The changes to enterprise bargaining introduced under the Fair Work Act 2009(Cth) (FW Act) have enabled groups of employers, such as franchisees, to bargain for one overarching single-enterprise agreement, where Fair Work Australia (FWA) authorises them to do so.
The FW Act has replaced the previously available “union” and “non-union” enterprise agreements with two types of enterprise agreements; single-enterprise and multiple-enterprise agreements. This presents employers such as franchisees with the option to move into the multi enterprise agreement stream or remain in the single-enterprise stream.
A single enterprise agreement is an agreement made between a single employer and some or all of their employees. This is the most common form of enterprise bargaining and there is no requirement to seek authorisation or to notify FWA that the parties wish to bargain for such an agreement.
Single-interest employer authorisation
The FW Act has introduced into the single-enterprise stream the concept of single-interest employers. These are employers who operate in a related way or share such a common interest that they may bargain together for a singleenterprise agreement (i.e. franchisees). Employers may bargain as a singleinterest employer where FWA has authorised them to do so by granting those employers an Single Interest Employer Authorisation (SIEA).
The consequences of a group of employers being brought into the single enterprise stream by an SIEA include:
- the employers will be able to bring a range of franchisees in various locations under one single enterprise agreement
- employees can take protected industrial action
- the vote required for approval is the majority of all employees who vote (not a majority of the employees of each franchisee/ employer)
- unions are prevented from obtaining scope orders against employers.
However, unions and or employees are not prevented from seeking Majority Support Determinations and Bargaining Orders or Serious Breach Declarations against an employer.
FWA must make an SIEA on application by a group of employers where it is satisfied that those employers to be covered by the agreement have agreed without coercion or threat to bargain together and either:
- the employers carry on business under the same franchise system and are franchisees of the same franchisor or related bodies corporate of the same franchisor, or
- the employers have been granted a Ministerial Declaration that they may bargain together.
A recent SIEA example: KFC
On 19 October 2009 FWA granted its first SIEA under section 249 of the FW Act in favour of Yum! Restaurants Australia Pty Ltd, the owner of the KFC franchise.
This SIEA decision enables the KFC franchisees to bargain together for a single-enterprise agreement with their employees.
The SIEA means that any enterprise agreement struck by the KFC franchisees and their employees will operate in respect of all restaurant workers, commissaries and homedelivery call centre employees employed across almost 50 KFC outlets.
The Domino’s experience
Franchisees should note that it is vitally important to ensure that the form and content of an SIEA application is correct.
In a recent decision of FWA involving an SIEA application by Domino’s Pizza Enterprises Limited (Domino’s) FWA required Domino’s to provide amended application documents to:
- properly identify the name of the franchisee
- include a complete copy of the authorisation form
- state the name of the authorised representative of the franchisee
- include the title of the authorised representative of the franchisee in compliance with the FW Act.
Following this amendment to the SIEA application materials, FWA found that the preconditions under the FW Act had been met, and accordingly, the SIEA could be granted to Domino’s.
Important considerations for franchisees and common interest employers
Franchisees and Franchisors who wish to bargain together to establish common terms and conditions of employment throughout the franchise business should consider whether an SIEA would assist them in the bargaining process.