Employers blast ‘union-friendly’ bargaining system targeting McDonald’s  

With the Shop, Distributive and Allied Employees Association (SDA) looking to expand its successful application for supported bargaining to all McDonald’s workers, employers have called for government intervention.

After scoring a successful application with the Fair Work Commission to bargain on behalf of 5,000 South Australian McDonald’s workers, the SDA has moved on to the big fish – filing new applications to Maccas and its Aussie franchisees with a bid to give their 115,000 workers the right to also collectively bargain.

“That ruling by the Fair Work Commission confirmed what was always obvious: that McDonald’s stores, whether franchisees or corporate – share common interests and that workers should be able to bargain together,” said Gerard Dwyer, national secretary of the SDA.

“McDonald’s should accept the umpire’s decision and get on with negotiating with all its employees, who are the largest cohort of low-paid and overwhelmingly young workers in the country.”

Innes Willox, chief executive of the Australian Industry Group (Ai Group), previously lamented the commission’s decision pertaining to the South Australian workers, doubling down on the SDA’s new application.

“The SDA application represents a dramatic and sadly inevitable escalation of the government’s multi-bargaining laws across the economy, well beyond what the government suggested would occur when it pushed through the laws in late 2022,” said Willox.

“Employer warnings at the time of economy-wide implications of the laws on jobs, costs, business confidence, and investment are now unfortunately coming to pass.

“An application seeking to cover all McDonald’s restaurants will impact hundreds of franchisees who are separate employers. Bargaining across such a broad range of businesses will undoubtedly be very complex and costly if authorised by the Fair Work Commission.

“As we have previously warned, there is now a clear risk that thousands of employers in the fast food, retail, hospitality and many other sectors, will be dragged into multi-employer bargaining by unions against their will and without the support of the majority of their employees.

“This includes many small businesses that are struggling to survive in the current difficult trading environment.”

Willox, who coined the current bargaining system as “union-friendly”, argued that the contemporary system will prove to be a “real risk” for Australian employers moving forward.

“There is a real risk that this stream now operates as an unfair mechanism for unions to seek to evade safeguards in the existing bargaining stream that generally require unions to demonstrate that a workforce wants them to bargain with their employers before a business can be forced into bargaining with them,” Willox said.

“There is a real risk that this stream now operates as an unfair mechanism for unions to seek to evade safeguards in the existing bargaining stream that generally require unions to demonstrate that a workforce wants them to bargain with their employers before a business can be forced into bargaining with them.

“Australian Industry Group urges the federal government to introduce urgent amendments to the Fair Work Act to tighten up the scope of the supported bargaining stream, and to address the unintended consequences reflected in the FWC’s decision.”

Cheeseburger price increases

Speaking to HR Leader, Workvergent founder and managing IR consultant Troy Gread touched on the impact that these successful applications could have on consumers across Australia.

“… It means that Macca’s wages inevitably go up, and so does the cost of my triple cheeseburger with chips in it!

“We’ve already seen this new framework applied in industries like disability services, coal mining, and even local government. In each case, the FWC has been simply willing to find a ‘common interest’ among employers – even in the face of strong opposition.

“What’s particularly significant about this McDonald’s case is that it’s the first time we’ve seen these laws used in a large commercial setting, a franchise network with no government funding and a traditionally award-reliant, transient workforce,” Gread said.

Gread also spoke on Willox’s point regarding the SDA not having the majority backing of all McDonald’s staff across Australia, claiming that lacking that support could make that successful application even more paramount.

“If the SDA is successful here, it sets a powerful precedent: that unions can compel bargaining in private sector workplaces without historical unionisation, and without majority employee backing,” said Gread.

“This fundamentally changes the industrial risk profile for franchises, retail, fast food, and hospitality operators. Businesses that once assumed they were insulated by the award, or the absence of union activity are now squarely in scope.

“I’ve said before that we haven’t seen anything significant like this earlier, because clearly the unions need to be as organised as ever – this tells me they are now organised.”