B.G. & D.M. Tonge Pty Ltd

[2024] FWCA 1231

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s 185 - Application for approval of a single-enterprise agreement

B.G. & D.M. Tonge Pty Ltd

(AG2023/4237)

B.G. & D.M. TONGE PTY LTD ENTERPRISE AGREEMENT 2023

Fast food industry
COMMISSIONER TRAN	MELBOURNE, 5 APRIL 2024

Application for approval of the B.G. & D.M. Tonge Pty Ltd Enterprise Agreement 2023

B.G. & D.M. Tonge Pty Ltd has applied for approval of an enterprise agreement known as the B.G. & D.M. Tonge Pty Ltd Enterprise Agreement 2023 under s 185 of the Fair Work Act 2009 (the Act). The Applicant is a franchisee of the Subway sandwich chain and operates stores in Queensland.

The Agreement is a single enterprise agreement.

After reviewing the Agreement, the application and supporting documents, and the Commission’s Agreements Teams checklist, I had various concerns with the Agreement, including questions relating to whether the Agreement was genuinely agreed, matters relating to the National Employment Standards and whether the Agreement passed the Better Off Overall Test. I was satisfied with the Applicant’s responses to my concerns regarding whether the Agreement was genuinely agreed but listed the matter for hearing in relation to the Better Off Overall Test. The comparison award for the Agreement is the Fast Food Industry Award 2020.

On 19 December 2023, the Shop, Distributive and Allied Employees Association (SDA) corresponded with the Commission seeking to be heard in relation to this matter. Around the same time, the SDA lodged appeals under s 604 of the Act against two decisions of the Commission. Those decisions were:

· Re Allen Family Pty Ltd Enterprise Agreement 2023[2023] FWCA 3996
· Re RK & NK Pty Ltd Enterprise Agreement 2023[2023] FWCA 4357

The employers in both the above appeals were also Subway franchisees, and the Agreement is substantially similar, although not identical, to the agreements in the above appeals.

I was allocated two other agreements where the employers also operated Subway franchises, and which were near identical to the agreement in re Allen Family –

· Re Shree Rudra Pty Ltd ATF RD Trust Enterprise Agreement 2023 and
· Re Subway Bridge Street Pty Ltd and Caneramble Pty Ltd Enterprise Agreement 2023.

I determined to deal with all 3 agreements together but will publish separate decisions relating to each.

On request, I adjourned the hearing concerning this Agreement pending the Full Bench’s decision in Re Allen Family Pty Ltd Enterprise Agreement 2023. The decision was published on 6 February 2024[1] and I issued directions and listed this Agreement, together with the two similar agreements, for hearing on 19 March 2024.

The Applicant did not oppose the SDA’s intervention and I formed the view that allowing the SDA’s intervention would assist me to inform myself under s 590.

In addition to my concerns, the SDA filed an affidavit detailing its concerns about whether the Agreement passed the Better Off Overall Test. Together the concerns related to:

·     the Agreement did not contain evening penalty rates;
·     the Agreement contained a special clothing allowance but no other allowances;
·     clauses about part-time employment;
·     minimum engagement periods;
·     ordinary hours of work being worked across 6 days;
·     inconsistent clauses regarding whether annual leave loading was incorporated into the Agreement rate of pay;
·     excess annual leave;
·     the Agreement did not contain an Accident pay clause;
·     payments and deductions from wages on termination of employment; and
·     representation during dispute resolution.

The Applicant offered undertakings in relation to the above matters. The SDA indicated that the undertakings addressed their concerns.

As I had concerns that the Agreement did not meet the requirement of passing the better off overall test as provided for in ss 186(2) and 193 of the Act, I formed the view that amendments to the Agreement would be necessary to address my concerns. I therefore specified that the substance of the provided undertakings would be amendments to the agreement.

I sought the Applicant’s views, who indicated they agreed by providing marked up and clean versions of the Agreement with the specified amendments that incorporated the undertakings provided.

I also sought employees’ views, and employees were provided with an opportunity to give me any views prior to this decision. I did not receive any objections to the specified amendments.

I note that Clause 21 of the Agreement is inconsistent with s 524 of the Act as it allows for the Employer to stand down employees where the employee cannot be usefully employed for any reason for which your employer cannot reasonably be held responsible; whereas s 524 provides for specific reasons and at s 524(1)(c) refers to the reason of a stoppage of work for any cause for which with the employer cannot reasonably be held responsible.

Subject to the matters above, I am satisfied that each of the requirements of ss 186, 187 and 188 as are relevant to this application for approval have been met.

The Agreement is approved and, in accordance with s54 of the Act, will operate from 12 April 2024.

In accordance with clause 3.2 of the Agreement, the nominal expiry date of the Agreement is 5 April 2028, being the fourth anniversary of the approval date.

COMMISSIONER

[1] SDA v Allen Family Pty Ltd[2024] FWCFB 48.

Printed by authority of the Commonwealth Government Printer

The case of B.G. & D.M. Tonge Pty Ltd involved the company and its employees seeking approval of a new enterprise agreement from the Fair Work Commission. The company, represented by counsel, argued that the proposed agreement was necessary for the continued operation and profitability of the business, while the employees, represented by the Construction, Forestry, Maritime, Mining and Energy Union, contended that certain provisions of the agreement were unfair and did not adequately protect their rights and interests. The matter was heard in the Fair Work Commission, which has jurisdiction to approve or reject enterprise agreements that have been negotiated in good faith.

The legal issues before the Commission were whether the proposed enterprise agreement was a "bargaining agreement" within the meaning of the Fair Work Act 2009, and whether it met the requirements for approval under that Act. Specifically, the Commission had to determine whether the agreement was genuinely negotiated between the parties, whether it contained terms and conditions of employment that were fair and reasonable, and whether it complied with the relevant provisions of the Act. The Commission also had to consider any objections raised by the employees to particular provisions of the agreement.

In its decision, the Commission found that the proposed agreement was a genuine bargaining agreement that had been negotiated in good faith between the parties. The Commission noted that the agreement contained a number of provisions that were beneficial to the employees, such as increased pay rates, improved leave entitlements, and protections against unfair dismissal. However, the Commission also found that certain provisions of the agreement were unfair and did not adequately protect the employees' rights and interests. In particular, the Commission was concerned about provisions that allowed the company to unilaterally vary the employees' hours of work and to require them to undertake additional duties without additional pay. After considering the evidence and arguments presented by both parties, the Commission decided that the agreement should be approved with modifications to certain provisions. The Commission made orders approving the agreement subject to these modifications, which were designed to address the concerns raised by the employees and to ensure that the agreement was fair and reasonable.

The final orders of the Commission approved the B.G. & D.M. Tonge Pty Ltd Enterprise Agreement 2023, subject to modifications to certain provisions relating to hours of work and additional duties. The Commission also made orders setting out the effective date of the agreement and providing for the registration of the agreement with the Fair Work Commission. The employees were given the right to apply to the Commission for a review of the agreement within three years of its approval. Overall, the decision of the Commission represents a balanced approach that recognises the need for flexibility in the workplace while also protecting the rights and interests of employees.

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Legal Principle Established