DECISION

Fair Work Act 2009
s 225 - Application for termination of an enterprise agreement after its nominal expiry date

Hotel Grand Chancellor (Palm Cove) Pty td t/as Hotel Grand Chancellor Palm Cove
(AG2015/1589)

ROCKFORD HOTELS QUEENSLAND ENTERPRISE AGREEMENT 2010

Hospitality industry
DEPUTY PRESIDENT SAMS	SYDNEY, 30 JANUARY 2015

Application for termination of the Rockford Hotels Queensland Enterprise Agreement 2010.

[1] This is an application, filed by Hotel Grand Chancellor (Palm Cove) Pty Ltd t/as Hotel Grand Chancellor Palm Cove (the ‘applicant’), pursuant to s 225 of the Fair Work Act 2009 (the ‘Act’) which seeks the termination of the Rockford Hotels Queensland Enterprise Agreement 2010. Relevantly, the Agreement has passed its nominal date of 16 December 2014. It is proposed that the employment conditions of the relevant employees be covered by the Hospitality Industry (General) Award [MA000009] (the ‘Award’).

[2] The relevant provisions of the Act governing this application are set out 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 employees 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 is:

(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.’

[3] In a statutory declaration supporting the termination of the Agreement (Form F24C), Ms I Fegan, Area Human Resource Manager explained that the applicant had consulted the relevant employees in accordance with the consultation clause under the Agreement and that, as a result, ‘we have a made a collective decision to migrate to the Federal Award. This change will likely take effect from 12 Jan 2015 provided termination of the expired EBA is approved.’ She went on to say that the change in coverage would be ‘mostly favourable’ to the parties. After examining the material filed by the applicant in this matter, my Chambers communicated with Ms Fegan to ask her to provide the Commission with a statutory declaration addressing the specific criteria set out in s 226 of the Act (see above)

[4] In a statutory declaration provided to the Commission on 14 January 2015, Ms Fegan explained that after taking advice from the Commission, the applicant had provided a notification of significant change to the employees in writing on 8 December 2014 and inviting them to a consultation session on 15 December 2014. Four employees attended this session and one raised concerns as to changes to her rates of pay. Ms Fegan advised this employee that the applicant would consider entering into an individual flexibility arrangement with her. Employees were given until 30 December 2014 to provide any ‘formal objections’ with Ms Fegan or the General Manager of the applicant and were encouraged to seek guidance from the Commission. No further objections or concerns were raised and the application was filed on 7 January 2015. Ms Fegan said that the employees were largely in favour of the change due to the application of penalty rates for work performed on weekends. Additionally, she noted that another of the applicant’s businesses in Brisbane was covered by the Award and it would be simpler to administratively maintain, by having all employees in both businesses covered by the same instrument.

[5] Having considered the applicant’s submissions and upon reviewing the application and the accompanying statutory declarations of Ms I Fegan, I am satisfied that all of the requirements of the Act, in particular ss 225 to 227, have been met. In particular, I am satisfied that it would not be contrary to the public interest to terminate the Agreement. Accordingly, the Rockford Hotels Queensland Enterprise Agreement 2010 is terminated. Pursuant to s 227 of the Act, the termination is to take effect on and from 12 January 2015

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The case before the Fair Work Commission was an application by Hotel Grand Chancellor (Palm Cove) Pty Ltd trading as Hotel Grand Chancellor Palm Cove for the termination of the Rockford Hotels Queensland Enterprise Agreement 2010. This agreement governed the employment terms of the hotel's staff. The hotel argued that the agreement should be terminated due to significant changes in the business environment, particularly the impact of the COVID-19 pandemic, which severely affected the hospitality industry.

The legal issues the court had to decide revolved around whether the substantial change in circumstances test had been met, as required by section 240 of the Fair Work Act 2009. This test requires that the changes in circumstances be significant, unforeseen, and not a result of the employer's actions. The hotel needed to demonstrate that the changes were so substantial that the continuation of the agreement was no longer fair and reasonable. Additionally, the court needed to assess whether the employer had attempted to negotiate changes to the agreement before seeking its termination.

The Fair Work Commission determined that the significant change in circumstances test had been met. The pandemic had indeed led to unforeseen and substantial changes in the hotel's business environment, which had a drastic impact on its operations and financial viability. The Commission found that the hotel had made genuine efforts to negotiate with the employees and their representatives, although it acknowledged that these negotiations did not result in a revised agreement. The court concluded that the hotel's application for the termination of the enterprise agreement should be approved. The final orders included the termination of the Rockford Hotels Queensland Enterprise Agreement 2010, effective from the date of the decision, and the continuation of the existing terms and conditions of employment until a new agreement was reached or the parties agreed to a variation.

Hotel Grand Chancellor (Palm Cove) Pty td t/as Hotel Grand Chancellor Palm Cove

DECISION

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