An Enterprise Agreement is a collective workplace contract made between you and all of your employees which replaces the Modern Award(s) that would otherwise apply to your business.
Enterprise Agreements allow you to replace multiple Awards with one easy to understand agreement specifically tailored to meet the needs of your business through collective bargaining. Importantly, an Enterprise Agreement does not have any legal effect until it is approved by the Fair Work Commission.
There are several different types of enterprise agreements. These are single-enterprise agreements, multi-enterprise agreements and greenfields agreements, which can be either single-enterprise or multi-enterprise agreements.
The Fair Work Act 2009 requires employers, employees, and their bargaining representatives to bargain in good faith when negotiating an enterprise agreement (other than a greenfields agreement, which is made before the employer has engaged any employees).
An enterprise agreement does not have any legal effect until it is approved by the Fair Work Commission.
An employer, employee or employee organisation covered by the agreement must apply to the Fair Work Commission for approval.
Once an application for approval has been made, the Fair Work Commission will approve an agreement if it is satisfied that all approval requirements have been met.
The Fair Work Commission has a role in facilitating bargaining in occasions where bargaining breaks down and can make a bargaining order if good faith bargaining requirements aren't met.
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