Barrington Hospitality, (Trustee for Rick Singh Family Trust) T/A Hungry Jacks Roxburgh Park , Hungry Jacks Sunbury

[2021] FWCA 4666

[2021] FWCA 4666

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Barrington Hospitality, (Trustee for Rick Singh Family Trust) T/A Hungry Jacks Roxburgh Park , Hungry Jacks Sunbury
(AG2021/4613)

BARRINGTON HOSPITALITY PTY LTD ENTERPRISE AGREEMENT 2016

Fast food industry
COMMISSIONER HARPER-GREENWELL	MELBOURNE, 20 AUGUST 2021

Application for termination of the Barrington Hospitality Pty Ltd Enterprise Agreement 2016.

[1] Barrington Hospitality, (Trustee for Rick Singh Family Trust) (Applicant) has applied, pursuant to s.225 of the Fair Work Act 2009 (the Act), to terminate the Barrington Hospitality Pty Ltd Enterprise Agreement 2016 1 (the Agreement). The Agreement has passed its nominal expiry date of 20 June 2020 and the Applicant is the employer covered by the Agreement.

[2] Directions were issued by the Commission requiring the Applicant to provide to all employees covered by the Agreement a copy of the Application and documents filed in the Commission in support of the application, together with a copy of the Directions. Any party wishing to be heard with respect to this application was given an opportunity to respond to the application. No party contacted Chambers in regard to the application in response to these directions.

[3] On 19 May 2021 further Directions were issued by the Commission requiring the Applicant to file written submissions addressing the likely effect the termination of the Agreement will have on employees. On 31 May 2021 Mr Singh from the Applicant filed his submissions setting out a comparison of Agreement and Award entitlements.

[4] On 8 July 2021 Mr Singh attended a conference before the Commission. During the conference it was raised with Mr Singh that if the Agreement is terminated, the Award will set termsand conditions of employment for employees of Hungry Jacks Roxburgh and Hungry Jacks Sunbury, and that the Award rates of pay that would be applicable to employees from the start of the first full pay period that starts on or after 9 April 2021 (being when the application was lodged) would be 3% below the current Agreement rates of pay.

[5] Mr Singh gave an undertaking to the Commission that if the application to terminate was granted existing employees will suffer no reduction in wages. Employees who are currently receiving wages above the Award rates would continue to do so until the Award rate became equivalent to the employees existing rate. Mr Singh was directed to provide the details of the undertaking he provided to the Commission on 8 July 2021 to the affected employees in writing. On 15 July 2021 Mr Singh filed a copy of a letter sent to employees through the Applicant’s payroll system (Keypay) on 15 July 2021 confirming the undertaking provided to the Commission.

[6] A Statement detailing the matters set out in [2] – [5] above and attaching the submissions filed by Mr Singh on 31 May 2021 (comparing Agreement and Award entitlements), and including a link to the Award, was issued by the Commission on 19 July 2021 giving employees of Hungry Jacks Roxburgh and Hungry Jacks Sunbury a further opportunity to advise the Commission of their views in relation to the possible termination of the Agreement and the impact on them if their employment was to be covered by the Award. The Applicant was required to provide a copy of the Statement and the Attachment to each affected employee via the keypay payroll system, and post a copy of the Statement and Attachment on the noticeboards in each workplace. Mr Singh provided a Statutory Declaration to Chambers on 3 August 2021 confirming compliance with this Direction.

[7] Any employee wishing to be heard with respect to this application was required to contact my Chambers by no later than 4pm on Monday 26 July 2021, after which time I would consider whether further directions should be made. I also advised that should no material be filed by employees of Hungry Jacks Roxburgh and Hungry Jacks Sunbury by the prescribed time, I would determine the application based on the material filed in the application by the Applicant, together with the undertaking provided at the conference by Mr Singh and correspondence confirming that undertaking filed by Mr Sing on 15 July 2021. No employee contacted Chambers in regard to the application.

The legislation

[8] 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.”

Section 225 of the Act

[9] I am satisfied the requirements of s.225 of the Act are met. As outlined above, the Agreement has passed its nominal expiry date and pursuant to s.225(a), Barrington Hospitality, (Trustee for Rick Singh Family Trust), an employer covered by the Agreement, has applied to the Commission for the termination of the Agreement.

Section 226(a) of the Act – Public Interest

[10] 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 2(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 20003(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…” 4

[11] 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. 5

[12] 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 the relevant modern award created during the Award Modernisation process and the National Employment Standards (NES). In this case, the relevant modern award for the relevant employees is the Fast Food Industry Award 2010 6.

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

[14] 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

[15] 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)

[16] I intend to adopt this approach.

[17] Mr Rick Singh, Director/Franchisee filed a declaration in support of the Application stating that the Award is current and fair to all employees and terminating the agreement would have no effect on his company. As outlined above further material was subsequently filed by Mr Singh and an undertaking provided to the Commission that if the application to terminate was granted existing employees will suffer no reduction in wages. Employees who are currently receiving wages above the Award rates would continue to do so until the Award rate became equivalent to the employees existing rate.

[18] Upon a further review of the Agreement, I noted that under the Agreement employees are paid loaded rates on all hours of work. In his submission Mr Singh undertook to provide each of the existing employees covered by the Agreement at the date of its termination an individual contract that provides the employee would not suffer a rate reduction in their total rate of pay (including allowances). Employees would move to the Award rate upon their anniversary increase where that increase is sufficient to ensure they do not suffer a reduction.
[19] I am 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. However, no submissions from any employees were filed in the Commission and I will therefore accord neutrality to their views in considering the application.

[20] As to the circumstances of the employees and the likely effect that termination of the Agreement would have on them, I have regard to the fact that the Act contemplates the Award and NES applying as the safety net in the event of termination of the Agreement, that terminating the Agreement would result in the employees being covered by the Award and am also satisfied that existing employees will suffer no reduction in wages under the Award in light of the undertaking provided by Mr Singh.

[21] I note there is no employee organisation covered by the Agreement.

Conclusion

[22] 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 affected employees and the fact that they will be covered by the Award if the Agreement is terminated, together with the views and circumstances of the Applicant and on the basis of the undertaking provided by the Applicant, I am satisfied it is appropriate in all the circumstances to terminate the Agreement. As outlined in paragraph [13] above, I am also satisfied it is not contrary to the public interest to terminate the Agreement.

[23] 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 20 August 2021.

COMMISSIONER

 1   AE419354

 2   [2015] FWCFB 540

 3 (2005) 139 IR 34

 4   Ibid at 40

 5   [2015] FWCFB 540 at [176]

 6   MA000003

 7   Ibid at [167]

 8   Fair Work Act 2009 (Cth), s.226

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<AE419354  PR732358>