McDonald’s Australia Enterprise Agreement 2009 Appeal [2010] FWAFB 4602

A Full Bench of Fair Work Australia (FWA) (Vice President Watson, Senior Deputy President Kaufman and Commissioner Raffaelli) on the 21 July 2010, have handed down its reasons for a decision in an appeal relating to the McDonald’s Australia Enterprise Agreement 2009. The decision at first instance was reported in Workplace Review (see (2010) 1 WR 20) in an article entitled “Egg McMuffin Over The Face” dealing with the decision of Commissioner Donna McKenna ([2010] FWA 1347 ,23 April 2010), in which she refused to approve the Enterprise Agreement covering McDonald’s 80,000 employees at its many outlets throughout Australia.

The Full Bench referred to Commissioner McKenna’s very lengthy decision, in which she dismissed  the application on each of the following grounds:

1. “The application, even with supplementary declarations, remains deficient as to the provision of required information;
2. McDonald’s did not take the required steps under s 180(3) of the Act;
3. McDonald’s did not discharge its responsibilities concerning the provision of information to satisfy the requirements of s 180(5)(a) of the Act;
4. The application failed to address the obligations in s 180(5)(b) and s 180(6) of the Act;
5. The employees who voted in favour of the Agreement cannot be said to have generally agreed to the Agreement;
6. There was a failure to comply with the provisions of s 180(2) of the Act;
7. The Agreement does not satisfy the no-disadvantage test.” [6]

The Full Bench stated that:

“The appeal under s 604 of the Fair Work Act is that of a re-hearing and the predecessor provisions in the Work Place Relations Act are equally applicable under the Fair Work Act.  Further, a successful appeal requires the identification of error on the part of the primary decision maker.”  [8]

The Full Bench neatly summarises the principles governing appeals under  the Act. This case is a good primer for anybody needing to understand  in a nutshell, what  appellate principles will be applied by Full Benches  .  (See [8]-[11] inclusive).

Commissioner McKenna below had said that each of the matters upon which she decided to reject the approval of the Enterprise Agreement alone, would have led to its demise let alone cumulatively.  The Full Bench dealt with  each of the  matters referred to above.It found that each finding  of the tribunal at first instance, was in error and amenable on appeal.

Some of the McNuggets of wisdom proffered by the Full Bench in setting aside the Commissioner’s decision were variously described as:

(i)    “(it) imposed additional statutory tests contrary to the terms of (the Act) [21]”; 

(ii)  “(Its) approach was not consistent with the Act [25]”;

(iii) “(It) mis-stated the (statutory) test [29] – [41]”;

(iv) “(The Commissioner) erred in her approach [34]”;

(v)  “No proper basis for (so) concluding [39]”; and

(vi) “(The Commissioner’s) conclusions were unsustainable [50].”

It appears what the Commissioner neglected to have regard to in an overall sense were the objects of the Act, in that the Fair Work Act was to provide a simple, flexible and fair framework for enterprises (s 171(a)).  Further, an object of Fair Work Australia was to facilitate the making of enterprise agreements (s 171(d)).  The Full Bench said:

“In considering the facilitative aspects of these objectives, the approval of enterprise agreements should be considered in a practical, non-technical manner and that reasonable efforts should be made to clarify matters with the parties and consider undertakings to clarify all remedy concerns to the extent that they may be available under s 190 of the Act” [13].

The union’s argument, inter alia, suggested that the Commissioner had an approach of “trying to find defects” [24].

An aspect of the Full Bench approach, in stark contrast to the approach of the Commissioner, was in the language used to describe either the parties or aspects of the proposed Enterprise Agreement.  The Commissioner had described parts of the Enterprise Agreement as “industrially confronting”[1] “exploitative”[2] whereas the Full Bench praised the “collaborative approach of the parties and commended them for their efforts [26].”

This decision comes no doubt as a great relief to McDonald’s, but more particularly to Australia’s largest and politically powerful union the socially conservative  Shop Distributive and Allied Employees’ Association (SDA).  One thing however is certain, that  after having digested this judgment one member of FWA will not be sitting down for a Happy Meal anytime soon.

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[2010] FWA 1347 at [118]