The Commission can only approve an agreement if it meets the relevant standards. Different rules apply to different types of agreements.
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The laws covering agreement making changed on 6 June 2023. Use this information if your notification time is before 6 June 2023. If notification time for your application is on or after 6 June 2023, see Changes to making Agreements for a summary of the new laws.
General requirements for agreements
A Commission Member will assess the agreement against the Fair Work Act 2009.
The employer must:
- meet all relevant timeframes to make an agreement
- give a valid Notice of Employee Representational Rights (NERR) (not for greenfields agreements)
- give a good explanation of the agreement to employees – section 180(5) of the Fair Work Act.
The agreement must:
- be signed and dated in the right way – section 185(2) of the Fair Work Act
- not exclude the National Employment Standards or any provision of those standards – sections 55 and 56, section 182(2)(c), section 196 and section 253 of the Fair Work Act
- cover employees who the employer chose in a fair way – section 186(3) of the Fair Work Act
- pass the Better Off Overall Test – section 186(2)(d) of the Fair Work Act
- have a correct nominal expiry date – section 186(5) of the Fair Work Act
- include the mandatory terms – section 186(6) of the Fair Work Act
- meet the needs of particular kinds of employees – section 187(4) of the Fair Work Act
- have the genuine agreement of the employees it covers (not for greenfields agreements) – section 186(2)(a) and section 188 of the Fair Work Act
- be consistent with good faith bargaining, if a scope order is in place – section 187(2) of the Fair Work Act
- not include any terms that are unlawful or designated outworker terms – section 186(4 and 4A) of the Fair Work Act.
Extra criteria for multi-enterprise agreements
Multi-enterprise agreements must meet extra requirements. The Member must be satisfied that:
- Each employer the agreement covers made a genuine agreement.
- No-one forced, or threatened to force, any of the employers to make the agreement unless permitted by the Fair Work Act – sections 186(2)(b) and 186(2AA)– section 186(2)(b) of the Fair Work Act.
- The employer varied the agreement if not all employees of all employers approved it – section 187(3) of the Fair Work Act.
Extra criteria for greenfields agreements
Greenfields agreements must meet additional requirements. The Member must be satisfied that:
- The unions under the agreement represent the interests of a majority of the employees who the agreement covers. Also, these unions must cover the employees for work they do under the agreement – section 187(5)(a) of the Fair Work Act.
- It is in the public interest to approve the agreement – section 187(5)(b) of the Fair Work Act.
- (single enterprise agreements only) Overall, the pay and conditions are consistent with the relevant industry for the same work. ‘Consistent’ may relate to the geographical area – section 187(6) of the Fair Work Act.
We check enterprise agreement applications against the requirements in the Fair Work Act using our pre-approval checklist (doc).
When the pre-approval check is completed, we give this to a Commission Member who reviews the application and the checklist before deciding whether to approve the agreement.