Ways to vary enterprise agreements

Enterprise Bargaining Agreements (EBAs) provide certainty and stability in workplace arrangements, but business and workforce needs can change over time. Economic conditions, operational requirements or workforce expectations may make it necessary to adjust existing terms. Varying an EBA allows updates without waiting for it to expire, but the process is highly regulated under the Fair Work Act 2009 (Cth) (FWA). 

Enterprise agreements can be varied in four ways: 

1. By agreement between employer and employees, with Fair Work Commission (FWC) approval. 

1. To remove ambiguity or uncertainty via an application to the Commission. 

1. To resolve issues regarding casual employee definitions or casual conversion provisions. 

1. On referral from the Australian Human Rights Commission to remove discriminatory terms. 

Variation by agreement between employer and employees 

Section 207 of the FWA allows variations by mutual agreement. For single-employer agreements: 

• The employer and employees covered by the agreement (including those who will be covered after the variation) must agree to the variation. 

• Employees receive a Notice of Employee Representational Rights (NERR) and time to consider the proposed change. 

• A majority vote of participating employees is required. 

• Once approved by employees, the variation must be lodged with the FWC within 7 days for formal approval. 

• Variations do not take effect until FWC approval, ensuring changes meet the Better Off Overall Test (BOOT). 

Variation to remove ambiguity or uncertainty 

If a clause is unclear or could be interpreted in multiple ways, the FWC can clarify its intent without reopening bargaining. Applications can be made by employers, employees, or unions. Variations take effect from the date specified in the FWC’s decision. 

Variation concerning casual employment definitions 

Following legislative reforms, the FWC may vary agreements to align with the statutory definition of a casual employee or casual conversion provisions. Applications can be made by employers, employees, or employee organisations. Variations may operate retrospectively. 

Variation to remove discrimination 

The FWC may also vary an agreement on referral from the AHRC to remove terms that would require unlawful acts under: 

• Age Discrimination Act 

• Disability Discrimination Act 

• Sex Discrimination Act 

Variations take effect from the date specified in the FWC’s decision. 

Disputes about variations 

Disputes can arise over proposed variations, particularly regarding ambiguities. Under s.217A FWA, the Commission may deal with disputes but cannot arbitrate disputes which are solely about removing ambiguity or uncertainty. Other disputes may still follow the agreement’s dispute resolution procedures (s.739 FWA). 

Need to vary your agreement?
Varying an enterprise agreement allows flexibility but requires compliance with legal procedures. For advice, contact us at 0261 755 900 or workplace@mba.org.au.