RR Storeco Pty Ltd

[2021] FWCA 3830

[2021] FWCA 3830

FAIR WORK COMMISSION

DECISION

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

RR Storeco Pty Ltd
(AG2020/4186)

APPLICATION FOR TERMINATION OF THE SDA-SUNSTATE FOODS PTY LTD AND ITS STORE EMPLOYEES COLLECTIVE AGREEMENT 2009-2012

Fast Food
DEPUTY PRESIDENT LAKE	BRISBANE, 2 JULY 2021

Application for termination of an enterprise agreement after its nominal expiry date.

[1] RR Storeco Pty Ltd (the Applicant) has made an application for the Fair Work Commission (the Commission) to terminate the SDA-Sunstate Foods Pty Ltd and its Store Employees Collective Agreement 2009-2012 (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (the Act).

[2] There are 213 employers covered by the agreement, including the Applicant.

[3] The Agreement had a nominal expiry date of 1 December 2012.

[4] The Applicant completed and filed a Form F24C – Statutory declaration in support of the application, providing that it seeks termination of the Agreement as it contains several terms and conditions that are less favourable to employees than the Fast Food Industry Award 2010 (the Award), including clauses 5.5 (laundry allowance), 6.3.1 (meal breaks), 6.5.2 (late work penalties), 6.5.3 (early work penalties), 6.6 (overtime) and 7.1 (no annual leave loading and no cashing out of annual leave).

[5] The Applicant further submits that while the current take home pay of employees under the Agreement is more than the Award for some employees, the Applicant Employers intend to providing undertakings to preserve take home pay and ensure no employee is disadvantaged by the termination of the Agreement. Those undertakings were subsequently provided.

[6] The Applicant indicated in its application that SDA Queensland (SDAQ)was an employee organisation covered by the Agreement. Accordingly, I invited the SDAQ to make submissions in response to the application.

[7] This matter is to be determined on the papers.

Applicant’s submissions

[8] The Applicant filed and relied on the F24C – Declaration in relation to termination of an enterprise agreement after the nominal expiry, signed 24 December 2020. The Applicant submitted that the termination of the Agreement would have the effect of ensuring that there is one unified set of rules and entitlements applying across all employees working for the Applicant Employers. This would be beneficial given that there are currently a mix of employees covered by the Agreement and the Award which has created confusion and dissatisfaction in the workplace where two employees of the same age, working the same job are entitled to different rates of pay, overtime and penalty rates.

[9] Christopher Mahoney, the Employment Relations Specialist of Craveable Brands which is the parent company of the Applicant, filed with a statement in support of this application. Mr Mahoney gave evidence that in early October 2020, the Applicant determined that the Sunstate Agreement was not better off overall for employees and decided to apply to terminate the Sunstate Agreement. Following consultation with the Franchisees operating stores covered by the Sunstate Agreement, he contacted Justin Power from SDAQ and discussions between them took place throughout November and December 2020.

[10] Mr Mahoney stated that, on 29 January 2021, a communication was issued to all employees covered by the Sunstate Agreement via the Applicant intranet explaining that an application to terminate the Sunstate Agreement had been made.

[11] On 8 February 2021, a further communication was issued to all employees covered by the Sunstate Agreement, explaining the effect of the termination of the Sunstate Agreement on their employment. Included in that communication were copies of the 2019/2020 wages applicable under the Sunstate Agreement, the 2020/2021 wages which would apply if the Sunstate Agreement were to be terminated, the proposed employer undertakings and a request for employees to complete a survey which asked, “How do you feel about the termination of the Sunstate agreement?”. Employees had three options for responses, namely, approve, disapprove and ‘other’ with the ability for employees to type a free text response. The above communications were issued as mandatory notices, meaning that employees could only use the intranet after having read and acknowledged they had read the above communications.

[12] On 11 February 2021, it was brought to Mr Mahoney’s attention that there was an issue with accessing the survey on the Applicant’s intranet. He organised for this issue to be rectified and confirmed the survey was accessible and working.

[13] On 12 February 2021, the Applicant generated a report of responses to the survey. Only two employees had responded, both in favour of terminating the Agreement.

[14] The Applicant also prepared and provided calculations based upon two randomly selected Sunstate Agreement covered employees’ rosters which show that the effect of the termination will be a modest increase in take home pay.

[15] The Applicant submitted a signed copy of the Employers’ Undertakings which were in the following terms:

“We the Employers agree as follows:

In the event that the [Agreement] is terminated, the following terms and conditions will continue to apply to employees who were covered by the Agreement

1. Clauses 3.1.7, 3.1.9, 4.6.6, 6.3.2, 7.4.1 and 7.7 … [which were extracted]
2. In addition to the above, all part-time employees will work not less than 9 hours per week. Existing part-time employees will not have their contracted hours reduced below their current agreed hours unless requested by the employee in writing.
3. The current applicable rates of pay under the Agreement… will be preserved and continue to apply to employees unless a more beneficial rate of pay would apply to the employee under the [Award], in which case, the rate of pay applicable under the Award will apply.

The above will continue to apply until… 1 February 2025.”

[16] The Applicant also provided an Excel spreadsheet detailed each of the affected employees that had been notified of the present application.

SDAQ’s response

[17] By email dated 20 April 2021, the SDAQ indicated that it “does not intend to file any material in this matter. We support the application and support the undertakings (version 2) - the company is going to amend and resubmit for consideration.”

Consideration

[18] I am satisfied that on assessment of the materials filed in the Commission, the termination of the Agreement is not contrary to the objects of the Act. The materials filed satisfy me that this is so and that termination of the Agreement will not be contrary to the public interest. The Agreement has passed its nominal expiry date, and there will be no adverse effect on employees if the application is granted.

[19] Pursuant to s.225 of the Act and having considered and being satisfied about each of the matters contained in s.226 of the Act, I order that the Agreement be terminated.

[20] I order that the termination will operate from 9 July 2021.

DEPUTY PRESIDENT

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