A review of multi-enterprise bargaining

In late 2022, the Fair Work Act 2009 (Cth) (FW Act) received significant amendments to enterprise bargaining, which came into effect on 6 June 2023. Through the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth), amendments to the FW Act were made to increase access to single interest employer authorisations (SIE Authorisations) and multi-enterprise bargaining.

What are SIE Authorisations?

By way of background, SIE Authorisations are granted by the Fair Work Commission (FWC), to allow for the negotiation of multi-enterprise agreements. Historically, only employers were allowed to apply for SIE Authorisations, which limited the bargaining of multi-enterprise agreements. Amendments to the FW Act now allow bargaining representatives, such as unions, to apply for SIE Authorisations.

Once a SIE Authorisation has been granted, a multi-employer enterprise agreement is then able to be bargained and negotiated by multiple employers with the employee representatives. Once a multi-employer enterprise agreement has been negotiated, it is then submitted to the FWC for approval and will apply to the multiple employers and its employees covered by the agreement. Multi-employer agreements effectively operate the same as single enterprise agreements, except they apply to multiple employers.

Negotiating multi-enterprise agreements is most suitable when the interests of the various employers are aligned. The changes to SIE Authorisations have attracted some controversy, as employers can now be compelled to negotiate alongside one another, where interests may not align, further complicating and delaying an already complex bargaining process.

What is required for obtaining SIE Authorisation?

The FWC can approve a SIE Authorisations to cover an employer in circumstances where it is not against public interest to do so and there are clearly identifiable common interests of the employers, such as:[1]

1. the geographical location;
2. being covered by a common regulatory regime;
3. the nature and operation of the enterprises; and
4. the terms and conditions of employment in those enterprises.

In effect, this means that a SIE Authorisation, if approved, can compel employers with a common interest to co-operate with other employers to collectively bargain with employee representatives for a multi-employer agreement.

Can an employer be excluded from a SIE Authorisation?

Under the FW Act, an application for a SIE Authorisation cannot cover employers:[2]

1. with fewer than 20 employees;
2. with current enterprise agreements that cover its employees;
3. where there is agreement with an employee organisation to bargain for a replacement enterprise agreement; or
4. who are already in good faith bargaining for an enterprise agreement, who have a history of effective bargaining and is less than nine months since the nominal expiry.

If an employer does not fall under any of the exceptions above, there is lower risk that they may be captured by a SIE Authorisation. However, if none of the above exclusions apply, it is still possible for the employer to avoid being compelled to bargain with other employers.

It is a requirement for the FWC to be satisfied that the employers have a clearly identifiable common interest. In effect, this means that if an employer can show that they do not have a clearly identifiable common interest with the other employers, they can be excluded from a SIE Authorisation.

Test case for contesting SIE Authorisations

Until recently, applications for SIE Authorisations went uncontested, with the first contested SIE Authorisation being heard just recently in the FWC: Association of Professional Engineers, Scientists and Managers, Australia v Great Southern Energy Pty Ltd T/A Delta Coal, Whitehaven Coal Mining Ltd, Peabody Energy Australia Coal Pty Ltd, Ulan Coal Mines Ltd (APESMA Case).[3]

The APESMA Case provides some clarity and guidance on contesting employer inclusion in a SIE Authorisation. In this case, the Association of Professional Engineers, Scientists and Managers Australia, applied for a SIE Authorisation to cover 4 coal mining employers, by arguing all the employers held a common interest.

The FWC, in its ruling, acknowledged that employers in the same industry and covered by the same modern award may be enough in itself to constitute common interests.[4] In its ruling, the FWC concluded that the test that is required for comparing common interests, is to consider whether the employers intended to be covered by the SIE Authorisation have joint, shared, related or like characteristics, qualities, undertakings or concerns that will impact or influence them in relation to bargaining for an enterprise agreement.[5]

Decision

One of the four employers intended to be covered by a SIE Authorisation in the APESMA Case was successful in satisfying the FWC that their business did not share the common interest with the others. The excluded employer was able to distinguish its business operations and activities from the others. Some of the key factors the excluded employer presented to the FWC that distinguished them from the others were its:[6]

1. use of different machinery for its operations;
2. different method and purpose for coal mining; and
3. carrying out fewer business functions prior to and post coal extraction.

While this case is specific to the coal mining industry, it does highlight that employers intended to be covered by a SIE Authorisation may be excluded if they can clearly distinguish themselves from the other employers being covered. It is unclear what direct effect the APESMA decision will have on future SIE Authorisation applications, however, it is foreseeable that there will be more employers challenging their inclusion if the circumstances warrant it.

Conclusion

Navigating the enterprise bargaining process for a single enterprise agreement can be a significant burden for employers, which can be further complicated by involving multiple employers who may not have aligned interests.

To prepare, employers should consider moving quickly should an application for a SIE Authorisation include them and they are compelled to bargain with other employers as part of a multi-employer agreement negotiation.

If you require advice or further information on the above changes and how they could impact you, we are well positioned to provide you with tailored industrial relations advice, please do not hesitate to get in touch.

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Authored by:

Jonathon Hadley, Partner
Liam Elliott, Lawyer
Alexander Greig, Paralegal

[1] Fair Work Act 2009 (Cth) sections 248 and 249.

[2] Ibid sections 249(1B), 249(1D).

[3] Association of Professional Engineers, Scientists and Managers, Australia 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 253.

[4] Ibid at [347].

[5] Ibid at [345].

[6] Ibid at [349].