What is an Enterprise Agreement ?
Employers today are finding that awards are complicated documents built over years of amendments that don’t make any sense to the operational concerns of their business. Workplaces can be subject to the control of many awards that leaves different groups of people operating under different rules. Employers and the Federal Government have recognized the need to have one agreement that covers an entire organisation, and allows the philosophies of the organisation to be incorporated into an enterprise agreement.
In the federal workplace relations system employers and employees can decide on their own wages and conditions of employment by making a workplace agreement. These agreements can replace all or part of awards with conditions tailored to the specific needs of the workplace. Employers and Employees today can enter into wage arrangements without the need for Union involvement and establish conditions of employment that are more reflective of their operations rather than the industries as a whole.
Benefits of an Enterprise Agreement
- Labour Forecasting
- Simplified Classification of Employees
- A Single Industrial Instrument for your Organisation
- Non-Union Workplace
- Reduced Indirect Wage Liability
- Increase Employee Productivity
- Reduced Staff Turnover & Training Costs
- Competitive Advantage due to increased flexibility
What are the types of Enterprise Agreements?
- Single Enterprise agreements
- Multi-Business Enterprise agreements
How does a Enterprise Agreement operate?
An Enterprise agreement is just like the AWARD, it will apply to existing and future Employees of your organisation. No agreement is needed for future Employees as once your existing staff approve the agreement by a valid majority (50% plus 1 of those Employees who voted) and it is then approved by Fair Work Australia all future Employees are bound by the enterprise agreement.
An enterprise agreement is made either with the Union or directly with your Employees. Should you choose to make an enterprise agreement with your Employees, then you are only required to speak to the Union about the agreement if an Employee requests you to.
An enterprise agreement will have a nominal period of 4 years but will continue to operate lawfully after the nominal period should the agreement not be terminated or replaced by another agreement. It is at your discretion as to whether wage increases continue to occur after this period.
Once a work agreement is negotiated or finalised then for it to be made legal by a 3 step process:
1) Provide all employees with the Notice of Representation Rights document (i.e. notice of ballot, time and place) and provide access to a copy of the proposed Agreement at least 21 days before the ballot date.
2) Ballot of Employees - valid majority i.e. if 11 Employees vote out of 50 you must have at least 6 of those Employees voting for the enterprise agreement for it to be validly approved; and
3) Approval by Fair Work Australia - Fair Work Australia will only approv the enterprise agreement if all the statutory requirements have been meet such as giving Employees access to a copy of the enterprise agreement, providing Employees at least 7 days notice of the ballot, and that the enterprise agreement meets the “better off overall test”.
Call Agnew D'Arcy today to discuss the implementation of an Enterprise Agreement today on 02 8354 1844, or click here to request more information.
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