NSW Hotel Management Pty Ltd T/A The Langham Hotel Sydney
[2022] FWCA 1422
•27 APRIL 2022
| [2022] FWCA 1422 |
| FAIR WORK COMMISSION |
| decision |
Fair Work Act 2009
s.225—Enterprise agreement
NSW Hotel Management Pty Ltd T/A The Langham Hotel Sydney
(AG2022/716)
THE OBSERVATORY HOTEL ENTERPRISE AGREEMENT
| Hospitality industry | |
| Commissioner Matheson | SYDNEY, 27 APRIL 2022 |
Application for termination of The Observatory Hotel Enterprise Agreement.
On 15 March 2022, NSW Hotel Management Pty Ltd T/A The Langham Hotel Sydney (Applicant) filed an application (Application) pursuant to s.225 of the Fair Work Act 2009 (Cth) (Act) to terminate The Observatory Hotel Enterprise Agreement (Agreement). A ‘Form F24C – Declaration in relation to termination of an enterprise agreement after the nominal expiry date’ (Form F24C) was filed in support of the Application.
The Agreement is a single enterprise agreement. It was approved by Commissioner Thatcher on 7 May 2010.[1]
The nominal expiry date of the Agreement is 13 May 2013.
Legislation
The relevant provisions of the Act are 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.
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.
227 When termination comes into operation
If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”
Consideration – s.225
Is the Applicant an employer covered by the Agreement?
The employer covered by the Agreement is named in clause 1.1.1 of the Agreement as “The Observatory Hotel (ACN 091 160 333)”. The Application indicates that on or around July 2012, the Applicant purchased the business of the hotel located at 89-113 Kent St, Sydney NSW 2000 (Hotel) from The Observatory Hotel Pty Ltd. The Observatory Hotel Pty Ltd was the owner of the trading name “The Observatory Hotel” and the ACN of the employer covered by the Agreement. I am satisfied that The Observatory Hotel Pty Ltd was the employer covered by the Agreement. The Observatory Hotel Pty Ltd subsequently changed its name to Belmond Pty Limited which was deregistered on 6 March 2015.
The Applicant subsequently engaged employees who had immediately prior been performing the same or substantially the same work at the Hotel for The Observatory Hotel Pty Ltd.
A hearing was held on 22 April 2022 at which I sought further particulars regarding the transfer of business and confirmation that the Applicant was the only employer covered by the Agreement. Having considered the materials before the Commission and explanations provided by the Applicant, I am satisfied that the Applicant is the sole employer covered by the Agreement as a result of a transfer of business pursuant to s.311 of the Act, that the Agreement is a transferable instrument and that the Agreement covers the Applicant and the transferring employees in relation to the transferring work. I am satisfied that the Applicant has standing to bring the Application.
Has the Agreement passed its nominal expiry date?
The Agreement has passed its nominal expiry date, being 13 May 2013.
Consideration – s.226
Section 226(a) – Public interest
Section 226(a) of the Act requires the Commission to consider how the termination of the Agreement might foreseeably affect the public as a whole, such as the impact on the achievement or otherwise of the various objects of the Act, employment levels, inflation and the maintenance of proper industrial standards.[2]
Consideration of the public interest will involve something that is distinct from the interests of the persons and bodies covered by the Agreement.[3] Section 226(b) of the Act clearly requires the interests of the persons or bodies covered by an agreement to be taken into account and those interests are considered separately from the public interest, although these interests may nevertheless be similarly affected.
The Applicant submitted that there is no matter known by the Applicant that would make the termination of the Agreement contrary to public interest.
I do not consider that the termination of the Agreement would impact employment levels, inflation and the maintenance of proper industrial standards, particularly noting that the Hospitality Industry (General) Industry Award 2020 (Award) would apply if the Agreement was terminated. I have not identified any interests in relation to the Application that are distinct in nature from the interests of the parties.
In all the circumstances, and having considered the materials before the Commission, I am satisfied that it is not contrary to the public interest to terminate the Agreement.
Section 226(b) – Appropriateness
All of the circumstances need to be taken into account in considering whether termination of the Agreement is appropriate. “Appropriateness” is a broad discretionary standard and reasonable minds may differ on what is appropriate in any given set of circumstances.[4] In assessing appropriateness by taking into account all of the circumstances, I have given specific consideration to the matters identified in s.226(b)(i) and (ii) of the Act and I have also considered the broader contextual matters relevant to the Application.
On 22 March 2022, the Commission directed that the Applicant serve a copy of the Commission’s directions, Application, Form 24C and an outline of its arguments, statements of evidence or other documents the Applicant intended to rely on in support of its Application on each employee and employee organisation covered by the Agreement.
The Commission’s directions also noted that if any employee or employee organisation covered by the Agreement opposed the Application, the matter would be listed for hearing and the absence of opposition to the Application would result in the matter being determined on the papers.
There are no employee organisations covered by the Agreement and no employee raised an objection to the Application or filed submissions in opposition in response.
The Applicant seeks to have the Agreement terminated and submitted that terminating the Agreement would benefit the Applicant, as the employer covered by the Agreement, as it would:
· modernise and simplify its industrial arrangements by reducing the number of industrial instruments that it must comply with and aligning terms to the Award which covers the majority of the employees of the Applicant; and
· address an issue that has arisen due to the Agreement’s age, whereby the Agreement’s name relates to a now defunct business that was purchased by the Applicant in 2012.
The Applicant submitted that all employees covered by the Agreement are paid on the basis of annualised salaries and that it had informed them that their salaries would not be reduced if the Agreement is terminated. Further, it submitted that if the Agreement is terminated, employees will become entitled to the benefit of forthcoming changes to the Award arising from the four yearly review of modern awards, which will impose additional safeguards in relation to the reconciliation of salaries against Award entitlements and the imposition of outer limits on overtime and penalty rates that may be incorporated into a salary.
It is declared in the Form F24C that:
· On 25 January 2022, employees were sent an email from the Applicant seeking their views on the prospective termination of the Agreement. A copy of the email and its attachment was attached to the Form F24C. The email:
oexplained that if the Agreement is terminated the Award will apply;
oadvised employees where they could access full copies of the Agreement and Award; and
oadvised that, for employees employed on an annualised salary basis, their annualised salary would not decrease.
· An online survey was sent to employees asking whether they agreed to the termination of the Agreement. A copy of the survey results were attached to the Form F24C indicating that two employees responded both supporting the termination.
· On 24 February 2022, the Applicant emailed employees attaching comparison of key terms in the Agreement and Award. A copy of the email and attachment was provided. The email invited employees to indicate whether, after reviewing the document, they had changed their views on the proposed termination or have additional views to share. No response was received by any employees.
· The Applicant intends to not decrease the current annualised salary amount of employees.
Conclusion
Having regard to the requirements of s.226 of the Act and based on the material before the Commission, I am satisfied that it is not contrary to the public interest to terminate the Agreement and that it is appropriate to do so having regard to all the circumstances.
Pursuant to s.226 of the Act, the Agreement is terminated. In accordance with s.227 of the Act, the termination of the Agreement shall operate from 10 May 2022. An Order to that effect will be issued in conjunction with this Decision.
COMMISSIONER
[1] [[2010] FWAA 3602]
[2] Re Kellogg Brown and Root, Bass Strat (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34, 40-41.
[3] Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540, [129].
[4] Tahmoor Coal Pty Ltd [2010] FWA 6486, [32].
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