Table of content
- What is EBA?
- What is Enterprise Bargaining(EA)?
- History of Enterprise Agreements(EA)
- How is an Enterprise Agreement(EA) made?
- Who can be a Bargaining Representative?
- What types of Enterprise Agreements(EA) are there?
- What’s the difference between a Modern Award and an Enterprise Agreement?
- How can Workstem assist you?
What is EBA?
EBA refers to “Enterprise Bargaining Agreement” or we can call it EA (Enterprise Agreement). Enterprise Bargaining Agreement (EBA) was a term prior to the Fair Work Commission (FWC) amending it to Enterprise Agreement.
An Enterprise Bargaining Agreement is a formal agreement negotiated between employers and employees (or their representatives, such as trade unions) to determine employment conditions and terms for a specific enterprise or workplace. These agreements cover various aspects of employment, such as wages, working hours, leave entitlements, other working conditions and benefits.
EBAs are an essential part of the industrial relations system in Australia. They allow employers and employees to collectively determine the terms of their employment, providing stability, clarity, and a framework for employment relations within the organisation, promoting harmonious and productive working environments.
What is Enterprise Bargaining(EA)?
Enterprise bargaining is a crucial process that holds both union representatives and company executives accountable for fulfilling the commitments they make to each other during negotiations. This process involves reaching agreements on wages, working conditions, and benefits that apply to entire industries.
The ultimate goal is to craft a customised and mutually advantageous Enterprise Bargaining Agreement (EBA) that addresses the specific requirements of the business or workplace while upholding fairness and reasonable expectations for all employees.
History of Enterprise Agreements(EA)
Prior to the emergence of bargaining, industrial awards served as the predominant method to govern the terms and conditions of employment for the majority of workers. With a plethora of awards in existence, each catering to various occupations, industries, and even individual companies, they established minimum employment standards.
The concept of Enterprise Agreements was first introduced in Australia as part of the Prices and Incomes Accord in 1991 (Mark VII). These agreements later assumed a central role in the Australian industrial relations system during the Accord’s revision in 1993 (Mark VIII). This revolutionary shift marked the end of almost a century of centralized wage-fixing in industrial relations.
How is an Enterprise Agreement(EA) made?
The process to make a new single and multi-enterprise agreement can be complex. The timeframe is set by the Fair Work Act 2009.
The brief procedures can be the following:
- Plan to make an agreement
- Start the bargaining process
- Develop the agreement
- Prepare employees to vote
- Apply for approval
- Commission issues a decision
For the complete process, please refer to: Fair Work
Who can be a Bargaining Representative?
The following people can be bargaining representatives for a single or multi-enterprise agreement:
- an employer that the agreement covers
- someone the employer appoints
- an employee that the agreement covers
- someone the employee appoints
- a union
What types of Enterprise Agreements(EA) are there?
There are three types of enterprise agreements: single-enterprise, multi-enterprise and greenfields agreements.
Single Enterprise Agreement (SEA)
A Single Enterprise Agreement is made between a single employer (or company) and its employees or employee representatives, such as a union. It covers the terms and conditions of employment within that specific enterprise. SEAs are the most common type of Enterprise Agreement.
Multi-Enterprise Agreement (MEA)
A Multi-Enterprise Agreement is made between two or more employers (or companies) and their employees or employee representatives. This type of agreement allows multiple enterprises to negotiate collectively and create a single agreement that covers employees working across those enterprises. MEAs are often used when businesses within the same corporate group or industry want to have consistent employment conditions.
A Greenfields Agreement is specifically designed for new enterprises or projects. It is made between an employer (or a group of employers) and employee representatives, usually before the employees are hired. Greenfields Agreements cover the terms and conditions of employment for the new enterprise’s workforce, ensuring that the initial employment arrangements are established fairly and transparently.
What’s the difference between a Modern Award and an Enterprise Agreement?
A Modern Award and an Enterprise Agreement are two different mechanisms used to set out employment terms and conditions. They are different in these aspects:
Modern Award: Modern Awards are industry or occupation-specific and cover most employees. They set out the minimum pay rates and employment conditions for employees in particular industries or job roles. There are more than 100 Modern Awards, each catering to different industries and professions.
Enterprise Agreement: An Enterprise Agreement, also known as an Enterprise Bargaining Agreement (EBA), is a negotiated agreement between an employer or group of employers and their employees (or employee representatives, such as unions). It applies to a specific enterprise (company) and allows customization of employment conditions beyond the minimum standards set by Modern Awards.
- Negotiation process:
Modern Award: Modern Awards are determined by the Fair Work Commission (FWC), which is an independent statutory authority. They undergo periodic reviews and updates by the FWC, and the process involves consultation with relevant stakeholders.
Enterprise Agreement: Enterprise Agreements are the result of negotiations between the employer and employees (or their representatives) at the enterprise level. These negotiations can cover a wide range of employment terms, but they must comply with the National Employment Standards (NES) and cannot undercut the minimum standards set by applicable Modern Awards.
Modern Award: While Modern Awards provide a baseline of employment conditions, they may not be suitable for all businesses or employees due to their broad application.
Enterprise Agreement: Enterprise Agreements offer greater flexibility, allowing employers and employees to tailor specific terms and conditions to suit their unique needs. This can be especially advantageous for enterprises with distinct requirements or those seeking more customised arrangements.
In summary, Modern Awards provide industry-wide minimum standards, while Enterprise Agreements offer greater flexibility and customization at the enterprise level. Both are essential components of Australia’s industrial relations system, ensuring fair and appropriate employment conditions across various sectors.
Whilst those employees who are successful in negotiating an Enterprise Agreement may receive greater benefits than those who are not, the overall number of employees earning comparatively high benefits may be reduced because few employees obtain an Enterprise Agreement.
How can Workstem assist you?
Workstem is a one-stop payroll & HR platform that meet your industry award and EBA. We facilitate clear employee information in one master file and provide a streamlined and compliant approach to handling EBA settings, ensuring compliance with legal requirements.
Workstem also facilitates seamless communication between management and employees, enabling real-time updates, notifications, and feedback. By leveraging Workstem’s capabilities, companies can effectively navigate the complexities of Enterprise Agreements, optimise workforce management, and foster a productive and harmonious work environment.
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