Lord of the Fries Pty Ltd

[2018] FWCA 3850

[2018] FWCA 3850

FAIR WORK COMMISSION

DECISION

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

Lord of the Fries Pty Ltd
(AG2018/1622)

LORD OF THE FRIES COLLECTIVE AGREEMENT 2009

Fast food industry
DEPUTY PRESIDENT MASSON	MELBOURNE, 5 JULY 2018

Application for termination of the Lord of the Fries Collective Agreement 2009.

[1] Lord of the Fries Pty Ltd T/A Lord of the Fries (Lord of the Fries) has made an application (Application) to the Fair Work Commission (the Commission) to terminate the Lord of the Fries Collective Agreement 2009 (Agreement) pursuant to section 225 of the Fair Work Act 2009 (the Act).

[2] The Agreement is a single business employee collective agreement made pursuant to s 342 of the Workplace Relations Act 1996 (the WR Act) that reached its nominal expiry date in 2014.

[3] The parties to the Agreement are Lord of the Fries Pty Ltd and full time, part time, causal and trainee employees of Lord of the Fries employed in the classifications contained in clause 12 of the Agreement (Employees). It does not cover Store Mangers as per clause 3.2 of the Agreement.

[4] There are no employee organisations covered by the Agreement.

[5] Section 225 of the Act states:

“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.”

[6] Section 226 of the Act states:

“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.”

[7] The Application was filed by Ms Amanda Walker, Training and HR Manager at Lord of the Fries on behalf of Lord of the Fries.

[8] Ms Walker has provided a Statutory Declaration in support of the Application. Ms Walker states that the parties to the Agreement are not seeking to negotiate a new enterprise agreement, and if the Agreement is terminated, Employees will instead be covered by the Fast Food Industry Award 2010 (Award).

[9] Ms Walker states that the Agreement only applies to the employees in the one store situated in Elizabeth Street, Melbourne. Ms Walker states that at the time of registering the Agreement, Lord of the Fries was a sole business, but has now adopted a franchise model. Ms Walker states that at the time of making the declaration, there are 18 Lord of the Fries stores. Two of these stores are franchised in New Zealand and 15 of the stores are franchised in Australia. Ms Walker states that all of the 15 Australian franchised stores are covered by the Award.

[10] Ms Walker states that the termination of the Agreement would not result in any employee employed in the Elizabeth Street, Melbourne store being impacted with a loss of income or conditions. Ms Walker states that on termination of the Agreement, adoption of the Award would result in all employees maintaining their current above award pay rate for ordinary hours as per the Agreement, and would in addition receive all other Award entitlements, allowances and penalty rates. Ms Walker states that the Employees’ terms and conditions would be enhanced should the Agreement be terminated.

[11] Ms Walker states that there are no legacy terms within the Agreement which would result in Employees being better off under the Agreement and therefore, termination of the Agreement would not be contrary to the public interest.

[12] Ms Walker further states that it would not be financially viable for Lord of the Fries to renegotiate a new enterprise agreement as it would require a pay rate, incorporating all of the allowances and penalty rates, to be calculated as one flat rate for all hours to meet the ‘better off overall’ test.

[13] The Directions issued on 3 May 2018 (Directions) required Lord of the Fries to provide a copy of an outline of submissions and other material on which it intended to rely to the Commission by on or by Friday, 18 May 2018. Lord of the Fries was further directed to provide their outline of submissions and other material on which it intended to rely to all Employees and conduct communication and information meetings with such Employees by Friday, 1 June 2018. Employees were also invited to lodge an outline of submissions and other material on which they intended to rely by Friday, 15 June 2018.

[14] On 17 May 2018, the Commission received submissions from Lord of Fries which included a comparison table of the Agreement versus the Award entitlements, an employee communication and consultation plan and an Employee information pack. Lord of the Fries also filed a letter to be provided to Employees on termination of the Agreement providing an undertaking regarding employee terms and conditions. The proposed undertaking states that although the current rate of pay under the Agreement is higher than that of the ordinary pay rate under the Award, Lord of the Fries will maintain Employees’ current above Award rate of pay until such a time as the Award ordinary rate of pay exceeds current Agreement rates, at which time Award rates will be applied.

[15] On 25 June 2018, the Commission conducted a Hearing. At this Hearing, the Applicant undertook to provide additional materials in support of their application. On 29 June 2018, Ms Walker provided a further statutory declaration stating that Lord of the Fries has engaged and shared information with all Employees. Ms Walker stated that all Employees were informed of the application to terminate the Agreement on 28 April 2018 and were sent the comparison table and information pack on 15 May 2018.

[16] Ms Walker also states that Lord of the Fries will implement all undertakings which provide that all Employees will retain their above Award hourly rate, in addition to the entitlements they would receive under the Award.

[17] The Commission received statutory declarations from three Employees. These Employees did not object to the Agreement being terminated.

Consideration

[18] As the Agreement has passed its nominal expiry date and the Applicant is an employer covered by the Agreement, I find that the Applicant has standing to make the Application pursuant to section 225(a) of the Act.

[19] No opposition to the Application was received for or on behalf of any employees.

[20] Based on the material contained in the statutory declaration filed with the Application and the two further statutory declarations, there is nothing before me which raises public interest considerations which might weigh against the termination of the Agreement. I am therefore satisfied that it is not contrary to the public interest to terminate the agreement.

[21] Pursuant to section 225 of the Act, and having considered and being satisfied as to each of the matters contained in subsections 226(b)(i) and (ii) of the Act, the Agreement is terminated.

[22] The termination will come into effect from 5 July 2018.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<AC326154  PR608569>