Ishakha Pty Ltd T/A Subway Glen Huntly

[2015] FWCA 8721

[2015] FWCA 8721

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Ishakha Pty Ltd T/A Subway Glen Huntly
(AG2015/6549)

FLAG OF CONVENIENCE ENTERPRISE AGREEMENT

Fast food industry
DEPUTY PRESIDENT BULL	SYDNEY, 22 DECEMBER 2015

Application for approval of the Flag of Convenience Enterprise Agreement

[1] An application has been made by Ishaka Pty Ltd (the applicant) for the approval of an enterprise agreement known as the Flag of Convenience Enterprise Agreement (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) and is a single enterprise agreement.

[2] The Agreement covers all employees engaged by the employer, who would otherwise be covered by the Fast Food Industry Award 2010 (the Award), being the relevant reference instrument for the purposes of the better off overall test (BOOT) as required under s.186 of the Act.

[3] The applicant was notified of the issues the Commission identified within the Agreement on 9 December 2015. Correspondence and requested undertakings addressing the identified issues were received from the applicant on 11 December 2015.

[4] Concerns raised by the Commission were with respect to:

1. The Consultation term;

2. Permitted deductions; and

3. The better off overall test as required under s.186 of the Act.

Consultation Term

[5] With respect to the consultation term contained in cl. 14 of the Agreement - Consultation, the applicant was advised that the consultation term did not provide for the employer to consult employees with regard to a change of employee’s regular roster or ordinary hours of work, as required under s.205 of the Act.

[6] Pursuant to s.205(2) of the Act, the model consultation term at Schedule 2.3 of the Fair Work Regulations 2009 will be taken to be a term of the Agreement. A copy of the model term is attached at Annexure A of this decision.

Permitted deductions

[7] Clause 48.3 of the Agreement allows the employer to deduct money from an employee’s entitlements upon termination of employment for property that has not been returned to the employer.  The applicant was advised that these deductions may not be permitted deductions meeting the requirements of s.324 of the Act, and that as such, the relevant clauses may be of no effect (see sections 253 and 326 of the Act).    

Related undertaking

[8] The applicant has provided an undertaking which states that the employer will not deduct money from an employee’s entitlements unless the requirements of s.324 have been met.

Better off Overall Test (BOOT)

[9] With respect to the BOOT, the applicant was advised of the Commission’s concerns that the base rates of pay for certain employees (Base rates of pay under the Agreement are contained in pay rate structures A to F) under the Agreement were not high enough to adequately compensate for the reduction in entitlements that employees would otherwise receive under the Award.

Related undertaking

[10] At the request of the Commission, the applicant has provided undertakings to increase rates of pay as requested. I am satisfied that the percentage increases to the base rates of pay results in employees being better off overall under the Agreement.

Conclusion

[11] Where the Commission has a concern that an agreement does not meet the requirements set out in s.186 and s.187 which includes that the agreement does not pass the BOOT, s.190 provides the employer with an opportunity to provide written undertakings acceptable to the Commission aimed at meeting those concerns 1.

[12] Undertakings provided by the applicant have addressed the concerns raised by the Commission. These undertakings are taken to be a term of the Agreement and are attached at Annexure B of the Agreement.

[13] Taking into account the higher rates of pay under the Agreement and the undertakings provided by the applicant, I am satisfied that the Agreement results in employees being better off overall under the Agreement.

[14] The undertakings are not so substantial that if asked to vote again, the employees who voted would not approve the Agreement. I am therefore satisfied that the undertakings do not result in a substantial change to the Agreement, as per s.190(3)(b) of the Act.

[15] I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[16] The Agreement is approved. In accordance with s.54(1), the Agreement will operate from 29 December 2015. The nominal expiry date of the Agreement is 4 years from the date of approval.

[17] This decision and its undertakings should be brought to the attention of employees covered by the Agreement by the employer.

DEPUTY PRESIDENT

Annexure A

Annexure B

<Price code A, AE417148 , PR575144>

 1   BUPA Care Services v P & A Securities Pty Ltd as trustee for the D’Agostino Family Trust T/as Michel’s Patisserie Murwillumbah and others[2010] FWAFB 2762 at (49).

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