Bakers Delight Holdings Ltd T/A Bakers Delight

[2019] FWCA 8078

[2019] FWCA 8078

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Bakers Delight Holdings Ltd T/A Bakers Delight
(AG2019/3063)

SHORAN BAKERY PTY LTD T/A BAKERS DELIGHT EDGEWORTH ENTERPRISE AGREEMENT

Retail industry
COMMISSIONER MCKINNON	MELBOURNE, 27 NOVEMBER 2019

Application to terminate expired enterprise agreement.

[1] Shoran Bakery Pty Ltd operated the Bakers Delight bakery franchise in Edgeworth, New South Wales. It made the Shoran Bakery Pty Ltd T/A Bakers Delight Edgeworth Enterprise Agreement with eight employees in 2009. 1 The Agreement nominally expired on 10 March 2014.

[2] In July 2019, Shoran Bakery went into liquidation. Its assets and employees were transferred to the franchisor, Bakers Delight Holdings Ltd, along with the Agreement.

[3] Other employees of Bakers Delight are employed under the General Retail Industry Award 2010. Bakers Delight seeks that the Agreementbe terminatedso that the same position applies to employees at the Edgeworth store. It says coverage under the modern award will bring the employment conditions of employees in line with industry standards in a way that ensures no employee will be disadvantaged.

[4] Section 226 of the Fair Work Act 2009 requires the Commission to terminate expired enterprise agreements on application if certain conditions are met. The question is whether the Agreement should be terminated in the circumstances.

[5] The Agreement incorporates the terms of two former State Awards, the Shop Employees (State) Award and the Bread Industry (State) Award which became notional agreements preserving state awards in the transition to the Fair Work Act 2009. At face value, some of the terms of the preserved state awards are more beneficial than terms of the modern award.

[6] Bakers Delight submits that employees will be better off under the modern award than if the Agreement continues to apply. While there are differences between the terms of the Agreement and the modern award, the opening hours of the bakery are such that the position of employees will improve overall if the Agreement is terminated. Specifically:

1. For employees who work on Thursday or Friday, the spread of hours is the same under the Agreement and the modern award, but the modern award penalty for evening work is higher;

2. For employees who work on a Saturday, weekend penalties are higher under the modern award for casual employees and will increase incrementally over the next 6 months to 150% by 1 March 2020.

3. Employees who work on Sunday are better off despite a one-hour variance in the spread of ordinary hours between the Agreement and the modern award (8:00am – 5:00pm compared to 9:00am – 6:00pm respectively), because the Sunday penalty is higher under the modern award by 15-25%.

4. Casuals will receive an extra 10% loading on closing shifts and an incrementally higher evening penalty over the next 2.5 years to 150% from 1 March 2021.

5. Permanent employees work a mix of open, close and weekend shifts. Higher weekend penalties under the modern award will leave them better off overall.

[7] Bakers Delight also sees value in streamlined administration in what it considers to be a complex regulatory environment. Administering a different set of terms and conditions of employment for a single former franchise will be burdensome and increase the risk of non-compliance with workplace laws.

[8] The views of the employees were sought but none were received. The offer of employment given to affected employees recognises their prior service for the purposes of personal and long service leave but not for annual leave which has been paid out. Continuity of service has not been recognised for redundancy or unfair dismissal eligibility purposes. The likely effect of terminating the Agreement on those employees who have accepted the offer of employment is that some nominally more favourable conditions will be displaced by terms of the modern award, while other terms and conditions of employment improve. In the context of the operating hours of the business and the different working hours of different classes of employee, I am satisfied that the potential for detriment is limited.

[9] No evidence is before me to support a finding that termination of the Agreement would be contrary to the public interest. I am satisfied that it is not.

[10] The Agreement was originally made to prevent “deleterious financial implications for the business” 2 when the modern award commenced on 1 January 2010. Nine years later, the business has gone into liquidation and Bakers Delight has decided to reinvest in the business, including for the benefit of employees. Termination of the Agreement will assist Bakers Delight in managing the business as one of many entities within its control. It will ensure that employees have the benefit of the modern award safety net for the first time. In all the circumstances, it is appropriate to terminate the Agreement.

[11] The Agreement is terminated effective from today.

COMMISSIONER

Appearances:

K Byrdy with B Nugent for Bakers Delight Holdings Pty Ltd

Hearing details:

2019.

Melbourne:

November 15.

Printed by authority of the Commonwealth Government Printer

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 1   Shoran Bakery Pty Ltd T/A Bakers Delight Edgeworth Enterprise Agreement [2010] FWAA 2450; PR995442 at [8].

 2   Shoran Bakery Pty Ltd T/A Bakers Delight Edgeworth Enterprise Agreement [2010] FWAA 2450; PR995442 at [8].