Enterprise agreements: bargaining, the BOOT and approval
An EBA replaces the award for your business — but only if it clears a test applied to every employee individually, and only if you hit statutory deadlines that cannot be compressed. Here is the whole process, with the dates that actually bind.
Enterprise bargaining is procedurally exacting and a misstep can cost you the agreement. It does not constitute legal, HR, or professional advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.
Quick summary
- What it does: replaces the modern award as the source of pay and conditions for the employees it covers.
- The test: every employee must be better off overall than under the award — assessed individually, not averaged.
- NERR: within 14 days of the notification time, in the prescribed form.
- Vote: no earlier than 21 clear days after the last NERR, with a 7-day access period immediately before.
- Approval: apply to the Fair Work Commission within 14 days of the agreement being made.
- Life: nominal expiry up to four years, but it keeps applying until replaced or terminated.
Do you actually need one?
Most employers do not. The relevant modern award applies automatically, costs nothing to adopt and is maintained for you. An enterprise agreement is worth the process when the award genuinely obstructs how you operate — you want annualised salaries instead of penalty rates, a different span of hours, or rostering flexibility the award does not allow.
Be honest about the cost. Bargaining is months of work, the approval process is exacting, and the agreement then has to be administered and eventually renegotiated. If the only motivation is reducing wage cost, the BOOT will block it — that is precisely what the test exists to prevent.
The three types
- Single-enterprise agreement — one employer (or related entities) and its employees. The common case.
- Multi-enterprise agreement — two or more employers bargaining together, used where businesses share an industry or supply chain.
- Greenfields agreement — for a genuinely new enterprise with no employees yet, made with one or more unions rather than by employee vote, because there is nobody to vote.
The better off overall test
The BOOT is the whole ball game. Before approving an agreement, the Commission must be satisfied that each employee and each prospective employee would be better off overall than under the relevant award.
Two features of that sentence do the work. Overall means it is a package test — you can trade a worse term for better ones. Each means it is assessed per employee, not across the workforce, so an agreement that suits your full-timers and disadvantages a handful of weekend casuals fails on the casuals.
This is where most agreements come unstuck, and the pattern is consistent: an annualised salary that works for someone on ordinary hours but leaves a Sunday-heavy roster worse off. Model the actual rosters you run, per classification and per employment type, against the award — the award pay guides and their calculators are the benchmark the Commission will use.
The bargaining timeline
These are statutory and cannot be shortened by agreement:
| Step | Timing |
|---|---|
| Give the notice of employee representational rights | Within 14 days of the notification time |
| Wait before you can ask employees to vote | 21 clear days after the last NERR |
| Access period — employees have the agreement to read | 7 clear days ending immediately before the vote |
| Vote passes | Majority of those who cast a valid vote |
| Apply to the Fair Work Commission | Within 14 days of the agreement being made |
The 7-day access period can run inside the 21 days, so the practical floor between notice and vote is three weeks, not four. The NERR date that matters is the last one given — if someone was on leave and received theirs a week late, the clock restarts from their notice.
Good faith bargaining
Bargaining representatives must meet good faith obligations: attend and participate in meetings, disclose relevant information (excluding confidential or commercially sensitive material), respond to proposals, and refrain from capricious or unfair conduct that undermines freedom of association.
Good faith does not require you to concede anything or to reach an agreement at all. It requires you to bargain genuinely. Where a party is not, the Commission can make bargaining orders — and a history of those does not help at approval.
Getting it approved
You apply to the Commission within 14 days of the agreement being made, with the declarations and supporting material. The Commission checks the BOOT, that the agreement was genuinely agreed to, that it does not undercut the National Employment Standards, and that the procedural steps were followed.
The procedural limb fails more agreements than the substantive one. A NERR that was altered from the prescribed form, an access period a day short, or a vote opened before the 21 days elapsed are all recoverable only by starting the relevant step again — after you have already bargained.
When it expires
An agreement carries a nominal expiry date of up to four years. Passing that date does not end it — the agreement keeps applying until it is replaced or terminated. What changes is that protected industrial action becomes available and either side can press to renegotiate. Plan the next round well before the date arrives, because the timeline above applies again.
Common mistakes
- Editing the NERR. Its form is prescribed. Agreements have been refused over added logos and altered wording.
- Counting the 21 days from the first notice. It runs from the last one given.
- Testing the BOOT on averages. It applies to each employee, including the weekend casual your model forgot.
- Shortening the access period. Seven clear days, ending immediately before the vote.
- Missing the 14-day approval window. It runs from the day the agreement was made, not from the vote result.
- Ignoring award increases afterwards. The award floor rises every 1 July; an agreement approved years ago can drift towards it.
The BOOT is a rostering question before it is a legal one
Whether an agreement leaves people better off depends on the rosters you actually run — which shifts, which classifications, how much weekend work. RosterElf models real rosters against award rates, so you can see the comparison the Commission will make before you commit to a position at the table.
Start free trialGeneral information only, not legal advice. Enterprise bargaining is procedurally exacting and the consequences of a misstep are real — take advice, and check the Fair Work Commission guidance for your circumstances.
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Enterprise agreement FAQ
- An EBA — enterprise bargaining agreement, more properly just an enterprise agreement — is a negotiated agreement between an employer and its employees that replaces the relevant modern award as the source of their pay and conditions. It has to be voted up by the employees it covers and approved by the Fair Work Commission, and it can only be approved if the employees are better off overall than they would be under the award.
- An award is an industry-wide instrument made by the Fair Work Commission that applies automatically to everyone in scope. An enterprise agreement is negotiated for one business, has to be voted on, and only takes effect once the Commission approves it. Where an enterprise agreement applies, it displaces the award for those employees — but the award still matters, because it is the benchmark the agreement is tested against and the instrument that revives if the agreement is terminated.
- No. Most Australian employers operate under the relevant modern award and never bargain. An enterprise agreement is worth considering when the award genuinely does not fit how you operate — annualised salaries in place of penalty rates, different span of hours, rostering flexibility that the award does not permit — and when you can afford the process, which typically runs months rather than weeks.