Following the Secure Jobs, Better Pay (“SJBP”) reforms which brought in changes to enterprise bargaining, the Fair Work Commission (“FWC”) has handed down a “test case” decision that provides guidance as to when it will (and will not) grant a single interest employer authorisation (“SIEA”).

What is a single interest employer authorisation?

Enterprise bargaining often occurs between a single employer and a group of its employees. However, multi-enterprise bargaining can also occur between multiple employers and a cohort of employees across workforces. SIEAs require a group of employers to bargain for a multi-enterprise agreement.

Case background

In this case, a union representing employees who were employed by four black coal mining companies (“Respondent Employers”) applied for a SIEA. The FWC granted the SIEA in relation to three of the four employers, forcing them to bargain with employees for a multi-enterprise agreement.

When will a SIEA be made?

The Fair Work Act 2009 (Cth) sets out the requirements for the FWC to make a SIEA.

The FWC has to determine whether the Respondent Employers:

• had clearly identifiable common interests; and
• had operations and business activities that were reasonably comparable with one another.

Unless the Respondent Employers could prove otherwise, the FWC would need to grant the SIEA (with all other requirements being met).

Clearly identifiable common interests

The Full Bench of the FWC examined whether the Respondent Employers had “joint, shared, related or like characteristics, qualities, undertakings or concerns” that would impact or influence them in relation to bargaining. The broad considerations included:

• geographical location;
• regulatory regimes applicable to the enterprises;
• the nature of the enterprises to which the agreement would relate; and
• terms and conditions of employment in the enterprises.

One of the Respondent Employers was able to distinguish itself as its commercial interest was only to supply coal within a corporate group subsidised at a loss.

Having regard to the above, the other Respondent Employers had apparent commonalities across their operational interests and so were found to have clearly identifiable common interests.

Reasonably comparable operations and business activities

This separate but connected consideration looked at how the enterprises of the Respondent Employers operated and what goods and services they provided, and if that rendered a SIEA inappropriate. The FWC found that the Respondent Employers (excluding the one mentioned above) were reasonably comparable because:

• they all operated underground black coal mines in the same industry predominantly for competitive export to industrial users in Asia;
• they all operated in rural NSW and so faced similar staffing difficulties;
• the work being performed by relevant SIEA employees was similar;
• they were subject to common regulatory regimes;
• while facing unique environmental challenges, they all confronted different stressors associated with the geology of their mines; and
• they all used longwall mining methods.

While one of the three mines was far smaller, older and less profitable, with a foreseeable alteration or cessation of operations in the near future, this was not sufficient to create a clear distinction. The FWC noted that in the event of those adverse circumstances eventuating, the respondent employer could apply to be removed from the single interest employer authorisation.

Takeaways for employers

The SJBP reforms have made it easier for employees and bargaining representatives to access a system of costly and complex multi-enterprise bargaining. Employers that have historically not engaged in complex bargaining or who have only bargained as individual enterprises may find they are “roped in” as part of broader industrial strategies.

We note the decision has now been appealed in the Federal Court of Australia. We will keep you updated of any significant developments.