A Fair Work Commission (FWC) ruling will allow 5,000 South Australian McDonald’s workers to negotiate better pay and conditions.
The relevant union – the Shop, Distributive and Allied Employees Association (SDA) – applied to the FWC for higher rates of pay and more secure hours for the SA staff.
It could trigger similar deals for Australia’s 100,000 McDonald’s workers, which employer groups argue will create “unintended” consequences for business.
McDonald’s hasn’t struck an employer agreement in Australia since 2013.
Maccas
McDonald’s latest data shows it has around 1,000 locations in Australia, employing more than 115,000 people.
Most stores are owned by a franchisee — owners responsible for a single restaurant or a small group.
McDonald’s employees have been covered by the standard Fast Food Industry Award since 2020.
What does that mean?
Award vs. agreement
An award sets out pay and conditions within a sector. It generally applies to a particular occupation, such as nursing.
This is distinct from an enterprise agreement, which is struck directly between employees and an employer.
For example, there are different enterprise agreements for staff at Big W, the Australian Tax Office (ATO), and Crown Casino Melbourne.
McDonald’s last agreement in Australia was struck in 2013.
Fair Work
The Shop, Distributive, and Allied Employees Association (SDA) is one of the unions representing retail and hospitality workers.
It has negotiated on behalf of employees at other fast food chains, such as KFC, Krispy Kreme, and Subway.
Federal laws passed in 2022 allow for unions to bargain on behalf of workers across different companies employed in a similar line of work, including multiple franchises. This is called multi-employer bargaining.
In August 2024, the SDA applied to the Fair Work Commission to bargain on behalf of McDonald’s franchise workers in South Australia.
The application relates to 5,000 McDonald’s workers at 53 stores in the state owned by 18 franchisees.
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Part of the SDA application required proof the McDonald’s franchises had “common interests”.
McDonald’s argued there were material differences between the franchises, including the number of stores they each run and the restaurant type (e.g. whether or not they have a drive-thru).
Decision
Fair Work has ruled the SDA can bargin for South Australian McDonald’s workers. In its ruling, the Fair Work Commission’s full bench noted “low rates of pay prevail in the industry.” The average McDonald’s ‘crew member’ is 20-years-old.
The SDA said it would push for pay increases above the current award entitlements and a guarantee of “predictable hours”.
SDA South Australia Secretary Josh Peak added that McDonald’s will “no longer deny their low-paid Australian workers the right to bargain”.
Unions
President of the peak union body, the Australian Council of Trade Unions (ACTU), Michele O’Neil said the victory was the result of a “David and Goliath struggle”.
On the “common interests” question, the Fair Work Commission noted the McDonald’s franchises bear similarities, such as the food and drink served at the stores, and the product labelling.
O’Neil said: “Anyone who has been to a McDonald’s store knows they look the same, their products are the same, right down to the pickles, sesame seed buns”.
Industry
Employer groups have expressed concerns about the broader impacts of the decision.
The ruling could now set a precedent for McDonald’s across the rest of Australia.
The Australian Industry Group’s CEO Innes Willox called the Fair Work’s judgment “deeply disappointing”.
He pushed the Federal Government to consider changing laws to “tighten up the scope of the supported bargaining stream, and to address the unintended consequences”.
Political response
Labor introduced the multi-employer bargaining provision in 2022.
In a statement to TDA, Employment Minister Amanda Rishworth said: “A record number of employees are covered by an enterprise agreement”.
“On average, enterprise agreements result in wage increases higher than the rest of the economy.”
Shadow Employment Minister Tim Wilson told TDA: “Labor’s multi-employer bargaining laws are designed to empower unions at the expense of customers and force up prices.”
