Unions can now apply for 'single-interest authorization' with multiple employers
With many amendments to the Fair Work Act 2009 (Cth) (FW Act) over the last 12 months, one of the major changes that has occurred is the way employers, employees and unions collectively bargain in Australia. In particular, the concept of multi-employer bargaining has reshaped the landscape for the making of collective workplace agreements.
One version of multi-employer bargaining is where two, three or more employers voluntarily agree to bargain together for a multi-enterprise agreement. To date, this type of agreement has not been common. This is most likely due to the practical, operational and commercial difficulties in having two or more employers find common ground with which to bargain with employees.
Despite this, in New South Wales (NSW), the Australian Manufacturing Workers' Union (AMWU) has been attempting to negotiate with the air-conditioning industry for a multiemployer deal. The proposed four-year agreement would cover nine companies in the ventilation and air-conditioning industry that employ about 200 workers between them.
Employee bargaining representatives (under s. 248 of the FW Act) can now apply to the Fair Work Commission (FWC) for an authorisation (a single-interest employer authorisation) in relation to a proposed enterprise agreement that will cover two or more employers.
However, to succeed with a single-interest authorisation, s. 249 requires each of the employers to be “common interest employers,” on the basis that each has:
A common industry (e.g. black coal mining).
A common method of work (e.g. underground mining).
A common geographic location (e.g. NSW).
A common industrial instrument regulating employment in the enterprises (e.g. Black Coal Mining Industry Award 2020).
To date, the only single-interest authorisation that has been granted was by Deputy President Judith Wright in the air conditioning industry multi-employer matter referred to above.
In her decision, Deputy President Wright stated the employers indicated a wish and determination to bargain together and established a “readily identifiable common interest" in circumstances, including that they:
Perform work in the same industry.
Are members of the same industry association.
Are "often subject to the same process in tendering for and the performance of HVAC work."
Principally operate in the same geographic area.
Employ workers from the same labour pool.
However, while Deputy President Wright’s decision is a significant one, the decision on Friday 23 August by the Full Bench of the FWC to accept that the Association of Professional Engineers, Scientists and Managers, Australia (APESMA) had met the requirements for a single-interest bargaining authorisation under s. 248 of the FW Act is a game changer!
Why? Because the FWC’s decision allows APESMA approval to negotiate on behalf of particular occupations (deputies, undermanagers, shift supervisors and control room operators) across three different coal mines with three different employers for a proposed multi-employer agreement.
This means Peabody Energy, Glencore’s Ulan Coal and Whitehaven Coal (Respondent Employers) must engage in multi-employer bargaining with the APESMA in relation to these occupations (for at least the next 12 months) in circumstances whereby the employers did not wish to bargain collectively.
It means potentially, other occupations in mining, or other industries, that meet the requirements of s. 249 can engage in bargaining with multiple employers as a method for negotiating new collective agreements for their occupation or trade.
Collective bargaining between one employer, one union and one workforce can be difficult, time consuming and expensive. However, collectively bargaining with the necessary involvement of three or four employers is next level.
Interestingly, the decision did not extend to include the authorisation to apply to the Chain Valley Colliery, operated by Delta Energy. Delta Coal submitted that the operations and business activities of Delta Coal are not reasonably comparable with the other respondent employers for reasons that include:
It uses significantly different machinery compared to the other respondent employers.
Unlike the other respondent employers, Delta Coal utilises the bord and pillar method of mining.
Each respondent employer extracts different amounts of coal.
It does not undertake any activities of washing extracted coal.
Delta Coal supplies its extracted coal for the sole purpose of electricity generation, whereas the other respondent employers also supply their coal for the purpose of steel making.
Delta Coal sells extracted coal directly to a related company.
Delta Coal may be subject to legislation which does not apply to the other Respondent Employers, such as the Essential Services Act 1988 (NSW).
Mining at the Chain Valley Colliery does not involve any exploration, transportation or commercial marketing.
Delta Coal does not employ shift engineers free from coverage of an existing enterprise agreement.
The FWC agreed with Delta Coal, stating:
“In our view, the fact that Delta Coal’s business activities are materially different from that of the other Respondent Employers together, with other differences in its operations as referred to above, mean that it’s operations and business activities are not reasonably comparable to the other SIEA Employees in the manner contemplated by s. 249(1)(b)(vi) of the FW Act.
“As a result, we are satisfied that only Delta Coal has proven to the contrary the presumption that its operations and business activities are reasonably comparable with those of the other Respondent Employers.”
Employers wishing to avoid multi-employer bargaining need to understand their business, that of their competitors and the detail of their operations. Only then will employers have a chance to demonstrate to the FWC that their business activities are “materially different” to other employers and therefore not reasonably comparable for the purposes of a s. 249 single-interest employer authorisation.
Kim Hodge is a partner at Squire Patton Boggs in Perth. Steve Bowler is a director at Squire Patton Boggs in Perth.
