Enterprise agreements have always required careful management — but the legal environment in which they operate has changed significantly since 2023. The Secure Jobs, Better Pay reforms introduced intractable bargaining declarations and expanded multi-employer bargaining. The Closing Loopholes Acts brought Same Job Same Pay, strengthened delegates' rights, and significantly increased the penalties for underpayment. Payday Super takes effect from 1 July 2026. And the Building Cooperative Workplaces No. 1 Act 2026, which took effect in July 2026, has updated how the Fair Work Commission processes bargaining disputes. For employers with an enterprise agreement already in place — or considering making one — the question is not whether these changes are relevant, but which of them require action. This article covers what an enterprise agreement is, how the making process works, what has changed, and when a review is warranted.

What an Enterprise Agreement is — and how it relates to modern awards and the NES

An enterprise agreement is a written agreement on employment conditions, made between an employer and its employees, that has been approved by the Fair Work Commission. Once approved, it governs the terms and conditions of employment for the employees it covers — replacing the modern award that would otherwise apply to those employees in that workplace.

The most common type is a single enterprise agreement, made by a single employer with its employees. Multi-enterprise agreements — covering more than one employer — also exist, but are less common in practice and involve different bargaining processes.

The relationship with modern awards and the NES

Modern awards set minimum employment conditions for particular industries or occupations. An enterprise agreement replaces the relevant modern award for the employees it covers — meaning the award's pay rates, penalty rates, allowances, and other conditions no longer apply directly. Instead, the terms of the enterprise agreement govern the employment relationship.

However, the National Employment Standards (NES) cannot be displaced by an enterprise agreement. The NES — which includes entitlements such as maximum weekly hours, leave entitlements, notice of termination, and redundancy pay — represents an absolute floor. An enterprise agreement cannot reduce or exclude NES entitlements, regardless of what the parties agree to.

The Better Off Overall Test

Before the Fair Work Commission will approve an enterprise agreement, it must be satisfied that each employee covered by the agreement would be better off overall than if the relevant modern award applied. This is known as the Better Off Overall Test (BOOT).

Following the Secure Jobs, Better Pay reforms, the Fair Work Commission applies the BOOT as a global assessment — not as a line-by-line comparison of each clause. The Commission assesses whether employees are better off overall by balancing the agreement's more beneficial terms against its less beneficial ones, and focuses on patterns of work that are reasonably foreseeable at the time the agreement is made, rather than remote or hypothetical scenarios. An agreement may trade off some award conditions for improvements in others, provided the net outcome is positive for each employee. However, employers should be aware that variations in rosters, penalty rates, and shift patterns are closely scrutinised. Where the Commission identifies concerns, it may invite the employer to provide undertakings to address them before approving the agreement.

What happens after the nominal expiry date

Every enterprise agreement has a nominal expiry date — a date specified in the agreement after which either party can apply to the Fair Work Commission to terminate it or begin bargaining for a replacement. However, reaching or passing the nominal expiry date does not cause an enterprise agreement to expire or cease operating.

An enterprise agreement continues to apply — and to govern employment conditions — until one of the following occurs: a new enterprise agreement covering those employees is approved and comes into operation, or the Fair Work Commission formally terminates the agreement on application.

This is a point that is frequently misunderstood. An employer that assumes the enterprise agreement has lapsed and begins paying employees under the relevant modern award, without a new agreement in place and without a termination order, is not operating lawfully. Equally, an employer that allows the agreement to run past its nominal expiry date without reviewing whether its terms still meet current legal requirements — including the BOOT, relative to any updated modern award rates — may face compliance exposure.

The EA-making process — key steps and timeframes

Making a new enterprise agreement — whether for the first time or as a replacement for an existing agreement — follows a structured process under the Fair Work Act. Each step has specific legal requirements, and failure to comply with them can result in the Fair Work Commission refusing to approve the agreement. The following covers the key steps for a single enterprise agreement.

Good faith bargaining and intractable bargaining

Where bargaining has reached an impasse, either party may apply to the Fair Work Commission for an intractable bargaining declaration, provided the minimum bargaining period of 9 months has elapsed. If the Commission makes such a declaration, it can then make a workplace determination — effectively imposing terms on the parties. This mechanism, introduced by the Secure Jobs, Better Pay reforms in 2023, means that prolonged bargaining deadlocks are no longer without consequence.

Genuine agreement — what employers must ensure before the vote

Under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, the formal 7-day access period requirement was replaced from 6 June 2023 by the overarching requirement that employees must have genuinely agreed to the agreement. The Fair Work Commission's Statement of Principles on Genuine Agreement sets out how this requirement is met in practice.

Employers must provide employees with a reasonable opportunity to consider the proposed agreement before voting. This includes the agreement itself and any documents incorporated by reference — such as modern awards or internal policies referred to in the agreement. The Statement of Principles indicates that a reasonable opportunity will generally include at least 7 full calendar days.

Employers must also ensure that the terms and effect of the agreement are explained to employees in an appropriate manner, taking into account the particular circumstances of the workplace — including employees who may have limited English proficiency or who are young workers.

Where minor changes are made after employees have begun to consider the agreement, a complete restart of the process may not be required, provided employees are given a reasonable opportunity to understand the changes before voting.

FWC approval — what the Commission assesses

Once lodged, the Commission assesses the agreement against the BOOT, confirms that all mandatory terms are present — including, for agreements voted on from 1 July 2024, a delegates' rights term — and verifies that the bargaining process complied with the Act. If approved, the agreement comes into operation seven days after approval, or on a later date specified in the agreement.

Major reforms HR teams need to know — 2023 to 2026

Enterprise agreement law has changed significantly since 2023. The following covers the reforms most directly relevant to employers making or reviewing an agreement in 2026, in reverse chronological order.

Building Cooperative Workplaces No. 1 Act 2026 — in effect from 7 July 2026

The Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Act 2026 received Royal Assent on 6 July 2026 and took effect the following day. Its most significant changes for employers involved in enterprise bargaining are:

• Where a Supported Bargaining Authorisation has already been made within the previous two years, parties can recommence supported bargaining without applying for a new authorisation. This reduces time and cost for employers and employee organisations already subject to an existing authorisation.

• The Fair Work Commission can now, with the consent of the parties, determine certain matters on the papers — without proceeding to a formal conference or hearing. This applies to straightforward enterprise agreement approvals, minor variations, and procedural matters, enabling these to be resolved more quickly and at lower cost.

The Act also made changes to general protections and road transport contractor provisions, which are outside the scope of enterprise agreement making.

Delegates' rights term — mandatory from 1 July 2024

From 1 July 2024, all enterprise agreements voted on by employees must include a delegates' rights term. This is a term setting out the rights of workplace delegates — employees who represent their colleagues as union representatives or similar in the workplace.

The delegates' rights term in an enterprise agreement must be no less favourable than the equivalent term in the modern award that covers the workplace delegates. If no modern award covers the workplace delegates, the term must at least include the minimum delegates' rights set out in section 350C of the Fair Work Act.

Where an agreement submitted for approval does not include an adequate delegates' rights term, the Fair Work Commission may still approve the agreement — but only if the applicable modern award term is taken to be included in the agreement instead. In practice, employers should ensure any agreement voted on after 1 July 2024 contains an express delegates' rights term that meets the required standard.

Intractable bargaining declarations — introduced 6 June 2023

As noted in the previous section, the Secure Jobs, Better Pay reforms introduced the intractable bargaining declaration framework from 6 June 2023. Where bargaining has been ongoing for at least 9 months past the nominal expiry date of the existing agreement or 9 months since bargaining commenced, whichever is later, a bargaining representative can apply to the Fair Work Commission for a declaration that bargaining is intractable.

If such a declaration is made, the Commission must then make a workplace determination — setting the terms of employment for the covered employees — unless the parties reach agreement during any post-declaration negotiation period specified in the declaration. The first intractable bargaining workplace determination was handed down in June 2024.

For employers, the practical significance of this framework is that prolonged bargaining is no longer without consequence. Where an employer is engaged in difficult negotiations, the risk that the Commission will ultimately impose terms — potentially including terms the employer would not have agreed to voluntarily — is a relevant factor in how bargaining strategy is approached.

Multi-employer bargaining and Supported Bargaining — from 6 June 2023

The Secure Jobs, Better Pay reforms also expanded the circumstances in which employees and unions can seek to bring an employer into multi-employer bargaining. The Supported Bargaining stream allows employees in industries or occupations where bargaining has historically been difficult — such as aged care, early childhood education, and disability services — to bargain collectively across multiple employers.

Where the Fair Work Commission makes a Supported Bargaining Authorisation, an employer named in the authorisation is required to participate in the bargaining process, regardless of whether it wishes to do so. Employers operating in sectors where Supported Bargaining has been actively used should be aware that an authorisation application can be made without their prior knowledge or consent.

Signs it may be time to review or renegotiate your EA

An enterprise agreement that was appropriate when it was made may no longer reflect the organisation's obligations, workforce, or cost structure. The following are the situations most likely to indicate that a review is warranted.

The modern award has overtaken the EA's wage rates

Annual Wage Review decisions have delivered above-average increases in recent years. Where an enterprise agreement was made several years ago, it is possible — and in some cases already the case — that the wage rates specified in the agreement have fallen below the minimum rates in the relevant modern award. Where this occurs, the employer is legally required to pay the higher award rate, even though the enterprise agreement remains in operation.

This is not a theoretical risk. An employer that continues to pay the agreement rate without checking whether it has been undercut by award increases may be committing underpayment. Given the significant civil and criminal penalties introduced under the Closing Loopholes reforms for wage theft, the consequences of underpayment are more severe than in previous years.

Finance and HR teams should check the current pay rates in the relevant modern award against the agreement's wage tables — not as a one-off exercise, but as a routine part of the annual review cycle.

The nominal expiry date has passed

As discussed above, an enterprise agreement does not expire when it passes its nominal expiry date. However, the longer an agreement operates past that date without review, the greater the risk that its terms have fallen out of step with current award conditions and legislative requirements. Where the nominal expiry date has passed — particularly if more than 12 months ago — a structured review is warranted.

The agreement does not include a delegates' rights term

Enterprise agreements voted on before 1 July 2024 were not required to include a delegates' rights term. As a result, many agreements currently in operation do not contain one. While the absence of the term does not invalidate an existing agreement, it is a factor to address when bargaining for a replacement. Employers should be aware that where a union seeks to bargain for a new agreement, the inclusion of an adequate delegates' rights term will be a baseline requirement for FWC approval.

The agreement's terms conflict with recent legislative changes

Payday Super, the Same Job Same Pay framework, and the expanded rights of workplace delegates are among the changes that may create tension with the existing terms of an enterprise agreement. Where an agreement contains provisions that are inconsistent with current law — or that assume a legal framework that has since changed — those provisions may not be enforceable, or may expose the employer to compliance risk.

A practical audit of the agreement against the current legislative landscape is the most reliable way to identify these gaps. Where conflicts are identified, legal advice on how to address them — whether through a variation to the agreement, a new agreement, or other measures — is recommended.

The business has changed significantly

An enterprise agreement that accurately reflected the business when it was made may no longer be appropriate where the organisation has grown, restructured, changed its service model, or taken on employees in roles or classifications not contemplated by the agreement. Where the coverage clause of the existing agreement does not clearly cover the employees now working in the business — or where it covers employees in roles that no longer exist — the agreement may be creating uncertainty about which employees are covered and on what terms.

An enterprise agreement that is working well is one that accurately reflects current employment conditions, complies with the legislative framework as it stands today, and has been recently enough reviewed that its terms have not been overtaken by award rate increases or new legal requirements. An agreement that was made several years ago, has passed its nominal expiry date, and has not been audited against current award rates and recent reforms may be creating compliance exposure that is not immediately visible.

The starting point is a structured audit of the current agreement against the modern award, the NES, and the reforms covered in this article. For advice on the bargaining process, agreement content, or compliance with current requirements, consult a workplace relations lawyer or contact the Fair Work Commission directly.

Official sources:

• Fair Work Commission — Enterprise agreements

• Fair Work Commission — Changes to making agreements

• Fair Work Commission — Approval of enterprise agreements

• Fair Work Ombudsman — Building Cooperative Workplaces reforms

• Fair Work Ombudsman — Enterprise bargaining and enterprise agreement changes

• Fair Work Ombudsman — Agreements

Last updated: August 2026