Bakers Delight Holdings Ltd T/A Bakers Delight

[2017] FWCA 3499

[2017] FWCA 3499

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Bakers Delight Holdings Ltd T/A Bakers Delight
(AG2017/1631)

VICTORIAN FRANCHISEE EMPLOYEE COLLECTIVE AGREEMENT (BD NO.1) 2007

Retail industry
DEPUTY PRESIDENT CLANCY	MELBOURNE, 3 JULY 2017

Application for termination of the Victorian Franchisee Employee Collective Agreement (BD No.1) 2007.

[1] On 10 May 2017, Bakers Delight Holdings Ltd (Bakers Delight) filed an application pursuant to Item 16, Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the TPCA Act) to terminate the Victorian Franchisee Employee Collective Agreement (BD No. 1) 2007 (the Agreement). The Agreement is a collective agreement-based transitional instrument.

[2] Item 16, Schedule 3 of the TPCA Act states that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) applies to applications to terminate collective agreement-based transitional instruments that have passed their nominal expiry date. I am satisfied that the Agreement is a collective agreement-based transitional instrument and, as indicated below, that its nominal expiry date of five years from its lodgement date has passed.

[3] The Act relevantly provides as follows:

“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.

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.

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.”

[4] A statutory declaration filed by Ms Rachel Goldstein, HR Coordinator for Bakers Delight, noted that two employees are covered by the Agreement and that should it be terminated, the General Retail Industry Award 2010 1 (the Award) would apply to those employees. Ms Goldstein submitted that the two employees would be better off overall with the Award applying to them. Ms Goldstein also noted the nominal expiry date of the Agreement was August 2012.

[5] On 16 May 2017, Directions were issued which required Bakers Delight to make reasonable arrangements to either provide a copy of the Directions, application and statutory declaration made by Ms Goldstein to all employees covered by the Agreement, or to display a copy of the documents in all the workplaces covered by the Agreement. The Directions noted that if any party opposed the application to terminate the Agreement, advice in writing was to be given to my chambers by close of business on 13 June 2017. No submissions or objections to the application were received from any party.

[6] On 14 June 2017, a Notice of Listing for a telephone mention on 30 June 2017 was sent to Bakers Delight. Bakers Delight was directed to provide the Notice of Listing to employees covered by the Agreement as soon as practicable, which it confirmed was done. Any employee who wished to attend the telephone mention was invited to provide their contact telephone number to my chambers by 4.00pm on 28 June 2017. No employee did so and the mention proceeded with Ms Goldstein present.

Section 225 of the Act

[7] I am satisfied the requirements of s.225 of the Act are met:

• The Agreement was lodged and commenced operating in August 2007. I have noted that Clause 8(a) of the Agreement provides the “duration of this agreement shall be for a period of five (5) years from the date of lodgement with the Workplace Authority.” Therefore, I am satisfied at the very latest, the nominal expiry date passed on and from 1 September 2012; and



• At the telephone mention, Ms Goldstein confirmed that Bakers Delight inherited the Agreement from the employer described in the Agreement, ‘Crusted Pty Ltd’ (ABN 64 104 711 971) and ‘Blue Sky Heaven Pty Ltd’ (ABN 57 093 489 055) pursuant to a transfer of business. Bakers Delight, as the employer covered by the Agreement, is eligible to apply to the Fair Work Commission for the termination of the Agreement. 2

Section 226(a) of the Act – Public Interest

[8] As regards s.226(a) of the Act and the manner in which the public interest is to be assessed, the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd 3(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 20004(Kellogg) which had concerned the corresponding, but not identical, provision from the Workplace Relations Act 1996. 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…” 5

[9] It is also relevant to highlight 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 the terms and conditions of an agreement may be altered by making a new agreement or by terminating the existing agreement. 6

[10] As was also recognised in Aurizon, s.226 of the Act is not limited to circumstances in which an agreement no longer applies to any employee. The Act clearly contemplates an agreement that still applies to employees being terminated 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 General Retail Industry Award 2010.

[11] In this application, the termination of the Agreement would not lead to an absence of award coverage for the employees. The Award provides for “proper industrial standards” within the meaning given to that term by Kellogg.

[12] 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.

Section 226(b) of the Act – Appropriateness

[13] The approach to assessing appropriateness by taking into account all the 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 ss. 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).” 7 (Reference omitted)

[14] I intend to adopt this approach.

[15] As the employer, Bakers Delight filed the application to terminate the Agreement. Clearly it supports the Agreement being terminated. Ms Goldstein stated the effect of terminating the Agreement on Bakers Delight would be that the General Retail Industry Award 2010 will apply to employees. No further submissions were made as to the effect of terminating the Agreement on the employer.

[16] I note there is no employee organisation covered by the Agreement and have taken this into account.

[17] Further to paragraph [5] above, Bakers Delight confirmed at the telephone mention that they complied with the Directions and the two relevant employees were provided with the Directions, application and statutory declaration on 16 May 2017. I am therefore satisfied the employees were on notice as to the application before me and had a reasonable period of time to file material should they have wished to do so. Ms Goldstein advised that in her discussion with one of the employees covered by the Agreement, no negative feedback was given to her in relation to the application to terminate. As no submissions from any employees were filed in the Commission, I will accord neutrality to their views in considering the application.

[18] As to the circumstances of the employees and the likely effect that termination of the Agreement would have on them, I note the Agreement covers employees in both retail and baking positions, including managers and apprentices. The Agreement contains rates of pay for casual and full time/part time retail shop assistants, shop managers and baking employees. Ms Goldstein confirmed that clause 17 of the Agreement, “Loyalty Bonus,” will continue to be honoured by Bakers Delight and paid to the two employees currently covered by the Agreement in the event it is terminated.

[19] There is no material before me to indicate what rates are currently being paid to employees covered by the Agreement but I am satisfied I can reasonably conclude, based on a reading of its terms, that if the Award was to apply to the employees, they would not be left with conditions less favourable than those they currently enjoy. In any event, the Act contemplates the Award and NES applying as the safety net, in the event of termination of the Agreement.

Conclusion

[20] The Agreement does not cover any employee organisation and the employees expressed no views in relation to the Application. However, having regard to the terms of the Agreement in their entirety as they apply to the employees and the fact that they will be covered by the Award if the Agreement is terminated with their Loyalty Bonus from the Agreement preserved, together with the views and circumstances of Bakers Delight, I am satisfied it is appropriate in all the circumstances to terminate the Agreement. As outlined in paragraph [12] above, I am also satisfied it is not contrary to the public interest to terminate the Agreement.

[21] Further to the above findings, the Act requires that I terminate the Agreement. 8 In accordance with s.227 of the Act, the termination will take effect from 3 July 2017.

DEPUTY PRESIDENT

 1   MA000004.

 2   Fair Work Act 2009 (Cth), s.225(a).

 3   [2015] FWCFB 540.

 4 (2005) 139 IR 34.

 5   Ibid at 40.

 6   [2015] FWCFB 540 at [176].

 7 Ibid at [167].

 8   Fair Work Act 2009 (Cth), s.226.

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