A.C.N. 600 042 082 Pty Ltd T/A Burger Urge Newcastle

[2015] FWCA 5729

[2015] FWCA 5729

FAIR WORK COMMISSION

DECISION

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

A.C.N. 600 042 082 Pty Ltd T/A Burger Urge Newcastle
(AG2015/3730)

BURGER URGE ENTERPRISE AGREEMENT 2015

Fast food industry
DEPUTY PRESIDENT BULL	SYDNEY, 8 OCTOBER 2015

Application for approval of the Burger Urge Enterprise Agreement 2015

[1] An application has been made for the approval of an enterprise agreement known as the Burger Urge Enterprise Agreement 2015 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement. The applicant is A.C.N 600 042 082 Pty Ltd trading as Burger Urge Newcastle.

[2] The Fair Work Commission (the Commission) wrote to the applicant, via its legal representative, Mr Ben Cooper on 8 July, 10 and 19 August 2015 with respect to the:

1. Consultation term not meeting the requirements under s.205 of the Act;

2. The employers to be covered by the Agreement;

3. Single interest employer test under s.172(5) of the Act; and

4. The Agreement meeting the requirements of the Better Off Overall Test as per s.186 of the Act.

[3] The applicant corresponded to the Commission on a number of occasions to address the issues raised, with final submissions received on 7 October 2015.

Consultation term

[4] With respect to the consultation term at clause 7.1 of the Agreement, the applicant was advised that the term did not meet the requirements of s.205(1)(a) of the Act. The clause requires a ‘significant’ change to rosters etc. before consultation can take place. This additional requirement is not apparent in the Act with respect to changes in rosters etc. Rather, s. 205 of the Fair Work Act 2009 (the Act) requires the employer to consult employees with regard to a change of employees regular roster or ordinary hours of work.

[5] Pursuant to s.205(2) of the Act, the model consultation term at Schedule 2.3 of the Fair Work Regulations 2009 will be taken to be a term of the Agreement. A copy of the model consultation term is attached at Annexure A of this decision.

Employers to be covered by the Agreement

[6] At 2.3 of the submitted application (F16), 10 employers were named as being covered by the Agreement; however, at Schedule B of the Agreement, there were 12 employers listed as being covered by the Agreement.

[7] The applicant was requested to address the discrepancy between the employers listed in the F16 and that of the Agreement. In particular, BU Crestwood Pty Ltd and DLM Pty Ltd whom are specified in Schedule B of the Agreement were not identified as being an employer to be covered by the Agreement in the submitted F16.

[8] It is submitted by Mr Cooper that BU Crestwood Pty Ltd and DLM Pty Ltd are Burger Urge franchisees, and prior to the ballot process elected not to be covered by the Agreement and employees did not participate in the ballot for the approval of the Agreement. As such, BU Crestwood Pty Ltd and DLM Pty Ltd did not make an application in relation to the Agreement, and are not covered by the Agreement in this application.

[9] Section 586(a) of the Act provides the Commission with a broad discretion to correct or amend an application, or other document relating to the matter before the FWC, on any terms that it considers appropriate. The exercise of this discretion has been applied by the Commission in correcting an agreement that is before the Commission for approval pertaining to inaccuracies or other errors relating to the agreement see for example [2015] FWCA 4099 and [2015] FWCA 3084.

[10] In this current application, BU Crestwood Pty Ltd and DLM Pty Ltd did not partake in the voting of the Agreement and do not wish to be covered by the Agreement. This constitutes as a mistake or error in the Agreement, as they are named as being employers to be covered by the Agreement, which they have not elected to, nor did they partake in the agreement voting process.

[11] I am satisfied that the Agreement contains an error in that BU Crestwood Pty Ltd and DLM Pty Ltd are incorrectly listed as employers being covered by the Agreement and that it should be corrected pursuant to s.586 of the Act. Accordingly, the Agreement is amended to delete BU Crestwood Pty Ltd and DLM Pty Ltd from Schedule B of the Agreement.

[12] On 7 October 2015, Mr Cooper further advised that Jewellery Three Pillars Pty Ltd had ceased to be a Burger Urge franchisee.

Single interest employer test under s.172(5) of the Act

[13] Pursuant to s.172(2) of the Act, the Commission requested the applicant address how 9 employers may make a single enterprise agreement, and in particular, how the applicant would satisfy the single interest employer test under s.172(5) of the Act.

[14] The single interest employer test under s.172(5) of the Act:

Single interest employers

             (5)  Two or more employers are single interest employers if: |

   (a)  the employers are engaged in a joint venture or common enterprise; or

   (b)  the employers are related bodies corporate; or

(c)  the employers are specified in a single interest employer authorisation that is in operation in relation to the proposed enterprise agreement concerned.

[15] Mr Cooper submits that the employers to be covered by the Agreement are each franchisees owning and operating ‘Burger Urge’ stores in Queensland and New South Wales. Each of the employers trades under the ‘Burger Urge’ brand as employers engaged in a common enterprise, thereby meeting the requirements under s.172(5).

[16] A “common enterprise” was defined by Mason J in Australian Softwood Forests Pty Ltd v Attorney General-General (NSW); Ex re Corporate Affairs Commission (1981) 148 CLR 121, 133 (Australian Softwood):

“An enterprise may be described as common if it consists of two or more closely connected operations on the footing that one part is to be carried out by A and the other by B, each deriving a separate profit from what he does, even though there is no pooling or sharing of receipts of profits. It will be enough that the two operations constituting the enterprise contribute to the overall purpose that unites them. There is then an enterprise common to both participants and, accordingly, a common enterprise.”

[17] In this application, the applicant submits that each employer is a franchisee of the ‘Burger Urge’ brand, and as such constitute as a common enterprise. Pursuant to s.172(5)(a), I am satisfied that the applicant and the employers to be covered by the Agreement are single interest employers within the meaning of the Act.

Better Off Overall Test (BOOT)

[18] The Commission was concerned that when compared to the Fast Food Industry Award 2010 (the Award) being the relevant award for the purposes of the BOOT, the Agreement offered reduced entitlements which may not result in employees being better off. Pursuant to s.190 of the Act, the applicant was provided with an opportunity to provide undertakings to address the concerns raised by the Commission. In particular, these concerns related to the Agreement not providing any weekend penalties and the rates of pay for Certificate II trainees.

Weekend Penalties

[19] Pay rates under the Agreement are inclusive of weekend penalties. The applicant asserts in its statutory declaration (F17) that this is a benefit to employees as this results in higher hourly rates of pay during the week than the Award. The Commission was not satisfied that the higher hourly rates of pay adequately compensated for the removal of weekend penalties and employees who may work only on weekends or a greater number of weekend hours than weekday hours would be worse off under the Agreement.

[20] The applicant provided rosters to support its position that under the rostering pattern of the employer, employees would be better off under the Agreement.

Undertaking in relation to the weekend work

[21] At the request of the Commission, the applicant has provided an undertaking which states that employees will not be rostered to work more than 3 hours on a weekend without first having worked 11.5 hours during the week. The undertaking provided by the applicant is taken to be a term of the Agreement. A copy of the undertaking is attached at Annexure B.

Rate of pay for a Certificate II trainee

[22] With respect to cl. 2.2.1 of the Agreement – Traineeship, it states that trainees may complete a Certificate II traineeship program. However, the Agreement does not specify a rate of pay for a Certificate II trainee. The applicant was requested to provide the rate of pay for these employees for clarification and certainty of the Agreement, as well as ensuring that such employees would be better off under the Agreement as per s.186 of the Act.

Undertaking in relation to the Certificate II trainee rates of pay

[23] The applicant has provided an undertaking specifying that employees undertaking a Certificate II training arrangement will be paid the applicable Certificate III training rate as contained in Schedule A of the Agreement. I note that this pay rate is above the corresponding pay rate provided under the Fast Food Industry Award 2010, being the relevant award for the purposes of the s. 186 better off overall test.

[24] The undertaking provided by the applicant is taken to be a term of the Agreement. A copy of the undertaking is attached at Annexure C.

[25] The undertakings provided by the applicant address the Commission’s concerns. Taking into account the higher rates of pay under the Agreement and the undertakings provided by the applicant, I am satisfied that the Agreement results in employees being better off overall under the Agreement.

[26] The undertakings are not so substantial that if asked to vote again, the employees who voted would not approve the Agreement. I am therefore satisfied that the undertakings do not result in a substantial change to the Agreement, as per s.190(3)(b) of the Act.

[27] I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[28] The Agreement is approved. In accordance with s.54(1), the Agreement will operate from 15 October 2015. The nominal expiry date of the Agreement is 4 years from the date of approval.

[29] This decision and its undertakings should be brought to the attention of employees covered by the Agreement by the applicant.

DEPUTY PRESIDENT

Annexure A

Annexure B

Annexure C

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