Enterprise agreements and enterprise bargaining
Published 12 December 2022 | Updated 6 June 2023
The Fair Work Act has been amended to include new enterprise agreement and bargaining laws.
The changes summarised on this page started on 7 December 2022. Other changes to enterprise agreements and bargaining start later. Find out more.
On this page:
- Termination of enterprise agreements after nominal expiry date
- Sunsetting of zombie agreements
- Errors in enterprise agreements
- Initiating bargaining
- Other changes to enterprise agreements and bargaining
- Other pages in this section
Termination of enterprise agreements after nominal expiry date
These changes took effect from 7 December 2022.
The process for terminating an enterprise agreement has changed. These changes start from 7 December 2022 and apply to applications already before the Commission and to new applications.
The Commission has to terminate an enterprise agreement if it is satisfied that one of the following applies:
- the continued operation of the agreement would be unfair for the employees it covers
- the agreement doesn’t, or is unlikely to, cover any employees, or
- all of the following apply:
- the continued operation of the agreement poses a significant threat to the viability of the business
- terminating the agreement is expected to reduce the risk of terminations of employment due to redundancy, insolvency or bankruptcy
- if the agreement has terms about termination entitlements, the employer or employers it covers guarantees the termination entitlements to the Commission.
The Commission also needs to be satisfied that it’s appropriate in all the circumstances to terminate the agreement.
In deciding whether to terminate an agreement, the Commission needs to consider the views of the employer or employers, employees or unions it covers. The Commission also needs to consider whether:
- bargaining for a proposed replacement agreement to cover the same or substantially the same employees as the existing agreement is occurring
- the termination would adversely affect the employees’ bargaining position.
We have the power to start court proceedings for alleged breaches relating to guarantees of termination entitlements. Employers who are found to have breached a guarantee to the Commission may face penalties. You can read our Compliance and Enforcement Policy for information about how we perform our compliance and enforcement role.
Agreements can still be terminated with the consent of employees as per existing rules.
Find out more about terminating agreements on the Fair Work Commission website.
Sunsetting of zombie agreements
These changes will take effect from 7 December 2023.
All agreements made before the commencement of the Fair Work Act that are still in operation will automatically ‘sunset’ (or terminate) on 7 December 2023 (which is 12 months after these changes commenced). These agreements, commonly known as ‘zombie agreements’, include:
- agreement-based transitional instruments
- Division 2B state employment agreements
- enterprise agreements made between 1 July 2009 and 31 December 2009.
Parties to an agreement can apply to the Commission to extend the sunset date for the agreement by up to 4 years at a time. Applications need to meet certain conditions, for example, that bargaining is occurring for a proposed replacement agreement or employees would be better off under the zombie agreement.
Employers who have employees covered by these agreements need to let those employees know, in writing, that the agreement will be terminating on 7 December 2023 unless an application for extension is made to the Commission before 7 December 2023. The written notice needs to be provided before 7 June 2023 (within 6 months of 7 December 2022).
The Commission will publish its decision and any written reasons for extending, or not extending, a zombie agreement, on their website. This includes publishing a copy of the relevant agreement if it’s a collective agreement. An individual agreement can’t be published by the Commission.
We have the power to start court proceedings for alleged breaches relating to employers failing to notify employees about sunsetting for zombie agreements. Employers who are found to have breached their obligations may face penalties. You can read our Compliance and Enforcement Policy for information about how we perform our compliance and enforcement role.
Read our updated information at Agreements made before 1 Jan 2010.
Find out more from the Fair Work Commission at Sunsetting of zombie agreements.
Errors in enterprise agreements
These changes took effect from 7 December 2022.
The Commission has new powers to correct errors in enterprise agreements on its own initiative or on application by an employer, employee or union covered by the agreement. This took effect from 7 December 2022.
The Commission also now has the power to decide how these corrections are made to an agreement.
The Commission has the power to validate a decision to approve an agreement or a variation to an agreement if the wrong version was mistakenly submitted for approval. This applies to approvals given by the Commission before, on or after 7 December 2022. The validation process could start on the Commission’s initiative or on application.
Find out more and keep up to date with the Commission's information at Information about the Secure Jobs Better Pay Act 2022 changes.
Initiating bargaining
These changes took effect from 7 December 2022.
There are changes to how bargaining for a new agreement can be initiated.
In certain circumstances, an employee can now initiate bargaining by writing to their employer via a bargaining representative.
The Commission can make a bargaining order following a request, even where the employer has refused to agree to bargaining.
Find out more on the Commission’s website at Request to bargain for a replacement agreement.
Keep up to date with the Commission’s information at Information about the Secure Jobs Better Pay Act 2022 changes.
Other changes to enterprise agreements and bargaining
There are other changes to enterprise agreements and bargaining. These relate to:
- approval of enterprise agreements
- better off overall test
- bargaining disputes
- industrial action (protected action ballots)
- bargaining streams.
Keep up to date on these changes at the Commission’s Secure Jobs, Better Pay section: Information about the Secure Jobs Better Pay Act 2022 changes.