Fair Work Commission

Enterprise agreements

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Enterprise agreements are collective agreements made at an enterprise level between employers and employees about terms and conditions of employment. The Fair Work Commission can provide information about the process of making enterprise agreements, as well as assess and approve agreements. We can also deal with disputes that occur about the terms of agreements.

Who can make an enterprise agreement?

An enterprise agreement can be made between one or more employers and two or more employees with their chosen representatives.

In the case of a greenfields agreement, where there are no employees employed, the employer negotiates with one or more relevant employee organisations (unions).

Why make an enterprise agreement?

Modern awards cover a whole industry or occupation and provide a safety net of minimum pay rates and employment conditions. Enterprise agreements can be tailored to meet the needs of particular enterprises.

What can an enterprise agreement include?

Enterprise agreements usually include a broad range of matters such as:

• rates of pay
• employment conditions, eg hours of work, meal breaks, overtime
• consultative mechanisms
• dispute resolution procedures
• deductions from wages for any purpose authorised by an employee.

They cannot, however, include unlawful content (such as discriminatory or objectionable terms).

Types of enterprise agreements

Approval processes for enterprise agreements vary depending on the type of agreement.

There are 3 types:

• Single-enterprise agreements – involving a single employer or one or more employers (such as franchisees) co-operating in what is essentially a single enterprise (such employers are known as single interest employers – see Division 10, Part 2-4, of the Fair Work Act 2009).
• Multi-enterprise agreements – involving 2 or more employers that are not all single interest employers.
• Greenfields agreements – involving a genuinely new enterprise that one or more employers are establishing or propose to establish and who have not yet employed persons necessary for the normal conduct of the enterprise. Such agreements may be either a single-enterprise agreement or a multi-enterprise agreement.

Continuous operation of agreements

Under the Fair Work Act 2009, agreements continue to operate after their nominal expiry date until they are replaced or terminated by application to the Commission. Through provisions in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, agreements made under previous legislation continue to have effect as agreement-based transitional instruments.