An enterprise agreement (or collective agreement) is an agreement made between a national system employer and some or all of its employees who are employed at the time the agreement is made. The agreement regulates minimum wages and employment conditions.

There are three types of enterprise agreements: single-enterprise agreements, multi-enterprise agreements, and greenfields agreements.

A single interest declaration (also known as a single interest employer authorisation) is a declaration that entitles multiple employers to use one enterprise agreement.

A multi-enterprise agreement is an agreement between two or more employers and their employees. The employers must:

• not qualify as single-interest employers;
• conduct the same type of business; and
• wish to offer the same working conditions to their employees.

A greenfields agreement is an agreement you may wish to enter into if you are establishing or propose to establish a new enterprise (either alone or with other employers) and you have not yet employed anyone. This agreement will set out the terms and conditions of employment for your future employees.

The type of agreement you will need to use depends on whether your business already exists or has not yet employed anyone.

The Fair Work Act 2009 (Cth) (FW Act) governs the requirements for making enterprise agreements.

However, enterprise agreements that are not made under the FW Act operate as unregistered or common law agreements. While you will not face a penalty under the FW Act if you breach an unregistered or common law agreement, there may be other legal risks of doing so. Seek legal advice if you no longer wish to be bound by the terms of an unregistered or common law agreement.