Enterprise Agreement vs Award: Understanding the Differences
When it comes to industrial relations and employment law in Australia, the terms `enterprise agreement` and `award` are used frequently. Both are important legal documents that govern the terms and conditions of employment, but they are distinct in their nature and application. In this article, we`ll explore the differences between enterprise agreements and awards and help you understand why they matter.
What is an Enterprise Agreement?
An enterprise agreement is a document negotiated between an employer and their employees, or their representatives (such as a union) that sets out the terms and conditions of employment. It is a binding agreement that outlines things like wages, hours of work, leave entitlements, and other employment conditions specific to a particular workplace or group of workplaces.
An enterprise agreement is a legally binding document that supersedes any award conditions that may otherwise apply. It can only be made by agreement between the employer and a majority of their employees, or by a bargaining representative authorized by the employees. Once a valid enterprise agreement is in place, it sets out the minimum employment conditions for the employees covered by it for the life of the agreement (which can be up to four years).
What is an Award?
An award is a legal document that sets out the minimum terms and conditions of employment for a particular industry or occupation. Awards are made by the Fair Work Commission and apply to all employees who fall under the relevant industry or occupation. They cover things like wages, penalty rates, overtime, leave entitlements, and other conditions of employment.
Awards set out the minimum employment conditions for employees covered by them and cannot be varied by agreement between the employer and their employees. However, enterprise agreements can be negotiated that improve on the minimum requirements set out in an award.
Key Differences between Enterprise Agreements and Awards
One of the key differences between enterprise agreements and awards is the fact that enterprise agreements are specific to a particular workplace or group of workplaces, while awards are industry or occupation-wide. Enterprise agreements can be tailored to suit the needs of a particular employer and their employees, while awards are more `one size fits all.`
Another difference is that enterprise agreements can contain provisions that are different from the relevant award, while awards cannot be varied by agreement between the employer and their employees. This means that if a valid enterprise agreement is in place, it will set out the minimum employment conditions for the employees covered by it, even if those conditions are different from those set out in the relevant award.
Finally, while both enterprise agreements and awards are legally binding documents, they are enforced in slightly different ways. A contravention of an enterprise agreement can be dealt with under the Fair Work Act 2009 (Cth), while a contravention of an award can be dealt with under the Fair Work Act 2009 (Cth) or by the relevant state or territory industrial relations commission.
Why Do Enterprise Agreements and Awards Matter?
Enterprise agreements and awards matter because they set out the minimum terms and conditions of employment for employees in Australia. They are important legal documents that protect the rights of workers and ensure that they are treated fairly and equitably.
For employers, enterprise agreements can provide greater flexibility and control over employment conditions, while also ensuring compliance with relevant industry standards. For employees, enterprise agreements can provide better pay and conditions than those set out in the relevant award, while also providing job security and protection from unfair treatment.
Conclusion
In summary, enterprise agreements and awards are both important legal documents that govern the terms and conditions of employment in Australia. While they have some similarities, there are also important differences between the two. Enterprise agreements are specific to a particular workplace or group of workplaces, while awards are industry or occupation-wide. Enterprise agreements can contain provisions that are different from the relevant award, while awards cannot be varied by agreement. Both documents are important for ensuring fair treatment and protection of workers` rights in the Australian workplace.