What is an enterprise agreement australia

Enterprise agreements are deals made between employers and employees and their union about the terms and conditions of their employment. This includes things like:

Enterprise agreements can be fine-tuned to suit the needs of a specific workplace or sector. They are required to offer better conditions than the relevant award that would otherwise apply.

Agreements are reached through negotiation between an employer and employees and their union.

Unionised workplaces usually have better wages and conditions, because employees working together with the resources of a union behind them have more bargaining strength.

Better off overall

Once an agreement is in place the relevant award no longer applies. The only parts of the award that remain in place are:

Although employers and employees can both make concessions when coming to an agreement, agreements must always leave employees better off overall than they would have been under the relevant award.

Agreements must be registered and approved by the Fair Work Commission before they come into effect. They remain in place until they expire or are terminated.

Types of agreement

There are three main types of enterprise agreement:

Single-enterprise agreements

Agreements made between a single employer and their employees.

Multi-enterprise agreements

Agreements made between a group of employees and multiple employers. These are most relevant when multiple employers all operate in the same workplace.

Greenfields agreements 

Agreements made between employers and a union in a new workplace. Greenfields agreements are made before the employer has employed anyone, which is why it is vital that unions are involved—so that future employees are sure to get a fair deal.

If you need to know more, you can contact your union or the Australian Unions Support Centre for free, confidential information and advice about any workplace issue.

Funding for this factsheet was provided by the Victorian Government as part of the uTech project and the Fair Work Ombudsman. 

Please note that the information given here is general information only and is not legal advice. For further assistance, it is recommended you speak to your union.

Almost two million union members have contributed to us providing this free workplace factsheet. Because you’ve read a few of our factsheets, we’re asking for your email address to keep reading. This is so we can keep you updated with the latest news and workplace advice.

Don’t worry: our factsheets will always remain free, thanks to the solidarity of the union movement.

Enterprise bargaining is an Australian term for a form of collective bargaining, in which wages and working conditions are negotiated at the level of the individual organisations, as distinct from sectoral collective bargaining across whole industries. Once established, they are legally binding on employers and employees that are covered by the Enterprise bargaining agreement. An Enterprise Agreement (EA) consists of a collective industrial agreement between either an employer and a trade union acting on behalf of employees or an employer and employees acting for themselves.

By definition, an agreement, is the outcome of a negotiation, and a decision, involving multiple parties. (See Fair trade)

On the one hand, collective agreements, at least in principle, benefit employers, as they allow for improved "flexibility" in such areas as ordinary hours, flat rates of hourly pay, and performance-related conditions. Whilst collective agreements may, on the other hand, benefit some workers by providing higher pay, bonuses, additional leave and enhanced entitlements (such as redundancy pay) than an award does[citation needed], they also may reduce employees' bargaining power against their employers, impacting their ability to successfully obtain such benefits. In other words, whilst those employees who are successful in negotiating an Enterprise Agreement may receive greater benefits than those who are not, the overall number of employees earning comparatively high benefits may be reduced because few employees obtain an Enterprise Agreement.[1]

Industrial Awards and the Fair Work Act

Unlike awards, which provide similar standards for all workers in the entire industry covered by a specific award, collective agreements usually apply only to workers for one employer. However, a short-term collaborative agreement (for example, on a building-site) occasionally yields a multi-employer/employee agreement.

Parties endorse proposed enterprise agreements between themselves (in the case of employees the matter goes to a vote). The Fair Work Commission then assess them for approval. (Under the Fair Work Act 2009, agreements now[update] renamed "enterprise agreements" and are lodged with the Fair Work Commission to assess entitlements against the modern award and be checked for breaches of the Act.)[2]


Enterprise Bargaining Agreements were first introduced in Australia under the Prices and Incomes Accord in 1991 (Mark VII). They later became the centrepiece of the Australian industrial relations system when the Accord was next revised in 1993 (Mark VIII). This ended nearly a century of centralised wage-fixing based industrial relations.

How an enterprise agreement is made

The Fair Work Act 2009 provides a simple, flexible and fair framework that assists employers and employees to bargain in good faith to make an enterprise agreement.[3]

Employers, employees and their bargaining representatives are involved in the process of bargaining for a proposed enterprise agreement. An employer must notify their employees of the right to be represented by a bargaining representative during the bargaining of an enterprise agreement (other than a greenfields agreement) as soon as possible, and not later than 14 days after the notification time for the agreement (usually the start of bargaining). The notification should be given to each current employee who will be covered by the enterprise agreement.[2]

Use of enterprise agreements

A standard enterprise agreement would last for three years.

EAs had one unique feature in Australia: whilst negotiating a federal enterprise bargaining agreement, a group of employees or a trade union could, without legal penalties, undertake industrial action (including strikes) in pursuit of their claims .

Issues regarding enterprise agreements

A major legal question associated with enterprise agreements stemmed from the High Court of Australia's decision in the case of Electrolux v The Australian Workers' Union. The question revolved around what these industrial instruments could cover. The Australian Industrial Relations Commission determined the matter in 2005 in the three certified agreements case.

The future of EAs in Australian industrial law

In the context of Australian labour law, the industrial reform of 2005–2006, known as "WorkChoices"[4] (with its corresponding amendments to the Workplace Relations Act (1996)) changed the name of such agreement documents to "Collective Agreement". State industrial legislation can also prescribe collective agreements, but the enactment of the WorkChoices reform will make such agreements less likely to occur.

Since the Fair Work Act was enacted, parties to Australian federal collective agreements now[update] lodge their agreements with Fair Work Australia for approval. Before an enterprise agreement will be approved a member of the tribunal must be satisfied that employees employed under the agreement will be 'Better Off Overall' than if they were employed under the relevant modern award.

See also

  • Collective bargaining
  • Sectoral collective bargaining
  • UK labour law
  • US labor law


  1. ^ Forsyth, Anthony. "There's one big reason wages are stagnating: the enterprise bargaining system is broken, and in terminal decline". The Conversation. Retrieved 28 August 2022.
  2. ^ a b "Enterprise Bargaining Fact Sheet". FairWork. Australian Government. Retrieved 26 September 2013.
  3. ^ "FAIR WORK ACT 2009 - SECT 171 Objects of this Part".
  4. ^ Hall, Richard (June 2006). "Australian Industrial Relations in 2005 – The WorkChoices Revolution". Journal of Industrial Relations. 48 (3): 291–303. doi:10.1177/0022185606064786.

Retrieved from "https://en.wikipedia.org/w/index.php?title=Enterprise_bargaining_agreement&oldid=1125043372"