5 Hogs Pty Ltd t/as Hogs Breath Townsville Central

[2015] FWCA 2616

[2015] FWCA 2616

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 185 - Application for approval of a single-enterprise agreement

5 Hogs Pty Ltd t/as Hogs Breath Townsville Central
(AG2015/450)

5 HOGS PTY LTD - ENTERPRISE AGREEMENT 2014

Restaurants
DEPUTY PRESIDENT SAMS	SYDNEY, 29 APRIL 2015

Application for approval of the 5 Hogs Pty Ltd - Enterprise Agreement 2014.

[1] This is an application, pursuant to s 185 of the Fair Work Act 2009 (the ‘Act’), filed by 5 Hogs Pty Ltd t/as Hogs Breath Townsville Central (the ‘applicant’) which seeks the approval of the Fair Work Commission (the ‘Commission’) of a single enterprise agreement to be known as the 5 Hogs Pty Ltd - Enterprise Agreement 2014 (the ‘Agreement’). The Agreement is to cover 31 employees, other than Restaurant Managers, who are employed at the applicant’s restaurant in Townsville, Queensland. For the purposes of s 186(3) of the Act, I am satisfied that the group of employees to be covered by this Agreement has been fairly chosen.

[2] The employees were last notified of their representational rights on 25 November 2014 and voting for the Agreement’s approval took place on 24 February 2015. The time limits under s 181(2) of the Act are thereby satisfied. In a secret ballot, 18 of the 19 employees who cast a valid vote, agreed to approve the Agreement. The application for approval of the Agreement was lodged on 4 March 2015, thereby satisfying s 185(3) of the Act.

[3] The matter was listed for hearing on 16 March 2015. Shortly before the hearing, the Commission was advised by Mr C Agnew, Solicitor for the applicant, that his client had been approached by the Australian Workers’ Union Queensland Branch (the ‘Union’) requesting an opportunity to bargain for the new Agreement. The Union’s approach had been made on the very day of the ballot of employees for the approval of the Agreement.

[4] The hearing proceeded on 16 March 2015 with Mr T McKernan appearing for the Union and Mr Agnew appearing for the applicant. In addition to claiming to have at least one member to be covered by the Agreement, Mr McKernan submitted that the Agreement failed to meet the Better Off Overall Test (the ‘BOOT’) and therefore could not be approved by the Commission. As Mr Agnew requested further particulars from the Union, the matter was adjourned and the parties were directed to file short submissions on the matters in contention. The application was listed for further hearing on 31 March 2015.

[5] As the parties’ submissions were relatively brief, I set them out in full below.

For the Union

‘I attach a copy of a BOOT analysis that we have done. With all due respect to Mr Agnew the one that he provided is incorrect. It had the incorrect Saturday and Sunday rates of pay for a number of the employees. I did the analysis based on the information provided in the Applicant’s analysis which is in some conflict with their submissions. In particular at paragraph 2 of the Outline of Submissions that Mr Agnew provided on behalf of the Applicant it states “12 of these are under 18 years of age”. According to the analysis provided by Mr Agnew only one employee is under 18. Therefore I have done the analysis with the available information and I am not sure as to how it would be effected if we had rates of pay that would be consistent with 12 employees being under 18 years of age.

12% loading
This loading has failed to make employees better off overall. For approximately 2/3 of employees they are worse off under the agreement than they would be under the Award. This comes about when the employees are working weekends and doing split shifts. The people that appear to be better off are the ones that do little or no weekend work. This is only taking a one week snap shot and would look worse for the Applicant on weeks that were to include a public holiday where the difference on those days would be much greater. We didn’t include any analysis of the cost of annual leave. It defies belief when you consider the Applicant’s analysis that people are better off with annual leave under the agreement. Quite simply the agreement provides a 12% total loading and nothing further for annual leave whereas under the Award employees would be getting 17.5% leave loading. Therefore it is clear that this portion adds to the worse off overall position.

2 Hour minimum shift
It is quite clear that we were referring to the part time employees having their minimum shift under the Award of 3 hours reduced to 2 hours under the Agreement. In any event the indicative roster provided contains examples of breaches of this clause with engagements of 1 hour and 1.5 hours.

Public Holidays
The Applicant has not indicated how the failure to pay any additional loading for work performed on a public holiday goes towards satisfying the BOOT. The lack of any loading only goes towards this agreement making employees worse off overall.

The fact that the Employer is providing a high level of employment for young employees in a high youth unemployment region
Even if paragraph 2 of the Applicants submissions were proven to be correct it only amounts to slightly more than 1/3 of employees being youths. They claim that 12 of 31 are under 18 years of age despite their analysis only confirming 1 employee under 18 years of age, two employees of 19 years of age and the remainder being classified as “Adult”. Additionally the fact that the Applicant may choose to employ people that would cost them less does not help the agreement pass the BOOT.

Based on the analysis that we have provided and the misleading information provided by the Applicant it is our submission that it is not possible to find that the proposed agreement passes the BOOT and therefore must not be approved.’

For the applicant

[6] The applicant’s submissions provided by Mr Agnew were as follows:

‘12% Loading

7. The Applicant’s [sic] considers that based on the indicative rosters set out in Schedule 1 to these submissions we submit that the 12% loading is enough to compensate employees covered and to be covered by the Agreement if you make an ‘overall assessment’ of the Agreement - meaning not only looking at the loading... but also the benefits under the proposed Agreement outlined in paragraph 15 of the submissions.

2 hour minimum shift

8. The applicant submits that clause 13.2 of the Award states as follows:

On each occasion a casual employee is required to attend work they are entitled to a minimum payment for two hours’ work.

If the union are referring to the part-time minimum hours as set out in clause 12 of the Award then we would submit that an overall assessment of the agreement would show that Employees who work those hours would be compensated for the loss of this entitlement.

Public Holidays

9. The Applicants submit that clause 5.7.2 states:

5.7.2 Required to work on a public holiday

It is an expectation that all employees will be required to work on public holidays given the nature of the Employer’s business. The Employer requires all Employees to be available to work on public holidays unless the Employee has reasonable grounds for refusal.

This clauses [sic] allows an Employee to refuse to work on a public holiday if they have reasonable grounds for refusal which is in compliance with section 114(3) of the Act.

Flexibility Clause

10. The Applicant submits that clause 7.1 of the Agreement uses the same words “arrangements when work is performed” as is set out in clause 7.1(a) of the Award and as set out in the Model Flexibility Term set out in Schedule 2.2 of the Fair Work Regulations 2009 (the Regulations). Regardless, the Applicant is prepared to replace the existing clause 7.1 with the Model Flexibility Term in Schedule 2.2 of the Regulations by signing an undertaking under section 190 of the Act.

Consultation Clause

11. The Applicant accepts that they have used the old Model Consultation Term but refers the Commission to section 205(2) of the Act which states:

Model consultation term

(2) If an enterprise agreement does not include a consultation term the model consultation term is taken to be a term of the agreement.

It is therefore the Applicant’s submission that any defect in the clause will be remedy by this section.

Regardless the Applicant is prepared to provide a section 190 undertaking which replaces the existing clause 7.3 with a new clause 7.3 in the terms of the Model consultation terms set out in Regulation 2.09 and Schedule 2.3 of the Regulations.

[7] Mr Agnew set out s 193 of the Act and went on to submit:

‘13. In our submission the Commission should following [sic] the Full Bench decision of Armacell Australia Pty Ltd [2010] FWAFB 9985 at at [41] where the Full Bench of Fair Work Australia said:

“The BOOT, as the name implies, requires an overall assessment to be made. This requires identification of terms which are more beneficial for an employee, terms which are less beneficial and an overall assessment of whether an employee would be better off under the agreement.”

14. In our submission the Commission must be satisfied for that agreement to pass the BOOT, that at the test time, the Agreement contains provisions that are more beneficial than equivalent terms in the modern award or are not conferred by the Award, that offset those provisions that are less beneficial, so that on balance, employees covered by the Agreement are better off overall if the Agreement applied to them than they would be if Award applied [sic].

15. In our submission this involves more than just looking at the indicative Rosteres set out in Schedule 1 to these submissions but that the Commission must also in our submission look at factors such as:

• The fact that the Employer offers all staff permanency of employment in an industry of high casualisation.



• The fact that the Employer is providing a high level of employment for young employees in a high youth unemployment region; and



• The fact that the loaded hourly rates means that the Employer will be paying increased personal leave, compassionate leave, long service leave, notice, redundancy, superannuation, paid parental leave and overtime.

16. We submit that the Agreement should be approved based on these submissions and the proposed undertakings set out in Schedule 2.’

[8] At the hearing on 31 March 2015, Mr Agnew criticised the Union’s BOOT analysis by submitting that:

a) the Union failed to mention that the 12% increases applied to all forms of leave, superannuation, notice and overtime; and

b) some of the employees identified as working split shifts did not do so, and others worked less than the Union claimed.

He put that the Union’s analysis was not a true picture of the actual rostering arrangements of the applicant’s business. Whereas, Mr Agnew’s sample roster was actually taken from a time shortly after the restaurant opened and when it was at its busiest.

[9] Mr Agnew said that as all the employees are part time and in an industry which is notoriously difficult to predict patronage/customers or an individual employee’s week by week circumstances, it was impossible to use a roster which was consistent every week. The applicant had used the busiest roster than was now the case.

[10] In response to the concerns of the Union as to firstly the minimum shift for part time employees being three hours and not two hours, secondly, the absorption of the 17.5% annual leave loading into the rate of pay and, thirdly, whether the 12% higher rate of pay guaranteed all employees would be ‘better off overall’, Mr Agnew proposed two further undertakings. In accordance with s 190 of the Act, the proposed undertakings were sent to the Union for its views. I am satisfied that the proposed undertaking in respect to an annual reconciliation to ensure no employee would be worse off under the Agreement, results in the major concern of the Union being addressed in that the BOOT has been met. I note that this type of undertaking has been accepted by the Commission in other enterprise agreement applications for approval.

[11] Having considered all of the matters I am required to take into account in respect to the approval of an enterprise agreement, in particular those under in particular ss 180, 186, 187, 188, 190 and 191 of the Act, I am satisfied that the Agreement passes the BOOT and there is no other basis why the Agreement should not be approved by the Commission.

[12] Pursuant to s 54 of the Act, the Agreement shall operate from 28 April 2015 and have a nominal expiry date of 1 March 2018.

DEPUTY PRESIDENT

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