Pakwin Pty Ltd T/A Inglewood Hotel
[2024] FWCFB 179
•21 MARCH 2024
| [2024] FWCFB 179 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 20A(4) - Application to extend default period for agreement-based transitional instruments
Pakwin Pty Ltd T/A Inglewood Hotel
(AG2023/4751)
| THE PAKWIN PTY LTD EMPLOYEE COLLECTIVE AGREEMENT 2008 Hospitality industry | |
| DEPUTY PRESIDENT WRIGHT | SYDNEY, 21 MARCH 2024 |
Application to extend the default period for The Pakwin Pty Ltd Employee Collective Agreement 2008
This decision relates to an application made pursuant to item 20A(4) of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the Transitional Act) by Pakwin Pty Ltd (the Applicant) to extend the default period for The Pakwin Employee Collective Agreement 2008 (the 2008 Agreement).
The application is made in accordance with subitem (6)(a) and subitem (7) on the grounds that bargaining is occurring for a proposed enterprise agreement and that “it is otherwise appropriate in the circumstances” to extend the default period.
The Full Bench in ISS Health Services Pty Ltd[1] described the three requirements that must be met for the first limb of subitem 6(a) and subitem (7) to apply. We are satisfied on the material provided that these requirements have been met and bargaining is occurring. In fact, the Applicant recently lodged an application in the Commission for the approval of an enterprise agreement.
The second limb of the test under subitem (6)(a) is whether the Commission is satisfied that “it is otherwise appropriate in the circumstances” to extend the default period.
The Applicant employs casual staff at the Inglewood Hotel (WA) under the 2008 Agreement. Were it not for the 2008 Agreement, which expressly excludes all awards, employees would be covered by the Hospitality Industry (General) Award 2020 (the Award).
The 2008 Agreement includes “rolled up rates” for both permanent and casual employees. The hourly rates of pay in the 2008 Agreement now fall below the Award, however, Item 13 of Schedule 9 of the Transitional Act operates to ensure the base rates of pay payable under an agreement-based instrument are the applicable Award rate. In addition, the Applicant submits that:
“The Hotel pays an additional 9% on the Award Monday to Friday casual hourly rates for work done between Monday and Saturday, a Sunday rate that is 55% above the Award Monday to Friday full-time/part-time hourly rates and a Public Holiday rate that is 101% in addition to the Award Monday to Friday full-time/part-time hourly rates.”
While the Applicant submits its pays above award rates for permanent workers, the Applicant also submits the Agreement only covers casual workers.
The 2008 Agreement contains a number of reduced terms and conditions when compared to the Award. These include (but are not limited to) the following:
The 2008 Agreement does not contain shift penalties, unlike the Award which provides for penalties for work engaged in between 7pm and 7am;
The 2008 Agreement does not include weekend penalty rates;
The 2008 Agreement offers reduced public holiday penalty rates;
The 2008 Agreement does not provide overtime rates for casual workers;
The 2008 Agreement does not contain minimum engagement for casual employees;
The 2008 Agreement does not include any entitlement to annual leave loading;
The 2008 Agreement does not include any of the Award allowances.
In a number of recent Full Bench decisions, the Commission has expressed a reluctance to extend the default period of transitional instruments that contain inferior conditions to those in the relevant modern award. In Peter Frick,[2] the Full Bench considered that the default position of the statute to automatically terminate transitional instruments on 6 December 2023 suggests a policy preference for employees covered by transitional instruments to be regulated by contemporary instruments.[3] In Kalfresh Management Services Pty Ltd,[4] the Full Bench expressed the view that where an agreement contains inferior and outdated terms and conditions, this weighs strongly against a conclusion that it is reasonable in the circumstances to extend a default period.[5] In Surf Hogs Pty Ltd T/A Hog’s Breath Café Surfers Paradise,[6] the Full Bench found that it was not appropriate to extend the default period of an Agreement on the basis that bargaining was occurring as “the inferior conditions in the Agreement mean it is likely that there would be a disadvantage to employees if the Agreement continues to apply prior to finalisation of the new agreement.”
Having regard to the Full Bench authorities and all the material presently before the Commission in this matter, we have determined it is not appropriate to extend the default period of the 2008 Agreement. It is not appropriate to do so because the inferior conditions in the 2008 Agreement mean it is likely that there would be a disadvantage to employees if the 2008 Agreement continues to apply.
In coming to this decision we have taken into account that there is currently an application for approval of an enterprise agreement before the Commission. We have also considered the fact that the Applicant only seeks a short extension to the default period until 1 May 2024 and it will take time and resources for the Applicant to make necessary administrative arrangements to give effect to the sunsetting of the 2008 Agreement and then to incorporate changes required from any future Agreement.
However, we are of the view that the potential disadvantage to employees of allowing the 2008 Agreement to continue outweighs these matters. In coming to this decision we have had regard to the fact that an application for approval of an enterprise agreement, particularly in cases where there are BOOT[7] and other concerns, can take a number of weeks. Indeed, in some cases an application for approval may not be successful and the parties will need to return to bargaining. In addition, we are mindful of the upcoming Easter and ANZAC day public holidays and the fact that if the 2008 Agreement continues, employees are likely to be receiving below Award rates for work on public holidays.
Given the circumstances outlined above, we do not think it is appropriate to extend the default period for bargaining when the ongoing operation of the 2008 Agreement is likely to disadvantage employees while they await the approval outcome. We are of the view that the 2008 Agreement should be replaced by a modern instrument that meets the requirements of the FW Act.
The Applicant, in the alternative, has submitted pursuant to subitem 6(b) that the default period should be extended on the grounds that it is “reasonable in the circumstances to make an order for extension of the default period.” The reasons given above in relation to it not being appropriate to extend the default period equally apply to our conclusion that it is not reasonable to extend the default period.
As our decision to refuse to extend the default period in accordance with subitem (6) is made after the sunset date in the Transitional Act, subitem 11(e) provides that we must extend the default period to the day of this decision or specify a day that is not more than 14 days after the day of this decision. Taking into account both the necessary administrative arrangements the Applicant will need to take to give effect to the sunsetting of the 2008 Agreement, and the fact that employees should not be further disadvantaged by being paid below award rates over the Easter public holiday period, the default period is extended to Thursday 28 March 2024.
DEPUTY PRESIDENT
[1] [2023] FWCFB 122.
[2] Peter Michael Frick [2023] FWCFB 137.
[3] Ibid, [32].
[4] Kallium Management Services Pty Ltd as Trustee For The Kalium Labour Trust T/A Kalfresh Pty Ltd [2023] FWCFB 217.
[5] Ibid, [14].
[6] [2024] FWCFB 12, [16].
[7] Better Off Overall Test, Fair Work Act 2009 (Cth) s 193.
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