McDonalds Australia Pty Ltd v SDA

FWA sets some guidelines for agreement approval

http://www.fwa.gov.au/decisionssigned/html/2010fwafb4602.htm

McDonalds appealed against a decision of McKenna C of FWA refusing to approve the McDonalds Australia Enterprise Agreement 2009, on grounds including that the pre-approval steps had not been complied with and the agreement did not pass the no-disadvantage test. The McDonalds agreement was made in collaboration with the SDA and covered approximately 80,000 employees across Australia.  

The Full Bench found that FWA’s role is facilitative in nature, and that enterprise agreement parties have the primary role in the making of the agreements. It emphasized that enterprise agreement approval requirements should be considered in a ‘practical, non-technical manner’ and that FWA should make reasonable efforts to clarify matters with parties or to seek undertakings to resolve concerns where necessary as an alternative to refusing approval of an agreement.  

In relation to the pre-approval steps, the Full Bench found:

• the application could not have been dismissed because statutory declarations filed in support of the agreement were deficient, without FWA having first sought further information to remedy any deficiencies;
• communications with employees (including joint communications with the SDA) should be assessed by adopting ‘a fair view of the communications as a whole’, rather than trying trying to find defects in the process;
• the Act requires employers to take ‘reasonable steps’ to ensure employees have access to information, not to demonstrate definitively that every employee actually received and understood the information;
• a full explanation of the agreement terms is not required prior to an employer requesting employees to vote on an agreement as long as reasonable steps are taken to explain the agreement, and explanations are not precluded during the access period;
• collaborating with employee bargaining representatives to explain the terms of an agreement to employees would be taking reasonable steps;
• explanations to different groups of employees (eg. young people, women, people from non-English speaking backgrounds) do not have to be differentiated if the method of explanation is adequate for all;

In relation to the no-disadvantage test, the Full Bench found that:

• it is not relevant to compare the agreement and the National Employment Standards;
• the effect of provisions of the agreement should be considered as a whole; and
• while there was some disadvantage to employees in comparison with the relevant awards, this was minimised by undertakings given by McDonalds or was confined to a small proportion of employees flowing from the adoption of uniform national standards or contingent on future events.

On balance, the Full Bench found that the agreement passed the no-disadvantage test, and approved the agreement.

Note: this decision dealt with an agreement assessed against the no-disadvantage test, because it was made during the bridging period. However, many of the findings in the decision are equally applicable to enterprise agreements assessed under the better off overall test under the Fair Work Act 2009. 

McDonalds appealed against a decision of McKenna C of FWA refusing to approve the McDonalds Australia Enterprise Agreement 2009, on grounds including that the pre-approval steps had not been complied with and the agreement did not pass the no-disadvantage test. The McDonalds agreement was made in collaboration with the SDA and covered approximately 80,000 employees across Australia.  

The Full Bench found that FWA’s role is facilitative in nature, and that enterprise agreement parties have the primary role in the making of the agreements. It emphasized that enterprise agreement approval requirements should be considered in a ‘practical, non-technical manner’ and that FWA should make reasonable efforts to clarify matters with parties or to seek undertakings to resolve concerns where necessary as an alternative to refusing approval of an agreement.  

In relation to the pre-approval steps, the Full Bench found:

• the application could not have been dismissed because statutory declarations filed in support of the agreement were deficient, without FWA having first sought further information to remedy any deficiencies;
• communications with employees (including joint communications with the SDA) should be assessed by adopting ‘a fair view of the communications as a whole’, rather than trying trying to find defects in the process;
• the Act requires employers to take ‘reasonable steps’ to ensure employees have access to information, not to demonstrate definitively that every employee actually received and understood the information;
• a full explanation of the agreement terms is not required prior to an employer requesting employees to vote on an agreement as long as reasonable steps are taken to explain the agreement, and explanations are not precluded during the access period;
• collaborating with employee bargaining representatives to explain the terms of an agreement to employees would be taking reasonable steps;
• explanations to different groups of employees (eg. young people, women, people from non-English speaking backgrounds) do not have to be differentiated if the method of explanation is adequate for all;

In relation to the no-disadvantage test, the Full Bench found that:

• it is not relevant to compare the agreement and the National Employment Standards;
• the effect of provisions of the agreement should be considered as a whole; and
• while there was some disadvantage to employees in comparison with the relevant awards, this was minimised by undertakings given by McDonalds or was confined to a small proportion of employees flowing from the adoption of uniform national standards or contingent on future events.

On balance, the Full Bench found that the agreement passed the no-disadvantage test, and approved the agreement.

Note: this decision dealt with an agreement assessed against the no-disadvantage test, because it was made during the bridging period. However, many of the findings in the decision are equally applicable to enterprise agreements assessed under the better off overall test under the Fair Work Act 2009.