An Enterprise Bargaining Agreement is a contract which makes changes to employment terms and conditions and is between an employer and employee/s. 

Enterprise Bargaining Agreements are a type of ‘registered agreement’ which can be negotiated. This type of negotiation is called ‘collective bargaining in good faith.’ 

Good faith, in this context, means bargaining representatives should:

  • reasonably attend meetings
  • divulge necessary information
  • consider and reply to proposals put forward by others
  • back up responses to proposals with reasons
  • respond in a timely fashion
  • not frustrate collective bargaining process or freedom of association 
  • not act in an erratic or unreasonable manner

The parties involved in bargaining the agreement are the employer, employees and, if the employee chooses, employee bargaining representatives. These representatives can be an organisation such as a trade union, or a person, such as someone who will be covered by the Enterprise Bargaining Agreement or the employee can choose themselves. 

After the agreement has been negotiated, a draft Enterprise Bargaining Agreement is given to all employees affected. The employees then vote on whether or not they agree to the agreement.

The agreement is then sent to the Fair Work Commission which must approve the agreement for it to become effective.  Enterprise Bargaining Agreements are highly regulated by the Fair Work Commission and have many minimum standards that must be met. The Fair Work Commission can also assist if there is a dispute in the negotiation process.

What Are The Types Of Enterprise Bargaining Agreements?

Enterprise Bargaining Agreements can be made before or after employment occurs. For example, a Greenfields Agreement is made before employees are employed, between the employer/s and an employee association, such as a trade union.

If an employee or group of employees is already employed, the type of Enterprise Bargaining Agreement they would enter into is called either a Single-Enterprise Agreement or a Multi-Enterprise Agreement.

What Is In An Enterprise Bargaining Agreement?

Wondering what needs to be included in an Enterprise Bargaining Agreement? Well, here’s our breakdown. 

  • The date of termination of the agreement must be included. This date can’t exceed 4 years from when the Enterprise Agreement was approved by the Fair Work Commission.
  • The Enterprise Agreement must set out how disputes are handled and allow an independent third party or the Fair Work Commission to settle disputes regarding National Employment Standards or modern award terms.
  • There must be a term for creating individual flexibility arrangements so that the Enterprise Agreement can be varied for individual employees who need it.
  • Lastly, the Enterprise Bargaining Agreement must make scope for consultation between the employer and employees where there are changes in the workplace likely to have a significant effect on staff. 

You Should Look Out For…

Look out for Enterprise Bargaining Agreements that contain unlawful terms. If an Enterprise Bargaining Agreement contains unlawful terms, the Fair Work Commission will not approve it. 

For instance, these agreements should never contain any discriminatory terms or terms that contradict the National Employment Standards, industrial action provisions or the Fair Work Act. 

The Enterprise Bargaining Agreement cannot leave an employee’s pay worse off than what is covered by their modern award. The agreement must leave the employee ‘better off overall’, which the Fair Work Commission will also examine. 

Why Do Employers Have Enterprise Bargaining Agreements?

Enterprise Bargaining Agreements can boost productivity, while providing more flexibility for both the employer and employee. 

Drilling down to finer details, an Enterprise Bargaining Agreement can improve flexibility for staff and employers in the following ways:

  • Flexible rosters and working hours
  • Widening an employee’s job classification
  • Job sharing
  • Better arrangements for employees who have family/care responsibilities
  • Career breaks
  • Simplifying the Modern Award provisions to make it easier for both the business and employees to understand their rights and to make compliance with the Modern Award more straightforward.

Other benefits are new training and thus job opportunities, efficiency goals, better service delivery, and better employee grievance procedures. 

Employee Bargaining Agreements provide a chance to be tailored to the specific needs of your staff, helping you hear and understand how productivity can be increased and what your staff need for a functional workplace. This gives you a valuable insight into your staff, and sets a positive and egalitarian tone for a style of communication that is between equals.

The Takeaway

If you’re looking to encourage innovation, productivity, and happier staff then an Enterprise Bargaining Agreement is a great start. Contact our expert employment lawyers for a consult on 1800 730 617 or team@sprintlaw.com.au.

About Sprintlaw

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