How Do I Create a Single Enterprise Agreement?

A single enterprise agreement is an agreement between an employer, or multiple employers who are single-interest, and their employees. As a business owner, this type of agreement is beneficial because it: 

• is simpler than an applicable modern award; 
• unifies all the conditions for your employees; and 
• can be used as a tool to attract talent to your business. 

A single enterprise agreement can be used for multiple employees who are working for you at the time of agreement. This article explains who can create single enterprise agreements and seven key steps when creating one. 

Who Can Create a Single Enterprise Agreement?

Only 'single interest employers' can create a single enterprise agreement. This can be a single employer or two or more employers who have a common interest. Examples of common interests include: 

• joint ventures; 
• shared businesses; 
• associated bodies corporate; or 
• being named in a single interest employer authorisation. 

Importantly, several employers who do not share a common interest cannot create a single enterprise agreement. This distinction is important because all enterprise agreements must follow the relevant law to be  approved by the Fair Work Commission (FWC). If you are concerned that a single enterprise agreement does not fit the structure of your business, you should consider  'multi-enterprise agreements' or 'greenfields agreements'. 

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Step 1. Preparation

When preparing to enter a single enterprise agreement, you must consider your employees' individual needs and circumstances, including how you will communicate with them throughout the bargaining process.

Notably, the FWC requires that you act fairly as an employer. Therefore, you must communicate with your employees appropriately and respectfully. This should include:

• providing your employees with copies of your conversations;
• considering the needs of vulnerable employees, such as newer employees or those who speak English as a second language; and 
• notifying your employees of the agreement before you begin bargaining to give them time for preparation. 

Step 2. Start Bargaining

Once you have finished preparation, you may begin the bargaining process. You can do so by: 

• drafting the terms of the agreement; or 
• appointing a representative to assist, such as an Industrial Officer. 

You must then notify all your relevant employees within 14 days that bargaining has begun. This can be done by providing a Notice of Employee Representational Rights, which informs your employees that a bargaining representative can assist them. This step is essential because if you fail to provide this notice, the FWC will not approve your agreement. 

You must bargain with your employees or their representatives in good faith. This may involve: 

• meeting to discuss the proposed terms; and 
• genuinely considering and responding to your employees' proposals. 

Step 3. Draft the Terms

When drafting the agreement, it is also important to remember that your terms should not disadvantage your employees. You cannot draft terms that leave your employees worse off than the national employment standards (NES) or their applicable award. By law, your terms must include: 

• coverage which sets out your name and your employee's name, work location and the work they will perform; 
• a consultation which sets out that you must consult with employees about significant workplace changes, such as to their ordinary hours of work;
• the procedure for settling disputes;
• flexibility which sets out that you can vary the agreement for different individual employees; and
• a nominal expiry date, which must be no more than four years after the date the agreement has been approved.

Additionally, you should also draft terms relating to:

• definitions;
• hours of work;
• classification structure;
• rates of pay, including penalty and overtime rates; 
• allowances;
• breaks; and
• deductions authorised by an employee.

Step 4. Prepare to Vote

After drafting the terms of your agreement, you must take a number of steps before putting the vote to your employees. You must provide your employees with: 

• notice of where and when you will hold the vote; 
• information about how they can vote; 
• a copy of the agreement;
• other material the agreement references, such as an occupational health and safety policy; and 
• an explanation of the terms of the agreement. 

As an employer, you must ensure that you explain both the terms of the agreement and their effects to your employees. You will need to lodge copies of this information to the FWC, who will ensure that your employees understand the terms and their impact before approving your agreement. 

Step 5. Vote on the Agreement

Once you have let your employees know the details of the vote, you must then conduct the vote following a specific procedure. When conducting the vote, you must record the:

• dates of the voting;
• number of employees covered by the agreement;
• number of valid votes; and
• number of votes in favour of the agreement. 

You must provide each of these details to the FWC when making your application, so it is important that you do it correctly. You can lodge the agreement with the FWC for approval if most employees who cast a valid vote voted in its favour.

Step 6. Lodge the Agreement

Importantly, you need to lodge the Agreement within 14 days of the vote, along with a: 

• application for approval of an enterprise agreement (Form F16);
• statutory declaration from you in support of an application for approval of an enterprise agreement (Form F17); and
• copy of the agreement signed by you and your employee representative, including the signature page. This page must include the name, address and explanation of the authority of each person signing the agreement.

You will be able to lodge the agreement online via the relevant FWC office.

Step 7. Approval of your Agreement

A Member of the FWC will assess your agreement against the requirements of the law. 

The Member must be satisfied that:

• all the above requirements have been met;
• your employees have openly accepted the Agreement;
• the terms of the agreement are more beneficial for your employees than the NES and their applicable award; 

• the agreement does not include any unlawful or designated outworker terms;
• its nominal expiry date is no more than four years after the date of approval;
• all bargaining occurred with good faith; and
• the agreement includes disputes, flexibility and consultation terms.

The member may require more information or seek to clarify specific points of the agreement's application. If there are no objections to the agreement's approval, a copy of the member's approval decision will be posted on the FWC website and emailed to the parties.

The Agreement will come into effect seven days after approval.

Key Takeaways

The FWC must approve an enterprise agreement before it comes into effect. It is important that you follow all the relevant steps correctly to ensure that it is approved. To prepare a single enterprise agreement, you must:

• prepare for bargaining;
• commence the bargaining process;
• draft the terms of the agreement;
• prepare and conduct a vote;
• lodge the agreement; and
• have the agreement approved.

If you need assistance developing an enterprise agreement, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1800 532 904 or visit our membership page.

Frequently Asked Questions

What is a single enterprise agreement?
A single enterprise agreement is a collective agreement between an employer and their employees that outlines terms and conditions of employment, aiming to provide benefits above the minimum standards set by modern awards.

How does the Fair Work Commission assess enterprise agreements?
The Fair Work Commission evaluates enterprise agreements using the Better Off Overall Test (BOOT) to ensure that employees are better off under the agreement compared to the relevant modern award.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.