Federal Court of Australia

Ardeen Pty Ltd v Shop, Distributive and Allied Employees Association [2026] FCAFC 93

ORDERS

THE COURT ORDERS THAT:

1.    The applicants have leave to rely on the sixth ground of review set out in their written submissions in reply.

2.    The originating application is dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    The 18 applicants operate fast food outlets in South Australia, trading as McDonald’s. They operate their businesses as unrelated entities and as Licensees under franchise agreements with the same franchisor, McDonald’s Australia Limited (MAL). Between them, they have approximately 4,500 employees. MAL itself operates a number of McDonald’s outlets in South Australia.

2    Part 2-4 of the Fair Work Act 2009 (Cth) (FW Act) contains provisions for the creation of enterprise agreements and erects different statutory schemes (known as streams) under which they may be bargained for. The Licensees’ employees are not presently covered by an enterprise agreement.

3    The respondent, Shop, Distributive and Allied Employees Association (SDA) is an employee organisation for the purpose of the FW Act.

4    On 30 June 2025, a Full Bench of the Fair Work Commission (FWC) made a supported bargaining authorisation under s 243 of the FW Act on SDA’s application. Written reasons for granting the authorisation are published as Application by Shop, Distributive and Allied Employees Association [2025] FWCFB 130 (Decision). An effect of the authorisation was to compel the Licensees and their employees to bargain together for a multi-enterprise agreement known as a supported bargaining agreement. Another effect was to empower the FWC to provide such assistance as it considered appropriate to facilitate bargaining for the agreement. Those powers include powers of intervention in the event that the participants in the bargaining process become intractable: FW Act, s 235. In addition, for so long as the supported bargaining authorisation is in operation, the only kind of enterprise agreement the Licensees may make is a supported bargaining agreement. They must not initiate bargaining for an enterprise agreement of any other kind: FW Act, s 172(7). In short, they are compelled to bargain (and to bargain together) when otherwise they could not have been forced to do so.

5    This is the Licensees’ application for orders in the nature of writs of certiorari and mandamus, quashing the Decision and compelling the Full Bench to determine SDA’s application according to law. To succeed on the application, the Licensees must show that the Decision is affected by jurisdictional error.

6    For the reasons that follow, the grounds for the application are not made out and the originating application will be dismissed.

BARGAINING STREAMS UNDER THE FAIR WORK ACT

7    An enterprise agreement is an agreement pertaining to one or more of the matters mentioned in s 172 of the FW Act. They include matters relating to the relationship between the employer and employees covered by the agreement, or matters relating to the relationship between the employer the employee organisation(s) covered by the agreement. Relevantly, a “single-enterprise agreement” is one made by an employer or two or more “related” employers with the employees who are employed at the time the agreement is made: FW Act, s 172(2). A “multi-enterprise agreement” is defined in s 172(3) as follows:

Multi‑enterprise agreements

(3)     Two or more employers that are not all related employers, or that are all related employers mentioned in subsection (3A), may make an enterprise agreement (a multi‑enterprise agreement):

(a)     with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or

(b)     with one or more relevant employee organisations if:

(i)     the agreement relates to a genuine new enterprise that the employers are establishing or propose to establish; and

(ii)     the employers have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement.

(notes omitted)

8    As observed in the recent Full Court decision of Ulan Coal Mines Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia (2025) 311 FCR 352 at [7]-[12] and [14], Part 2-4 of the FW Act marks a significant departure away from the traditional path to collective agreement making since 1904. Under previous regulations, collective (enterprise) agreements arose from the joint will of employers and employees (and their representatives) at the enterprise level to bargain. Part 2-4 proscribes alternative bargaining pathways for the making of enterprise agreements, known as bargaining streams. Those streams include “supported bargaining” under Div 9 where persons may apply to the Commission for a “supported bargaining authorisation” (as is the case here) where certain conditions are met and the authorisation is deemed “appropriate”. Another stream is that of “single interest employer authorisations” as prescribed under Div 10 (which was the subject of the Ulan decision), where again an application can be made and is the subject of certain conditions (including, without being exhaustive, and differently from an application under Div 9, the need for a majority of employees who want to bargain for the agreement). Each of the new streams can force employers (in this case the Licensees) to bargain with a bargaining agent or union against their will.

9    Section 172(7) provides that if an employer is specified in a supported bargaining authorisation that is in operation, the only kind of enterprise agreement the employer may make with the employees specified in the authorisation is a supported bargaining agreement, and the employer must not “initiate bargaining, agree to bargain, or be required to bargain with those employees for any other kind of enterprise agreement”.

10    Division 9 of Part 2-4 of the FW Act is headed “Supported bargaining”. Under s 242, the persons who may apply to the FWC for a supported bargaining authorisation include an employee organisation that is entitled to represent the industrial interests of an employee in relation to the work to be performed under the agreement.

11    The power to make a supported bargaining authorisation is conferred on the FWC under s 243 of the FW Act:

243    When the FWC must make a supported bargaining authorisation

Supported bargaining authorisation—main case

(1)    The FWC must make a supported bargaining authorisation in relation to a proposed multi-enterprise agreement if:

(a)    an application for the authorisation has been made; and

(b)    the FWC is satisfied that it is appropriate for the employers and employees (which may be some or all of the employers or employees specified in the application) that will be covered by the agreement to bargain together, having regard to:

(i)    the prevailing pay and conditions within the relevant industry or sector (including whether low rates of pay prevail in the industry or sector); and

(ii)    whether the employers have clearly identifiable common interests; and

(iii)    whether the likely number of bargaining representatives for the agreement would be consistent with a manageable collective bargaining process; and

(iv)    any other matters the FWC considers appropriate; and

(c)    the FWC is satisfied that at least some of the employees who will be covered by the agreement are represented by an employee organisation.

Note:    This subsection is subject to section 243A (restrictions on making supported bargaining authorisations).

Common interests

(2)    For the purposes of subparagraph (1)(b)(ii), examples of common interests that employers may have include the following:

(a)    a geographical location;

(b)    the nature of the enterprises to which the agreement will relate, and the terms and conditions of employment in those enterprises;

(c)    being substantially funded, directly or indirectly, by the Commonwealth, a State or a Territory.

…

What authorisation must specify etc.

(3)    The authorisation must specify:

(a)    the employers that will be covered by the agreement; and

(b)    the employees who will be covered by the agreement; and

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

Operation of authorisation

(4)    The authorisation comes into operation on the day on which it is made.

12    Section 243A imposes restrictions on that power. They include a prohibition on the making of a supporting bargaining authorisation if it specifies an employer or an employee who is covered by a single-enterprise agreement that has not expired.

13    An effect of the supported bargaining authorisation is that SDA has become the bargaining representative for most (if not all) of the employees mentioned in the authorisation: FW Act, s 176(1), (2).

14    Whilst the supported bargaining authorisation is in operation, the FWC may, of its own initiative, provide to the bargaining representatives such assistance as it considers appropriate to facilitate bargaining for the agreement, and that it could provide if it were dealing with a dispute: FW Act, s 246(2). The facilitative powers of the FWC include those contained in Div 8 of Part 2-4. They include the power to make an intractable bargaining declaration, provided that certain conditions are met: FW Act, ss 234, 235.

15    As adverted to above, these new provisions erect a number of means by which a bargaining process may be commenced under the FW Act. Among them are the provisions in Div 10 of Part 2-4 relating to single interest employer authorisations. If made on the application of a bargaining representative under s 248(1)(b), the affected employers must either consent (FW Act, s 249(1)(b)(iv)), or there must be majority support for bargaining among the employees: FW Act, s 249(1B)(d). In addition, where the affected employers are franchisees it is necessary that they have the same franchisor or are related to the franchisor (or a combination of the two): FW Act, s 249(1)(b)(v), (2). The requirement for majority employee support to commence a bargaining process also applies in the case of a single-enterprise agreement. It follows that absent a supported bargaining authorisation made under s 243 of the FW Act, multiple employers could not be compelled to bargain collectively, unless a majority of employees support the bargaining process.

16    Section 182(2) of the FW Act specifies how and when a multi-enterprise agreement is made. It provides:

Multi-enterprise agreement that is not a greenfields agreement

(2)    If:

(a)    a proposed enterprise agreement is a multi-enterprise agreement; and

(b)    the employees of each of the employers that will be covered by the agreement have been asked to approve the agreement under subsection 181(1); and

(c)    those employees have voted on whether or not to approve the agreement; and

(d)    a majority of the employees of at least one of those employers who cast a valid vote have approved the agreement;

the agreement is made immediately after the end of the voting process referred to in subsection 181(1).

17    Effective from 6 June 2023, Div 9 of Part 2-4 of the FW Act was the subject of significant amendments introduced by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth). Prior to those amendments, Div 9 contained what was known as a “low paid bargaining scheme”. That scheme was the first to be introduced to compel multiple employers to bargain. In its 14 years of operation the low-paid bargaining stream had been utilised on five occasions. Only one of those applications was successful: Application by United Workers’ Union, Australian Education Union and Independent Education Union of Australia [2023] FWCFB 176 at [20] (Hatcher P, Asbury VP and Hampton DP).

18    By s 611 of the Secure Jobs Act, s 243 was repealed and wholly substituted.

19    The Revised Explanatory Memorandum explaining the amendments included a statement to the effect that the newly introduced supported bargaining stream was intended to be easier to access than the former low-paid bargaining stream, and that the revised criteria for making the authorisation was intended to address the “limited take-up” of the low-paid bargaining process. The amendments included the removal of objects relating to productivity and service delivery, the removal of a “public interest” criterion, and the reduction of express mandatory relevant considerations from 10 to the four now mentioned in s 243(1)(b).

THE DECISION OF THE FULL BENCH

20    On 5 August 2024, SDA filed an application under s 242 of the FW Act for a supported bargaining authorisation in respect of a proposed multi-enterprise bargaining agreement naming the 18 Licensees as employers. MAL is not listed as an employer.

21    The proposed agreement would cover those employees of the Licensees who performed work at their outlets falling within certain classifications of the Fast Food Industry Award 2020 (FFI Award) and/or maintenance work at or in connection with the outlets.

22    The Full Bench referred to the objects of the FW Act as a whole set out in s 3. They include:

(f)    achieving productivity and fairness through an emphasis on enterprise‑level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; …

23    The Full Bench also referred to the objects set out in s 171(a) (relating to Part 2-4) and s 241(c) (relating specifically to Div 9), which provide as follows:

171 Objects of this Part

The objects of this Part are:

(a)     to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

…

241 Objects of this Division

The objects of this Division are:

…

(c)     to address constraints on the ability of those employees and their employers to bargain at the enterprise level, including constraints relating to a lack of skills, resources, bargaining strength or previous bargaining experience; and

…

24    The Full Bench said that those objects indicated that enterprise level bargaining was intended to remain the “primary and preferred mode of agreement-making under the FW Act”: Decision, [12]. The Full Bench added (at [15]):

As we understand it, none of the SA Licensees’ observations is intended to suggest that s 243 should be construed as excluding fast food franchisees from its operation altogether, but rather seek to identify matters which should inform the Commission’s consideration of appropriateness generally under s 243(1)(b) and the identification of matters considered appropriate under s 243(1)(b)(iv). We consider it to be uncontroversial, and consistent with [Application by United Workers’ Union, Australian Education Union and Independent Education Union of Australia [2023] FWCFB 176], that the consideration of appropriateness under s 243(1)(b) would be informed by that part of the general object of the FW Act concerned with enterprise bargaining (s 3(f)) as well as the more specific objects of the FW Act concerned with enterprise agreements (s 171) and supported bargaining (s 241). It may also be accepted that ss 3(f) and 171(a) disclose a general preference for collective bargaining at the ‘enterprise level’ but, as s 241 discloses, that is subject to the availability of supported multi-enterprise bargaining where there are constraints on the ability of employees and their employers to bargain at the single-enterprise level or to provide support to such employees and employers to bargain. The existence of such constraints, and whether support is needed to bargain, may be taken into account in considering appropriateness under s 243(1)(b).

(footnote omitted)

25    The detailed consideration given by the Full Bench will be discussed in the context of each ground of review. By way of broad summary, the Full Bench:

(1)    addressed submissions relating to the proper construction of s 243 of the FW Act, specifically relating to the matters to be taken into account;

(2)    set out factual findings relating to such things as the conduct of the Licensees’ business, the employment terms and conditions, the employees’ characteristics, the nature of the work and the history of bargaining;

(3)    considered each of the four matters referred to in s 243(1)(b) in turn; and

(4)    had regard to “other matters” bearing on the exercise of the power.

26    The conclusions of the Full Bench are drawn together at [89] of the Decision:

Having regard to the matters we have taken into account above, we conclude that it is appropriate for the SA Licensees and their employees that will be covered by the multi-enterprise proposed by the SDA to bargain together because:

•    The prevailing pay and conditions within the fast food industry are at or close to the minima provided for by the FFI Award, and low rates of pay prevail in the industry.

•    The SA Licensees have clearly identifiable common interests of direct relevance to enterprise bargaining.

•    It is more probable that not that the likely number of bargaining representatives would be consistent with a manageable collective bargaining process.

•    Unless the authorisation sought is granted, the SA Licensees will not engage in bargaining, and as a result their employees will not have access to bargaining.

•    Absent the re-engagement of McDonald’s businesses in bargaining, the proportion of employees in the fast food industry who are covered by enterprise agreements will remain low.

•    Support is required for the SDA and any other employee bargaining representatives in order for the employees to meaningfully engage in the bargaining process.

•    A significant proportion of the employees support engagement in bargaining.

27    The Full Bench went on to say that those matters prevailed over other matters weighing against the grant of the authorisation, including a number of matters raised in opposition by the Licensees. The Full Bench concluded (at [90]):

… Had the SA Licensees identified an alternative path, other than through supported bargaining, by which enterprise bargaining might proceed on a consensual basis, these matters may have been assigned greater and perhaps decisive weight. However, it is apparent to us that the SA Licensees do not propose to voluntarily engage in bargaining with their employees on any basis, since they prefer to continue to apply the FFI Award and the [Miscellaneous Award 2020]. In those circumstances, a supported bargaining process pursuant to which the SA Licensees and their employees bargain together will in our view best serve the relevant objects of the FW Act in ss 3(f), 171 and 241.

JUDICIAL REVIEW

28    This application for judicial review is brought in the Court’s original jurisdiction. On such an application, the onus is on the Licensees to demonstrate that the Full Bench committed jurisdictional error.

29    Five grounds of review are set out in the affidavit of Stephen Thomas Smith made on 21 July 2025. A proposed sixth ground of review is raised by way of an annexure to the Licensees’ written submissions in reply. The Licensees should have leave to introduce the sixth ground, there being no prejudice asserted by SDA and no suggestion that the ground raises an issue not agitated before the Full Bench.

30    By their written submissions, the Licensees allege that the Full Bench erred in six ways, respectively reflecting each ground of review:

(a)     first, it wrongly construed s 243(1)(b) of the FW Act so as to exclude consideration of other bargaining streams available under Part 2-4 of the FW Act, the parties’ history of successful engagement in bargaining in those other streams and the historical access to bargaining regimes under the relevant legislation;

(b)    second, in so doing, it failed to have regard to part of the McDonald’s Parties’ substantial and clearly articulated argument on that score;

(c)    third, it wrongly construed s 243(1)(b)(i) so as to render low “prevailing rates of pay” relevant in the s 243(1)(b) “appropriateness” assessment in and of themselves, rather than as relevant only insofar as they establish that it is appropriate for the McDonald’s Parties and their employees to be supported to bargain;

(d)    fourth, it failed to have regard to the competitive disadvantage to the McDonald’s Parties of more costly rates of pay and conditions likely flowing from any supported bargaining agreement when compared with other McDonald’s entities not covered by the [supported bargaining authorisation] (and the McDonald’s Parties’ substantial and clearly articulated arguments on this score);

(e)    fifth, it failed to have regard to the McDonald’s Parties’ clearly articulated argument concerning the need to balance the array of differences between the respondents’ respective operations and their commercial, operational and bargaining-related significance, against their broadly expressed “common interests”, at the ‘appropriateness’ stage; and

(f)    sixth, and as a consequence of (e) above, it misconstrued s 243(1)(b) and misunderstood the nature of the state of satisfaction it was required to reach.

(footnote and cross-references omitted)

31    It is convenient at this juncture to make some global observations concerning the issues raised by those grounds.

32    Grounds 1, 3 and 6 allege that the Full Bench misconstrued s 243(1)(b) of the FW Act. The grounds otherwise allege a failure to have regard to clearly articulated arguments (Grounds 2, 4 and 5) and the taking into account of an irrelevant consideration (Ground 3). The errors in Grounds 2, 4 and 5 are said to arise by virtue of the errors of construction alleged in Grounds 1, 3 and 6. There is hence a degree of overlap and repetition.

33    The starting point for all of the grounds is that a supported bargaining authorisation must be made in relation to a proposed multi-enterprise agreement if each of the three conditions specified in subss (1)(a), (1)(b) and (1)(c) of s 243 are met. The present focus is solely on the condition in subs (1)(b), the other conditions undoubtedly fulfilled.

34    Section 243(1)(b) is expressed in both subjective and evaluative language: the FWC must be “satisfied” that it is “appropriate” for the relevant employers and employees “to bargain together”. In reaching that state of satisfaction, the FWC must have regard to each of the considerations mentioned in subss (1)(b)(i) through (iv). It is important to bear in mind the subject matter of the enquiry to which those considerations are addressed – they are directed to the question of whether it is appropriate that the employees and the employers “bargain together”. The word “bargain” must necessarily take its meaning from the statutory context. It contemplates that the employers and employees will participate in the particular mode of bargaining that will follow under the FW Act if the supported bargaining authorisation was to be made.

35    Each of those considerations are mandatory in the sense discussed by the High Court in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 41 (Mason J). It is well-established that the weight to be given to a mandatory consideration is a matter for the decision-maker: Peko-Wallsend at 41 (Mason J).

36    The fourth of the considerations is itself expressed in subjective terms. It requires that the FWC have regard to any other matters it “considers appropriate”. In forming its view as to what is or is not appropriate, the FWC is not subject to express restraints. However, the absence of express restraint does not leave the power at large. In accordance with well-established principles, in determining the matters to which it will or will not have regard, the FWC is subject to implied restraints. They include a requirement that it act within the bounds of legal reasonableness (incorporating rationality), not exercise a statutory power for improper purposes and (subject to contrary intention) observe the rules of procedural fairness. A decision may be affected by jurisdictional error if a state of satisfaction is not properly formed in accordance with those principles: R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 432 (Latham CJ); see also Avon Downs Pty Ltd v Commissioner of Taxation (Cth) (1949) 78 CLR 353 at 360 (Dixon J) and Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123 at [34] (Kiefel CJ, Gageler and Keane JJ).

37    The requirement to have regard to relevant considerations at times arises in cases where there exists an express requirement to have regard to representations or submissions advanced by persons having a statutory right to advance them. An example is to be found in s 501CA(4) of the Migration Act 1958 (Cth), a discretionary power to revoke the cancellation of a visa. In Plaintiff M1/2021 v Minister for Home Affairs (2022) 275 CLR 582 at [25], Kiefel CJ, Keane, Gordon and Stewart JJ emphasised that the requisite level of engagement by the decision-maker with the representations must occur within the bounds of legal reasonableness. Their Honours continued:

… What is necessary to comply with the statutory requirement for a valid exercise of power will necessarily depend on the nature, form and content of the representations. The requisite level of engagement – the degree of effort needed by the decision-maker – will vary, among other things, according to the length, clarity and degree of relevance of the representations. The decision-maker is not required to consider claims that are not clearly articulated or which do not clearly arise on the materials before them.

(footnotes omitted)

38    Their Honours went on to restate (at [27]) the established principle that (for example):

… if review of a decision-maker’s reasons discloses that the decision-maker ignored, overlooked or misunderstood relevant facts or materials or a substantial and clearly articulated argument; misunderstood the applicable law; or misunderstood the case being made by the former visa holder, that may give rise to jurisdictional error.

(footnotes omitted)

39    The failure of a decision-maker to have regard to a substantial, clearly articulated argument may give rise to a constructive failure to exercise jurisdiction: Dranichnikov v Minister for Immigration and Multicultural and Indigenous Affairs [2003] HCA 26; 197 ALR 389 at [24]-[25] (Gummow and Callinan JJ), [86]-[89] (Kirby J).

40    In Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421, the powers of a tribunal were subject to a requirement that it consider the merits of the decision under review “in light of the information, evidence and arguments which are relevant to the application and which are provided to it or which it obtains for itself”, importing a requirement that it take account of any substantial, clearly articulated argument advanced by a party in support of their case: at [13] (Bell, Gageler and Keane JJ), [104], [105] (Nettle and Gordon JJ). In circumstances where the Tribunal was required to make a written statement setting out the reasons for the decision, and where a matter was not mentioned in the written statement, a court would be entitled to infer that the matter was not considered by the Tribunal to be material: at [106] (Nettle and Gordon JJ, citing Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323).

41    Those principles have been applied in an industrial law context, including for the purposes of the judicial review of a decision of the FWC: Qube Logistics (Rail) Pty Ltd v Australian Rail, Tram and Bus Industry Union [2025] FCAFC 73 at 156-157 (Katzmann, Wheelahan and Raper JJ).

42    Here, the asserted failure of the Full Bench to have regard to “substantial and clearly articulated arguments” is said by the Licensees to be an instance of (or evidence of) the Full Bench misconstruing the word “appropriate” where it appears in s 243 of the FW Act. The word there appears twice. It was submitted that the Full Bench erred in determining the scope of matters that were “appropriate” to take into account in the formation of its state of mind under s 243(1)(b) either by erroneously concluding that the Licensees’ arguments were themselves irrelevant, or by failing to appreciate that they were relevant. It was also submitted that it was wrong for the Full Bench not to regard the substantive matters raised by the Licensees as relevant to the substantive question of whether a supported bargaining authorisation should be made. As will be seen, in respect of some of the grounds, the Licensees articulate the alleged error as a failure to have regard to mandatory considerations in the Peko-Wallsend sense.

43    For the purposes of all of the grounds of review it is necessary to identify the arguments in fact made before the Full Bench, and the reasons the Full Bench gave (or failed to give) in respect of them. In performing its own function on this application for judicial review, the Court is to consider the reasons of the Full Bench fairly and as a whole. The reasons are not to be overzealously scrutinised with an eye too keenly attuned to error: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272 (Brennan CJ, Toohey, McHugh and Gummow JJ).

GROUNDS 1 AND 2

44    These grounds relate to two arguments advanced before the Full Bench.

45    The first was that the Full Bench should have regard to the legislative history of the FW Act, indicating a legislative intention that enterprise-level bargaining was to remain the primary and preferred mode of agreement-making. The argument was that the amendments introduced by the Secure Jobs Act were intended to address the limited take up of the former low-paid bargaining stream by removing unnecessary hurdles but should not otherwise be construed too broadly. The Licensees argued that the focus of the new provisions was upon employees “who require support to bargain” and upon addressing “constraints on the ability of those employees … to bargain at the enterprise level, including constraints relating to a lack of skills, resources, bargaining strength or previous bargaining experience”. The quoted words are extracted from s 241 of the FW Act where the objects of Div 9 of Part 2-4 are set out. They are not, the Licensees submitted, directed to employees and employers to whom bargaining support may be of some assistance, but rather to those who “require” support.

46    The second argument was that the Full Bench should have regard to SDA’s rationale for applying for a supported bargaining authorisation, namely that it would avoid the requirement to establish majority employee support for bargaining, as required to access the single-enterprise bargaining and single interest multi-employer bargaining streams. It was submitted that the requirement to demonstrate majority support in those contexts was “an integral protective feature” of those streams, the latter of which made express reference to franchisees having the same franchisor. The Licensees submitted in this proceeding that the absence in Div 9 of Part 2-4 of the FW Act of a requirement to demonstrate majority support to bargain was “a function of that Division’s intended focus upon those employees ‘who require support to bargain’ and who are impaired by ‘constraints on the ability … to bargain at the enterprise level’”. The Licensees submitted that those characteristics warranted the removal of what was otherwise “an integral part of the ‘balanced framework’ which the FW Act contemplates, and in particular the ‘fair framework’ which Part 2-4 contemplates”. Accordingly, it was submitted, any assessment of “appropriateness” in a given case must involve questions of “comparative appropriateness between the various bargaining streams”. However, the Licensees say that they did not positively invite the Full Bench to determine that supported bargaining was not the “most appropriate” form of bargaining and it was not suggested in the present application that the Full Bench ought to have made any such finding. Assuming that to be true, it remains unclear to this Court as to what is meant by the phrase “comparative appropriateness”. We will return to that issue shortly.

47    The Licensees said that their ultimate submission was that the supported bargaining authorisation was not appropriate in the present case by reason of:

(1)    the parties’ history of effective bargaining under single interest employer authorisations;

(2)    the historical access constraints on enterprise bargaining; and

(3)    the present access constraints on alternative forms of enterprise bargaining within the scheme of the FW Act.

48    It is not disputed that arguments to the effect of those summarised above were advanced before the Full Bench.

49    By Ground 1, the Licensees contend that the Full Bench erred by concluding that the matters raised were irrelevant in its consideration of whether it was appropriate to grant the authorisation. The error is said to emerge at [17] of the Decision where the Full Bench said that “[t]he different mandatory considerations in respect of other modes of bargaining prescribed by ss 237(2) or 249 are not relevant in this context”. The error is also said to find expression at [88] where the Full Bench said that the statutory criterion of majority support applying in respect of other types of bargaining applications could not be appropriately raised as a bar to an application under s 242, to which the criterion did not apply.

50    They further contended that by those paragraphs, the Full Bench misconstrued s 243 of the FW Act by “ignor[ing] relevant considerations”. The error is said to have affected the exercise of the power in that the state of satisfaction required to be formed under s 243(1)(b) was not properly formed.

51    By Ground 2, the Licensees contended that the Full Bench did not grapple with the two arguments. They acknowledged that the Full Bench mentioned some aspects of the arguments but complained that the Full Bench made no reference to them in its assessment, discarded them as irrelevant or “considered them only at the level of construction …, rather than considering the relevance of those matters to the largely untethered assessment of ‘appropriateness’”. The alleged failure to grapple with the submissions was said to be a consequence of the error of construction alleged by Ground 1.

52    Each ground should be rejected.

53    The Full Bench had before it written submissions in which the Licensees had raised six discrete arguments concerning the proper construction of s 243(1)(b) and the relevance of the legislative history and current structure to that task. The first was that the amendments to Div 9 were not intended to expand the scope of enterprises to which it would otherwise apply. That argument was supplemented at [13] (extracted below) and was then addressed at both [15] (extracted at [24] above) and [17] (also extracted below).

54    The second argument was that enterprise level bargaining was to remain the primary and preferred mode of agreement-making. The Full Bench referred to that argument at [12] and largely accepted it at [15].

55    The Full Bench then (correctly) summarised the Licensees’ third and fourth arguments as follows:

[13]     The third observation is that the assessment of appropriateness required by s 243(1)(b), and the identification of matters which might be considered appropriate under s 243(1)(b)(iv), is informed by the object provisions of the FW Act and also by Division 9’s place within Part 2-4 and the respective roles to be played by each of the four bargaining streams which Part 2-4 establishes. In that respect, it is important that franchisees are expressly contemplated under the single interest employer stream in Division 10 (s 249(2)), and nothing in the scheme of Division 9 gives any express or implied indication that the supported bargaining provisions were intended to apply to franchise operations generally, or to the fast food industry in particular. Section 243(2)(c) identifies government funding as an example of common interests that employers may have for the purpose of the supported bargaining stream, but this is not given as an example of ‘clearly identifiable common interests’ in s 249(3A) for the purpose of the single interest bargaining stream, suggesting that the supported bargaining stream contemplates a different scope of employers than those to whom the single interest employer bargaining stream will apply. Additionally, the fact that franchise operations are not included within the meaning of ‘common interest employers’ in the single interest employer agreements stream (ss 249(3) and (3A)) but are dealt with separately in s 249(2), suggests that the notion of a ‘common interest’ is not intended to include ‘related employers’ such as joint venturers, related bodies corporate and franchise operations.

[14]     The SA Licensees’ fourth observation is that the inquiry required under s 243(1)(b) should be construed as referring to whether it is appropriate for the relevant employers to bargain together for a supported bargaining agreement specifically, rather than under the other streams in which franchisees might bargain together for an enterprise agreement. …

56    Those two arguments were also addressed by the Full Bench at [15]. Three things were said of them. First, the submissions were understood as not suggesting that s 243 should be construed as excluding fast food franchisees from is operation altogether, but rather to identify which matters should inform both its consideration of appropriateness under s 243(1)(b) and the matters that it should consider to be appropriate under s 243(1)(b)(iv). Second, the Full Bench accepted that the question of what was “appropriate” must be informed by the statutory objects referred to in ss 3(f), 171 and 241 of the FW Act. Third, the Full Bench recognised that the existence of the constraints on the ability of employees and their employers to bargain at the single-enterprise level (being constraints referred to in s 241), may be taken into account in considering appropriateness under s 243(1)(b).

57    At [16], the Full Bench explained why it rejected the Licensees’ first and third arguments to the effect that fast food franchisees should be excluded from the reach of s 243 all together. The Licensees propounded the argument for their exclusion (from Div 9) by reason of express legislative contemplation of bargaining involving franchisees in s 249 under the Div 10 single interest employer authorisation bargaining stream. The Full Bench considered that argument and reasoned (at [16]):

… the fact that, in respect of the separate single interest employer bargaining scheme, s 249(2) makes special provision for the position of franchisees does not provide any legitimate contextual basis to restrict the scope of the consideration required under s 243(1)(b) in a way not supported by the text of the provision.

58    It is against all of that context that the impugned passages at [17] (which included addressing the Licensees’ fourth argument) and [88] of the Decision are to be understood. It is necessary to extract them in full. At [17], the Full Bench said:

We accept the proposition in the SA Licensees’ fourth observation that the consideration under s 243(1)(b) as to whether it is appropriate for the relevant employers to ‘bargain together’ should properly be construed as a reference to bargaining together for a supported bargaining agreement. The wider context of Division 9 of Part 2-4, the subject of which is the facilitation of enterprise agreement-making through supported bargaining, makes that clear enough. However, we do not accept the SA Licensees’ further proposition, which is implicit in the framing of its fourth observation but made more explicit elsewhere in its submissions, that this requires consideration of whether it might be more appropriate for bargaining to proceed via single-enterprise bargaining (initiated by a majority support determination made under s 237) or single interest multi-employer bargaining (initiated by a single interest employer authorisation made under s 249). This further proposition is advanced as the foundation for the contention that the SDA’s application should be rejected because its rationale is said to be to avoid having to demonstrate majority employee support for bargaining (either under s 237(2)(a) or s 249(1B)(d)). Whether it may have been open to an applicant for a supported bargaining authorisation to have made an alternative application under Part 2-4 to force the initiation of bargaining is not something which, as a matter of construction, forms part of the consideration required by s 243(1)(b). The SA Licensees’ contention in this respect fails to recognise that the making of an authorisation under s 243 leads to a type of bargaining that is distinct from the other modes of bargaining contemplated under Part 2-4 because it enables the Commission on its own initiative to provide such assistance as it considers appropriate to facilitate bargaining (s 246(2)). It is this which gives content to the notion of ‘supported’ bargaining. Thus, an applicant may elect to apply for a support [sic] bargaining authorisation because it leads to a particular mode of bargaining which is perceived to be effective for the employees and employers in question. In that context, the inquiry required by s 243(1)(b) is whether it is appropriate for multi-employer bargaining of that particular type to occur, as guided by the mandatory consideration of the matters identified in subparagraphs (i)–(iv). The different mandatory considerations in respect of other modes of bargaining prescribed by ss 237(2) or 249 are not relevant in this context. That is not to say, however, that the views of employees as to bargaining may not be taken into account as a matter considered to be appropriate under s 243(1)(b)(iv) and, as we set out below, we have in fact taken into account the evidence concerning the views of employees in this case.

(emphasis added)

59    The reasoning was later repeated and reinforced at [88]:

Third, the SA Licensees submit that the SDA’s ‘only apparent rationale for seeking to invoke Division 9 is the undoubted advantage of avoiding the need to obtain a majority support determination under s 237 of the FW Act’. For the reasons we have stated in paragraph [17] above, we do not consider that a statutory criterion that applies in respect of other types of bargaining applications can appropriately be raised as a bar to an application under s 242, to which that criterion does not apply. We have separately taken into account, as an appropriate consideration, the evidence concerning the views of employees, and it is not necessary to restate our conclusions in that respect.

(footnote omitted, emphasis in original)

60    The Full Bench plainly understood the Licensees’ submission to include an invitation to undertake a comparison of the pre-conditions necessary to commence the various bargaining processes under the FW Act so as to ascertain which was the “more appropriate”. The Full Bench did not err in identifying that such an argument was at least implicit in the Licensees’ submissions. The Full Bench rejected the submission for the reasons that it gave. It identified that a supported bargaining process was a different mode of bargaining, which explained the existence of different pre-conditions. When it described the mandatory considerations in other contexts as “not relevant in the present context”, the Full Bench should be understood to have rejected the Licensees’ submissions as they were put: the mandatory considerations preconditioning other streams were not relevant for the particular exclusionary purposes the Licensees had advanced. They included the argument that franchisees were excluded from the operation of Div 9 because of the express reference to them in Div 10 and the arguments regarding “comparative appropriateness”. Importantly, the Full Bench did not state that the absence of majority employee support was irrelevant. To the contrary, it accepted that the lack of evidence of support was indeed a matter to be taken into account when determining whether it was appropriate to make the supported bargaining authorisation. Later in the Decision it did just that (as referred to further below at [56]-[60] and [84]). The Full Bench understood the substance of the submission relating to the absence of majority support and it is clear from the balance of the reasons that the Licensees could not be compelled to bargain unless the SDA’s application was granted, including because they had not demonstrated majority support. That is reinforced elsewhere (at [83]) and was described by the Full Bench as a matter that weighed against making the authorisation.

61    The Licensees’ argument that the power in s 243 should be exercised in accordance with the objects in s 241 was not only understood and considered, it was expressly embraced, including its focus on the concept of bargaining constraints. The existence or non-existence of constraints was then in fact given active consideration elsewhere in the Decision, as discussed below.

62    The suggestion that the legislative history was ignored in such a way as to amount to jurisdictional error must also be rejected. The Full Bench referred at some length to the repeal of the low-bargaining stream, the purposes of the amendments and the state of the FW Act both before and after the amendments. To the extent that the legislative history informed the proper construction of s 243 of the FW Act, consideration of the history by the Full Bench is subsumed in its analysis and rejection of the other arguments. The Full Bench was under no obligation to repeat back the whole of the submissions in the same language articulated by the parties.

63    The Licensees’ fifth and sixth arguments related to common interests and will be dealt with in the context of Grounds 5 and 6.

64    On this application it was said that the Full Bench failed to mention oral submissions relating to the construction questions that were said to be “more nuance[d]” than those made in writing. The oral submissions added little of substance to that which had been said in writing. To the extent that the Licensees by their oral submissions intended to make a different point to that made in writing, that difference ought to have been clearly articulated. With respect, any difference between the oral submissions and written submissions is not at all apparent to this Full Court. In any event, as we have said, it was not necessary for the Full Bench to articulate the submissions of the Licensees in the exact language in which they were expressed, or at all. The substance of each argument was fairly understood. The rejection of the arguments does not disclose an error in the proper construction of the word “appropriate” in each context where it appears in s 243.

65    The conclusions reached by the Full Bench that the lack of evidence of majority support did not present a “bar” to the application was correct as a matter of law. It was equally correct to say that the absence of evidence of majority support could be taken into account when determining whether the making of the supported bargaining authorisation was appropriate. The Full Bench in fact considered the employees’ views about enterprise bargaining from [56] of the Decision. It identified that 379 employees had been approached by SDA officials to participate in a survey and that 232 employees had done so: at [58]. SDA’s reasons for not obtaining evidence for bargaining support were set out in a witness statement of Mr Ali Amin, extracted as follows (Decision, [59]):

Based on my experience, including in having sought what I believe to be the biggest majority support determination ever made by the Commission (Shop, Distributive and Allied Employees Association v Eudunda Farmers Ltd and Others [2024] FWC 1340), I do not view it as realistic to obtain a petition from more than 50% of the Respondents [sic] workforce within a timeframe that means endorsements do not become stale because of employee attrition. That application concerned approximately 600 workers across 20 stores employed by 5 associated entities which operated in accordance with legislated shop trading hours. This application concerns approximately 4,500 workers across 52 [sic] stores employed by 18 entities with a much higher turnover of labour, considerably younger, working shorter shifts and operating across a much longer span of hours.

66    The Full Bench accepted that evidence (at [84]):

The SDA has not attempted to demonstrate that the majority of employees of the SA Licensees wish to bargain for an enterprise agreement. We accept Mr Amin’s evidence, which was not challenged or contradicted by the SA Licensees, that demonstrating majority support by way of the usual means of a verified petition obtained within a reasonable timeframe would be impracticable having regard to the number of employees, their dispersal across a number of worksites, their high turnover, and the shortness of their shifts worked across a wide span of hours and days. However, the results of the SDA’s survey of a proportion of the employees of the SA Licensees, and its limited petition, does demonstrate to our satisfaction the existence of significant employee support for the proposed enterprise bargaining. The evidence of Mr Lucas, Mr Rogers and Ms Burgess concerning the wishes of employees, to which we have earlier referred, is of no probative value since it effectively involves a conclusion from silence. Our findings as to the wishes of employees favour the making of an authorisation to some degree, but this cannot be given significant weight because of the limited evidence as to this issue.

67    The Full Bench went on to deal with the Licensees’ submissions concerning whether the employers and employees required support to bargain. Its analysis on that topic was as follows (at [85]):

The evidence of the SA Licensees, which we accept, is that they do not require support to bargain and may call on the assistance of MAL as required. This weighs against the making of the authorisation sought. However, the position with respect to the employees is different. As earlier stated, the SDA will be the main employee bargaining representative, and it is a large and sophisticated registered organisation with a high degree of experience in enterprise bargaining. However, we have inferred from the evidence that, although it has members employed by each of the SA Licensees, it does not represent more than a minority of the employees overall. Moreover, Mr Amin’s evidence concerning its practical incapacity to obtain a majority support petition indicates that it is unlikely that it will be able to communicate effectively with more than a relatively small proportion of the workforce. The evidence concerning the characteristics of the SA Licensees’ workforce indicates that employees will have considerable difficulty, unaided, in becoming meaningfully involved in the enterprise bargaining process: the workforce is overwhelmingly casual, young and inexperienced in the workplace, and is widely dispersed both in terms of physical location and working hours. Assistance to the SDA and any other employee bargaining representatives, and indirectly to the SA Licensees, of the type that the Commission is empowered to provide under s 246 if an authorisation is granted would be required in order for the views of employees about bargaining issues to be obtained and communicated. This aspect is also important for the effectiveness of the bargaining process itself and is a significant matter weighing in favour of the making of a supported bargaining authorisation.

68    In light of that detailed analysis, we do not accept that the Full Bench failed to have regard to the Licensees’ submissions on that topic, whether giving rise to questions of fact or law. The Full Bench concluded that the employees required support. The submissions on this application on that topic amounted to an attempt to cavil with the merits of the factual conclusion of the Full Bench.

69    We do not otherwise consider it necessary to characterise the matters raised by the Licensees as mandatory relevant considerations. That could only amount to an academic exercise. The substance of the matters raised in the submissions was in fact taken into account, as were the submissions themselves.

70    Grounds 1 and 2 must fail.

GROUND 3

71    Section 243(1)(b)(i) required that the Full Bench have regard to “prevailing pay and conditions within the relevant industry or sector (including whether low rates of pay prevail in the industry or sector)” when determining whether it was appropriate for the Licensees and their employees to bargain together.

72    By Ground 3, the Licensees contended that the Full Bench erred in ascribing that consideration any weight in favour of the supported bargaining authorisation without first making findings, founded in evidence, as to whether the low rates of pay in the fast food sector were caused by (or a consequence of) a need for supported bargaining. The Licensees contended that the Full Bench impermissibly leapt from the objective fact of low prevailing rates of pay to a conclusion that a supported bargaining authorisation be made without considering whether those prevailing rates of pay meant that it was appropriate for the Licensees and their employees to bargain together for a proposed multi-enterprise agreement. They submitted that low rates of pay do not weigh in favour of a supported bargaining authorisation in and of themselves. Drawing from arguments from Grounds 1 and 2, they submitted that the legislative history required that the power in s 243 be exercised to fulfil the objects in s 241, and hence any consideration of low rates of pay must be in aide of the question of whether the employees require support to bargain, not whether it is desirable that they be supported. In order to determine whether they require support involved, according to the Licensees, determining the cause of the low rates of pay, namely the constraints of the ability of those employees to bargain (as identified in s 241(b)).

73    Some initial observations may be made of the consideration in s 243(1)(b)(i) within the rubric of the Full Bench determining whether it is satisfied that it is appropriate for relevant employers and employees to bargain with each other.

74    First, it is concerned with prevailing pay and conditions within an industry or sector, not at the level of a particular employer’s business. Within the text, low prevailing rates of pay are specifically mentioned. Of itself, the text indicates that low rates of pay may point to something that higher rates of pay may not.

75    Second, as we have said in relation to Grounds 1 and 2, the consideration in s 243(1)(b)(i) does not arise in the abstract. It forms a part of the enquiry as to whether it is appropriate that the Licensees and employees bargain together. The threshold is one of appropriateness, not one invoking the public interest, nor necessity or certainty.

76    Third, whilst the express statutory objects are relevant in discerning the purposes of the power, and can assist in giving practical content to common terms used in the various provisions in Div 9 of Part 2-4 of the FW Act (National Disability Insurance Agency v WRMF (2020) 276 FCR 415 at [145] (Flick, Mortimer and Banks-Smith JJ)), they are not to be read as if their words were directly supplanted into s 243 as mandatory considerations, pre-conditions or tests.

77    Fourth, Parliament should be understood to have included a reference to prevailing low rates of pay for a purpose: the FW Act envisages that a bargaining process may culminate in an agreement under which employees are better off overall.

78    Fifth, it may be accepted that where there is a history of participation in bargaining processes, including because in such cases the inference of a causal connection between low rates of pay and a need for support in bargaining will be less likely to be drawn, a finding by the FWC that low rates of pay prevail in an industry or sector will carry less weight than might otherwise be the case in determining whether it is satisfied that it is appropriate for there to be bargaining.

79    That is one of the very arguments the Licensees advanced before the Full Bench. The Licensees urged the Full Bench to conclude that the low rates of pay in the sector were not a reflection of a need for supported bargaining, but rather a function of the fast food industry with its high turnover and low margins. They further relied upon an asserted history of successful bargaining which, they submitted, told against a finding that low rates of pay were an indication of a need for supported bargaining.

80    The Full Bench dealt at some length with the pay and conditions prevailing in the fast food sector. Its findings included (see Decision, [25]-[27], [43], [45]):

(1)    The industry had the highest proportion of employees who were paid no higher than the minimum award rate.

(2)    The workforce was largely comprised of young part time or causal workers, 58.1 percent of whom were employed in large businesses (those employing 200 or more employees).

(3)    There was a high degree of mobility in employment, a significant proportion of employees working whilst engaged in secondary or tertiary education.

(4)    The Licensees employed 4,500 employees in total, more than 90 per cent of them casual and most of them award-reliant.

(5)    Whilst some were paid above award rates, they were usually in more senior roles or in areas in which recruiting was difficult.

81    The Full Bench then set out detailed findings concerning the history of bargaining in the sector more generally, and specifically concerning the Licensees.

82    The Full Bench later drew on those findings when addressing the consideration in s 243(1)(b)(i), commencing with the following:

The prevailing pay and conditions within the relevant industry or sector (including whether low rates of pay prevail in the industry or sector):  s 243(1)(b)(i)

63    The SDA contends, and the SA Licensees accept, that the prevailing rates of pay, within the fast food industry are at, or close to, award rates of pay. This is clearly borne out by the evidence we have earlier recited concerning the labour force characteristics of the industry. It follows, applying the principles stated in [Application by United Workers’ Union, Australian Education Union and Independent Education Union of Australia [2023] FWCFB 176], that low rates of pay prevail in the industry since employees are predominantly paid at or close to the lowest rates which are legally available to be paid. Subject to some employees being on salaried arrangements or IFAs as earlier discussed, there is no dispute that the SA Licensees also apply the award conditions.

64    The SA Licensees submit that this consideration should not be assigned material weight because while, in some cases, prevailing rates at or near the award might indicate imbalances that require the support of the Commission to be addressed, in this case there is no evidence of this. Rather, there is a demonstrated history of effective and efficient bargaining between sophisticated industrial participants under single interest employer authorisations going back decades, plus high levels of enterprise bargaining across the industry as a whole. Those prevailing rates, they submit, are not attributable to any want of bargaining ability or effectiveness, but are more readily explained by the high-volume and low-margin nature of the industry as a whole.

83    The Full Bench there correctly summarised the argument now put before us: the Licensees’ position was that any connection between low rates of pay and a need for supported bargaining was a matter to be proven on the basis of evidence, and not automatically assumed to be a consideration weighing in favour of a supported bargaining authorisation. The Full Bench disposed of the argument as follows (at [65]):

We do not accept this submission. The prescription of the prevailing rates of pay in the relevant industry or sector as a mandatory matter for consideration itself requires that this be given weight as a fundamental element in our overall consideration. Section 241(a) identifies the object of Division 9 of Part 2-4 as being directed to ‘employees and their employers who require support to bargain’. The inclusion in the statutory scheme of s 243(1)(b)(i) as a mandatory consideration, in the context of the origin of the supported bargaining scheme in the previous low-paid bargaining scheme and the references in the extrinsic material to low-paid industries and sectors as examples of where there may be difficulty in bargaining, suggests that a finding that low rates of pay prevail in an industry or sector is to be taken as at least an indicator that employees and their employers in that industry or sector may need support to bargain. For that reason, such a finding is to be assigned significant weight.

(footnote omitted, emphasis added)

84    The Full Bench went on (at [66]) to consider the Licensees’ submission that there was a history of successful bargaining telling against a causal connection between low prevailing rates of pay and a requirement for support:

We deal with the history and extent of bargaining in the fast food industry in more detail later in our decision. It is sufficient to say at this point that the evidence does not support the proposition that there is anything approaching ‘high levels’ of enterprise bargaining in the fast food industry, and there has been no enterprise bargaining involving MAL or any of its franchisees, including the SA Licensees, since 2019. As to the contention that the industry is of a ‘high-volume and low-margin nature’, this may well be the case, but there was no evidence that established this or demonstrated that this was the cause of low pay in the fast food industry. Accordingly, these matters do not provide any proper basis for declining to assign significant weight in our consideration to our finding that low rates of pay prevail in the fast food industry. This finding plainly favours the making of a supported bargaining authorisation.

85    The Licensees seize upon the word “itself” (in [65]) as demonstrating that the Full Bench reasoned that low rates of pay weighed in favour of the supported bargaining authorisation and so failed to consider evidence showing that the low rates of pay were not causally related to the need for bargaining support. Further, emphasis was placed on the reference in both [65] and [66] to the assignment of significant weight to the finding of prevailing low rates of pay. This submission involves both a misreading of the Decision and a mistaken view as to Parliament’s intention.

86    The Full Bench had regard to the legislative history and explanatory materials when asking whether, as a matter of statutory construction, low rates of pay should be regarded as an indicium of a need for supported bargaining. The legislative history and explanatory materials supported the conclusion it then reached. There was no error in that approach. It is consistent with the observations at [74] to [78] above.

87    Earlier in the Decision, the Full Bench had identified that a purpose of the recent amendments was to address the low take-up of the former low-paid bargaining scheme by making the criterion less stringent. The Full Bench was correct to conclude that the prevalence of low rates of pay was “at least an indicator that employees and their employers in that industry or sector may need support to bargain”. By that finding it recognised that there may be a causal connection between low pay and the need for supported bargaining. The possibility of that connection is logically a factor that may be taken into account when concluding that it is appropriate to make a supported bargaining authorisation.

88    A careful review of the decision reveals that the Full Bench did not assume the appropriateness of the making of the authorisation by reason of the existence of prevailing low rates of pay. The attribution of “weight”, whilst always within the domain of the primary decision-maker (Peko-Wallsend at [39]-[41]), did not, in this case, have the effect of the Full Bench failing to undertake the statutory task required of it.

89    Each of the facts and circumstances urged upon the Full Bench by the Licensees were considered and ultimately rejected indicating that there was no constructive failure to consider all of the integers of s 243 in determining whether it was satisfied that it was appropriate that the Licensees and their employees bargain together. The Full Bench did not accept that the low rates of pay were a function of the sector’s low margins and high turnovers, nor did it accept that there was a history of productive or successful bargaining. It would hardly have been necessary for the Full Bench to have made those findings if it had proceeded on the basis that prevailing low rates of pay automatically weigh in favour of a supported bargaining authorisation irrespective of other facts bearing on the topic.

90    SDA submitted that the Licensees’ arguments on this topic were an attempt to re-introduce more stringent conditions on the power conferred under s 243, being conditions that the amendments were intended either to remove or to render more flexible. That submission is accepted. No longer is it mandatory to consider bargaining history, relative bargaining strength and whether a low-paid authorisation would “assist low-paid employees who have not had access to collective bargaining or who face substantial difficulty bargaining” (formerly s 243(2)(a)-(c)). Under the amended regime, there is no requirement to make a positive finding that prevailing low rates of pay are in fact the consequence of a history of an absence of supported bargaining, nor to make a positive finding that low pay affected the capacity to bargain. The conclusion that low rates of pay in the fast food sector may be an indicator of a need for supported bargaining was a factor that could rightly be taken into account when concluding that the authorisation was appropriate.

91    Ground 3 must therefore fail.

GROUND 4

92    Ground 4 alleges that the Full Bench failed to have regard to the Licensees’ substantial and clearly articulated argument regarding the competitive disadvantage that would be suffered by the Licensees by virtue of more costly rates of pay and conditions likely to flow from an enterprise agreement made as a result of a supported bargaining authorisation.

93    The disadvantage was said to be against:

(1)    McDonald’s branded stores operated by MAL, both within and outside of South Australia; and

(2)    other McDonald’s franchisee stores, both within and outside of South Australia.

94    The Licensees submitted that the Full Bench necessarily failed to have regard to the argument because it is neither mentioned nor resolved in the Decision. They contended that failure constitutes jurisdictional error in accordance with the principle discussed in Dranichnikov at [24] (Gummow and Callinan JJ). Alternatively, they submitted that the argument was “at least capable on any fair view of affecting the [Commission’s] formation of its state of satisfaction under s 243(1)(b)”.

95    In the course of the proceedings before the Full Bench, the Licensees’ arguments concerning competitive disadvantage were made for the first time orally. The topic was raised to explain the reason for the Licensees’ opposition to SDA’s application. It was described by Counsel for the Licensees in opening as “not a particularly significant point” and was later picked up (comprising 21 lines of the transcript). On this application the Licensees sought to explain away that remark as a mere “passing description”. We do not accept that characterisation. A point that is made for the first time orally should be clearly advanced, unequivocally pressed and supported by evidence, so as to leave the decision-maker in no doubt both as to the finding that is invited and its asserted significance.

96    When asked by the Full Bench whether it should consider the reasons for employer opposition (as distinct from the fact of it) Counsel for the Licensees accepted that one of the reasons for opposition included that employers were operating according to the terms of the FFI Award as well as the concern as to competitive disadvantage and stated that the reason (for opposition to the authorisation) “wouldn’t be irrelevant, but we don’t have a considerable amount of evidence”.

97    It is common ground that the Decision contains no reference to any alleged competitive disadvantage vis-à-vis the Licensees on the one hand and the operators of other McDonald’s outlets on the other.

98    Having regard to the above exchanges, we do not accept that the argument regarding competitive disadvantage was one advanced in a way that enlivened any obligation on the part of the Full Bench to specifically grapple with it as a discrete matter over and above the fact of the Licensees’ opposition. The argument was not presented as substantial. More fundamentally, the proposition that the making of the supported bargaining authorisation would have the consequence that the Licensees would suffer a competitive disadvantage was a factual proposition for the Licensees to prove. It has not been shown that the Full Bench was taken to evidence on that question or invited to make any particular finding in respect of it. Insofar as there was evidence capable of supporting a finding that the Licensees were in competition with each other and all other operators of McDonald’s outlets, this Full Court was not taken to it. In our view, the submission could only have been one relating to the profitability of the Licensees relative to the profitability of operators whose employees were paid less. That is so obvious that it hardly rates a mention.

99    A substantial argument is one that is clearly material or of undoubted relevance, in the sense that it is capable of altering the decision to be made: Insurance Australia Ltd v Milton [2016] NSWCA 156 at [9] (Basten JA, Leeming and Simpson JJA agreeing); DNA17 v Minister for Immigration and Border Protection [2019] FCAFC 146 at [53]-[54] (Kerr, Davies and O’Bryan JJ); Saffari v Australian Information Commissioner [2023] FCAFC 127 at [23] (Sarah C Derrington, Stewart and Abraham JJ). The argument concerning competitive disadvantage does not meet that threshold.

100    In any event, the Full Bench dealt with the broader submission of which it was a subset, concluding that the Licensees’ opposition to the application was a consideration that tended against the making of a supported bargaining authorisation (Decision, [79], [83]). The circumstance that an employer opposes a supported bargaining authorisation implicitly carries with it opposition to a process having the potential to render employees better off and hence make the enterprise potentially less profitable. There was no obligation on the Full Bench to express that possible consequence in words, let alone in words that referenced the Licensees’ competitors, whoever they might be and howsoever a competitive advantage might be measured. To the extent that the submission required any degree of consideration, it is encompassed in the greater generality of the Decision, recognising the fact of the Licensees’ opposition and ascribing that opposition some weight: see WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 236 FCR 593 at [47] (French, Sackville and Hely JJ).

101    Ground 4 has no merit.

GROUNDS 5 AND 6    

102    Ground 5 alleges that the Full Bench erred in its reasoning in connection with the mandatory relevant consideration in s 243(1)(b)(ii) of the FW Act, namely whether the employers affected by the supported bargaining authorisation have “clearly identifiable common interests”. Subsection 243(2) prescribes factors that are to be taken into account in connection with that enquiry.

103    The Licensees alleged that the Full Bench failed to consider their clearly articulated argument bearing on that topic, expressed in Ground 5 as a need to both:

(1)    “consider, assess and balance the array of differences between the respondents’ respective operations and their commercial, operational and bargaining-related significance, against their broadly expressed ‘common interests’”; and

(2)    engage in “a proper balancing exercise between the general nature of the respondents’ operational and other commonalities on the one hand, and the extent and nature of their operational and other differences on the other, having regard to the purpose of that inquiry, weighed against a finding of ‘appropriateness’ under s 243(1)(b) of the FW Act”.

104    The Licensees submitted that the argument was neither mentioned nor resolved by the Full Bench in the Decision and that (as alleged in Ground 6) the failure to resolve the argument shows that the Full Bench misunderstood the meaning of s 243 and the nature of its task. The Licensees submitted that the misapprehension of the submission is evidenced from the Decision at [74]. There the Full Bench said:

The SA Licensees submit that they (and MAL) do not have clearly identifiable common interests, and point to differences in location, size, configuration, facilities, pricing and business structure as demonstrative of this. Our factual findings in paragraph [46] above acknowledge these differences. However, the existence of clearly identifiable common interests as between the employers to be covered by the proposed agreement does not require that their interests, or the characteristics of their businesses, be identical, and the differences between the SA Licensees the subject of our findings are not of such a nature as to negate the common interests which can clearly be identified.

105    The Licensees submitted that whilst the Full Bench made findings about the existence of differences in the Licensees’ operations, it did not go on to undertake the alleged requisite “balancing exercise” and hence erroneously disregarded the differences as irrelevant. They submitted that they had never argued that the interests of the employers needed to be identical, nor had they argued that the differences “negated” the commonalities. They further submitted that the Full Bench reduced their argument to one of construction, asserting that it must have concluded that the differences must be ignored altogether in the appropriateness test.

106    As with the other grounds, arguments on this point elevated the Licensees’ submissions on an issue to the status of “mandatory considerations” in and of themselves, coupled with an assertion that an absence of any express reference to the submissions in the Decision necessarily pointed to jurisdictional error. In addition, Grounds 5 and 6 wrongly sought to read words and sentences from the Decision outside of the context of the Decision as a whole.

107    Upon a fair reading of the Decision, the Full Bench did not ignore the differences in the Licensees’ interests on an erroneous basis that the statute required only that weight be given to the commonalities. Read in its proper context, the word “negate” in [74] of the Decision should not be understood as an adjective rejecting the differences as irrelevant as a matter of statutory construction. The context was as follows.

108    The Full Bench set out at some length the common features of the Licensees’ operations, particularly the common terms of the franchise agreements under which they operated. It then set out (also at some length) the most significant differences in their operations (at [46]).

109    At [67]-[69], the Full Bench repeated and elaborated upon its earlier findings concerning the common interests of the Licensees arising from the business model under which they operated. That overarching business model required each of them to comply with a franchise system as to:

•    the adoption and exclusive use of specified McDonald’s formulae, methods and policies;

•    menu items;

•    food ingredients, handling and preparation;

•    cleaning standards;

•    specifications as to restaurant fixtures, lighting, equipment, signage, seating, and layout;

•    parking facilities;

•    opening hours;

•    employee uniforms;

•    customer service standards; and

•    food packaging and container and paper products.

110    At [70], the Full Bench made findings as follows:

These requirements means that the SA Licensees’ restaurants have a broad degree of similarity both in the substance of their operations and the way they are presented to the public. Even more significantly, it means that the work performed by employees across all the restaurants is fundamentally the same, since it involves the preparation and service of the same menu items in the same way and using the same equipment. This similarity extends to the ancillary functions of cleaning and maintenance, since there is a high degree of standardisation in the environment in which employees work. That there are some differences between restaurants, such the fact that some have McCafé operations and some do not, or that the restaurants’ layout and size may be different, do not detract from these fundamental similarities.

111    The Full Bench went on to say that the commonality in the work of the employees was reflected in the standardisation of positions and position descriptions across the Licensees’ businesses, and their “largely common” remuneration arrangements, whereby employees were paid minimum award rates, with some exceptions relating to senior employees (whose arrangements were also common). The Full Bench identified those matters as showing that the Licensees had clearly identifiable common interests with respect to their employees’ pay and conditions, being the very subject matter at the heart of the statutory bargaining process. Adding to that commonality was a clause in the franchise agreement restraining the Licensees from employing or soliciting the employment of those employed by other Licensees. That had the effect of restricting the employees’ capacity to realise the market value of their experience and skills by moving to another McDonald’s employer to obtain higher wages: Decision, [72]. That state of affairs was held to be a factor facilitating the payment of low wage rates, an outcome that by its very nature was a common interest of the Licensees.

112    In addition, the Full Bench found that the Licensees participated in cooperative arrangements for advertising expenditure as well as employment relations matters, such that there was an organisational structure across the geographical location of South Australia: Decision, [73]. The Full Bench said that the matters of common interest were clearly identifiable, that they arose out of the evidence given by the Licensees’ own witnesses, and that they were plainly relevant to the question of whether the Licensees “should be required to bargain together”. That conclusion must be understood as having been reached notwithstanding the differences that had also been identified. The Full Bench concluded (at [75]):

… The employment arrangements for all employees across all the SA Licensees are essentially the same in terms of the nature of the work performed and their remuneration and conditions of employment, and this renders it practicable for an enterprise agreement to be negotiated which would apply common terms and conditions to all the employees. From the SA Licensees’ perspective, the commercial interests which they would bring to bear in bargaining, while not identical, have much in common because they all operate according to the business model of the McDonald’s System.

113    It is against all of that context that the passage at [74] is to be understood. By stating that the differences did not “negate” the commonalities, the Full Bench should be understood to say that the differences were not such as to dissuade it from the conclusion that there was such a degree of commonality of interests that it was practicable (and hence appropriate) for the Licensees to bargain together. The reasoning process did indeed involve a conclusion that the identified differences were not sufficient to negate the weight or effect of the commonalities, but to proceed in that way did not involve the imposition of an “anterior requirement” (as submitted by the Licensees), nor did it mean that the differences were ignored in the ultimate outcome. The Full Bench adopted an entirely orthodox approach to the evidence before it. Its conclusion that the common interests weighed in favour of the supported bargaining authorisation (notwithstanding the identified differences) was plainly open to it.

114    As to the submission that the Full Bench did not in terms refer to a submission concerning the need to engage in a “balancing exercise”, a decision-maker will not fall into jurisdictional error by failing to articulate a submission in the precise words or at the same length or with the same emphasis as may be advanced by a party before it. The Court on judicial review is concerned with substantive compliance with the law, not with a semantic comparison between submissions and reasons.

115    It follows that Grounds 5 and 6 must also fail. The application for judicial review must therefore be dismissed.

Associate:

Dated:    20 July 2026

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