"The Fair Work Commission's recent controversial decision to issue a supported bargaining authorisation requiring McDonald's franchisees in South Australia to enter into multi-party bargaining arrangements has undoubtedly emboldened the SDA to bargain for a multi-employer agreement across all McDonald's restaurants," said Innes Willox, Chief Executive of the national employer association Australian Industry Group.
"The SDA application represents a dramatic and sadly inevitable escalation of the Government's multi-bargaining laws across the economy, well beyond what the Government suggested would occur when it pushed through the laws in late 2022. Employer warnings at the time of economy-wide implications of the laws on jobs, costs, business confidence and investment are now unfortunately coming to pass.
"An application seeking to cover all McDonald's restaurants will impact hundreds of franchisees who are separate employers. Bargaining across such a broad range of businesses will undoubtedly be very complex and costly if authorised by the Fair Work Commission.
"As we have previously warned, there is now a clear risk that thousands of employers in the fast food, retail, hospitality and many other sectors, will be 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.
"There is a real risk that this stream now operates as an unfair mechanism for unions to seek to evade safeguards in the existing bargaining stream that generally require unions to demonstrate that a workforce wants them to bargain with their employers before a business can be forced into bargaining with them.
"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.
"In the context of McDonald's there are also real questions about whether the SDA actually represents many employees working in the chain of restaurants, let alone whether the majority of workers who will be impacted by the union bargaining claims support their application.
"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.
"We always warned from the time leading up to the September 2022 Jobs and Skills Summit that the implementation of radical changes to bargaining laws would be a 'slow burn'. The implications and risk of the amendments are now clearly being demonstrated.
"The bargaining claim comes on the back of a separate SDA proposal to curtail the capacity of retail and fast food businesses to engage junior employees on discounted rates.
"Ultimately, there is a very real risk that unsustainable unions claims, pushed by the SDA through either bargaining or their award case, will undermine the viability of employers in the fast food industry continuing their model of offering employment opportunities to young workers.
"Employers in the fast food industry, such as McDonald's, are proud to offer thousands of young workers their first employment opportunity but they aren't a magic pudding that can accommodate dramatic cost increases. They operate in a highly competitive and cost-sensitive environment.
"Expert evidence advanced in the Award case by Australian Industry Group shows that the SDA's wage claim in the proceedings will cause thousands of young workers to lose their jobs. Efforts to achieve the same increases through bargaining would have similar impacts.
"The SDA seems determined to attack employment opportunities for young people in the fast food and retail sectors, despite there being few other sectors that offer a pathway into employment for these workers. It is a sad day when it is obvious that union claims will potentially deny employment opportunities to thousands of young Australians wanting to get their foot on the job ladder," Mr Willox said.
