An enterprise agreement is a written agreement negotiated between an employer and its employees or their representatives. It sets out the terms and conditions of employment for the employees who are party to the agreement. The Fair Work Act 2009 (the Act) outlines the process for making an enterprise agreement. In this article, we will discuss how an enterprise agreement is made according to the Fair Work Act.

Step 1: Who Can Make an Enterprise Agreement?

Under the Fair Work Act, an enterprise agreement can be made between an employer and a group of employees or their representatives. The employees must work in a genuine enterprise that is covered by the Act.

Step 2: What Needs to be Included in the Enterprise Agreement?

The enterprise agreement must include the following mandatory terms:

– The terms and conditions of employment, including pay rates, hours of work, and leave entitlements.

– A dispute resolution process.

– A flexibility clause, which allows the employer and employees to agree to certain changes to the agreement.

Step 3: Preparing the Enterprise Agreement

The employer or their representative must draft the enterprise agreement. This includes identifying the matters to be included in the agreement and ensuring that the agreement complies with the requirements of the Act.

Step 4: Notification and Consultation

Before the enterprise agreement is made, the employer must notify its employees or their representatives of its intention to make an agreement. The employer must also provide a copy of the proposed agreement and information about the impact of the agreement on the employees.

Step 5: Voting

Once the notification and consultation process is complete, the employees who are covered by the agreement are entitled to vote on the proposed agreement. The vote is conducted by the Australian Electoral Commission and is generally conducted in the workplace.

Step 6: Approval

If the majority of employees who vote approve the agreement, it can be lodged with the Fair Work Commission for approval. The Fair Work Commission will then assess the agreement against the requirements of the Act to ensure that it meets legal requirements.

Step 7: Commencement

Once the agreement is approved by the Fair Work Commission, it comes into effect and replaces any existing industrial agreement that covers the employees.

In conclusion, making an enterprise agreement according to the Fair Work Act involves a detailed process that requires careful consideration of legal requirements. It is important for employers and workers to understand their rights and obligations when negotiating an enterprise agreement. By following the process outlined in the Act, employers and employees can create an agreement that benefits everyone involved.