Difference between Industrial Award and Enterprise Agreement

When it comes to determining employee wages, benefits, and working conditions, there are two main types of agreements that employers and employees can enter into: industrial awards and enterprise agreements. Each agreement has its own unique benefits and drawbacks, and it`s important to understand the differences between the two before making any decisions.

Industrial Awards:

Industrial awards are standard agreements that set out minimum wages, conditions, and entitlements for employees who work in the same industry or occupation, regardless of the specific employer. These awards are determined by the government and are enforced by the Fair Work Commission to ensure that employees are treated fairly and equitably.

The purpose of industrial awards is to establish a minimum standard for employees in a given industry or occupation, including their wages, working hours, overtime, annual leave, and other entitlements. The benefits of industrial awards are that they provide a level of protection for employees, ensuring that they are paid fairly and treated appropriately. Additionally, industrial awards can simplify the payroll process for employers by providing a clear and consistent framework for payment and entitlements.

However, industrial awards can also be restrictive for employers, who may be unable to negotiate individual terms and conditions for their employees. Additionally, industrial awards may not allow for the flexibility needed to respond to changing circumstances.

Enterprise Agreements:

Enterprise agreements, on the other hand, are agreements between employers and employees that set out terms and conditions tailored for a specific workplace. Enterprise agreements allow employers and employees to negotiate wages, working hours, leave entitlements, and other working conditions that are specific to their workplace.

Unlike industrial awards, enterprise agreements are not determined by the government and are not subject to the same minimum standards. These agreements are developed through a negotiation process between the employer and employees, with the goal of finding mutually beneficial terms and conditions.

The benefits of enterprise agreements are that they allow for flexibility and customization of working conditions to suit the needs of the particular workplace. Additionally, enterprise agreements enable employers to be more competitive in their industries by offering unique incentives to attract and retain high-quality employees.

However, enterprise agreements can also be complex and time-consuming to negotiate. Additionally, employers may find it challenging to develop an agreement that meets the needs of all employees.

In conclusion, both industrial awards and enterprise agreements have their own unique benefits and drawbacks. Industrial awards provide a minimum standard of entitlements and protections for employees while offering employers a consistent framework for payroll. Enterprise agreements offer employers and employees greater flexibility and customization of working conditions but can be complex and time-consuming to develop. It`s important to carefully consider the needs of both parties before deciding which agreement is best suited to your workplace`s unique circumstances.