Khazaly Labour Services Pty Ltd T/A Nando’s Malaga, Nando’s Hillarys And Nando’s Kingsway

[2022] FWCA 2490

[2022] FWCA 2490

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Sch. 3, Item 16—Application to terminate collective agreement-based transitional instrument

Khazaly Labour Services Pty Ltd T/A Nando’s Malaga, Nando’s Hillarys And Nando’s Kingsway

(AG2022/1810)

Nando’s Malaga Australia Workplace Agreement 2008

Fast food industry
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 29 JULY 2022

Application for termination of the Nando’s Malaga Australia Workplace Agreement 2008

1. Khazaly Labour Services Pty Ltd (Applicant) has applied pursuant to Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the Nando’s Malaga Australia Workplace Agreement 2008 (Agreement).[1] The Agreement is expressed to cover the Applicant and its employees employed in Western Australia who are engaged in, or in connection with, the performance of duties and tasks comprehended by the classifications described in clause 6 of the Restaurant, Tearoom & Catering Workers’ Award 1979 as at 26 March 2006.[2]

1. The Agreement has passed its nominal expiry date.[3]

1. The Agreement is a collective agreement-based transitional instrument to which Items 15 and 16 of Schedule 3 of the Transitional Act apply. The effect of Items 15 and 16 of Schedule 3 of the Transitional Act is that the termination of agreement provisions found in Subdivisions C and D of Division 7 of the Fair Work Act 2009 (Act) apply to the Agreement as though a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

1. Section 225 of the Act provides:

“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.”

1. Section 226 of the Act provides:

“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.”

1. Mr K Khazaly, director of the Applicant, provided a statement in support of the application. The statement sets out the background to the application as follows:

·   The Applicant entered into a franchise agreement with Nando’s Australia Pty Ltd (Nando’s) in 2007 under which it employs around 80 employees at stores in Malaga, Hillarys and Kingsway;

·   Historically, Nando’s was of the view the Restaurant Industry Award 2010 (Restaurant Award) covered its restaurant-based employees and the base rate of employees under the Agreement is adjusted to reflect the base rate of pay for the equivalent classification under the Restaurant Award;

·   Nando’s decided to adopt the Fast Food Industry Award 2010 (Fast Food Award) as the award covering its restaurant based employees with effect from 1 November 2021;

·   From 1 November 2021 Nando’s began paying its restaurant based employees the higher of the rate of pay for the equivalent classification under the Restaurant Award (as at 1 February 2021) or rate of pay for the equivalent classification under the FFIA (as at 1 November 2021) as well as the allowances, loadings and penalty rates set out in the Fast Food Award;

·   Since 1 November 2021, the Applicant implemented the same changes for its employees and applied the Fast Food Award.

1. In his statement, Mr Khazaly provides, inter alia, that the Applicant agreed to terminate the Agreement for the following reasons:

·   The Agreement reflects an approach to penalty rates that, although lawful, is out-of-step with contemporary industry, community and employee expectations;

·   The Agreement is outdated and open to challenge/termination at any time; and

·   The Applicant has introduced benefits outside of the Agreement structure (for example, Fast Food Award penalty rates and agreed regular work patterns), which could become confusing and cumbersome to manage in circumstances where the Agreements continues to apply.

1. Mr Khazaly states the likely effect the termination will have on the Applicant is an increase in labour costs as well as a substantial change to its rostering software application and rostering practices. Mr Khazaly states the termination will give affected employees a legal entitlement to the Fast Food Award penalty rates, loadings and allowances that are currently being provided on a voluntary basis.

1. Mr Khazaly sets out the steps taken by the Applicant to communicate the changes, including series of mandatory e-learning modules. Mr Khazaly made himself available for questions or enquiries and did not receive any request for a meeting or any questions from employees.

1. On 15 June 2022, I issued directions inviting any employee covered by the Agreement who wishes to inform the Commission of their views on the application to do so by 4:00pm on Monday, 4 July 2022. The directions required the Applicant to provide employees covered by the Agreement with a copy of the application together with the directions and any undertaking it intends to provide to the Commission, and to inform employees they have until 4 July 2022 to inform the Commission of their views. On 28 June 2022, the Applicant filed a statutory declaration by Mr Khazaly confirming compliance with the directions.

1. Mr Khazaly also gave an undertaking, on behalf of the Applicant, to the effect that the Applicant will continue to pay any employee whose rate of pay under the Agreement is higher than under the Fast Food Award the rate of pay under the Agreement until the Fast Food Award catches up such that no employee shall have their rates reduced as a result of terminating the Agreement.

1. No employee filed any material in the Commission.

1. On the basis of the material before me, I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account all of the circumstances including those in s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me which raises public interest considerations which might militate against termination of the Agreement. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

1. The termination will operate from 29 July 2022.

1. An order giving effect to this decision is separately issued in PR744120.

DEPUTY PRESIDENT

[1] AC313662.

[2] Ibid at cl 4.

[3] Ibid at cl 5.2.

Printed by authority of the Commonwealth Government Printer

<AC313662  PR744119>