Great news for franchisors and parties who have similar interest businesses
Many smaller franchise operations or groups of employers who operate similar businesses, find it very difficult to manage industrial relations across the group. Individual Enterprise Agreements are expensive to negotiate and are often intimidated by having to deal with a Union that has more industrial relations resources than they do.
A recent case shows that there are solutions available.
The Fair Work Commission (“FWC”) has given a group of 7-Eleven franchise operators’ approval to bargain as a single interest group.
Section 248 of the Fair Work Act 2009 (Cth) (“FW Act”) relevantly provides that:
248 Single interest employer authorisations
(1) Two or more employers may apply to FWC for an authorisation (a single interest employer authorisation) under section 249 in relation to a proposed enterprise agreement.
(2) The application must specify the following:
(a) the employers that will be covered by the agreement;
(b) the employees who will be covered by the agreement;
(c) the person (if any) nominated by the employers to make applications under this Act if the authorisation is made.
Section 172(5) of the FW Act relevantly provides that:
Single interest employers
Two or more employers are single interest employers if:
(a) the employers are engaged in a joint venture or common enterprise; or
(b) the employers are related bodies corporate; or
(c) the employers are specified in a single interest employer authorisation that is in operation in relation to the proposed enterprise agreement concerned.
Pursuant to s.248(2)(a) above, 16 operators who are franchisees of the same franchisor, 7-Eleven, applied to the FWC, seeking an authorisation that they were a single interest employer under s.172(5) of the FW Act. They sought an Order that one of their number be the nominated person to apply under the Act.
Section 249 of the FW Act set out when the FWC must make a single interest employer authorisation:
Single interest employer authorisation
(1) FWC must make a single interest employer authorisation in relation to a proposed enterprise agreement if:
(a) an application for the authorisation has been made; and
(b) FWC is satisfied that:
(i) the employers that will be covered by the agreement have agreed to bargain together; and
(ii) no person coerced, or threatened to coerce, any of the employers to agree to bargain together; and
(c) the requirements of either subsection(2) (which deals with franchisees) or (3) (which deals with employers that may bargain together for a proposed enterprise agreement) are met.
(2) The requirements of this subsection are met if FWC is satisfied that the employers carry on similar business activities under the same franchise and are:
(a) franchisees of the same franchisor; or
(b) related bodies corporate of the same franchisor; or
(c) any combination of the above.
Employers that may bargain together for the agreement
(3) The requirements of this subsection are met if FWC is satisfied that all of the employers are specified in a declaration made under section 247 in relation to the agreement.
The Application was successful. The presiding Commissioner was satisfied the 16 operators met all the pre-conditions for a single interest employer authorisation, including that they all owned and carried on similar business activities under the 7-Eleven franchise.
In other words, there would be one negotiation, covering all sites for one enterprise agreement, applicable to all sites.
There was no opposition to the authorisation, which takes effect immediately.
If you’d like to know more, or discuss other aspects of your businesses industrial relations strategy, please let us know.