Barry Nominees Pty Ltd T/A Golden City Hotel

[2019] FWCA 5404

[2019] FWCA 5404

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 16 Sch. 3—Termination of transitional instrument

Barry Nominees Pty Ltd T/A Golden City Hotel
(AG2019/2179)

Food, beverages and tobacco manufacturing industry
DEPUTY PRESIDENT CLANCY	MELBOURNE, 2 AUGUST 2019

Application for termination of the Golden City Hotel Employee Collective Agreement 2007.

[1] On 21 June 2019, Barry Nominees Pty Ltd T/A Golden City Hotel (GCH) filed an application (the Application) pursuant to Item 16, Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the TPCA Act) to terminate the Golden City Hotel Employee Collective Agreement 2007 (the Agreement). The Application was accompanied by a statutory declaration of Mr Tim Kearney, Company Director of GCH, dated 21 June 2019, and the following annexures:

•  A memo to all employees of GCH dated 13 June 2019;

•  A comparison table demonstrating differences between that under the Agreement and the Hospitality Industry (General) Award 2010 (the Award); and

•  Results of a survey conducted by GCH seeking its employees’ views on termination of the Agreement.

[2] Mr Phillip Ryan of Hospitality Legal Pty Limited was recorded as GCH’s representative.

[3] Item 16, Schedule 3 of the TPCA Act states that Subdivision 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, noting its nominal expiry date, 8 July 2012 has passed.

[4] On 28 June 2019, I issued directions to requiring GCH to provide all employees covered by the Agreement a copy of the directions, the Application and the statutory declaration made by Mr Kearney by way of email as well as posting the material on the staff notice board. Employees covered by the Agreement were invited to file any material in response to the Application by 4:00PM on 19 July 2019.

[5] On 4 July 2019, Mr Ryan emailed my chambers advising that GCH had complied with my directions issued on 28 June 2019.

[6] No employees filed any material in response to the Application by 4:00PM on 19 July 2019.

Legislation

[7] 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.”

Tim Kearney’s statutory declaration

[8] In his statement, Mr Kearney said that there are employees covered by the Agreement. He declared the steps undertaken by GCH to obtain the views of its employees in relation to the Application.

[9] Mr Kearney said that on 13 June 2019, a staff meeting was held at the premises of GCH where the Application was proposed and explained. He said that employees who were unable to attend this meeting were consulted with at other times.

[10] Mr Kearney said that the employees were provided with a memo dated 13 June 2019, a comparison table setting out the differences in the key terms and conditions under the Agreement and the Award, as well as full copies of the Agreement and the Award.

[11] The memo dated 13 June 2019 addressed to employees was attached to Mr Kearney’s statutory declaration as Annexure A. It indicated that GCH intended to make an application to the Commission to terminate the Agreement and advised that the effect of this would result in the employees’ terms and conditions being covered by the Award. The memo further invited employees covered by the Agreement to participate in a survey to collect their views on termination of the Agreement. Attached to the memo was a comparison document which contained a table comparing the major terms in the Agreement to the Award, and the memo also indicated that full copies of each would be available for their perusal.

[12] The comparison document was also attached to Mr Kearney’s statutory declaration as Annexure B. It compared key terms between the Agreement and the Award, including the minimum hourly wages as at 1 July 2018, penalty rates, public holiday rates, overtime, full time employment, part time employment, allowances, meal breaks, rosters, leave entitlements and termination notice.

[13] Mr Kearney said that between 13 June 2019 and 17 June 2019, employees of GCH were invited to participate in an anonymous survey conducted via Survey Monkey to seek their views on the proposed transfer of coverage from the Agreement to the Award. He attached, as Annexure C, a document demonstrating that of the 16 respondents to the survey, no responses opposed the termination of the Agreement and no comments were made where an open response was invited.

[14] Mr Kearney advised that one of the 16 respondents to the survey was himself testing the survey on 11 June 2019, but submitted that this did not change the results demonstrating that all respondents did not oppose the termination of the Agreement.

Consideration

Section 225

[15] I am satisfied that GCH, as the employer covered by the Agreement, is eligible to apply to the Commission for the termination of the Agreement under s.225(a) of the Act. I am also satisfied that the Agreement has passed its nominal expiry date of 8 July 2012.

Section 226(a) – Public interest

[16] Having regard to 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 1(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 20002(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…” 3

[17] 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. 4

[18] 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 Hospitality Industry (General) Award 2010 (the Award).

[19] 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.

[20] 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) – Appropriateness

[21] 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).” 5 (Reference omitted)

[22] I intend to adopt this approach.

[23] As the employer, GCH filed the Application to terminate the Agreement. Clearly, it supports the Agreement being terminated. Mr Kearney did not declare the effect of terminating the Agreement on GCH. However, he did declare that GCH consulted with its employees about the effect of terminating the Agreement on them. He also declared that of the 15 employees who responded to GCH’s survey, all respondents supported the termination of the Agreement.

[24] There is no employee organisation covered by the Agreement.

[25] In response to my query on 2 August 2019, GCH submitted that it employed 45 employees, 41 of whom are covered by the Agreement.

[26] 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. While no submissions from any employees were filed in the Commission, I have noted that 15 employees support termination. As to the balance of the employees covered by the Agreement, I am prepared to conclude that they are not opposed to such a level that has motivated them to register their opposition, either through the filing of material in response to my directions or a survey response. They appear indifferent.

[27] 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 full-time and part-time employees in the positions of Hospitality Duties Level 1, Hospitality Duties Level 2, Hospitality Duties Level 3, Hospitality Duties Level 4, Hospitality Duties Level 5 and Hospitality Duties Level 6.

[28] The material before me indicates the base hourly rates of pay currently being paid to employees covered by the Agreement are higher than that stipulated by the Award. Under the Agreement, however, employees do not appear to have the benefit of penalty rates for working on Saturdays, Sundays, public holidays and afternoon or evening loadings. GCH submitted that these were built into the hourly flat rate of pay, weekly salary and annualised salary. Further, under the Agreement, there appears to be no additional benefit for work performed on a public holiday or where a rostered day off falls on a public holiday, no entitlement to additional pay for hours worked outside ordinary hours of work, and no provisions for allowances covering meals, laundry, tools, uniforms and special clothing, vehicles, working late and working early, working away, first aid, broken periods of work, and overnight stays.

[29] I am therefore satisfied that if the Award was to apply to the employees, they would receive more favourable conditions in terms of the penalty rates for weekends, public holidays and afternoon or evening work. I have also had 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.

Conclusion

[30] The Agreement does not cover any employee organisation and 15 employees expressed support for the Application. Having regard to the terms of the Agreement in their entirety as they apply to the employees, the fact that the only employees who have been motivated to engage in this process have registered their support for the termination of the Agreement, as well as the fact that the employees will be covered by the Award if the Agreement is terminated, together with the views and circumstances of GCH, I am satisfied it is appropriate in all the circumstances to terminate the Agreement. As outlined in paragraph [20] above, I am also satisfied it is not contrary to the public interest to terminate the Agreement.

[31] In the covering letter to the Application, GCH requested that as it has a weekly pay period commencing on a Monday, any decision to terminate the Agreement should take effect on a Sunday so as to avoid the administrative burden of falling during a pay period.

[32] Further to the above findings, the Act requires that I terminate the Agreement. 6 In accordance with s.227 of the Act, and having regard to GCH’s request that the termination take effect on a Sunday, the termination will take effect from 4 August 2019.

DEPUTY PRESIDENT

<AC308078  PR710985 >

 1   [2015] FWCFB 540.

 2 (2005) 139 IR 34.

 3   Ibid at 40.

 4   [2015] FWCFB 540 at [176].

 5 Ibid at [167].

 6 Section 226 of the Fair Work Act 2009 (Cth).

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