What is an Enterprise Agreement?
An enterprise agreement is a deal between an employer and employees setting pay and conditions, approved by the Fair Work Commission.
An enterprise agreement (EA) is a legally binding agreement between an employer and a group of employees about terms and conditions of employment. It's negotiated collectively and must be approved by the Fair Work Commission.
An EA can set pay rates, working hours, rosters, leave, and other conditions. It must pass the 'better off overall test' — meaning employees must be better off than they would be under the relevant award.
Key facts
- •Negotiated between an employer and employees collectively
- •Must be approved by the Fair Work Commission
- •Must pass the 'better off overall test' (BOOT) against the relevant award
- •Typically lasts 3-4 years before renegotiation
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Employment CheckFrequently asked questions
How is an EA different from an award?
An award covers a whole industry or occupation. An EA is specific to one employer (or a group of employers) and their employees. EAs can provide different conditions but must leave employees better off overall.
Can I negotiate my own EA?
Enterprise agreements must cover at least two employees. Individual arrangements are covered by contracts of employment, which still can't go below the award or NES.
General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.