How enterprise agreement bargaining actually works - a plain-English guide for employers

Enterprise agreement bargaining can feel overwhelming, especially if it's your first time. There are legal requirements, union representatives, employee votes, and a government approval process - and if you get any of it wrong, the whole thing can be sent back to the start.

This guide won't replace legal advice, but it will give you a clear map of what's involved so you can walk into the process with confidence.

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Phase 1: Preparation

Step 1: Decide whether you need an enterprise agreement

An enterprise agreement (EA) replaces the relevant Modern Award for your covered employees and sets your own terms and conditions - as long as they're at least as good as the award overall. The test used to check this is called the Better Off Overall Test, or BOOT.

EAs are worth considering when your award is complicated, when you want to customise shift structures or allowances, or when your workforce size means a union has requested bargaining.

Key question to ask yourself: Does an EA actually make life simpler for my business, or am I doing this because I have to? Knowing the answer shapes how you approach the table.

Step 2: Understand who's at the table

Every person involved in bargaining is a "bargaining representative." As the employer, you're one. Your employees can represent themselves, or a union that has members in your workplace can be their representative - and if a union covers your employees, they generally have the right to bargain. You can also have a lawyer or HR consultant at the table.

Getting clear on who's representing who before bargaining begins prevents confusion and conflict later.

⚠️ Important: If a union issues you a Notice of Employee Representational Rights (NERR), you must respond appropriately. Missing this step is one of the most common reasons EA applications get knocked back by the Fair Work Commission.

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Phase 2: Bargaining

Step 3: Issue the Notice of Employee Representational Rights

Before bargaining formally begins, you must give all employees who will be covered by the agreement a Notice of Employee Representational Rights (NERR). The Fair Work Commission has a prescribed form for this - you can't use your own version.

This notice tells employees they have the right to be represented by a union or bargaining rep, and it must be given within 14 days of the start of bargaining.

Practical tip: Use the FWC's prescribed NERR form exactly as written. Download it from fwc.gov.au. Customising it is a common and costly mistake.

Step 4: Bargain in good faith

Good faith bargaining isn't just a phrase - it's a legal obligation under the Fair Work Act. It means attending meetings, disclosing relevant information, genuinely considering the other side's proposals, and not engaging in tactics that delay or frustrate the process.

You don't have to agree to everything. But you do have to genuinely engage. If the other party believes you're not bargaining in good faith, they can apply to the Fair Work Commission for a bargaining order - and that gets expensive and slow.

What this looks like in practice: Keep records of every meeting, every proposal made, and every response given. A paper trail shows good faith - and protects you if there's ever a dispute about the process.

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Phase 3: Drafting and voting

Step 5: Draft the agreement

Once the parties have reached in-principle agreement on the key terms, someone needs to draft the actual document. Enterprise agreements have mandatory terms that must be included - a dispute resolution procedure, a flexibility term, a consultation clause, and (since 2024) a delegates' rights term.

The draft needs to clearly set out all terms, be internally consistent, and pass the BOOT compared to the applicable Modern Award. This is the step where most employers engage an employment lawyer or specialist HR advisor to make sure nothing is missed.

Practical tip: Review a few similar agreements on the FWC website before you start drafting. Search for agreements in the same industry - they'll give you a practical sense of clause structure, language, and what's standard. Start at fwc.gov.au/work-conditions/enterprise-agreements/find-enterprise-agreement.

Step 6: The access period and employee vote

Before employees vote on the agreement, they must have 7 clear days to read the full document - this is called the "access period." During this time, you must take reasonable steps to explain the terms of the agreement and how it affects employees.

The explanation needs to be accessible for the whole workforce, which could mean providing it in multiple languages or holding Q&A sessions. After the access period, employees vote. A majority of those who vote must vote yes for the agreement to pass.

⚠️ Don't skip the explanation step. The FWC takes this seriously. If employees didn't genuinely understand what they were voting on, the agreement can be refused - even if the vote passed.

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Phase 4: Approval and going live

Step 7: Lodge with the Fair Work Commission and get approval

Once the vote passes, you have 14 days to lodge the agreement with the Fair Work Commission. The FWC will then assess whether it meets all the requirements - including the BOOT, the mandatory terms, and whether the bargaining process was conducted properly.

If everything checks out, the agreement is approved and becomes operative 7 days after approval. If the FWC has concerns, they may request undertakings (minor amendments) or, in serious cases, refuse approval altogether. This is rare if the process has been done carefully - but it does happen.

Timeline to expect: From the start of bargaining to a live agreement, a well-run process typically takes 3–6 months for a straightforward agreement with a cooperative workforce. Union environments with contested claims can take longer.

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Enterprise bargaining is often less adversarial than employers expect - particularly when they approach it with transparency, good preparation, and genuine respect for the people across the table. The businesses that run into trouble are usually the ones that try to rush the process or underestimate what's required.

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About to start EBA bargaining? Flex HR can support your process from preparation through to FWC lodgement.