How will potential changes to multi-enterprise bargaining affect employers?

Saul Harben, Jesse Rutigliano
26 Sep 2022 Time to read: 1 MIN

Employers should take note of any developments in single or multi-enterprise bargaining so they are fully aware of their changing obligations and duties.

The utilisation of multi-enterprise agreements is currently a hotly debated topic in Australian federal industrial relations, with the current Government suggesting amendments to the Fair Work Act 2009 (Cth) (FW Act) are imminent.

So, what is a multi-enterprise agreement and how does it differ from a single enterprise agreement?

A multi-enterprise agreement is an enterprise agreement that connects more than one employer to a group of works usually in the same industry – for example a multi-enterprise agreement could cover ten distinct Aged Care employers and their respective employees – whereas a single enterprise agreement is between a single employer and a group of their employees.

As it stands, bargaining for a multi-enterprise agreement can only occur where two or more employers voluntarily agree to bargain together, thus there is no ability for employees to put forth a majority support determination to the Fair Work Commission when an employer and/or employers have not agreed to bargain.

However, a union entitled to represent the industrial interests of a covered employee(s) to the multi-enterprise agreement may apply for a low-paid authorisation, which if granted will trigger obligations on the employer(s) to bargain in good faith, and to give employees a notice of employee representational rights. In addition, employer(s) may be subject to bargaining orders (if applied for by covered employees).

What is the multi-enterprise bargaining debate about?

Employer associations and industry groups hold concerns that on the introduction of multi-enterprise bargaining will lead to increased bargaining disputation, reduction in productivity gains and industry wide industrial action. The Minister for Employment and Workplace Relations, Tony Burke, has made it clear that the current Government aims to introduce multi-enterprise bargaining for low-paid workers without allowing sector-wide or industry-wide strikes.

The unions’ views are that with the increased use of multi-enterprise bargaining there will be an increase in wages for covered employees due to the increase in leverage and bargaining power that comes with larger groups of employees.

The Government’s proposed amendments are yet to be seen, with the consultation process with peak bodies and unions still underway.

Key takeaways for employers

It is clear that the Government will propose amendments to the FW Act in order to make multi-enterprise bargaining more accessible. It is important that employers take note of these changes and any developments in single or multi-enterprise bargaining in order to ensure they are fully aware of their changing obligations and duties.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.