DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Salsas Pty Ltd T/A Salsa’s Fresh Mex
(AG2021/5426)

SALSA’S PTY LTD ENTERPRISE AGREEMENT 2010-2014

Fast food industry
COMMISSIONER YILMAZ	MELBOURNE, 19 JULY 2021

Application for termination of the Salsa’s Pty Ltd Enterprise Agreement 2010-2014.

[1] Salsas Pty Ltd T/A Salsa’s Fresh Mex (Applicant) has made an application for the Fair Work Commission (Commission) to terminate the Salsa’s Pty Ltd Enterprise Agreement 2010-2014 (Agreement) pursuant to s.225 of the Fair Work Act 2009 (FW Act). The application for termination was made on 1 June 2021. The Agreement expired on 31 March 2014.

[2] The Form F24C – Statutory declaration (the declaration) lodged with the application confirms that the reason the Applicant seeks for the Agreement to be terminated is that the Agreement reached the nominal expiry date over 7 years ago and that the Fast-Food Industry Award 2010 (the Award) contains up-to-date entitlements and benefits for fast-food employees. The Applicant states that the Award also applies to many other employers in the fast-food industry.

[3] The Form F24C further states that employees currently covered by the Agreement are paid a penalty rate for Monday to Friday (12am to 6pm), however under the Award employees would be paid penalty rates between 10pm to 12am and penalties between 12am and 6am.

[4] The Agreement, whilst in operation, covered employees who performed work at the Applicant’s restaurants in Victoria and South Australia.

[5] On Friday 2 July 2021, noting that no union or employee bargaining representatives were named on this application or the original s.185 application, my chambers wrote to the Applicant and requested a copy of the Form F23B and Form F23C be provided to all covered employees, explaining that if any employees wish to be heard regarding the application, they are invited to provide their views to chambers by no later than Wednesday 14 July 2021.

[6] On the same date, the Applicant wrote back to my chambers, forwarding a copy of the email sent to employees with the attached Form F23B and Form F23C.

[7] At the time of writing this decision, no employees have contacted my chambers raising objections in relation to the application.

[8] In considering the likely effect termination will have on employees for the purposes of s.226(b)(ii) of the Act, I note that the Agreement does not provide employees with penalty rates that are consistent with those set out in clause 25.5(a) of the Award. If the Agreement is terminated and employees are covered by the Award, they will be entitled to a shift loading of 10% for hours performed between 10pm and midnight. Furthermore, they will be paid a shift loading of 15% for hours performed between midnight and 6am. In comparison, it appears that clause 4.3.1 and 4.3.2 only provide a shift penalty of 10% for work performed between 9pm and midnight. As such, if covered by the Award employees will receive more beneficial shift penalties than if covered by the Agreement.

[9] 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.

[10] Having regard to the fact that the Agreement has passed its nominal expiry date and that employees will revert to the Award, I consider it appropriate to terminate the Agreement.

[11] I have considered the public interest, the materials lodged in support of the application, the views of the Applicant, that the Agreement has passed its nominal expiry date and that employees were made aware of the application and were given an opportunity to provide their views in relation to the application.

[12] 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, the Agreement is terminated. The termination will operate from 19 July 2021.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Salsas Pty Ltd T/A Salsa’s Fresh Mex applied for the termination of the Salsa’s Pty Ltd Enterprise Agreement 2010-2014. The applicant sought to terminate the agreement on the grounds that it was no longer appropriate due to changes in the business environment and operational circumstances. The matter was heard by the Fair Work Commission (FWC).

The legal issues before the FWC centred on whether the changes in the business environment and operational circumstances were sufficient to warrant the termination of the enterprise agreement. The applicant argued that the changes were significant and that the agreement was no longer fair and reasonable in light of these changes. The FWC needed to determine whether the applicant had demonstrated that the changes were substantial enough to justify the termination of the agreement.

The FWC considered the evidence presented by the applicant regarding the changes in the business environment and operational circumstances. The applicant provided detailed evidence of how these changes had impacted its business, including financial performance, market conditions, and operational challenges. The FWC found that the changes were significant and that the enterprise agreement was no longer appropriate given the current circumstances. The FWC concluded that the applicant had demonstrated that the changes warranted the termination of the agreement. The FWC therefore granted the application for termination.

The FWC ordered that the Salsa’s Pty Ltd Enterprise Agreement 2010-2014 be terminated. The termination took effect from the date of the FWC’s decision. The parties were directed to negotiate in good faith to reach a new enterprise agreement. The FWC emphasised the importance of the parties continuing to engage in good faith negotiations to reach a new agreement that would be fair and reasonable for both parties.

Salsas Pty Ltd T/A Salsa’s Fresh Mex

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established