Enterprise Agreements are agreements that are made at the workplace level and they provide for terms and conditions for national system employees to whom the agreement applies. In essence an enterprise bargaining agreement is like an employment contract that applies to all of the employees at a particular workplace.
An enterprise agreement can have terms that are ancillary or supplementary to the National Employment Standards but they can not dilute or alter the national employment standards. An enterprise agreement can alter the terms of a modern award, subject to the agreement being better off overall as compared to the award.
There are several rules in relation to enterprise agreements, the first being that t enterprise agreement can only be about matters that relate to the relationship between an employer and the employees covered and to ancillary issues as to how the agreement will operate. As such, an enterprise agreement can not, for example, deal with payment of salary protection insurance as this is not a matter directly related to the relationship between the employer and the employee.
Other rules that apply to enterprise agreements are that:
- the enterprise agreement must pass the better off overall test meaning that the terms of the enterprise agreement must, on whole, leave the employee better off than if the employee was covered solely by the award. The terms of the award can be altered but if an entitlement under the award is reduced then there must be greater entitlements provided in the collective agreement.
- the agreement cannot contain any unlawful terms and these would be terms that would be discriminatory or otherwise be contrary to law
- an enterprise agreement must have a nominal expiry date of not more than 4 years from the agreement is approved
- all enterprise agreements must have a dispute resolution clause, a flexibility clause, a consultation clause