Enterprise bargaining is an Australian term for a form of collective bargaining, in which wages and working conditions are negotiated at the level of the individual organisations, as distinct from sectoral collective bargaining across whole industries. Once established, they are legally binding on employers and employees that are covered by the Enterprise bargaining agreement. An Enterprise Agreement (EA) consists of a collective industrial agreement between either an employer and a trade union acting on behalf of employees or an employer and employees acting for themselves.
By definition, an agreement, is the outcome of a negotiation, and a decision, involving multiple parties. (See Fair trade)
On the one hand, collective agreements, at least in principle, benefit employers, as they allow for improved "flexibility" in such areas as ordinary hours, flat rates of hourly pay, and performance-related conditions. Whilst collective agreements may, on the other hand, benefit some workers by providing higher pay, bonuses, additional leave and enhanced entitlements (such as redundancy pay) than an award does[citation needed], they also may reduce employees' bargaining power against their employers, impacting their ability to successfully obtain such benefits. In other words, whilst those employees who are successful in negotiating an Enterprise Agreement may receive greater benefits than those who are not, the overall number of employees earning comparatively high benefits may be reduced because few employees obtain an Enterprise Agreement.[1]