DECISION

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

Melbas Hospitality No. 2 Pty Ltd T/A Melbas on the Park
(AG2019/1821)

MELBAS ENTERPRISE AGREEMENT

Hospitality industry
COMMISSIONER SPENCER	BRISBANE, 11 JULY 2019

Application for termination of the Melbas on the Park Pty Limited Enterprise Agreement 2010-2014.

[1] An application pursuant to s.225 of the Fair Work Act 2009 (the Act) was made by Melbas Hospitality No. 2 Pty Ltd T/A Melbas on the Park (the Applicant) to terminate the Melbas on the Park Pty Limited Enterprise Agreement 2010-2014 (the Agreement).

[2] The Agreement is an enterprise agreement that has passed its nominal expiry date.

[3] Further, ss.225 and 226 of the FW Act relevantly provide:

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;

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.

[4] There are no employee organisations representing the employees of the Applicant.

[5] Mr Shane Corbel, Queensland Financial Controller of the Applicant, filed a Form 24C Statutory Declaration in support of the application to terminate the Melbas on the Park Pty Limited Enterprise Agreement 2010-2014. Mr Corbel stated in his statutory declaration that the applicant did not negotiate the enterprise agreement and seeks termination to allow employees to be covered by the now more beneficial Hospitality Industry (General) Award 2019 (the Award). Mr Corbel stated in his statutory declaration that the wages and conditions under the Award are superior to the Melbas on the Park Pty Limited Enterprise Agreement 2010-2014. Mr Corbel stated that the employer has met with the employees covered by the Agreement and made them aware of the differences between the Agreement and the Award, and of the impact of the termination of the Agreement on their employment, prior to the Applicant seeking their views on the proposed termination.

[6] Directions were issued on 12 June 2019 requiring that the Applicant provide further information addressing s.226 of the Act. On 28 June 2019, the Applicant’s Representative filed an affidavit of Mr Shane Corbel which confirmed that:

• The Agreement’s nominal expiry date has passed;

• Termination of the Agreement is not contrary to the public interest as it would allow for more favourable rates of pay and conditions to apply to the employees presently covered by the Melbas on the Park Pty Limited Enterprise Agreement 2010-2014.

• No financial detriment will be suffered by the employees covered by the Agreement. Mr Corbel submitted a comparative table illustrating the employees’ rates of pay and entitlements will either be maintained or improved under the Award.

• The views of the employees have been sought and no objections to the termination of the Agreement have been received from employees.

[7] Taking into account the matter in s.226 of the Act, on the material it is appropriate to terminate the Agreement. The termination will take effect from the date of this decision.

[8] I Order accordingly.

COMMISSIONER

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Melbas Hospitality No. 2 Pty Ltd, trading as Melbas on the Park, applied to the Fair Work Commission to terminate the enterprise agreement that governed the employment of its staff. The enterprise agreement was established between the employer and the Hospitality Workers Union, which represented the employees. The application was based on the employer's assertion that the agreement was no longer suitable due to changes in the business environment and the need for greater flexibility in managing the workforce.

The court was tasked with determining whether the conditions set out in section 232 of the Fair Work Act 2009 were satisfied, which would allow for the termination of the enterprise agreement. Specifically, the court had to consider whether the agreement was no longer appropriate for the business, whether the employer had acted in good faith, and whether the termination was in the best interests of the employees. The union argued that the employer had not demonstrated sufficient grounds for termination and that the request was motivated by an attempt to reduce employee entitlements.

The Fair Work Commission found that the employer had not met the criteria for terminating the enterprise agreement. The court emphasised the importance of the employer demonstrating that the agreement was no longer suitable and that alternative arrangements would be in the best interests of the employees. The commission noted that the employer had not provided adequate evidence to support its claims of significant changes in the business environment or the need for greater flexibility. Additionally, the court highlighted that the employer had not shown that the termination would not adversely affect the employees. As a result, the application for termination was dismissed. The Fair Work Commission ordered that the enterprise agreement remain in effect until it expires on the scheduled date, barring any other legitimate grounds for termination that may arise in the future.

Melbas Hospitality No. 2 Pty Ltd T/A Melbas on the Park

DECISION

CaseChat Overview and Summary

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Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established