Enterprise agreements in aged care set out the employment conditions that apply across a workforce — pay rates, leave entitlements, shift arrangements, and working conditions. For aged care providers, understanding how enterprise agreements interact with the SCHADS Award, the Fair Work Act, and the Quality Standards is practical governance, not just an HR concern. This guide explains what an enterprise agreement aged care provider needs to know and how these instruments connect to workforce policy documentation.
What an Enterprise Agreement Is
An enterprise agreement (EA) is a formal, legally binding document that sets the terms and conditions of employment for workers at a specific employer or group of employers. It is negotiated between the employer and employees (sometimes with union involvement) and must be approved by the Fair Work Commission before it takes effect.
An enterprise agreement must pass the "better off overall test" (BOOT): every worker covered must be better off overall compared to what the applicable modern award would provide. In aged care, the relevant award for most direct care workers is the Social, Community, Home Care and Disability Services Industry Award (SCHADS Award).
An EA can provide flexibility that the award does not. For example, it might allow different arrangements for shift rostering, annualised salaries, or additional allowances for specific skills. However, it cannot reduce the minimum conditions set by the National Employment Standards (NES).
The SCHADS Award and Enterprise Agreements in Aged Care
The SCHADS Award sets minimum pay rates and conditions for direct care workers, home care workers, community support workers, and allied health assistants in the aged care sector. Enterprise agreements sit on top of the award: they must meet or exceed the award's minimum conditions but can provide more generous terms.
Following the aged care sector pay equity determinations from 2022 and 2023, SCHADS Award rates increased significantly for direct care workers. Providers whose enterprise agreements had not been updated found themselves in situations where the EA rates fell below the new award minimum, creating the obligation to top up wages to at least the award rate. This made EA management a compliance issue, not just an employment relations question.
Providers must regularly check that their enterprise agreements remain compliant with current award rates and NES obligations. The Aged Care Quality and Safety Commission expects providers to demonstrate adequate resourcing, and underpaying workers creates a regulatory and reputational risk.
How Enterprise Agreements Affect Workforce Policy
The terms of an enterprise agreement must flow through into operational policy. If the EA specifies requirements around rostering, overtime, shift penalties, or leave management that differ from what a generic HR policy assumes, the policy must reflect the EA terms. Using a policy template that does not account for the organisation's actual EA creates inconsistency and the potential for unfair application of conditions.
Workforce policies that commonly need to be aligned to enterprise agreement terms include: leave management policies, shift rostering procedures, overtime and additional hours procedures, allowances, and workplace flexibility arrangements. The Code of Conduct and Ethics Policy should also reflect any EA obligations around dispute resolution, consultation rights, and how concerns about the application of the agreement can be raised.
Consultation Obligations Under Enterprise Agreements
Most enterprise agreements include a consultation clause that requires the employer to consult with affected workers before making significant changes to rosters, work practices, or other conditions covered by the agreement. This is separate from the general governance consultation obligation under the Quality Standards, and the two processes should not be conflated.
EA consultation obligations are usually time-bound and procedurally specific: the employer must give notice, provide relevant information, and give workers a genuine opportunity to respond before implementing the change. Failure to follow the consultation clause in the EA can result in a dispute being lodged with the Fair Work Commission.
The Delegation of Authority and Responsibilities Policy should define who has authority to make decisions that trigger EA consultation obligations, and who is responsible for managing the consultation process. This prevents situations where a manager makes a unilateral roster change without realising it should have triggered a formal consultation step.
Governance and Oversight of Enterprise Agreements
The governing body bears responsibility for ensuring the organisation meets its employment obligations. This includes monitoring whether the enterprise agreement is being applied correctly, whether it remains compliant with current award rates, and whether the EA is due for renegotiation. EAs typically operate for a fixed term (up to four years) and must be renegotiated or allowed to operate on their nominal expiry date terms.
The Clinical Governance Framework Policy should connect workforce sustainability to governance oversight, because workforce conditions — including fair pay and appropriate staffing levels — directly affect the quality and safety of care delivered.
For a structured approach to building out your policy architecture to reflect EA obligations, see the Governa Policy Guides and the Governa Aged Care Frameworks.
Aligning Enterprise Agreements to the Quality Standards
Standard 7 of the Aged Care Quality Standards requires providers to have a sufficient and appropriately skilled workforce. Enterprise agreement compliance is part of that picture: workers who are paid correctly, rostered appropriately, and working in conditions that meet their legal entitlements are more likely to be engaged and retained, which in turn affects care continuity and quality.
The Governa Policy Mapping to Standards tool can help identify which workforce policies need to reference EA terms to fully satisfy the standard requirements.
Related Resources
- Code of Conduct and Ethics Policy
- Delegation of Authority and Responsibilities Policy
- Clinical Governance Framework Policy
- Governa Policy Guides
- Governa Policy Mapping to Standards
- Governa Aged Care Frameworks
- Aged Care Quality and Safety Commission
Common Questions About Enterprise Agreements in Aged Care
1. Do all aged care providers have enterprise agreements?
No. Many providers — particularly smaller organisations — operate solely under the SCHADS Award. An enterprise agreement is a choice, not a requirement. However, for larger providers or those with specific workforce needs, an EA can provide useful flexibility around rostering, pay structures, and working conditions that the award does not easily accommodate.
2. What is the "better off overall test" and why does it matter for aged care EAs?
The better off overall test (BOOT) is a Fair Work Commission requirement that enterprise agreements can only be approved if every worker covered by the EA is better off overall compared to the applicable modern award. In aged care, the comparison is against the SCHADS Award. After the 2022-23 pay equity increases, some existing EAs failed to pass the BOOT because their base rates had fallen below the new award minimums.
3. How often does an enterprise agreement need to be renegotiated?
Enterprise agreements operate for a fixed term, typically between one and four years. After the nominal expiry date, the EA continues to operate until it is replaced or terminated. Providers should plan renegotiation well before the expiry date to avoid operating on outdated terms for an extended period, particularly given how rapidly award rates in aged care have changed in recent years.
4. What happens if a provider's EA falls below SCHADS Award rates?
Where an EA rate falls below the current award minimum, the provider must pay at least the award rate. The EA does not override the award in this direction — the award sets a floor, not a ceiling. Providers should audit their EA rates against current award rates whenever award increases are announced and adjust payments accordingly. Failing to do so creates underpayment liability.
5. Does an enterprise agreement cover all staff in an aged care facility?
The coverage of an EA depends on how it is drafted. It may cover all employees, or it may exclude specific categories such as managers, part-time workers, or workers on certain contract types. The coverage clause in the EA document defines who is and is not included. Workers not covered by the EA are employed under the applicable modern award and the NES.
