Enterprise Agreements: How They Work & Voting Rules
An enterprise agreement is a written agreement between an employer and its employees that sets pay and conditions for a workplace. It must be approved by the Fair Work Commission and leave every covered employee better off overall than the relevant modern award. This guide explains who an enterprise agreement covers, how enterprise agreement voting works and what employers and workers should check.
- The agreement replaces the modern award for covered employees, but it can never take away National Employment Standards entitlements such as 4 weeks of annual leave a year for full-time staff.
- The Fair Work Commission must approve the agreement, and employees vote on it before it is lodged.
- Pay under an agreement still has to meet the national minimum, which is $26.44 per hour from 1 July 2026 for award-free employees, and must pass the better off overall test against the award.
- Check the agreement's expiry date, because it can be replaced or can stay in force after its nominal expiry until a new one is made.
What is an enterprise agreement?
It is made at the workplace level, usually between one employer and its employees. It sets rates of pay, hours, leave and other conditions that suit that business.
It sits above the National Employment Standards and the modern award. Most private-sector employees are in the national system under the Fair Work Act 2009 (Cth), while NSW state public sector employees are in a separate system.
| Term | Meaning | Why it matters |
|---|---|---|
| Enterprise agreement | A workplace agreement on pay and conditions approved by the Fair Work Commission. | It replaces the award for covered employees. |
| Modern award | An industry or occupation safety net of minimum pay and conditions. | The agreement must leave employees better off than the award. |
| Better off overall test | A Fair Work Commission test comparing the agreement with the relevant award. | An agreement that fails the test is not approved. |
| Bargaining representative | The person or union who represents employees in negotiating the agreement. | Employees can choose their representative. |
| Nominal expiry date | The date the agreement is meant to end. | It stays in force after this date until replaced or terminated. |
| Greenfields agreement | An agreement made for a new project before any employees are hired. | It is common on large construction projects. |
Who an enterprise agreement covers
| Situation | What applies |
|---|---|
| Full-time employee | The agreement sets pay and hours, with the NES as the floor, including 38 ordinary hours a week plus reasonable additional hours. |
| Part-time employee | Covered in the same way, with minimum engagement and agreed-hours rules coming from the agreement or award. |
| Casual employee | Covered if the agreement says so, including the casual loading, which is 25% under most awards. |
| Labour hire worker | Covered by the provider's agreement or the award, not the host's agreement, unless a regulated labour hire arrangement order applies. |
| Genuine contractor | Not covered, though an ABN does not decide the question. |
Enterprise agreement vs modern award
Both set conditions, but they work differently. Read our guide to modern awards explained for the award side.
| Item | Modern award | Agreement |
|---|---|---|
| Who it covers | Whole industries or occupations | One employer or workplace |
| How it is made | Set by the Fair Work Commission | Negotiated, voted on and approved |
| Minimum rates | Up 4.75% from 1 July 2026 | Must beat the award overall |
| NES | Sits on top of the NES | Cannot go below the NES |
| Where to check | Fair Work Ombudsman pay guide | The agreement itself, on the Fair Work Commission site |
The industry awards matter too. Read the fast food award, retail award, mining award and cleaning award guides to compare your own conditions.
Enterprise agreement voting step by step
Voting is a formal process, and employers must follow every step. A rushed vote before a long weekend is a common reason approval is delayed.
- Notify employees in writing of the right to be represented by a bargaining representative when bargaining starts.
- Negotiate in good faith with the employees' representatives, and share the proposed terms.
- Give every employee the proposed agreement and a plain-language explanation within the access period in the Fair Work Act, before the vote.
- Hold the vote, which must be free of pressure, and every covered employee gets a chance to vote.
- Count the votes, and treat the agreement as approved by employees only if a majority of those who cast a valid vote support it.
- Lodge the agreement with the Fair Work Commission, which checks the process and the better off overall test.
Employer obligations under an enterprise agreement
- Pay at least the rates in the agreement, and never less than the award or the national minimum.
- Issue payslips within 1 working day of payday and keep time and wage records for 7 years.
- Pay super at 12% of ordinary time earnings so it reaches the fund within 7 business days of payday.
- Report payroll information to the ATO through Single Touch Payroll on or before each payday.
- Give every new employee access to the agreement and explain how it applies.
- Keep a dated record of when each pay rise took effect, and update rates on the date the agreement says.
- Check the expiry date and plan negotiations early, so the agreement does not lapse unnoticed.
Worker rights under an enterprise agreement
- Ask your employer for a copy of the agreement, or find it on the Fair Work Commission website.
- Check your classification and pay rate against the agreement and your payslip.
- Raise any difference with your employer in writing and keep your payslips.
- If the issue is not fixed, contact the Fair Work Ombudsman on 13 13 94 for free advice.
Super and pay rises under an enterprise agreement
- Check that super is paid on top of wages, at 12% for 2026-27, as the law requires.
- Compare any pay rise against the 4.75% award increase from 1 July 2026, because the agreement must still beat the award overall.
- Read our guide to minimum wage in Australia to check the floor rates.
- Read our guide to super guarantee to check how super is paid.
Common mistakes to avoid
- Assuming an agreement can remove NES entitlements to save cost.
- Letting it expire without planning the next round of bargaining.
- Rushing the vote or pressuring employees, which can invalidate approval.
- Paying agreement rates that fall below a newly increased award rate.
- Forgetting to give new starters access to the agreement.
- Failing to update rates in payroll on the date the agreement requires.
Enterprise agreement FAQ
How does enterprise agreement voting work?
Employees receive the proposed agreement and an explanation, then vote. The agreement is approved by employees if a majority of those who cast a valid vote support it. The Fair Work Commission then checks the process and the better off overall test.
What is an enterprise agreement?
It is a written agreement on pay and conditions between an employer and its employees, approved by the Fair Work Commission. It replaces the modern award for covered employees and cannot go below the NES.
Can an agreement pay less than the award?
Not overall. The Fair Work Commission applies the better off overall test, which compares the agreement with the award. An agreement that leaves employees worse off overall is not approved.
What happens when it expires?
It stays in force after its nominal expiry date until it is replaced or terminated. Check the agreement and the Fair Work Commission, or call the Fair Work Ombudsman on 13 13 94.
Next step
This is general information, not legal, tax or financial advice, so check the Fair Work Ombudsman, the ATO or an employment lawyer for your situation. Start with our guide to modern awards explained, or talk to TQN Personnel about host employer services.