When it comes to employment agreements in Australia, there are two types that are commonly used by businesses – enterprise agreements and workplace agreements. While both agreements are designed to establish the terms and conditions of employment, there are fundamental differences between the two that employers and employees need to be aware of.
An enterprise agreement is an employment agreement that is negotiated between an employer and their employees (or their representatives) at an enterprise level. It covers a group of employees who are employed by the same employer and performs similar roles and work. Enterprise agreements are legally binding and must comply with the Fair Work Act 2009.
The key feature of an enterprise agreement is that it sets out the terms and conditions of employment for a specific group of employees. These agreements cover matters like rates of pay, working hours, leave entitlements, dispute resolution processes, and other matters that relate to employment.
Enterprise agreements can be made for a maximum of four years, and employers and employees can negotiate the terms and conditions of the agreement. The agreement is then voted on by the employees, and if it is approved, it is lodged with the Fair Work Commission for approval.
A workplace agreement, on the other hand, is an individual agreement made between an employer and an employee. It sets out the terms and conditions of employment for that specific employee, including their pay rate, hours of work, leave entitlements, and other employment conditions. Workplace agreements are also legally binding and must comply with the Fair Work Act 2009.
Unlike enterprise agreements, workplace agreements are made on an individual basis and don`t cover a group of employees. They may be used for a specific period or ongoing by agreement between the employer and the employee.
While workplace agreements can be made for a specific period, the employee can terminate the agreement on reasonable notice. The employer can also terminate the agreement if the employee breaches the agreement.
The main difference between an enterprise agreement and a workplace agreement is that an enterprise agreement covers a group of employees, while a workplace agreement only covers an individual employee. An enterprise agreement can be made for a maximum of four years, while a workplace agreement can be made for any reasonable period as agreed between the parties.
Another critical difference is that enterprise agreements are negotiated by the employer and the employees or their representatives. In contrast, workplace agreements are negotiated between the employer and the individual employee.
In conclusion, enterprise agreements and workplace agreements have different features and purposes. Employers and employees should carefully consider which type of agreement is suitable for their interests and comply with the Fair Work Act 2009 when negotiating employment agreements.