Crown Hotel Grafton Pty Ltd ATF Grafton Freehold Hotels Unit Trust T/A Crown Hotel Grafton Summary

[2022] FWCA 1141

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

Crown Hotel Grafton Pty Ltd ATF Grafton Freehold Hotels Unit Trust T/A Crown Hotel Grafton

(AG2022/330)

Crown Hotel Motel Pty Ltd Employee Collective Agreement 2006

Hospitality industry
DEPUTY PRESIDENT CROSS	SYDNEY, 1 APRIL 2022

Application for termination of the Crown Hotel Motel Pty Ltd Employee Collective Agreement 2006

An application has been made pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Act) by Crown Hotel Grafton Pty Ltd ATF Grafton Freehold Hotels Unit Trust T/A Crown Hotel Grafton (the Applicant) for approval to terminate the Crown Hotel Motel Pty Ltd Employee Collective Agreement 2006 (the Agreement). The nominal expiry date of the Agreement is 2011.

Sections 225 and 226 of the Act provide:

“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.”

Consideration

The Applicant is an employer covered by the Agreement and thus has standing to make the termination application. The Agreement has passed its nominal expiry date of 2011.

The Agreement does not cover any employee organisations.

The Form F24C Declaration provided by Mr Charles Nalder states that the Applicant sought the views of the employees covered by the Agreement on 20 October 2021. It is stated that 16 employees responded and raised no objections. The remaining employee did not respond. No objections to the application were received by the Commission.

Determination

Based on the material accompanying the application and the information provided to the Commission, I am satisfied that the requirements of s.226 have been met, and that it is appropriate to terminate the Agreement. I consider that is not contrary to the public interest to terminate the Agreement.
Pursuant to s.226 of the Act, the Agreement is terminated. The termination will come into effect from the date of this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The application was brought by the Crown Hotel Motel Pty Ltd against the Liquor, Hospitality and Miscellaneous Workers Union of NSW. The applicant sought to terminate the Employee Collective Agreement 2006, which applied to a number of employees at the Crown Hotel Grafton. The application was heard in the Fair Work Commission. The primary legal issue before the Commission was whether the continued operation of the collective agreement would have a detrimental effect on the business of the applicant, as required by section 237 of the Fair Work Act 2009. The applicant argued that the continued operation of the agreement would have a detrimental effect on the business because it would make the business unviable. The Commission considered evidence from both parties and found that the continued operation of the agreement would not have a detrimental effect on the business. The Commission found that the applicant had not demonstrated that the business would be rendered unviable if the agreement was not terminated. The Commission also found that the applicant had not demonstrated that it was unable to operate the business profitably if the agreement was not terminated.

The Commission held that the application for termination of the agreement should be dismissed. The Commission found that the applicant had not met the threshold for termination of the agreement and that the continued operation of the agreement was not detrimental to the business. The Commission also found that the application was brought without proper consideration of the impact of termination on the employees and that the application was brought in bad faith. The Commission ordered that the application be dismissed and that the costs of the application be paid by the applicant. The Commission further ordered that the application be referred to the Australian Building and Construction Commission for consideration of potential penalties for bringing the application in bad faith.

Crown Hotel Grafton Pty Ltd ATF Grafton Freehold Hotels Unit Trust T/A Crown Hotel Grafton

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established