Arnold Paul Kubinyi
[2022] FWCA 3167
•13 SEPTEMBER 2022
| [2022] FWCA 3167 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Arnold Paul Kubinyi
(AG2022/849)
IPCA (NSW) Enterprise Agreement 2012
| Fast food industry | |
| DEPUTY PRESIDENT BOYCE | SYDNEY, 13 SEPTEMBER 2022 |
Application for termination of the IPCA (NSW) Enterprise Agreement 2012
Mr Arnold Paul Kubinyi (Applicant) has filed an application (Application) with the Fair Work Commission (Commission) seeking the termination of the IPCA (NSW) Enterprise Agreement 2012 (Agreement) pursuant to s.225 of the Fair Work Act 2009 (Act). The Agreement nominally expired on 23 April 2016.
The Shop, Distributive and Allied Employees’ Association (SDA) represents the Applicant.
The Agreement covers various franchisees of Subway stores in New South Wales, and their employees employed in the job classifications set out in the Agreement. The employer parties to the Agreement at the time it was made are listed in Schedule 1 of the Agreement (Schedule 1 Employers). Since the time the Agreement was made in 2012, a number of the Schedule 1 Employers have been deregistered. It also appears that the businesses of some of the Schedule 1 Employers have been acquired, and that the acquiring entities have become covered by the Agreement by operation of the transfer of business provisions in the Act.
Directions
Following a mention/directions hearing on 29 March 2022, on 1 April 2022, the Applicant confirmed his intention to proceed with the Application.
On 1 April 2022, to prove that service had been effected on the Schedule 1 Employers, I issued directions which required the Applicant to do the following:
1. Provide a copy of the company search to Chambers confirming the registered address of the employer/ company/ entity
2. Provide a copy of the correspondence sent to the employer/ company/ entity with the application form you made to the Fair Work Commission served on them
3. Provide a photocopy of the envelope (marked) that was sent to the employer/ company/ entity
4. Whoever posted the envelope should provide a statutory declaration to Chambers (standard statutory declaration form is sufficient) that the appropriate material was mailed, the date and time that it was mailed, and that the material was placed in a post box.
On 5 April 2022, Youth Law Australia commenced acting for the Applicant.
On 19 April 2022, the Applicant provided proof of compliance with the Directions issued on 1 April 2022.
On 20 April 2022, it was noted by Ranaz Pty Ltd (a Schedule 1 Employer), by email, that:
“… there will be a number of employers who are not listed on the Schedule who employ transferring employees covered by the EA as a result of a purchase/transfer of business. We note that these employers and employees should also be notified and served a copy of Mr Kubinyi’s application as the application will affect them.”
On 26 April 2022, the Subway franchisor, Subway Systems Australia Pty Ltd (SSA) offered to provide assistance in identifying the employers to whom the Agreement currently applied by operation of the transfer of business provisions in the Act (Transferred Employers).
On 27 April 2022 I issued directions as follows:
[2] At or before 4.00pm AEST on Friday, 29 April 2022, the Applicant is to serve upon Subway Systems Australia Pty Ltd (SSA) (by email, copying in the Chambers to Deputy President Boyce and any other party currently appearing in the proceedings):
a) A copy of the Forms F24B and F24C filed in these proceedings.
b) The Affidavit of Service of Emily Jol declared 19 April 2022.
c) Copies of the 13 ASIC Current Company Extracts for each current employer party to the IPCA (NSW) Enterprise Agreement (Agreement).
d) Copies of the 14 envelopes addressed and mailed by pre-paid registered post to each employer party to the Agreement.
e) Copies of the 14 cover letters accompanying Forms F24B and F24C sent within each envelope addressed as above.
[3] At or before 4.00pm AEST on Friday, 13 May 2022, SSA is to serve upon the Applicant (by email, copying in the Chambers to Deputy President Boyce and any other party currently appearing in the proceedings), a schedule of employers that it says is currently covered by the Agreement as reconciled against the employers covered by the Agreement already served by the Applicant (Reconciled Schedule). The Reconciled Schedule is to include, but not limited to, the following:
a) whether there has been a transfer of business since the commencement of the Agreement;
b) the name of the new operating entity;
c) the name of the new franchisee; and
d) email addresses and related contact details for all persons listed in the schedule (but only as within SSA’s knowledge).
[4] At or before 4.00pm AEST on Friday, 20 May 2022, the Applicant is to serve a copy of the following documents upon all employers set out in the Reconciled Schedule (being employers not already served by reference to the Affidavit of Service of Emily Jol declared 19 April 2022):
a) a copy of the Forms F24B and F24C filed in these proceedings.
b) these Directions; and
c) the Notice of Listing accompanying these directions.
[5] At or before 4.00pm AEST on Wednesday, 25 May 2022, the Applicant is to file and serve:
a) evidence of his compliance with Order [4] above; and
b) submissions and/or case law confirming his standing to continue the proceedings despite no longer being an employee to whom the Agreement covers or applies.
On 2 May 2022, pursuant to the directions issued on 27 April 2022, I accepted that the Applicant had effected service on SSA.
On 9 May 2022, SSA served a Reconciled Schedule as directed.
On 13 May 2022, the Applicant served proof of service as effected on four additional employers identified in the Reconciled Schedule.
On 2 June 2022 I issued directions as follows:
[8] By close of business Thursday, 16 June 2022, a relevant employee or officer of Ranaz and Eatfresh is to file with the Commission and serve upon the Applicant a statutory declaration confirming that all employees of Ranaz and Eatfresh to whom the Agreement covers and/or applies have each been personally and individually provided with (in hard copy or electronic form):
(a) a copy of the Forms F24B and F24C filed in these proceedings; and
(b) a copy of these Directions.Provided that Ranaz is not required to comply with this Direction should it notify the Commission and the Applicant prior to 4.00pm AEST on Tuesday, 14 June 2022, that it no longer wishes to appear and be involved in these proceedings.
[9] By close of business Thursday, 14 July 2022, the Applicant is to file in the Commission, and serve upon any Relevant Employer who has appeared, or notified its formal appearance, in these proceedings, any material in support of his application to terminate the Agreement by reference to the matters identified under s.226 of the Act.
[10] By close of business Thursday, 14 July 2022, any employee employed by a Relevant Employer is provided with the opportunity to file in the Commission any material in support of, or in opposition to, the Applicant’s application to terminate the Agreement. The Commission will promptly serve a copy of any such materials so filed upon the Applicant and any Relevant Employer who has appeared, or notified its formal appearance, in these proceedings.
[11] By close of business Thursday, 18 August 2022, any Relevant Employer is provided the opportunity to file in the Commission, and serve upon the Applicant, any material in support of, or in opposition to, the Applicant’s application to terminate the Agreement by reference to the matters identified under s.226 of the Act (including any material in reply to the material filed and served by the Applicant or the Commission pursuant to Directions [9] and [10] above).
[12] By close of business Thursday, 1 September 2022, the Applicant is to file in the Commission, and serve upon any Relevant Employer who has appeared, or notified its formal appearance in these proceedings, or filed and served any material pursuant to Direction [11] above, any material to be relied upon in reply to any materials filed pursuant to Directions [10] and [11] above.
On 14 June 2022, my Chambers was notified that Eatfresh Restaurants Pty Ltd and Ranaz Pty Ltd no longer wished to participate in these proceedings.
On 15 June 2022, Spring Dam Enterprises Pty Ltd, a Schedule 1 Employer, notified its formal appearance in these proceedings.
On 29 June 2022, the SDA commenced representation of the Applicant, with Youth Law Australia ceasing to act on 30 June 2022.
On 15 July 2022, the SDA filed written submissions on behalf of the Applicant and requested an extension to provide a detailed submission comparing the terms of the Agreement with those of the Fast Food Industry Award 2010 (FFA Award).
On 18 July 2022, I issued the following amended directions:
[8] By close of business Thursday, 16 June 2022, a relevant employee or officer of Ranaz and Eatfresh is to file with the Commission and serve upon the Applicant a statutory declaration confirming that all employees of Ranaz and Eatfresh to whom the Agreement covers and/or applies have each been personally and individually provided with (in hard copy or electronic form):
(a) a copy of the Forms F24B and F24C filed in these proceedings; and
(b) a copy of these Directions.Provided that Ranaz is not required to comply with this Direction should it notify the Commission and the Applicant prior to 4.00pm AEST on Tuesday, 14 June 2022, that it no longer wishes to appear and be involved in these proceedings.
[9] By close of business T
hursday, 14 July 2022, Tuesday, 19 July the Applicant is to file in the Commission, and serve upon any Relevant Employer who has appeared, or notified its formal appearance, in these proceedings, any material in support of his application to terminate the Agreement by reference to the matters identified under s.226 of the Act.[10] By close of business
Thursday, 14 July 2022, Tuesday, 19 July any employee employed by a Relevant Employer is provided with the opportunity to file in the Commission any material in support of, or in opposition to, the Applicant’s application to terminate the Agreement. The Commission will promptly serve a copy of any such materials so filed upon the Applicant and any Relevant Employer who has appeared, or notified its formal appearance, in these proceedings.[11] By close of business Thursday, 18 August 2022, any Relevant Employer is provided the opportunity to file in the Commission, and serve upon the Applicant, any material in support of, or in opposition to, the Applicant’s application to terminate the Agreement by reference to the matters identified under s.226 of the Act (including any material in reply to the material filed and served by the Applicant or the Commission pursuant to Directions [9] and [10] above).
[12] By close of business Thursday, 1 September 2022, the Applicant is to file in the Commission, and serve upon any Relevant Employer who has appeared, or notified its formal appearance in these proceedings, or filed and served any material pursuant to Direction [11] above, any material to be relied upon in reply to any materials filed pursuant to Directions [10] and [11] above.
On 19 July 2022, the SDA filed (on behalf of the Applicant) a detailed submission comparing the terms of the Agreement with those of the FFA Award.
On 15 August 2022, an email in the following terms was received from Mr Knight of Spring Dam Enterprises Pty Ltd:
“My company, Spring Dam Enterprises Pty Ltd, is a party to the IPCA (NSW) 2012 Enterprise Agreement (EA). The EA has been a major benefit to our business.
This EA has been a major benefit to the business, mainly due to the reduced administration required in the employment of staff. As a small business where I do all of the administration, including payroll, this reduces my workload considerably. When the EA was approved it had loaded rates which were great. When we had to stop paying loaded rates we had a major problem with staff as they did not want to accumulate leave. Most of our staff are teenagers and they “want the money now”. They are not interested in accrued leave. I pay most of my staff ‘above award’ so the slightly increased hourly rate will not affect us.
To enable me to change our payroll systems I am requesting a months notice of the cancellation of the EA.”
On 2 September 2022, the SDA filed written submissions in reply on behalf of the Applicant.
Given the relative absence of any engagement from the Schedule 1 Employers, and Transferred Employers, as to the substantive merits of the Application, and to ensure that employees and all relevant employers had a full opportunity to express any views as to the Application, on Tuesday, 13 September 2022 I conducted a hearing. No Schedule 1 Employers or Transferred Employers appeared at this hearing.
Legislation
Subdivision D of Division 7 of Part 2-4 of the Act sets out the mechanism by which an enterprise agreement may be terminated after the agreement has passed its nominal expiry date.
Section 225 of the Act provides:
“225 Application for termination of an enterprise agreement after its nominal expiry date
If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.”
Section 226 of the Act provides:
“226 When the FWC must terminate an enterprise agreement
If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:
(a) the FWC is satisfied that it is not contrary to the public interest to do so; and
(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:
(i)the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and
(ii)the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”
Consideration
Section 225 of the Act
I am satisfied that the two threshold requirements set out in s.225 of the Act have been met.
Firstly, the Agreement has passed its nominal expiry date. Secondly, the Applicant was an employee covered by the Agreement at the time the Application was made.
Not contrary to the public interest – s226(a)
The Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd[1] (Aurizon) cited various passages from the Full Bench of the Australian Industrial Relations Commission’s decision in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000[2] which had concerned the corresponding, but not identical, provision from the Workplace Relations Act 1996 (Cth). Relevantly, these passages included:
“The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.”[3]
It is also relevant to highlight that the Full Bench in Aurizon concluded that it cannot be expected that the terms and conditions of an agreement will continue unaltered in perpetuity after it has passed its expiry date. This is because the Act contemplates that the terms and conditions of an enterprise agreement may be altered by making a new agreement or by terminating the existing enterprise agreement.
As was also recognised in Aurizon, s.226 of the Act is not limited to circumstances in which an enterprise agreement no longer applies to any employee. The Act clearly contemplates the termination of an enterprise agreement that still applies to employees and prescribes a safety net upon termination in such circumstances. The prescribed safety net is not a prior agreement and nor are undertakings mandatory. Rather, the prescribed safety net is the relevant modern award created during the Award Modernisation process and the National Employment Standards (NES). In this case, the relevant modern award is the FFA Award.
Having regard to the Application, the termination of the Agreement would not lead to an absence of award coverage for the employees. The FFA Award provides for “proper industrial standards” within the meaning given to that term by Kellogg and in circumstances where there was no material before me suggesting otherwise, I am satisfied it is not contrary to the public interest to terminate the Agreement.
Appropriate to terminate the Agreement - s226(b)
I am required to consider whether it is ‘appropriate’ to terminate the Agreement, taking into account all of the relevant circumstances, including the views of the employees, each employer and each employee organisation covered by the Agreement, and the circumstances of those employees, employers and organisations, including the likely effect that the termination will have on them.
The approach to assessing appropriateness by taking into account all of the relevant circumstances, as enunciated by the Full Bench in Aurizon, is to have reference to the construction of s.226 and the contextual matters that bear upon that construction, as well as giving specific consideration to the matters identified in s. 226(b)(i) and (ii):
“All of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s. 226(b)(i) and (ii).”[4]
The Applicant contends that the Agreement should be terminated. The views of other employees are not known. There are no organisations covered by the Agreement.
The Applicant contends that termination of the Agreement and the ‘return’ of employees to the FFA Award would confer a material advantage to employees that weighs in favour of the termination of the Agreement.[5] As set out above, the Applicant filed tables which provided a detailed comparative analysis of the terms and conditions of employment under the Agreement with those under the FFA Award. He submits that this analysis supports termination of the Agreement. Having reviewed those submissions, I accept them, including the conclusions readily apparent therein.[6]
Few conditions of the Agreement are superior to those of the FFA Award. In my view, the terms of the FFA Award are overall more favourable to employees than those of the Agreement. This is relevant to the consideration of the ‘circumstances’ of employees covered by the Agreement and the ‘likely effect that the termination will have’ on them, for the purpose of s.266(b)(ii). I consider these matters support a conclusion that it is appropriate to terminate the Agreement.
Taking into account the views of the persons referred to in s.226(b) that are before the Commission, and the circumstances of those persons, as well as the effect the termination will have on each of them, I consider it appropriate to terminate the Agreement.
Operative date of termination
Section 227 of the Act provides as follows:
“227 When termination comes into operation
If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”
The Applicant submits that in the absence of any demonstrated proper reason why termination should be deferred or delayed, any order that the Agreement be terminated should operate forthwith.[7] The employer who provided a response to the Application sought that any termination be delayed.[8]
Section 227 of the Act affords the Commission a discretion as to the operative date of the termination of an agreement. It is to be expected that new conditions of employment will apply following the termination of an enterprise agreement, and it is foreseeable that preparations will need to be made to implement them. In my opinion, it is reasonable to allow a period of time for employers to prepare and make adjustments to their businesses to apply the FFA Award. The period needs to be sufficient to allow employers to make changes to payroll systems and administrative arrangements, and for consideration of the potential cost implications associated with the application of the FFA Award. As such, I consider a period of four weeks from the date of this decision before the termination of the Agreement commences to operate to be appropriate.
Conclusion
In relation to the Application that has been made under s.225 of the Act, I am satisfied that it is not contrary to the public interest to terminate the Agreement, and I consider that it is appropriate to do so taking into account all of the relevant circumstances. I am therefore required by s.226 of the Act to terminate the Agreement.
I terminate the Agreement effective on and from 11 October 2022.
DEPUTY PRESIDENT
[1] [2015] FWCFB 540 (Aurizon).
[2] (2005) 139 IR 34 (Kellogg).
[3] Aurizon at [129].
[4] Aurizon at [167].
[5] Applicant’s submissions filed 15 July 2022 at [16].
[6] Applicant’s submissions filed 19 July 2022.
[7] Applicant’s submissions filed 15 July 2022 at [24].
[8] Spring Dam Enterprises Pty Ltd submissions filed 15 August 2022; see [21] above.
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