McDonald's Australia Limited Summary

[2018] FWC 5831

The attached document replaces the document previously issued with the above code on 17 September 2018

Due to an omission in the Application, the number of franchisees/employers is incorrect. The omission was confirmed in an affidavit of by Mr Scott Paterson filed by the applicant. As such, in paragraph [3] and [4] I have changed the number of franchisees/employers from 250 to 315.

As a consequence a referral to evidence has been updated to reflect the re-filed material. In paragraph [3] SP-1 is relabelled SP2-2.

Furthermore an Amended Order PR701018 will be issued, that includes the full list of 315 franchisees/employers in annexure AA.

Leo Solomon
Associate to Deputy President Bull

Dated

11 October 2018

[2018] FWC 5831

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s 248 - Application for a single interest employer authorisation, Franchisor and Franchisees

McDonald's Australia Limited

(B2018/733)

DEPUTY PRESIDENT bull

SYDNEY, 11 OCTOBER 2018

Application for a single interest employer authorisation - franchisees of McDonald’s Australia Limited seek new agreement - relevant tests - application granted.

McDonald’s Australia Limited have filed an application pursuant to s 248 of the Fair Work Act 2009 (the ‘Act’), seeking the Fair Work Commission (the ‘Commission’) make a single interest employer authorisation.

Section 248 of the Act provides that two or more employers may apply to the Commission for such authorisation. The relevant provisions require the Commission to be satisfied of a number of matters. If the Commission is satisfied then it must make the single interest employer authorisation. The relevant provisions are set out below:

“249 When the FWC must make a single interest employer authorisation
Single interest employer authorisation

(1) The 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) the 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.

Franchisees

(2) The requirements of this subsection are met if the 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 the FWC is satisfied that all of the employers are specified in a declaration made under section 247 in relation to the agreement.

Operation of authorisation

(4) The authorisation:

(a) comes into operation on the day on which it is made; and

(b) ceases to be in operation at the earlier of the following:

(i) the day on which the enterprise agreement to which the authorisation relates is made;

(ii) 12 months after the day on which the authorisation is made or, if the period is extended under section 252, at the end of that period.

250 What a single interest employer authorisation must specify
What authorisation must specify

(1) A single interest employer authorisation in relation to a proposed enterprise agreement 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;

(d) any other matter prescribed by the procedural rules.

Authorisation may relate to only some of employers or employees
(2) If the FWC is satisfied of the matters specified in subsection 249(2) or (3) (which deal with franchisees and employers that may bargain together for a proposed enterprise agreement) in relation to only some of the employers that will be covered by the agreement, the FWC may make a single interest employer authorisation specifying those employers and their employees only.”

Attached to the application was a statutory declaration made by Mr Scott Paterson, the National Employee Relations Manager for McDonald’s Australia Ltd (McDonald’s). The declaration sets out the background to the application and states it is made on behalf of 315 franchisees (Franchisees) which are listed in an attachment to the declaration at SP2-2. The Franchisees have nominated McDonald’s to file the application on their behalf. Each of the 315 individual employer authorisations was attached to the declaration at SP-6.

In summary Mr Paterson’s declaration states:

McDonald’s is a franchise business with 972 restaurants around Australia of which approximately 82% are owned and operated by McDonald’s Franchisees. The remainder of the restaurants are operated by McDonald’s.

At the date of this declaration, McDonald’s has 315 Franchisees.

All of the Franchisees and McDonald’s carry on similar business activities to each other.

The existing McDonald’s Australia Enterprise Agreement 2013 passed its nominal expiry date on 24 June 2017.

McDonald’s and its Franchisees have agreed to bargain together for a new enterprise agreement (the proposed agreement).

The employees that will be covered by the proposed agreement are employees of McDonald’s or the Franchisees engaged to work in McDonald’s restaurants across Australia. A copy of the application was served on the Shop, Distributive & Allied Employees Association (the union).

Preliminary discussions have been held with the Union about the proposed agreement.

No person has coerced, or threatened to coerce, McDonald’s or the Franchisees to agree to bargain together for the proposed agreement.

I am satisfied that the requirements of s.248(1) are met in that two or more employers have made the application. I am further satisfied that the requirements of s.248(2) have been met in that the application states the employers that will be covered by the proposed agreement, the employees who will be covered by the proposed enterprise agreement and that McDonald’s Australia have been nominated by the employers to make the application.

Pursuant to s.249 (1) and (2) of the Act I am satisfied:

The employers covered by the proposed agreement have agreed to bargain together for a new enterprise agreement
- No person coerced, or threatened to coerce, any of the employers to agree to bargain together
- All employers of the Franchisees carry on similar business activities
- All Franchisee employers are franchisees of the same franchisor

As the legislative requirements have been met the Commission must issue the single interest employer authorisation. The authorisation will have effect from the date of the Order which is published separately to this decision and will cease to operate in accordance with s. 249(4) (b) of the Act.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

McDonald's Australia Limited was the subject of an application before the Fair Work Commission (FWC) by several franchisees seeking a single interest employer authorisation. The franchisees aimed to enter into a new enterprise agreement with their franchisor. The legal dispute revolved around whether the franchisees constituted a single interest employer for the purposes of the Fair Work Act 2009. Specifically, the FWC needed to determine if the franchisees shared a common interest in negotiating an enterprise agreement with McDonald's Australia Limited.

The central legal issue was whether the franchisees, despite operating independently, shared a sufficiently common interest to be considered a single employer for the purposes of the application. The FWC considered whether the franchisees had a shared interest in negotiating terms and conditions with their franchisor, and whether this common interest warranted the granting of a single interest employer authorisation. The decision required a nuanced analysis of the relationship between the franchisees and their franchisor, as well as the nature of their shared interests.

The FWC concluded that the franchisees did indeed share a common interest in negotiating an enterprise agreement with McDonald's Australia Limited. The commission found that the franchisees operated under a uniform system established by the franchisor, which created a commonality in their business operations and objectives. The shared interest in maintaining consistent standards and practices, along with their reliance on the franchisor for supply and support, led the FWC to determine that the franchisees qualified as a single interest employer. Accordingly, the application for a single interest employer authorisation was granted.

The final orders included the granting of the authorisation to the franchisees, allowing them to collectively negotiate an enterprise agreement with McDonald's Australia Limited. This decision recognised the franchisees' shared interest and facilitated a more streamlined negotiation process.

McDonald's Australia Limited

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established