Single interest employer authorisations

30 November 2022

Under the current legislation, there are three different types of multi-employer enterprise agreements (EAs):

  • Low paid authorisations;
  • Multi-EAs; and
  • Single interest employer authorisations (SIAs).

The Bill proposes to allow multiple employers to bargain together for a single interest enterprise agreement, in wider circumstances permitted under the current legislation.

In the second reading speech, key changes to the single interest bargaining stream were outlined as follows:

Under our changes, employers in the single-interest stream must have clearly identifiable common interests and the Fair Work Commission must be satisfied that it is in the public interest.

We want to see businesses competing on quality, on innovation, on product and service offerings—not on who can pay the lowest wage. If we are going to get wages moving, we need to stop the race to the bottom.

The proposed changes will:

  • Allow employee bargaining representatives, as well as just employers, to apply for a SIA.
  • Remove the current requirement for two or more employers with common interests who are not franchisees or otherwise single interest employers to apply for a Ministerial declaration prior to obtaining a SIA from the Fair Work Commission (FWC).
  • Allow unions to organise protected strikes across workplaces provided the businesses have a “common interest.”
  • Allow the FWC to make a SIA covering an employer with or without its consent, in the following circumstances:
    • The employer(s) agree to bargain or a majority of employees who are employed by the employer(s) and who will be covered want to bargain;
    • The employers have clearly identifiable common interests (such as geographical location, being regulated by a common regulatory regime and the nature of the enterprises to which the single interest EA will relate);
    • The group of employees to be covered by the SIA was fairly chosen (having regard to whether the group is geographically, operationally or organisationally distinct);
    • At least some of the employees that will be covered by the SIA are represented by an employee organisation;
    • The employers and bargaining representatives of employees of those employers have had an opportunity to express to the FWC their views on the single interest EA; and
    • It is not contrary to public interest to do so.

The FWC cannot make a SIA unless the FWC is satisfied that all of the following apply:

  • The employer is not a small business (*currently a business with 15 or fewer employees).
  • The employer is not currently awaiting a decision for another SIA.
  • The employer is not specified in a single interest EA or Supported Bargaining Agreements in relation to employees that would be covered by a single interest authorisation being considered.
  • The employer is not currently covered by an EA that has passed is nominal expiry date.

In a most recent media release announced by the Minister for Industrial Relations, the Honourable Tony Burke, advised the following amendments will be included as part of the changes to SIAs:

  • Amend the definition of ‘small business employer’ to fewer than 20 employees in the single interest stream.
  • Increase the FWC’s discretion to refuse to issue a single interest authorisation from six months to nine (9) months from the nominal expiry date of an existing single enterprise agreement, where bargaining is occurring in good faith.
  • The introduction of a “reasonably comparable” test that the FWC must consider for all common interest employers.
  • Empower the FWC to remove a business with fewer than fifty employees from a single interest authorisation either where their circumstances change or where the majority of employees vote for it, subject to appropriate safeguards.
  • Increase the ‘minimum bargaining period’ for the purpose of an intractable bargaining declaration to 9 months, commencing after either the nominal expiry date of the agreement or 9 months from the commencement of bargaining, whichever is later.

The proposed changes will see businesses bargain for agreements that cover multiple employers, with limited opportunities to remove themselves from the agreements or proposed agreements. Employers and employee organisations would be able to apply to the FWC for approval of a variation to extend coverage of an existing single interest employer agreement to a new employer and its employees, subject to meeting specified requirements.

Employers should consider these potential changes, watch for final amendments and begin assessing how these proposed changes will impact current bargaining models and strategies.

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