Enterprise Agreements Part 3: Negotiation

Enterprise Agreement Negotiation - IR Simplified
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This is part 3 in a series on enterprise agreements.

You can find the lead post in the series here.

Part 1: Enterprise Agreements Part 1: What Are They? we discussed what enterprise agreements are, how they differ from Modern Awards and talked about what can and cannot be in one.

Part 2: Enterprise Agreements Part 2 – Planning was a discussion around the planning that should happen behind the scenes of the enterprise agreement.

In this episode, we will talk a little more about what happens during the negotiation phase of enterprise agreement negotiations.

So, without further ado, here we go.

Make It Happen

After giving is some serious thought and more than a little bit of prior planning, you have decided that an enterprise agreement will be a good thing for the future growth of your business.

What’s got you confused is how you make it happen.

Do you just give your staff the agreement that you prepared earlier and wait for a yay or nay from them?

Or, do you give them a blank sheet of paper and get them to write down their wish list, picking and choosing what you want to put into it?

Whilst the process of negotiating an enterprise agreement is relatively easy, there are certain things that need to be done, and in the right order, otherwise you may have some explaining to do when you seek approval from the Fair Work Commission.

Notice Of Employee Representational Rights.

Before you can start bargaining for the enterprise agreement, you need to let your staff know that it is happening. This is where the Notice of Employee Representational Rights comes in.

Schedule 2.1 of the Fair Work Regulations 2009 specifies the content that the notice should have.
It is also worth noting that the notice of employee representational rights should be just that, and not have anything else attached to it, either in the email notification or when/if the notice is placed on a notice board.


How often should you meet to negotiate the agreement?
Where should you meet?

The frequency of meetings is entirely up to you, though in the interests of workplace harmony, I would be inclined to say that you should meet as often as you can, for as long as it takes to get a document that all parties are happy with.

Sure, these meetings can be a hassle and pain in the proverbial. Though think of it this way. A little bit of discomfort now will prevent the whole lot of disruptions that come from protected industrial action.

As for the location, well that is entirely up to you. If you have a boardroom not being used, that is a good enough spot.

Though, if you are negotiating with a union, they will request some sort of ‘neutral’ location claiming that negotiating at the workplace gives the company a ‘home ground advantage’.

Bargaining In ‘Good Faith’

Those who are involved in the bargaining for a new enterprise agreement, including bargaining representatives, are required to bargain in good faith.

The following are the requirements that a bargaining representative for a proposed enterprise agreement must meet to be considered as bargaining in good faith:

  • Attending, and participating in, meetings
  • Disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner
  • Responding to proposals made by other bargaining representatives for the agreement in a timely manner
  • Giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals
  • Refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining
  • Recognising and bargaining with the other bargaining representatives for the agreement.

It should be noted that the good faith bargaining requirements do not require a bargaining representative to, a) make concessions during bargaining for the agreement or, b) reach agreement on the terms that are to be included in the agreement.


Once all the bargaining reps have agreed on the content in the agreement, and a draft has been prepared, the following steps need to be taken to ensure that it is valid.

  • Explanation of the terms of the agreement, and the impact that those terms will have
    The explanation must be in a way that is appropriate for the audience.
  • Vote on the agreement
    This cannot occur until after 21 days have passed since the notice of employee representational rights was issued.
    Those voting also must have been given access to the draft agreement for seven (7) days prior to the vote.

The employer must also notify employees of:

  • The time when the vote will take place
  • The location where the vote will take place
  • The voting method that will be used

For a single enterprise agreement to be made, a successful vote needs to occur. This is achieved when a majority of the employees of the employer who cast a valid vote endorse the agreement.

Fair Work Commission approval

This is the final step in having the draft agreement recognised and registered as an approved agreement.

Once the agreement has been made via a successful vote, a bargaining representative for the agreement must apply to the Commission for approval of the agreement. The application must be lodged with the Commission within 14 days of the agreement being made.

When the Fair Work Commission approves an agreement they take into account the following points.

  • the agreement has been made with the genuine agreement of those involved
  • the agreement passes the better off overall test
  • the agreement does not include any unlawful terms or designated outworker terms
  • the group of employees covered by the agreement was fairly chosen
  • the agreement specifies a date as its nominal expiry date (not more than 4 years after the date of Commission approval)
  • the agreement provides a dispute settlement procedure
  • the agreement includes a flexibility clause and a consultation clause.

If there are concerns about any of the above points, the Commission may seek an undertaking from the employer to rectify any issues.

The next article in this series covers protected industrial action. How to minimise the chance of it, how it happens, and why a protected action ballot should be seen as a god thing for businesses.

Once it is published, you will find that article here: Enterprise Agreement – Protected Industrial Action