An agreement made under the Fair Work Act 2009 (Cth) (FW Act), most commonly at the enterprise level, relating to the minimum terms and conditions of employment, including wages, for an employer and at least two employees who will be covered by the agreement. An enterprise agreement can be made to cover an:

For an existing enterprise, there are two different types of enterprise agreement available under the FW Act, being:

(Sections 12, 172(2)(a), 172(3)(a) and 172(6), FW Act.)

An enterprise agreement made to cover a new enterprise is referred to as a greenfields agreement, with the two necessary pre-conditions being that the employer (or employers):

(Section 172(2)(b) and 172(3)(b) and 172(4), FW Act.)

Like an agreement for an existing enterprise, a greenfields agreements can also be either a:

(Section 172(2)(b) and 172(3)(b) and 172(4), FW Act.)

Once made, an agreement must be submitted to the Fair Work Commission (FWC) for approval. If approved by the FWC, the agreement operates from seven days after the agreement is approved or, if a later date is specified in the agreement, that later date (section 54, FW Act).

Generally, while in operation, an agreement displaces any modern award otherwise applicable to the employee (and the employer in respect of that employee) (sections 47, 48 and 52, FW Act). Among other considerations, in order to approve an enterprise agreement, the FWC must be satisfied that each award covered employee and each prospective award covered employee would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee (section 186(2)(d), FW Act).

The FWC can deal with disputes in accordance with the dispute resolution procedure clause of the agreement.

Subject to limited exceptions (see section 189(4) of the FW Act), an enterprise agreement operates for a period of up to four years from the date of approval, with the relevant date specified in the agreement as the nominal expiry date. While an agreement must have a nominal expiry date within four years, the agreement continues to operate beyond the nominal expiry date unless and until it is replaced by a new enterprise agreement or terminated by the FWC. However, the pay rate in an applicable enterprise agreement must not be less than the base rate of pay that would be payable to the employee under the modern award if the award applied to the employee (section 206(1), FW Act).

While an enterprise agreement cannot displace the application of the National Employment Standards (NES) (section 61(1), FW Act), the FW Act permits inclusion of terms in an agreement that are ancillary or incidental to, or that supplement, the NES (section 55(4), FW Act). However, a term of an agreement has no effect to the extent it contravenes section 55 of the FW Act (section 56, FW Act).