An enterprise agreement, also known as a collective agreement sets out the minimum conditions of employment for employees engaged in particular types of work in an enterprise. They are negotiated voluntarily between an employer and the employees concerned, or a union on the behalf of those employees. A NSW Enterprise Agreement needs to be approved by the NSW Industrial Relations Commission.

An employer, before employing someone, must give the person notice that an enterprise agreement exists and access to a copy or summary of the agreement in a language that the person understands. Enterprise agreements must comply with all workplace laws and, in general, employees should not be worse off under the agreement compared to awards.

An enterprise agreement must contain the following terms:

• a nominal expiry date for the agreement which is no longer than four years from the date Fair Work Australia approves the agreement;
• a dispute settlement procedure;
• a flexibility term that allows for the making of individual flexibility arrangements; and
• a consultation term, which requires the employer to consult their employees about any major workplace changes that are likely to have a significant effect on them and allows the employees to have representation in that consultation.

It is possible to cancel an approved agreement. Whilst the agreement is within its nominal term, agreement by both parties is needed to terminate. Generally, once the nominal term has expired an agreement can be terminated by one of the parties giving the other party 3 months written notice of the intention to terminate.

Enterprise bargaining is the process which employers and employees use to negotiate a set of rules and conditions for their workplace, which results in an enterprise agreement. Other terms to describe enterprise bargaining are ”workplace bargaining” or “collective bargaining”. Bargaining on a proposed enterprise agreement begins when the employer agrees to bargaining or initiates bargaining, or when a majority support determination comes into operation, or a scope order comes into operation or a low-paid authorisation that specifies the employer comes into operation. This is known as the notification time.

Those involved in the bargaining process, including bargaining representatives, are required to bargain in good faith. The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:

• attending, and participating in, meetings at reasonable times;
• disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
• responding to proposals made by other bargaining representatives for the agreement in a timely manner;
• giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative's responses to those proposals;
• refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining; and
• recognising and bargaining with the other bargaining representatives for the agreement.

The good faith bargaining requirements do not require a bargaining representative to:

• make concessions during bargaining for the agreement; or
• reach agreement on the terms that are to be included in the agreement.

If you require advice on your rights, obligations or entitlements pursuant to an Enterprise Agreement, or you believe an enterprise agreement may be right for your workplace, then we can assist you with any questions you may have.

Call one of our Commercial Lawyers for free initial telephone advice on your circumstances on (02) 9525 8688.