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Understanding enterprise bargaining, and the pre-approval steps and preparing your enterprise agreement for lodgement with the Fair Work Commission

Enterprise bargaining is the process, generally between an employer and its employees, of negotiating the terms of an enterprise agreement.

The Fair Work Act 2009 regulates how this process is to occur, setting the rules about bargaining, the content of the agreements, and the process required to have an agreement voted on by the employees and approved by the Fair Work Commission.

An enterprise agreement sets out the terms and conditions of employment agreed between an employee (or collection of employees) and an employer.

An enterprise agreement must contain the following terms:

  • a nominal expiry date which must be no longer than 4 years from the date the Fair Work Commission approves the agreement;
  • a dispute resolution clause in accordance with the Fair Work Act 2009;
  • a flexibility term that allows the employees and employer to make individual flexibility arrangements, to meet the genuine needs of the employees and employer; and
  • a term requiring the employer to consult with their employees about any major workplace changes such as redundancies.

Following we have set out the process for initiating the bargaining of the terms of the enterprise agreement, voting on the enterprise agreement and lodging it for approval with the Fair Work Commission.

Issue your employees with a Notice of their Representational Rights.

You must issue your employees with a “Notice of Representational Rights” no later than 14 days after you commence the bargaining process and no less than 21 days before your employees are expected to vote on the Enterprise Agreement.

Explain the Enterprise Agreement to your employees.

You must take all reasonable steps to ensure that:

  1. the terms of the Enterprise Agreement and the effect of those terms are explained to the employees who will be covered by the Enterprise Agreement; and
  2. this explanation is appropriate for employees and their circumstances. E.g. taking into account an employee’s age or language skills.

Adhere to the 21-day waiting period after the Notice of Representational Rights is given

Your employees must not vote on the Enterprise Agreement until at least 21 days after the day they were given notice of their representational rights.

Adhere to the 7-day access period

All your employees who will be covered by the Enterprise Agreement must be provided with a copy of the Enterprise Agreement (or sufficient access to it) plus a copy of or access to the relevant modern award which is incorporated into the Enterprise Agreement, at least 7 days prior to voting on the Enterprise Agreement.

NOTE: If you change or amend the Enterprise Agreement during the 7-day access period, a new 7-day access period must commence from the time the changed/amended Enterprise Agreement is re-issued to employees.

Information to be provided to employees

At the same time as complying with the access requirements (outlined in point 4 above) and therefore at least 7 days prior to the vote, you must notify your employees of:

  1. the time and place where the vote will take place; and
  2. the voting method e.g. ballot box or electronic means

Once you have complied with all of these steps, you can ask your employees to vote.

Approval and when an Enterprise Agreement is “made”

The Enterprise Agreement is approved and made when a majority of the employees who will be covered by it validly vote in favour of it. A majority is considered to be 50% plus one.

Ensure you have not committed any offence in making your Enterprise Agreement.

When making an Enterprise Agreement it is an offence to:

  1. coerce or force any employee to make an Enterprise Agreement;
  2. make false or misleading statements in relation to making, approving, lodging, varying or terminating an Enterprise Agreement;
  3. discriminate against anyone based on their union/non- union status.

 NOTE: Financial penalties may be imposed if you found to have committed any of these offences.

 If you have any questions or need assistance with enterprise agreements and bargaining, please do not hesitate to contact me or the team at Turnbull Hill Lawyers.


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