My enterprise agreement has worse conditions than my award. Which one applies?

What the Law Says

Under Australian workplace law, an enterprise agreement can replace award conditions — but only if it meets strict legal requirements, especially the 'better off overall test'.

An enterprise agreement is a legally binding workplace agreement between an employer and its employees. Once approved by the Fair Work Commission (FWC), it replaces the relevant modern award for those employees — but only if it satisfies the Better Off Overall Test (BOOT).

The BOOT requires that each employee covered by the agreement be 'better off overall' compared to the entitlements they would receive under the applicable award. This is assessed by comparing wages, allowances, leave, hours, and other conditions on a case-by-case basis.

If the FWC finds the agreement does not pass the BOOT, it cannot be approved — and if already approved, it may be varied or set aside. Where no valid agreement applies, the award automatically governs employment conditions.

Statutory Text

An enterprise agreement passes the better off overall test if the FWC is satisfied that each employee who would be covered by the agreement would be better off overall if the agreement applied to the employee than if the relevant award applied.

— Fair Work Act 2009 (Cth), s. 193 — Better off overall test

Statutory Text

An enterprise agreement does not come into operation unless it has been approved by the FWC.

— Fair Work Act 2009 (Cth), s. 186 — Approval of enterprise agreements

What to Do

Sources