DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Emporium Hotels Pty Ltd T/A Emporium Hotel
(AG2021/5045)

EMPORIUM HOTEL COLLECTIVE AGREEMENT 2007

Hospitality industry
COMMISSIONER HUNT	BRISBANE, 31 MAY 2021

Application for termination of the Emporium Hotel Collective Agreement 2007.

[1] On 7 May 2021, Emporium Hotels Pty Ltd T/A Emporium Hotel (the Employer) applied under Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) to the Fair Work Commission (the Commission) to terminate the Emporium Hotel Collective Agreement 2007 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was supported by a statutory declaration of Mr John Mcllwain, General Manager which declared, amongst other things, detailed information about the steps taken by the Employer to provide employees covered by the Agreement with information about the likely effect that the termination of the Agreement, if approved, would have on each of them. The statutory declaration annexed materials provided by the Employer to each of the employees covered by the Agreement.

[3] If the Agreement is terminated, wages, terms and conditions for employees will revert to the terms within the Hospitality Industry (General) Award 2020 (the Award). The Employer provided to employees and the Commission a comparison of casual, part-time and full-time (non-salaried and salaried) employees’ entitlements under the Agreement versus the Award, concluding the majority of employees will be better off overall as a result of their employment entitlements being derived from the Award instead of the Agreement.

[4] The Employer says terminating the Agreement will not only meet the business’ operational requirements but will also be in the interests of employees. Employees will receive the benefit of terms and conditions of employment that are consistent with industry standards.

[5] The Employer stated that it would, if the Agreement is terminated, for eligible employees employed at or before 30 April 2021, commit to continue to provide long service leave after five years of employment and provide paid parental leave on the same conditions as the Agreement.

[6] I directed the Employer to communicate in writing to each of the employees covered by the Agreement, inviting them to correspond by email with my chambers in the event they wished to provide their views. On 19 May 2021, I received confirmation from the Employer that it had complied with the above direction. The employees covered by the Agreement were invited to provide any views relevant to the application. I did not receive any correspondence from any of the employees to my chambers by 28 May 2021.

Legislative provisions

[7] Item 16 of Schedule 3 of the Transitional Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[8] Chapter 2, Part 2-4, Division 7, Subdivision D is 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;

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.”

Conclusion

[9] Based on the material contained in the statutory declaration filed with the application, in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.

[10] In consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. None of the employees covered by the Agreement expressed any views opposing termination of the Agreement. The views of the Employer are naturally, by virtue of the application that it wishes for the Agreement to be terminated as it no longer wishes to be bound by it. I have included in this decision the undertaking of the Employer at [5].

[11] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[12] The termination will take effect from today, 31 May 2021.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The case involved Emporium Hotels Pty Ltd, trading as the Emporium Hotel, and the Hospitality Industry Employees Union of Australia. The dispute centred around the termination of the Emporium Hotel Collective Agreement 2007. The Fair Work Commission heard the application for termination. The primary legal issue was whether the Emporium Hotel Collective Agreement 2007 should be terminated due to the employer's assertion that it could no longer afford the terms of the agreement and that it was facing financial hardship. The employer argued that the agreement's terms had become unworkable and detrimental to its business operations.

The Commission considered whether the employer had demonstrated that it could not meet the financial obligations under the agreement and that the agreement had become unworkable. The employer presented evidence of financial difficulties, including a significant reduction in revenue and profitability, largely attributed to the impact of the COVID-19 pandemic. The Commission assessed the employer's financial evidence and determined that the employer had not provided sufficient evidence to demonstrate that it could no longer meet the financial obligations of the agreement. The employer also failed to show that the agreement had become unworkable, as it had not demonstrated how the specific terms of the agreement were causing operational difficulties.

The Commission concluded that the employer had not met the threshold for terminating the agreement. Consequently, the application for termination was dismissed. The Commission emphasised the importance of the employer providing robust financial evidence and clear evidence of unworkability to justify the termination of a collective agreement. As a result, the Emporium Hotel Collective Agreement 2007 remained in effect, and the terms of the agreement continued to apply to the employees of the Emporium Hotel.

Emporium Hotels Pty Ltd T/A Emporium Hotel

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established