The Fair Work Commission's decision to issue a supported bargaining authorisation requiring McDonald's franchisees in South Australia to bargain for a multi-employer agreement with the Shop, Distributive and Allied Employees' Association (SDA) is deeply disappointing and a vindication of long-standing employer concerns about the scope of the Federal Government's multi-employer bargaining measures.
The decision highlights the risk for thousands of employers in the fast food, retail, hospitality and many other sectors, of being dragged into multi-employer bargaining by unions against their will and without the support of the majority of their employees. This includes many small businesses that are struggling to survive in the current difficult trading environment.
The union-friendly supported bargaining stream was intended to operate in sectors where the employers and employees need a lot of support to bargain, typically because of the Government-funded nature of those sectors. This is the first time that a supported bargaining authorisation has been issued outside of a Government-funded sector.
Many hundreds of enterprise agreements have been made in the fast food industry and there is no reason why the main enterprise bargaining laws should not apply, including the requirement for a union to establish that the majority of employees support the negotiation of an enterprise agreement.
The Australian Industry Group urges the Federal Government to introduce urgent amendments to the Fair Work Act to tighten up the scope of the supported bargaining stream, and to address the unintended consequences reflected in the FWC's decision.
The recent Draft Report of the Review Panel that considered whether the bargaining laws were operating as intended, contains the following relevant comments:
"The Review Panel acknowledges that the ongoing matter in relation to McDonald's franchises in South Australia may, in future, require further consideration about the intended scope of the supported bargaining stream. However, until such time as the FWC has considered the evidence in that matter, it is premature to consider further changes."
Consistent with the above comments of the Review Panel, now that the FWC has issued its decision in the SDA v McDonald's case, the scope of the supported bargaining laws needs to be reconsidered.
Innes Willox is Chief Executive of the national employer association, Australian Industry Group
