While multiple-employer agreements have existed for some time, legislative amendments in 2022 are seeing bargaining for these agreements move from the periphery to the centre of the industrial spotlight.
The Secure Jobs, Better Pay reforms to the Fair Work Act 2009 (Cth) (FW Act) in 2022–2023 marked a significant change in collective bargaining in Australia. The reforms introduced new and refined streams for supported and single interest multi-employer bargaining, designed to encourage and increase enterprise bargaining, while purportedly improving wages and productivity. Whilst having different requirements, the result of bargaining through either mechanism is a single enterprise agreement which will apply to multiple employers, regardless of the operational needs of employers.
Employers are now being forced to the bargaining table to negotiate enterprise agreements which will cover them, as well as their competitors. Recent high-profile cases in the fast food, mining, and health and community services sectors have tested the boundaries of the new legislative regime, with significant implications for employers, employees, and unions alike.
We are taking a look at the two avenues that are utilised to get multiple-employer agreements off the ground and the ultimate outcome from two key decisions in this rapidly evolving area.
Supported Bargaining Stream
The supported bargaining provisions are aimed at employees who require ‘support’ in enterprise bargaining due to lack of skills, resources and bargaining strength. Unions can coalesce lower paid or fragmented workforces and apply to the Fair Work Commission (FWC) for a supported bargaining authorisation. Relevantly, the FWC must make the authorisation if it is satisfied that it is appropriate for the employers and employees subject to the application to bargain together having regard to:
- the prevailing pay and conditions within the industry or sector;
- whether the relevant employees have an ‘identifiable common interest’; and
- whether the likely number of bargaining representatives would be consistent with a manageable bargaining process.
So far, employees in childcare, disability care and fast food have been identified in this category.
Case Study 1: McDonald’s and the Fast-Food Sector
The Shop, Distributive and Allied Employees Association (SDA) have had perhaps the most significant and high-profile win under the supported bargaining provisions, when the FWC granted its application for a supported bargaining authorisation in respect of McDonald’s franchises in South Australia (McDonald’s Decision).[1]
The SDA argued that the McDonald’s franchisees shared clear identifiable common interests: uniform branding, standardised systems, and a workforce overwhelmingly reliant on the Fast-Food Industry Award. In relation to the employees bargaining power and positions, the SDA relied on the absence of enterprise agreements since 2019, coupled with the youth, inexperience, and low pay of the workforce to support multiple employer bargaining.
McDonald’s argued that operational differences between stores, such as location, size, and management practices, preclude a finding of common interest. However, they were unsuccessful, with the FWC finding that the South Australian franchisees have a broad degree of similarity both in the substance of their operations and the way they are presented to the public. Notably, the Commission also held that the supported bargaining stream does not require unions to demonstrate majority employee support, a key point of contention for employers.
McDonald’s are now subject to the authorisation which requires 18 McDonald’s’ franchisees to bargain together with their 5000 employees over 50 restaurants, preventing a ‘divide and conquer’ approach.
On the back of this success, the SDA is now seeking to extend the supported bargaining authorisation to McDonald’s franchises across the country, potentially covering 115,000 McDonald’s employees.
Single interest employer bargaining stream
In contrast to supported bargaining, the single interest employer bargaining stream is not concerned with the bargaining power or resources of the employees who will be subject to it. It is necessary (unlike a supported bargaining authorisation) that the majority of employees who are employed by a relevant employer named in the application want to bargain for the agreement. However, similar to supported bargaining authorisation, the FWC must be satisfied (amongst other matters) that the employers subject to the authorisation have clearly identifiable common interests, with the FW Act referencing the employers’ geographical location, regulatory regime and nature of the enterprises as relevant consideration for a common identifiable interest. Further, the operations and business activities of each of the relevant employers must be reasonably comparable.
Case Study 2: Coal Employers and the Mining Sector
In 2023, the Association of Professional Engineers, Scientists and Managers, Australia (APESMA) sought to negotiate a multi-employer agreement covering a small and discrete group of workers employed by four separate employers at four respective coal mines (the Employers).
In a hotly contested case, the Full Bench of the FWC awarded the single interest employer authorisation, finding that the employers had clearly identifiable common interests and that the statutory requirements for single interest authorisation were satisfied (Coal Decision). [2]
The Employers argued that the differences in their day-to day operations, their direct commercial competition and differing employment conditions favoured against the authorisation being made. However, only one of the Employers was successful, with the FWC finding their business activities and structure materially different, particularly noting it did not operate to generate profit or commercial gain.
The remaining unsuccessful Employers appealed the Coal Decision to the Full Court of the Federal Court but were again unsuccessful, with the Federal Court finding the FWC had applied the correct statutory tests.[3]
Despite the legal victory, practical challenges soon emerged for those subject to the authorisation. Company closures, operational differences, and resistance from rival unions led to a shift away from multi-employer bargaining. At one of the Employer’s sites, protracted bargaining resulted in lockouts, industrial action, and intractable bargaining declarations, whilst another Employer was removed from the bargaining after announcing closure of its mine site. The relevant unions have now abandoned their multi-employer bargaining strategy and announced they are seeking individual employer agreements, underscoring the complexity of applying a unified bargaining framework in industries with diverse operations and business models. Perhaps biting off more than they can chew.
Key takeaways for employers
The two cases above involve two different employer groups working within different sectors but who were ultimately subject to the same outcome – being obligated to bargain for a multi-employer agreement despite their vigorous objections.
In the case of McDonald’s Decision, the SDA’s win has seen the expansion of its bargaining strategy from South Australia (where the authorisation was limited to) to Australia-wide. Should it have continued success with this strategy, it has the potential to bargain for a single agreement that will cover hundreds of individual employers and over a hundred thousand employees. It provides an indication of just how many employers may be forced to bargain for multi-employer agreements, with no requirement for FWC to satisfied that the employers or a majority of employees are in fact in support of such an agreement.
The Coal Decision underscores the legal hurdles employers will face in convincing the FWC that they do not share a ‘common interest’ with their commercial rivals in an application for a single interest employer authorisation. In reviewing the Coal Decision, the Federal Court has emphasised the FWC is allowed to perform a ‘highly evaluative exercise’ on what common interest there may be between employers and is not bound by a restrictive definitions or mathematical formulae. However, while the union was successful in its application, the practical realities of engaging in multi-employer bargaining with an unwilling and differing group of employers quickly came to the forefront, with the strategy ultimately collapsing.
The experience suggests that, while the single interest employer authorisation can be a powerful tool, its success depends on the willingness of parties to engage and the manageability of the bargaining group (both employers and employees) overall.
[1] B2024/992 – Application by Shop, Distributive and Allied Employees Association
[2] APESMA v Great Southern Energy Pty Ltd T/A Delta Coal, Whitehaven Coal Mining Ltd, Peabody Energy Australia Coal Pty Ltd, Ulan Coal Mines Ltd [2024] FWCFB 322.
[3] Ulan Coal Mines Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia [2025] FCAFC 127.
The views expressed in this article are general in nature only and do not constitute legal advice. Please contact us if you require specific advice tailored to the needs of your organisation’s circumstances.