives who you must bargain with and what the pay and conditions should look like.

It’s sensible to map your intended roles against any relevant Modern Awards at this point, so you can design a realistic structure and pass the BOOT later.

2) Identify Relevant Union(s)

You will bargain with union(s) entitled to represent the industrial interests of the employees who will perform the work. In many industries, there may be more than one relevant employee organisation. Early, respectful engagement helps keep the process on track.

3) Prepare A Draft Agreement And Bargain In Good Faith

Draft the proposed agreement, including classifications, rates, allowances, rostering, ordinary hours, overtime, and required terms like consultation and dispute resolution. Share the draft with the unions and negotiate in good faith.

Keep project timelines in mind. Greenfields bargaining can be efficient if you plan ahead, but it still takes time to reach agreement on detail.

4) Check Legal Requirements

Before applying to the FWC for approval, check that the agreement meets legal requirements, including:

• It is for a genuinely new enterprise and made with relevant union(s).
• It contains all mandatory terms (e.g. flexibility, consultation and dispute resolution clauses).
• It doesn’t include unlawful terms and is consistent with the National Employment Standards (NES).
• It leaves workers better off overall than the relevant award(s) (BOOT).

Many employers seek help with award compliance at this stage to reduce FWC approval risks.

5) Apply To The Fair Work Commission

Once the union(s) sign the agreement, you apply to the FWC for approval. The Commission assesses the application against the Fair Work Act tests. If satisfied, it approves the agreement and sets a nominal expiry date (maximum of four years).

Approval gives you certainty: you can move into recruitment and onboarding knowing your industrial instrument is locked in for the nominal term.

What Must A Greenfields Agreement Include?

While the details vary by industry, there are core content and compliance requirements you’ll need to address.

Mandatory Terms

• Flexibility Term: Allows an individual flexibility arrangement with an employee (within strict limits) to vary certain terms by agreement.
• Consultation Term: Sets out how you will consult employees about major workplace changes (e.g. restructures, significant rostering changes).
• Dispute Resolution Term: Provides a pathway for resolving disputes, including referral to the FWC if needed.

Coverage, Classifications And Pay

• Coverage: Define which employer(s), employees and roles are covered, and any exclusions.
• Classification Structure: Map roles to levels so rates and progression are clear.
• Rates And Allowances: Set base pay, allowances, loadings, overtime, penalty rates and superannuation in a way that passes the BOOT against the relevant award(s).

Working Time And Rosters

• Ordinary Hours And Span: Define hours, daily/weekly limits and breaks in a way that works operationally and lawfully.
• Overtime And Penalties: Clarify when they apply and how they’re calculated.
• Leave: Reflect NES entitlements and any additional benefits (e.g. project‑specific leave).

Interaction With The NES And Awards

• National Employment Standards: An agreement cannot undercut the NES. Make sure your clauses clearly state that NES minimums prevail if there’s any inconsistency.
• Modern Awards: The agreement must leave employees better off overall than the relevant award(s). Build your proposal around realistic award comparisons from the outset.

Nominal Term And Signatures

• Nominal Expiry: Up to four years from approval.
• Execution: The agreement is signed by the employer(s) and the union(s) with coverage.

Even with an approved Greenfields Agreement in place, you’ll still issue role‑specific documents at onboarding such as an Employment Contract and the policies your staff must follow. The agreement sets the industrial floor; contracts and policies help manage day‑to‑day expectations.

Greenfields Vs Other Options: Which Is Right For You?

Before committing to a Greenfields Agreement, it’s wise to weigh it against your other industrial relations options. The “right” path depends on your project, timeline and workforce model.

1) Relying On Modern Awards And Individual Contracts

For some small projects or early‑stage ventures, using the default award plus well‑drafted contracts can be enough. This pathway is simpler and avoids union bargaining, but it gives you less certainty about future variability (for example, award increases or classification disputes). It also means you’ll still need robust workplace policies and onboarding documents to set expectations clearly.

2) Bargaining An Enterprise Agreement After Hiring

Instead of making a Greenfields Agreement, you can start your new operation and then bargain with employees. This can work if you’d prefer to negotiate directly with your workforce. The trade‑off is timing - bargaining and approval can take months, which may not suit time‑sensitive projects or tender commitments.

3) Using A Greenfields Agreement

This pathway is attractive if your project needs cost certainty and clear industrial settings before the first hire. You’ll bargain with relevant unions up front, embed project‑appropriate flexibility clauses, and (once approved) operate with a known framework for up to four years. You’ll still need to align day‑to‑day documentation like contracts, induction materials and a staff handbook with the agreement.

Decision Pointers

• Do you need known labour costs to bid for or finance the project?
• Will your workforce be project‑specific and distinct from existing operations?
• Are relevant unions active in your industry and open to pragmatic bargaining?
• Do your timelines allow for agreement negotiation and FWC approval before hiring?

If you’re unsure, speaking with an employment lawyer early can save time and rework later.

Onboarding And Compliance After Approval

Greenfields Agreements don’t “run themselves.” Once approved, you’ll still need to embed the obligations across your HR processes:

• Offer letters and contracts that align with the agreement and NES.
• Payroll and rostering systems configured to deliver the agreed rates, penalties and overtime rules.
• Clear policies for safety, conduct, leave and grievances, so leaders know how to apply the agreement in practice.
• Regular checks for award compliance and BOOT risk if roles evolve or duties expand.

Good documentation and training help prevent disputes - especially as your team grows quickly from zero to fully operational.

Key Takeaways

• A Greenfields Agreement lets you set wages and conditions for a genuinely new enterprise before hiring, by bargaining with relevant union(s) and obtaining FWC approval.
• It can deliver cost certainty and smoother hiring for new projects, but it requires upfront planning, union engagement and time for approval.
• Your agreement must include mandatory terms, meet the NES, and pass the BOOT against relevant award(s) - design your classifications and rates around these tests from the outset.
• Even with an approved agreement, use role‑specific documents like an Employment Contract, plus practical workplace policies, to manage day‑to‑day expectations.
• Consider alternatives (awards + contracts, or bargaining after hiring) if your project is small, timelines are tight, or you prefer direct bargaining with employees.
• Getting tailored advice from an employment specialist early can streamline bargaining, reduce approval risks and align your HR documents with your agreement.

If you’d like a consultation on planning or drafting a Greenfields Agreement for your new venture, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.