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 consists of a collective industrial agreement between either an employer and a trade unionacting on behalf of employees or an employer and employees acting for themselves. 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. On the other hand, collective agreements benefit workers, as they usually provide higher pay, bonuses, additional leave and enhanced entitlements than an award does.
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 occasionally yields a multi-employer/employee agreement. Parties endorse proposed enterprise agreements between themselves. The Fair Work Commission then assess them for approval.
History of enterprise bargaining agreements
Enterprise Bargaining Agreements were first introduced in Australia under the Prices and Incomes Accord in 1991. They later became the centrepiece of the Australian industrial relations system when the Accord was next revised in 1993. 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. 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 as soon as possible, and not later than 14 days after the notification time for the agreement. The notification should be given to each current employee who will be covered by the enterprise agreement.
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 in pursuit of their claims.
In the context of Australian labour law, the industrial reform of 2005 - 2006, known as "WorkChoices" 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 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.
