An enterprise agreement provides the terms and conditions of employment for those employees to whom it applies. It also sets out the rights and obligations of the employer(s) and any employee organisation(s) that it covers.

Type of Enterprise Agreements

There are several different types of enterprise agreements:

Ø single-enterprise agreements

o Single-enterprise agreements are made between a group of employees and:

§ an employer; or

§ two or more employers that are single interest employers which are defined as:

· employers that are related bodies corporate, or are engaged in a joint venture or common enterprise, or have been specified in a single interest employer authorisation

Ø multi-enterprise agreements

o multi-enterprise agreements are those made between two or more employers and groups of their employees. Employers must voluntarily agree to bargain together for a multi-enterprise agreement, with the exception of employers specified in a low-paid authorisation.

Ø greenfields agreements.

o Greenfields agreements (which are made before the employer has engaged any employees who will be covered by the agreement), can be either single-enterprise or multi-enterprise agreements.

Permitted Matters

Enterprise agreements must be about permitted matters, which are:

Ø matters pertaining to the relationship between the employer (or employers) and employees covered by the agreement;

Ø deductions from wages for any purpose authorised by an employee covered by the agreement; and

Ø how the agreement will operate.

Mandatory Terms

The following mandatory terms must be contained in all agreements:

Ø Flexibility Term which allows an employee and the employer, through genuine written agreement, to vary the effect of the agreement in relation to the individual employee and the employer in order to meet the genuine needs of both parties

o The flexibility term must set out the particular terms of the agreement which may be varied by an individual flexibility arrangement. The terms that are selected will be a matter for bargaining. These terms may include:

§ arrangements for when work is performed, overtime rates, penalty rates, allowances and leave loading.

o The employer is required to ensure that an individual flexibility arrangement is only about permitted matters and doesn’t include an unlawful term.

o The employer MUST also make sure that the employee would be better off overall under the individual flexibility arrangement than if there was no individual flexibility arrangement.

Ø Consultation Term which requires the employer(s) to consult the employees covered by the agreement about any major workplace changes that are likely to have a significant effect on those employees. The term must also allow for those employees to be represented during consultation. A person representing the employees could be an elected employee or a representative from an employee organisation.

Ø Dispute resolution term which sets out a procedure for the settlement of disputes about matters arising under the agreement and in relation to the National Employment Standards. This term must provide for Fair Work Australia or another person who is independent of the parties to deal with a dispute, and must provide for the representation of employees in the dispute settlement process.

Ø There are model flexibility and consultation terms contained in the Fair Work Regulations and these terms will be automatically included as part of the agreement, if such terms are not included in the agreement. However, the model dispute settlement term will only provide guidance.

Unlawful Terms

If an enterprise agreement contains unlawful terms then Fair Work Australia must refuse to approve the enterprise agreement. A term of an enterprise agreement will be an “unlawful term” if it:

Ø Is discriminatory

Ø Is objectionable

Ø would be inconsistent with the unfair dismissal provisions, the industrial action provisions or the right of entry provisions of the Fair Work Act 2009