Laria Barnett

[2024] FWCFB 132

[2024] FWCFB 132

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

Laria Barnett

(AG2023/4788)

BURGER URGE ENTERPRISE AGREEMENT 2015

Fast food industry
DEPUTY PRESIDENT BELL COMMISSIONER JOHNS COMMISSIONER ALLISON	MELBOURNE, 13 MARCH 2024

Application for termination of the Burger Urge Enterprise Agreement 2015 – agreement terminated.

1. This decision concerns an application (the Application) made by Ms Laria Barnett (Ms Barnett) for the termination of the Burger Urge Enterprise Agreement 2015 (AE415344) (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Act).

1. The Agreement is a single enterprise agreement made pursuant to s.185 of the Act. It was approved by Deputy President Bull in matter AG2015/3678 on 29 September 2015.[1] The Agreement has a nominal expiry date of 28 September 2019.

1. The Agreement currently covers the following employers:

   a.   Burger Urge Pty Ltd

   b.   BU Rockhampton Pty Ltd,

   c.   BU Mackay Pty Ltd, and

   d.   BU Bundaberg Pty Ltd

   (collectively, the Employers) [2]

2. The Employers engage employees at Burger Urge outlets throughout Queensland, New South Wales and the Northern Territory. The Agreement covers employees engaged by the Employers at these franchises under the classifications set out in Schedule A in the Agreement (the Employees). Ms Barnett is an employee covered by the Agreement.

1. There is no employee organisation covered by the Agreement.

Legislative Framework

1. Section 225 of the Act provides 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;

(c)       an employee organisation covered by the agreement.”

1. Section 226 of the Act relevantly provides that:

“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;

…

(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.

…

(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).

…

(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.”

Submissions and Procedural History

1. As noted above, Ms Barnett is an employee covered by the Agreement and therefore entitled to make an application to terminate the Agreement under s.225(b) of the Act.

1. Ms Barnett submits that the Commission should terminate the Agreement because the continued operation of the Agreement would be unfair for the employees covered by the Agreement. Ms Barnett submits this is because the Agreement provides for terms and conditions which are below the relevant modern award, the Fast Food Industry Award 2020 (the Award).

1. Ms Barnett, who is a junior employee, has provided payslips showing an hourly rate of $9.97 gross. Ms Barnett submits this is 8 cents above the applicable Award rate for ordinary hours, Monday to Friday. However, Ms Barnett submits that in accordance with clause 4.1.2 of the Agreement, the Agreement rate is an all inclusive rate covering “all loadings, penalties, allowances, regular overtime or ancillary payments”. She submits she is significantly worse off under the Agreement rate.

1. In particular, Ms Barnett submits that the Agreement rate does not compensate her for the following Award entitlements:

·   Saturday/Sunday penalty rates under the Award (noting Ms Barnett is often rostered to work on the weekend);

·   Annual leave loading (Clause 22.2(c) of the Award);

·   Special Clothing – laundering Allowance (Clause 17.5 of the Award).

1. In addition, Ms Barnett submits her employer has engaged in a number of breaches of the Agreement.

1. This includes an alleged breach of an undertaking made to Deputy President Bull as part of the approval application of the Agreement. In that undertaking the Employers committed to ensure employees would “not be rostered to work more than 3 hours on a weekend without first having worked 11.5 hours during the same week (Monday- Friday).”[3] Ms Barnett submits she regularly works more than three hours on the weekend without having worked 11.5 hours Monday to Friday.

1. Initially the Employers opposed the application to terminate the Agreement. As a result, and pursuant to s.615A(3) of the Act, the matter was allocated to a Full Bench of the Commission and directions were issued on 18 December 2023 programming a hearing of the matter.

1. On 29 January 2024, the Employers wrote to the Commission advising that they no longer intended to oppose the termination application by Ms Barnett. The Employers submitted they had commenced bargaining for a replacement Agreement and sought that any proposed termination ordered by the Commission would take effect on the first full pay period on or after 1 April 2024.

1. Accordingly on 30 January 2024 the Commission reissued directions. The directions required the Employers to serve a copy of the following materials on each employee covered by the agreement:

·   The Directions;

·   The materials filed by Ms Barnett;

·   The Employers’ email dated 29 January 2024 stating that they did not oppose the Application and requesting the termination of the Agreement occur not before 1 April 2024.

1. The Directions invited employees to provide their view on the Application and the proposed termination of the Agreement to the Commission by 9 February 2024.

1. On 12 February 2024, the Commission sent a further email to the parties, which:

·   Confirmed that no response had been received from any employees wishing to provide their views on the Application or the proposed date of termination of the Agreement (being not before 1 April 2024);

·   Set out the provisional view of the Full Bench that it would be appropriate to terminate the Agreement, noting the Employer no longer contests this, and the preliminary view that the date of termination would be 1 April 2024;

·   Confirmed that if the parties did not wish to make any further submissions, the Full Bench would determine the matter ‘on the papers’; and

·   Provided the parties with a copy of the Better Off Overall Test (BOOT) analysis of the Agreement and Award that the Commission’s agreement team had undertaken.

1. Following this email, the Commission received further correspondence from the parties which confirmed the correct identification number of the Agreement. The Employers also reiterated their submission that the termination apply from the first full pay period on or after 1 April 2024, and otherwise had no objections to the proposed course of action. We have proceeded to determine the matter on the papers. While the date of the first full pay period was not specified, the Employers subsequently clarified the date to be 14 April 2024. 

BOOT Analysis

1. To assist in considering whether the continued operation of the Agreement is unfair for employees covered by the Agreement, the Bench arranged for analysis by the Commission’s agreements team of the Agreement compared to the Award. As noted, this analysis was provided to the parties.

1. We note that while the base rates of pay in the Agreement are well below the Award, s.206 of the Act operates to ensure when an agreement rate is less than the applicable award rate, the award rate applies. While the Employers did not provide any submissions on current rates of pay, Ms Barnett provided payslips confirming she is paid 8 cents above the Award. Accordingly, our consideration assumes that employees are receiving Award rates.

1. However, even when Award rates are assumed, the analysis of the Agreement when compared with the Award highlighted a number of areas where the Agreement was less beneficial. These include (without being limited to):

·   Weekend penalties – the Agreement does not provide for penalties for ordinary hours worked on a weekend. In comparison the Award provides a loading of between 125% - 175%.[4] Even if employees were to work at least 11 hours Monday to Friday, it is highly unlikely - short of evidence that employees were being paid significantly above the Award - that employees would be better off under the Agreement;

·   The Agreement does not provide annual leave loading;

·   The Agreement does not provide for Award allowances;

·   The Agreement does not provide shift penalties;

·   Part-time employees do not have safeguards in relation to their agreed hours of work. 

1. The Employers did not provide any submissions on how the Agreement met the BOOT. There was no reason for us to doubt the correctness of the analysis prepared by the agreements team.

Consideration

1. Having considered the material before us, including submissions made by the parties and the BOOT analysis, we are of the view that it would be unfair for the employees covered by the Agreement if the Agreement were permitted to continue. This is because the Agreement has significantly less beneficial terms for those employees than the Award.

1. In coming to our decision, we have had regard to the matters in s.226(4). There is no evidence before us to suggest that a notification time for a proposed enterprise agreement commenced before the Application. Since the Application, the Employers have submitted that bargaining is currently occurring. This appears to be supported at least in part by communication from the Employers to employees on 31 January 2024 stating: “Burger Urge commenced drafting a new agreement some time ago, and the review process will commence shortly”.  However, even if bargaining is ongoing at the date of termination of the Agreement, we are not of the view that termination of the Agreement will adversely affect the bargaining position of the employees, as the termination will, in all likelihood, lead to an increase in entitlements for employees.

1. Under s.226(5), in deciding whether to terminate an Agreement, the Commission may have regard to “any other relevant matter”. We have noted that the Employers do not contest the application. As noted above at [12] Ms Barnett submits that her employer has breached a number of provisions in the Agreement. Whether or not there has been a breach as alleged is not a matter we are in a position to express a view about on the material before us, although if there were breaches, that is a serious matter.

1. There were no other relevant matters drawn to our attention that we should have regard to for the purpose of s.225(5).

1. For the reasons given above we are satisfied that the continued operation of the Agreement would be unfair for the employees covered by the Agreement and we are further satisfied, in accordance with s.226(1A), that it is appropriate in all the circumstances to terminate the Agreement. Accordingly, pursuant to s.226(1), the Commission is required to terminate the Agreement.

1. The Employers have sought that the Agreement terminate not before the first full pay period on or after 1 April 2024, which was clarified to be 14 April 2024. We are satisfied that it is appropriate to align the date of termination with the payroll cycle.

1. We order that the Agreement will be terminated with effect from 14 April 2024.   

DEPUTY PRESIDENT

Hearing details:

Matter determined on the papers.

[1] [2015] FWCA 5724 in matter number AG2015/3678. For avoidance of possible confusion, there is an identically titled enterprise agreement approved by Deputy President Bull on 8 October 2015 in matter number AG2015/3730, being the Burger Urger Enterprise Agreement 2015 (AE415346). This decision only concerns the first-mentioned enterprise agreement, namely Burger Urge Enterprise Agreement 2015 (AE415344).

[2] It is noted that, with the exception of Burger Urge Pty Ltd, the Employers differ from the employers named in the Agreement at Schedule B. The Employers are covered by the Agreement as a result of transfer of business arrangements. (see the following decisions [2019] FWC 8348, [2019] FWC 8422, [2019] FWC 8439).  The Employers have confirmed they are the only entities that currently engage employees under the Agreement. 

[3] [2015] FWCA 5724, Annexure B.

[4] Saturday and Sunday work under the Award attracts 125% penalty for permanent employees and 150% penalty for casual employees, with the exception of employees classified at Lv 2 – 3 who attract a 150% penalty for permanent employees and a 175% penalty for casual employees.

Printed by authority of the Commonwealth Government Printer

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