Enterprise bargaining agreements (EBA)

What Is an Enterprise Bargaining Agreement?

An Enterprise Bargaining Agreement (EBA), now formally referred to as an Enterprise Agreement (EA) under the Fair Work Act 2009, is a legally binding agreement between an employer (or group of employers) and a group of employees (or their union) about the terms and conditions of employment at the workplace level.

EBAs allow employers and employees to negotiate employment terms that can differ from the applicable modern award—as long as they pass the Better Off Overall Test (BOOT) and meet minimum conditions under the National Employment Standards (NES).

Fair Work Ombudsman – Enterprise Agreements

Key Features of EBAs

• Apply to a specific enterprise or employer and its employees
• Must be approved by a majority of affected employees
• Are submitted to and must be approved by the Fair Work Commission (FWC)
• Must not undercut minimum award or NES entitlements
• Typically cover a fixed term (e.g. 3–4 years)
• Can include conditions on:
  • Wages and penalty rates
  • Hours of work and rostering
  • Leave entitlements
  • Flexibility arrangements
  • Dispute resolution processes

Once approved, an EBA becomes legally enforceable, and any employment terms within it override the relevant modern award if they provide equal or better conditions.

Types of Enterprise Agreements

There are three main types of EBAs:

1. Single-enterprise agreements – Between one employer (or more, if in a joint venture) and their employees.
2. Multi-enterprise agreements – Between two or more unrelated employers and groups of employees.
3. Greenfields agreements – Made in relation to a new enterprise before any employees are hired.

Fair Work Commission – Making an Agreement

Benefits of Enterprise Bargaining Agreements

For Employers:

• Customise employment terms to suit your business operations
• Improve workforce engagement by involving employees in decision-making
• Lock in wage rates and conditions to support long-term budgeting
• Introduce flexible rostering, penalty structures, or job classification systems

For Employees:

• Secure above-award pay or conditions
• Negotiate on workplace-specific issues such as shift loading or travel time
• Participate in a democratic process to shape their employment conditions

EBA vs Modern Award: What's the Difference?

How Microkeeper Supports EBAs

Managing a workforce under an EBA requires payroll and HR systems that can handle custom rules and interpretations. Microkeeper offers powerful tools for Australian businesses navigating EBAs:

• Custom Award Interpretation – Automate EBA-specific pay rates, penalties, and allowances
• Flexible Rostering – Build shift schedules that meet negotiated hours, breaks, and notice periods
• Digital Timesheets – Track actual hours worked and apply correct EBA conditions automatically
• Employee Console – Empower staff to view payslips, request leave, and understand their entitlements

Explore Payroll features with Microkeeper

Important EBA Considerations

• EBAs must include a dispute resolution procedure and comply with good faith bargaining principles
• Employees must be better off overall compared to the award (BOOT)
• Employers must allow at least 7 clear days between issuing the final draft EBA and employee voting
• Employers are required to keep copies and records of the agreement and voting process

Failure to meet these standards can result in rejection by the Fair Work Commission or legal challenges from unions or employees.

FAQs About Enterprise Bargaining Agreements

How long does it take to implement an EBA?

‍The process can take several months and includes consultation, negotiation, drafting, voting, and FWC approval.

Are EBAs mandatory for employers?

‍No, employers are not required to make an EBA, but many opt for it to secure customised terms and workplace stability.

Can an EBA expire?

‍Yes. Most EBAs have a nominal expiry date but remain in effect until replaced or terminated.

What happens when an EBA ends?

‍If not replaced, the EBA continues to apply until it is terminated or replaced by a new one.

Final Thoughts

Enterprise Bargaining Agreements allow businesses and employees to move beyond a one-size-fits-all award structure. While EBAs offer more flexibility and customisation, they also require careful compliance, consultation, and implementation. For Australian employers, using an HR and payroll system like Microkeeper helps ensure you can accurately apply and manage the terms of your enterprise agreement with confidence.

_{Disclaimer: This glossary entry is for general information only and does not constitute legal advice. Always consult a qualified employment relations specialist or the Fair Work Ombudsman for specific EBA guidance.}

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