Spruiked as unlocking a regime historically unused, heralded as creating efficiencies and promoting ease of transferability of skills, criticised as a punitive policy intervention that will make it substantially harder and more costly to do business, and now tested by the Full Bench of the Commission (Commission) in a heavily contested setting, multi-employer bargaining is off and racing.
After a reasonably slow (and mostly, non-adversarial) uptake, the recent decision involving four major black coal industry operators and the Association of Professional Engineers Scientists and Managers Australia (APESMA) has compelled the Commission to put Labor’s multi-employer bargaining provisions under the microscope in the first significant contested application of its kind since the commencement of the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth).
Whilst the battle is not over (noting that three of the four employer respondents to APESMA’s application have lodged judicial review proceedings in the Federal Court on 20 September 2024), the Commission’s consideration and application of the single interest employer authorisation provisions set out in the Fair Work Act 2009 (Cth) (FW Act) gives some present guidance as to how these provisions will likely be applied in practice.
The battlelines are drawn…
The battlelines identified in the Commission’s 148 page decision in APESMA v Great Southern Energy Pty Ltd t/as Delta Coal, Whitehaven Coal Mining Ltd, Peabody Energy Australia Coal Pty Ltd and Ulan Coal Mines Ltd[1] can best be summarised as a contest as to whether:
- a majority of the employees, who were employed by each of the respondent employers at a time determined by the Commission and who would be covered by the agreement, wanted to bargain for the agreement;
- each of the respondent employers had clearly identifiable common interests;
- it was not contrary to the public interest to make the authorisation;
- the operations and business activities of each of the respondent employers were reasonably comparable with those of the other employers that would be covered by the agreement;
- one of the respondent employers was excluded from the scope of the APESMA application as they had an enterprise agreement that has not yet passed its nominal expiry date.
In short, the Commission was not satisfied that any of these factors warranted a finding that the authorisation sought by APESMA should be dismissed.
Of particular note is the Commission’s consideration of the identifiable common interests and comparable business activities criteria set out in the FW Act.
What are “common interests” for the purposes of multi-employer bargaining?
Without a definition under the FW Act, the Commission found that the term “common interests” should be given its ordinary meaning. That is, “common” means “shared, joint, united” and “shared or joint” consistent with previous decisions. Similarly, “interests” means “concernment”, “business, concerns or cause”, “goals, principles and business concerns” and “characteristics or matters that impact or influence the organisation”.
That is to say that where the employers have shared or joint business, concern, goals or principles (among others), it will be difficult to argue against the common interest.
The Commission also identified that the “common interests” must be clearly identifiable, or plainly discernible or recognisable, however they need not be self-evident.
Despite the extensive evidence led by the respondent’s employers which articulated points of distinction by reference to location, mine life, mining method, equipment, transport considerations, geology, customers, production and conditions of employment, the Commission held that the respondent employers had not drawn the necessary connection between these distinctions and the facilitation of bargaining which would arise under the authorisation. The Commission went on to say that the claimed differences between them, such as conditions of employment, upon closer examination, revealed them to be attributes, rather than interests, and gave rise to interests that were common.
The outlier…
The outlier in this regard was the fourth employer respondent. That employer, by virtue of its sole commercial purpose of covering its costs of providing a reliable supply of thermal coal to one of its related bodies corporate in the generation of electricity, was found to be comprehensibly different to the commercial purpose of the other three employers who undertook their mining activities to make a profit from the sale of coal.
This, in turn, revealed different retention, attraction, price and bargaining priorities which distinguished its interests from the interests of the employers in a bargaining setting.
The reasonable comparability test
In respect of reasonable comparability, the Commission held that test is concerned with the respondent employer entities, and the enquiry is targeted at the ‘operations’ and ‘business activities’ of those specific entities. The Commission did, however, accept that the operational and business activities of the respondent employers may be influenced by their relationship within the broader corporate group structure and this context may have some relevance in understanding what the respondent employers do and why they do it.
Further, the Commission held that greater weight should be given to differences in operations and business activities of the respondent employers to the extent that these relate to the proposed coverage of the authorisation. In other words, greater weight should be attached to the operations and business activities of the respondent employers to the extent that they relate to the work performed by the employees proposed to be covered by the agreement and are connected to bargaining.
Distilling these points down, the interesting feature of the case is that the Commission took steps to anchor the considerations in new provisions to bargaining for the enterprise agreement which would occur under the proposed authorisation and the relevant employees who would be covered by the terms of any agreement which would be a product of that bargaining. As such, broader distinctions were able to be sidelined by the Commission once a focussing on bargaining with a particular group of employees occurred.
It was through this lens that the Commission was able to find that the authorisation by APESMA, in respect of 3 of the 4 employer respondents, should be granted.
Key takeaways for employers
If you are an employer who is faced with an application for a single interest authorisation, understanding the differences and similarities between you and your co-employers is important.
However, the next layer of that analysis needs to be on developing how these matters impact bargaining interests, goals and objectives such that it may be a point of distinction from another entity who may be at the bargaining table.
Through this approach, a more refined defence to an application, which not only goes to distinguish an employer from its counterparts, but also informs how those distinctions will impact an employer’s bargaining stance, interests, goals, objectives and drivers and ultimately militate against a finding that multi-employer bargaining should occur, will be possible.
Whether this line of reasoning prevails before the Federal Court is yet to be seen. However, Kingston Reid will keep you across the latest in this space as it unfolds.
Stay tuned to see whether the Federal Court walks back what some commentators have regarded as a return to centralised wage fixing not seen since the 1980s or whether enterprise level bargaining, focussed on single enterprise agreements as between employers and their employees, will remain as a core, primary objective in Australia’s industrial relation system.
[1] [2024] FWCFB 253
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The views expressed in this article are general in nature only and do not constitute legal advice.
Please do not hesitate to contact us if you require specific advice tailored to the needs of your organisation in relation to the implications of these changes for your organisation.