Employee X
[2025] FWCA 1732
•26 MAY 2025
| [2025] FWCA 1732 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date
Employee X
(AG2025/1283)
GRILL'D NORWOOD ENTERPRISE AGREEMENT 2014
| Fast food industry | |
| COMMISSIONER PLATT | ADELAIDE, 26 MAY 2025 |
Application for termination of the Grill'd Norwood Enterprise Agreement 2014
On 29 April 2025, the Shop, Distributive and Allied Employees Association (the Applicant or SDA) made an application for termination of the Grill'd Norwood Enterprise Agreement 2014 (the Agreement), a single-enterprise agreement that had passed its nominal expiry date pursuant to s.225 of the Fair Work Act 2009 (the Act) on behalf of Employee X.
The SDA and the Respondent provided information, on a confidential basis, which satisfied me that Employee X was an employee covered by the Agreement and had standing to make the application.
The nominal expiry date of the Agreement was 24 July 2018.
LEGISLATION
The following sections of the Act are relevant to this application:
“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 Terminating an enterprise agreement after its nominal expiry date
(1) 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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or
(b)the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or
(c) all of the following apply:
(i)the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement;
(ii)the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement;
(iii)if the agreement contains terms providing entitlements relating to the termination of employees' employment--each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement.
(1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.
(2) This subsection covers a termination of the employment of an employee:
(a)at the employer's initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b)because of the insolvency or bankruptcy of the employer.
(3) In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:
(a)the employees (unless there are no employees covered by the agreement);
(b)each employer;
(c)each employee organisation (if any).”
Note: The President may be required to direct a Full Bench to perform a function or exercise a power in relation to the matter if any of the employers, employees, or employee organisations, covered by the agreement oppose the termination (see subsection 615A(3)).
(4) In deciding whether to terminate the agreement (the existing agreement ), the FWC must have regard to:
(a)whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and
(b)whether bargaining for the proposed enterprise agreement is occurring; and
(c)whether the termination of the existing agreement would adversely affect the bargaining position of the employees that will be covered by the proposed enterprise agreement.
(5) In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.
CONSIDERATION
The application was supported by a Form F24C declaration of Ali Amin, Industrial Officer, which is relevantly summarised as follows:
· The Agreement does not provide for penalty rates on Saturday, Sunday & Public Holidays or allowances such as annual leave loading, despite the entitlement under the Fast Food Industry Award 2020 (the Award).
· ‘Non-trainee’ workers are 1%-37% worse off under Agreement in comparison with the Award as to minimum rates and conditions. The Applicant submits that the disparity with the Award will continue to grow as the Agreement does not increase its rates in line with the Award.
· Due to the workforce being largely causal, young in age and there being a high turnover, employees would lack the bargaining power to rectify the conditions.
· The Employer has not taken any steps to bargain since the nominal expiry date of the Agreement.
On 6 May 2025, I issued Directions seeking views from the employer and any employees covered by the Agreement in accordance with s.226(3) of the Act. Whilst the employer did not oppose the application, it raised issue as to when termination of the Agreement should take effect. The employer provided submissions dated 23 May 2025 which are summarised below.
· The employer commenced bargaining on 14 May 2025, therefore termination should be delayed by 90-120 days to allow for bargaining to occur.
· On 20 May 2025, Grill’d Company (which incorporates 149 stores nationally) recommenced bargaining for a replacement agreement known as the Grill’d Enterprise Agreement 2025. This agreement is not proposed to cover the Respondent. An application for approval in respect of this agreement was recently rejected by the Commission.
· Immediate termination would result in multiple industrial instruments applying to the Respondent in a relatively short period of time, which may result in confusion at a workplace level and would impose a large administrative burden for the employer.
· I also received a declaration from Ms Cassie Hinks at Restaurant Manager employed by the Respondent who is covered by the Agreement – Ms Hinks submitted that the termination date should be deferred to allow a period for bargaining on a new agreement to occur.
Based on the information received, I am satisfied pursuant to s226(1)(a) that the continued operation of the Agreement would be unfair for the employees covered. Both parties agree that the Agreement should be terminated. The only dispute concerns the operative date.
I note that the Respondent’s agreement to bargain occurred very recently. There is merit in permitting the parties a reasonable opportunity to conclude an agreement. Whilst the Respondent’s bargaining approach may be informed by the experience of other members of the Grill’d organisation, it is a legally separate process. The Respondent in this matter is a Grill’d franchisee.
Having considered the material before me, I am of the view that three months from the commencement of bargaining is an appropriate period.
I am satisfied having regard to s226(1A) of the Act, that it is appropriate in all circumstances to terminate the Agreement.
In accordance with s.227 of the Act, the termination will come into effect from 4:00pm (SA) on 13 August 2025.
COMMISSIONER
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