Once in operation, an enterprise agreement operates instead of the provisions of the modern award that would otherwise apply to the business.

An enterprise agreement (or “enterprise bargaining agreement” / “EBA” as they were formerly known) is an agreement that is entered into between an employer and its employees (or a particular defined group of employees).

Some of the advantages of implementing an enterprise agreement include that it allows for employers and employees to agree on arrangements of working that might not be permitted under modern awards and so provides the flexibility for arrangements in the workplace to fit the needs of the business. Furthermore, once in place, employees covered by the enterprise agreement have limits on bringing industrial action during the “nominal term” of the agreement (usually four years).

The agreement will apply to new employees engaged by the employer, even though they were not employed at the time the agreement was made. Enterprise agreements last indefinitely until they are terminated by an order of the Fair Work Commission (usually on an application from an employee or employer).

There are very strict rules about the process for implementing an enterprise agreement and the matters that can be included in the agreement.

Employees must be consulted about the proposed enterprise agreement and unions have a right to be involved in this process.

Employees must vote on the enterprise agreement and a majority of the voting employees must approve it.

Once employees have voted for the agreement it must be sent to the Fair Work Commission for approval with supporting documentation which explains why the employees are “better off overall” under the agreement than under a modern award (the so-called “BOOT” test).

At EI Legal our lawyers have a wealth of experience in drafting enterprise agreements and guiding employers through the process of their implementation.

Enterprise agreement interpretation

We also regularly advise on the interpretation and operation of existing enterprise agreements. If you have an enterprise agreement in operation at your business – or you have bought a business covered by an agreement – please contact us if you require assistance in understanding its terms.

Employers should be aware that the base rate of pay provided for in an enterprise agreement cannot fall below the minimum rate of pay provided for by a modern award that would otherwise apply to an employee covered by an agreement. Given the minimum rates of pay in modern awards increase every July, you should regularly compare the enterprise agreement base rate of pay with the award rate of pay. Need help doing that? Contact us today.

Industrial relations lawyers

Disputes with employees – and their trade unions – sometimes arise over enterprise agreements. At EI Legal our lawyers are skilled in representing employers in negotiations with unions (whether in relation to enterprise agreements or otherwise).

If you wish to have a confidential discussion about industrial relations matters please contact our offices.

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If you require any assistance regarding this matter, please contact us.

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