Definition of an Enterprise Agreement

Enterprise agreements are legally binding between an employer and its employees or union.

Enterprise agreement may have other interpretations, but it is most commonly used to describe a working agreement between a company and its employees. It lays out agreed upon working conditions and wages.

Basics

Enterprise agreements offer an option for companies looking to establish working agreements on wages and conditions with employees. It is an alternative to a company working with industry or trade unions.

History

Enterprise agreements originated in 1991 from the Industrial Relations Commission (IRC). It reduces trade union dominance and allows organizations to negotiate directly with its employees or its employee union. The IRC must ratify enterprise bargaining agreements.

Benefits

A general benefit of an enterprise agreement is it establishes a working relationship between company management and employees. It typically leads to higher pay rates and better working hours and conditions for employees, who in turn agree to better production. Conflict resolutions are also more efficient in one organization than when management negotiates with trade unions.

References

• Special Loans: Enterprise Agreement Definition
• Red Goldfish: Enterprise Agreement - Definition
• Word IQ: Enterprise Bargaining Agreement Definition