Barrington Hospitality Pty Ltd T/A Hungry Jacks Roxburgh Park , Hungry Jacks Sunbury

[2016] FWCA 3825

[2016] FWCA 3825

FAIR WORK COMMISSION

DECISION

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

Barrington Hospitality Pty Ltd T/A Hungry Jacks Roxburgh Park , Hungry Jacks Sunbury
(AG2016/1020)

BARRINGTON HOSPITALITY PTY LTD ENTERPRISE AGREEMENT 2016

Fast food industry
DEPUTY PRESIDENT BULL	SYDNEY, 5 JULY 2016

Application for approval of the Barrington Hospitality Pty Ltd Enterprise Agreement 2016

[1] An application has been made by Barrington Hospitality Pty Ltd T/A Hungry Jacks Roxburgh Park, Hungry Jacks Sunbury (the applicant) for the approval of an enterprise agreement known as the Barrington Hospitality Pty Ltd Enterprise Agreement 2016 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) and is a single enterprise agreement.

[2] The Agreement covers all employees engaged by the employer. As per s.186 of the Act, I am satisfied that the group of employees was fairly chosen.

Better off overall test (BOOT)

[3] The Fast Food Industry Award 2010 (Award) is the relevant reference instrument for the purposes of the better off over all test (BOOT) as required under s.186 of the Act.

[4] The Agreement provides base rates of pay which are higher than the corresponding minimum rates of pay under the Award, being 5.28% to 9.02% higher for all employees. The Agreement provides that a fixed salary may be paid as an alternative to the hourly rates of pay.

Fixed salary

[5] The Agreement does not provide fixed salary rates. However, at cl.8 of the Agreement, it states:

“….. we may decide instead to pay you a fixed salary. Regardless of how you are paid, however; the total pay you receive will always be equal to or greater than the minimum pay entitlements (including all allowances and penalties) that you are entitled to receive under this Agreement.”

[6] Upon enquiry by the Commission, the applicant submitted that the reason a specific salary rate was not provided to the employees who voted on the Agreement is because if the salary was to be greater than the minimum entitlements outlined in the Agreement (as contained in Schedule B of the Agreement) then that salary figure would be the result of individual discussions between the employer and the relevant employee.

Section 186 – Genuine agreement

[7] In considering the approval of an agreement, s.186(2)(a) of the Act requires that the Commission be satisfied that the agreement was ‘genuinely agreed’, having regard to s.188(c). Section 188, which explicates the “genuinely agreed” in s.186(2)(a), provides:

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”

[8] The applicant relies on clause 8 of the Agreement, which explicitly states that the applicant may pay an employee a ‘fixed salary’, and that the fixed salary will ‘always be equal to or greater than the minimum entitlements under the Agreement’.

[9] In addressing s.188 of the Act, the applicant submits that all employees were aware of the ‘fixed salary’ option and as detailed in the applicant’s statutory declaration (F17), reasonable steps were taken to ensure that employees were informed of the agreement making process. The applicant submitted a copy of an information sheet titled “A GUIDE TO THE PROPOSED NEW EA” (the Guide) which was distributed to all employees leading up to the ballot.

[10] The Guide advises employees to refer to cl.8 and Schedule B of the Agreement, which states that employees may be paid on a ‘fixed salary’(which will be no less than the minimum entitlements under the Agreement) and outlines the minimum entitlements, respectively.

[11] In reference to s.188 of the Act, the Full Bench in KCL Industries Pty Ltd 1 stated:

“[28] Section 188 was considered in general terms by a Full Bench in Ostwald Bros Pty Ltd v Construction, Forestry, Mining and Energy Union 2. The Full Bench majority (Watson SDP and Gooley C, as she then was) said:

“[78]...“Genuinely agreed”, in s.188 is expressed in terms of satisfaction that particular bargaining provisions within the Act have been complied with (ss.188(a) and (b)) and satisfaction of a more general criterion in s.188(c), rather than in terms of a general consideration of whether in the circumstances of a particular agreement a member is satisfied that the agreement has been genuinely agreed to by the employees.

[79]As the Full Bench in Galintel 3 noted “Section 188 establishes a set of requirements, each of which must be satisfied if the necessary finding is to be made under s186(2)(a).”

[80] Section 188 of the Act does not provide a wide general discretion for determining whether employees have genuinely agreed to an enterprise agreement focused at the point of approval. Rather it requires specific actions to have been undertaken (in ss. 188(a) and (b) at specified times in advance of approval), with s 188(c) then requiring satisfaction that there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. Section 188(c) of the Act, although itself a broad discretionary consideration, is an additional matter about which [the Commission] needs to be satisfied and relates to grounds other than those arising in relation to the ss. 188(a) and (b) matters”.”

(My underline)

[12] Circumstances including the provision of material or information to employees which has the character of being misleading or intimidating, 4or where approval is affected by a material non-disclosure, or there is a scheme underpinning the agreement about which employees are not informed,5will be relevant to the Commission’s assessment of whether the agreement has been genuinely agreed by the employees.

[13] It is therefore necessary to take into account whether employees had been properly informed of a ‘fixed salary’ being payable under the Agreement rather than an hourly rate. The Agreement at cl.8 stated that a ‘fixed salary’ was possible under the Agreement, and the information guide which was distributed to employees as part of the bargaining process specifically referred to cl.8. As stated in Galintel, provided that the pre-approval requirements, as set out in s.188(a) and (b) are met, then s.188(c) requires the Commission to be satisfied that there are no other reasonable grounds for believing that the agreement has not genuinely been agreed to by the employees.

[14] In this application, all other pre-approval steps as required under s.188 have been complied with. Based on the material before me, I am not of the view that there has been a false misrepresentation by the applicant in the course of the agreement making process which may constitute a reasonable ground for believing under s.188(c) of the Act that the Agreement has not genuinely been agreed to by the employees.

[15] For abundant clarity, the applicant has provided an undertaking which states that the applicant will provide a payment method to an employee should it decide to pay the employee via a fixed salary arrangement. The undertaking also states that fixed salaries will be more than or equal to the minimum pay entitlements under the Agreement. The undertaking is taken to be a term of the Agreement and is attached at Annexure A of this decision.

[16] With respect to whether the ‘fixed salary’ rates satisfy the BOOT, it follows that as the hourly rates of pay under the Agreement satisfy the BOOT, ‘fixed salary’ rates must therefore satisfy the BOOT on the basis that the ‘fixed salary’ rates are higher than or equal to hourly rates of pay under the Agreement.

Penalties

[17] Under the Agreement, employees are entitled to overtime payments for work additional to their ordinary hours which is performed under the employer’s direction. Sunday penalty rates and public holiday penalties are also payable under the Agreement. If the employer and employee both agree, additional work may be taken as time off in lieu at ordinary time.

[18] The Commission wrote to the applicant in relation to concerns about the rates of pay given that employees are not entitled to penalty payments for evening shift work and ordinary work on Saturdays. The applicant was also advised of the Commission’s concern with the lack of written agreement in relation to whether part-time fixed salaried employees are entitled to overtime payment for work outside their ordinary agreed hours.

[19] In response to the Commission’s concerns, the applicant provided undertakings providing that fixed salary part time work arrangements will be agreed in writing and work outside the agreed upon hours will be overtime. The undertaking also states that full time employees, part time and casual employees will work a maximum of 20 hours on Saturdays over a four week period and a maximum of 20 hours beyond 9pm from Monday to Friday over a four week period.

[20] The undertakings provided by the applicant address the Commission’s concerns in relation to penalty payments for evening and Saturday work, fixed salaries and overtime payments for part-time employees. I am satisfied that the parameters provided in the undertaking in conjunction with the higher base rates of pay under the Agreement means that employees will be better off under the Agreement.

[21] The undertakings are taken to be a term of the Agreement and are attached at Annexure B of this decision.

[22] 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.

Conclusion

[23] Taking into account the higher rates of pay under the Agreement in conjunction with the applicant’s undertakings, I am satisfied that employees will be better off overall under the Agreement.

[24] 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.

[25] The Agreement is approved. In accordance with s.54(1), the Agreement will operate from 12 July 2016. The nominal expiry date of the Agreement is 20 June 2020.

DEPUTY PRESIDENT

Annexure A

Annexure B

 1   [2016] FWCFB 3048 at [28]

 2   [2012] FWAFB 9512

 3   Galintel Rolling Mills Pty Ltd T/A The Graham Group [2011] FWAFB 6772 at [36]

 4   Peabody Moorvale Pty Ltd v CFMEU [2014] FWAFB at [7] (Although this observation was made in the context of additional written material distributed at the same time as the Notice of Employee Representational Rights it is equally relevant in circumstances where oral presentations are made to employees); Re MSS Security Pty Ltd [2010] FWA 3687

 5   Grocon Enterprise Agreement (Victoria) AIRC(2003) 127 IR 13 at 48; Manfield Coalair and CEPU Electrical Division Northern Territory Enterprise Agreement Gove Alumina Refinery and Mine Site - 2010-2012 [2011] FWAA 9129 per Lawler VP at [23]

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