Broker Cheatsheet: Enterprise Bargaining Agreements

Understanding Enterprise Bargaining Agreement Cover

What is an Enterprise Bargaining Agreement (EBA)?

Enterprise agreements and modern awards contain minimum entitlements for wages and conditions of employment.

Some employees are not covered by an award or an enterprise agreement. For these employees, a national minimum wage order provides a safety net of minimum wages.

The National Employment Standards (NES) are minimum standards that cannot be overridden by the terms of enterprise agreements or awards.

EBA’s and awards are filed with Fair Work Commission and can be found on their website.

What is Enterprise Bargaining Agreement Cover?

Most enterprise agreements include:

  • wage rates
  • employment conditions (eg; hours of work, meal breaks, overtime, allowances, etc)
  • a consultation process
  • dispute resolution procedures
  • deductions from wages for any purpose authorised by an employee.
  • EBA’s cannot include unlawful content (such as discriminatory or objectionable terms)
  • EBA’s can also include requirements for Income Protection insurance for employees.

What type of Income Protection insurance is usually stipulated in an EBA?

Where an EBA mentions this insurance, it will stipulate the minimum requirements of cover (eg; weekly income protection limit, the waiting/benefit period for benefits, and sometimes the maximum premium rate for the cover, and also lump sum benefits).

How does EBA differ from Group Personal Accident and Sickness Cover?

As mentioned above, EBA’s generally stipulate the income protection benefits that are to be provided by the employer, whereas Group Personal Accident & Sickness terms and coverage can be stipulated and negotiated with the insurer.

Why are fewer Insurers Offering EBA Cover?

  1. Difficulty for insurers to match the covers terms, etc at an acceptable premium.
  2. Often there is no way to amend benefits or charge a higher premium if the business is unprofitable.
  3. Terms and premium rates often have to be ‘guaranteed’ for the term of the EBA (eg; 3-4 years).

Simplifying EBA Cover Process for Brokers

  • Provide the insurer with specific details of the insurance requirements of the EBA (or copy of the insurance section of the EBA).
  • Is there a premium rate guarantee requirement?
  • Provide the insurer with detailed claims experience.
  • Advise if the current benefits can be amended to get to the required premium rate if the claims history isn’t good.