Multi-Employer Enterprise Bargaining

By Chris Delaney ASIAL Workplace Relations Advisor

ASIAL reported on the changes, some of which have already taken effect and others are scheduled to be rolled out in the coming months.

In this article we discuss the changes to Enterprise Bargaining, which are the most dramatic since it was first introduced to employers and employees in 1993.

Multi-Employer Bargaining – we are told - has been introduced to streamline the negotiation process, leading to more consistent conditions across an industry. It is said to be particularly valuable in sectors where there are many small employers carrying out comparable services in an industry.

The new laws on Enterprise Bargaining came into effect on 6 June 2023 putting the power for bargaining in the hands of employees (and their Union representatives) and the Fair Work Commission. The focus now is on industry or sector-wide bargaining. The Government’s objective being to get wages moving

It may be good for employees and unions but will it be good for employers in the Security Industry?

The crucial changes affecting the bargaining process include:

• The power of employees (and their Unions) to force employers – and sometimes their competitors into negotiating Agreements including Multi-Employer Agreements; and

• Giving the Fair Work Commission power to intervene in bargaining by imposing arbitrated outcomes on parties without their consent.

Although employers (and their employees) may still seek to negotiate at the single enterprise level, the changes are essentially designed to facilitate agreements with multiple employers at either an industry level or with a group of employers with commonalty in their enterprises. Add the new power accorded to the Fair Work Commission (FWC) to intervene in bargaining by imposing arbitrated outcomes on parties without their consent, and it may be that the outcome of bargaining does not reflect the real needs of the employer parties.

We have to wonder if a Multi-Employer Enterprise Agreement will in reality just be a substitution for the prevailing Modern Award, albeit with higher rates of pay.

The 3 Multi-Employer Bargaining Streams

There are three streams covering “multi-employer agreements.“

1. Supported bargaining agreement - This is most likely to occur in low paid industries or those mainly dependent on minimum award wages. Under this stream a Union or employer can make an application to the FWC to make a Supported Bargaining Authorisation (SBA) forcing

“reasonably comparable” groups of employees and employers to bargain for an agreement. SBA replaces the current “low-paid bargaining” provisions which were intended to encourage employees and their employers in low-paid industries to negotiate an enterprise agreement.

2. Single-interest employer agreement - provides workers with common interests to bargain together and force businesses to negotiate with them. Unions to be able to “rope-in” employers to such agreements, which will be made along industry lines. In this stream the FWC has the power to make orders forcing a group of employers to participate in multi-employer bargaining without their agreement, where it is satisfied of sufficiently common interests.

3. Co-operative Bargaining Agreement - gives businesses an opportunity to opt in to agreements that they find appropriate for their business. However, employers with a current enterprise agreement would not be able to opt-in.

How will Security Industry Employers be affected?

While each of the streams will have a likely effect on security businesses, the most probable will be the supported bargaining stream

Section 243 of the Fair Work Act specifies that the FWC must make a supported bargaining authorisation, including consideration of “whether low rates of pay prevail in the industry or sector”, whether the employers have common interests, and the number of bargaining representatives involved, while s244 covers the removal and addition of employers to a supported bargaining authorisation. The Commission will take into account:

• pay and conditions — what the prevailing pay and conditions in the relevant industry or sector are, including whether low rates of pay are prevalent;

• common interests — whether the employers have clearly identifiable common interests, such as:

- a geographical location;

- the nature of the enterprises and the existing terms and conditions of employment in those enterprises;

- being substantially funded by government (state, territory or federal);

• bargaining representation — whether the likely number of bargaining representatives is manageable for a collective bargaining process, and;

• other matters — any other matters the Commission considers appropriate.

The Commission must also be satisfied that at least some of the employees are represented by a registered employee organisation (union).

The Supported Bargaining stream is likely to be attractive to unions, given that it is not subject to the same majority support requirements as Single Interest EAs.

The United Workers Union (and others) have already applied to the FWC to authorise multi-employer negotiations involving 65 employers and 12,000 workers in the early childhood education and care sector. The first hearing is set for August 2023.

The application states that the 65 employers have identifiable common interests, taking into account:

1. the commonality in the nature of their enterprises; and

2. the commonality in the terms and conditions of employment in those enterprises; and

3. that each of the employers are substantially funded, directly or indirectly, by the Commonwealth; and

4. that each of the employers have a common regulatory framework.

So, it appears that these changes are likely to significantly change the way enterprise bargaining agreements will be negotiated and as more bargaining disputes come before the FWC we will have a better insight into how, in practical terms, it may affect our industry.

It is important to note that there is an exemption for businesses with 20 staff or less however in the Security Industry there are many small businesses with more than 20 staff. These businesses could be forced to join the stream by a simple majority vote. Whether that happens in practice will depend on whether unions can organise a successful vote in individual workplaces. If businesses have 50 staff or less, they can also argue that they shouldn’t be forced to join.

Single-Interest Employer Agreement (SIEA)

A registered industrial organisation – Union – may make an application to the FWC seeking to force multiple employers to bargain together for a multi-enterprise agreement in the ‘single-interest employer stream’. Employers joined to an SIEA an not allowed to enter into any other bargaining agreement for a period of at least 12 months. That may be extended by the FWC on application from the Union(s) involved.

When considering approval of an SIEA the FWC must consider the following:

• At least some of the employees to be covered by the proposed multi-enterprise agreement must be represented by a union.

• A ‘majority’ of each employer’s employees to be covered by the proposed agreement must want to bargain for it.

• The employers have clearly identifiable common interests – which includes considerations as to geographical location, regulatory regime and the nature of employment, but is otherwise open ended.

• The authorisation is not inconsistent with the public interest.

• The operations and business activities of each employer must be reasonably comparable with those of the other employers.

• The employer must not have an enterprise agreement that is within its nominal expiry date.

• The employer must not have agreed in writing, with a relevant union, to bargain for a proposed singleenterprise agreement that would cover the employer and the employees.

• The employer must have at least 20 employees (including part-time employees and regular and systematic casuals).

Even if an employer has not been a party to negotiations for an SIEA once it is made, a Union can apply to the FWC to “rope-in” an employer where a majority of employees want to be covered and the FWC will be required to apply the SIEA if the above factors are met.

Employers with “current” Enterprise Bargaining Agreements

The new laws also make it easier for employees and their representatives to commence bargaining with employers for single employer enterprise agreements by simply making a written request to the employer. A request to commence bargaining needs to:

• Replace an existing single enterprise agreement that has passed its nominal expiry date;

• The nominal expiry date must be within the past 5 years; and

• The purpose is to replace agreements for substantially the same employees.

On receipt of a valid written request to bargain, the employer must take all reasonable steps to give a Notice of Employee Representational Rights (NERR) to employees to be covered by the agreement within 14 days. The bargaining process then begins.

What employers should do?

As stated earlier, the bargaining agreements are the most significant in the past 30 years. Like many changes to laws, until tested in courts and industrial tribunals we will not know how the changes will be interpreted and what is the best advice on how to approach bargaining.

However, employers should be conscious that it is more likely than not that their businesses will be affected by the change.

Every business should as far as reasonably possible keep well informed on industrial issues within the industry. Understand what is affecting your clients and competitors and understand your employees. When it comes to identifying how the changes will affect your business it is conducting a SWOT analysis to discover the strengths, weaknesses, opportunities and threats so that you can plan appropriately to manage the industrial relations as and when they arise.

More Info

ASIAL Members seeking further information or assistance should contact ir@asial.com.au

Note: The information provided above is for convenient reference only. ASIAL and Chris Delaney & Associates Pty Ltd provide this information on the basis that it is not intended to be relied upon in any cases, as the circumstances in each matter are specific. Accordingly, we provide this information for general reference only, but we advise you to take no action without prior reference to a workplace relations specialist.