Schwartz Family Company Pty. Ltd. T/A Mercure Sydney
[2023] FWCA 2733
•07 SEPTEMBER 2023
| [2023] FWCA 2733 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date
Schwartz Family Company Pty. Ltd. T/A Mercure Sydney
(AG2023/2674)
MERCURE SYDNEY COLLECTIVE AGREEMENT 2009
| Hospitality industry | |
| DEPUTY PRESIDENT CROSS | SYDNEY, 07 SEPTEMBER 2023 |
Application for termination of the Mercure Sydney Collective Agreement 2009
An application has been made pursuant to s.225 of the Fair Work Act 2009 (Clth) (the Act) by Schwartz Family Company Pty. Ltd. T/A Mercure Sydney (the Applicant) for approval to terminate the Mercure Sydney Collective Agreement 2009 (the Agreement). The nominal expiry date is January 2012.
The application was accompanied by a Form F24B and F24C provided by Ms Jessica Cameron, Talent & Culture Manager for Mercure Sydney, dated 08 August 2023.
On 09 August 2023, I issued directions requiring, the employer Mercure Sydney to provide all employees covered by the Agreement a copy of the directions and the Application. Those dictions were:
The Employer, Mercure Sydney, is directed to communicate in writing to each of the employees covered by the Agreement, forwarding this email to them (with attachments and any other material supplied to the Commission at lodgement) and inviting them to correspond by email with Chambers in the event they wish to provide their views relevant to s.226 above. The Employer is directed to provide this email to employees covered by the Agreement by no later than 4:00pm 10 August 2023. For employees who don’t have email, a copy of this email and all other material supplied to the Commission at lodgement should be placed on the staff notice board in the meal rooms (or another accessible place) with the Chambers email contact.
The Employer is directed to provide an email to chambers explaining compliance with direction [1] by no later than 4:00pm 11 August 2023.
Employees covered by the Agreement may provide their views to the application by no later than 4:00pm 25 August 2023 by emailing [email protected].
On 11 August 2023, my chambers sent correspondence to the Applicant noting that no communication has been received in relation to the directions issued on 09 August 2023:
The Deputy President notes that no communication has been received in relation to direction one (1) in the correspondence below.
The Deputy President requests that the Employer provide an email to chambers explaining compliance with direction one (1) by 4:00 PM on Monday 14 August 2023.
On 14 August 2023, the Applicant sent correspondence to Chambers requesting a small extension.
On 14 August 2023, I granted an extension for Mercure Sydney to comply with direction (1) by 4pm this afternoon.
On 14 August 2023, Ms Cameron emailed my chambers advising that Mercure Sydney has complied with the directions by way of forwarding all correspondence and communicating to staff to address any issues they had with terminating the agreement to my chambers.
No employees filed any material in response to the Application by 4:00pm on 25 August 2023.
Legislation
Sections 225 and 226 of the Act 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;
(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.
Considerations
Section 225
I am satisfied that Mercure Sydney, as the employer covered by the Agreement is eligible to apply to the Commission for the termination of the Agreement under s.225(a) of the Act. I am also satisfied that the Agreement has passed its nominal expiry date of January 2012.
Section 226(a) – Public Interest
Having regard to s.226(a) of the Act and the manner in which the public interest is to be assessed, the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd (Aurizon) cited various passages from the Full Bench of the Australian Industrial Relations Commission’s decision in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (Kellogg) which had concerned the corresponding, but not identical, provision from the Workplace Relations Act 1996. Relevantly, these passages included:
“The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them…”.
It is also relevant to highlight the Full Bench in Aurizon concluded that it cannot be expected that the terms and conditions of an agreement will continue unaltered in perpetuity after it has passed its expiry date. This is because the Act contemplates the terms and conditions of an agreement may be altered by making a new agreement or by terminating the existing agreement.
As was also recognised in Aurizon, s.226 of the Act is not limited to circumstances in which an agreement no longer applies to any employee. The Act clearly contemplates an agreement that still applies to employees being terminated and prescribes a safety net upon termination in such circumstances. The prescribed safety net is not a prior agreement and nor are undertakings mandatory. Rather, the prescribed safety net is the relevant modern award created during the Award Modernisation process and the National Employment Standards (NES). In this case, the relevant modern awards are the Hospitality Industry (General) Award.
In this Application, the termination of the Agreement would not lead to an absence of award coverage for the employees. The Awards provide for “National Employment Standards”.
In circumstances where there was no material before me suggesting otherwise, I am satisfied it is not contrary to the public interest to terminate the Agreement.
Section 226(b) – Appropriateness
The approach to assessing appropriateness by considering all the circumstances, as enunciated by the Full Bench in Aurizon, is to have reference to the construction of s.226 and the contextual matters that bear upon that construction, as well as giving specific consideration to the matters identified in ss.226(b)(i) and (ii):
“All of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s . 226(b)(i) and (ii).” (Reference omitted)
I intend to adopt this approach.
As the employer, Mercure Sydney filed the Application to terminate the Agreement and it clearly supports the Agreement being terminated. Ms Cameron stated that it would be unfair for the agreement to remain in operation as the agreement has been identified as a Zombie Agreement by the Fair Work Commission and will cease on the 7 December 2023. Ms Cameron requested that the agreement be terminated earlier to be in line with the 152 hour cycle that majority of current employees are on to ensure that employees are getting paid all their applicable overtime and penalty rates that they are entitled to with the change that is coming.
There is no employee organisation covered by the Agreement.
I am satisfied the employees were on notice as to the Application before me and had a reasonable period of time to file material should they have wished to do so. While no submissions from any employees were filed in the Commission, I am prepared to conclude that they are not opposed to such a level that has motivated them to register their opposition, through the filing of material in response to my directions. They appear indifferent.
The Act contemplates the relevant Awards and NES applying as the safety net, in the event of termination of the Agreement. Further, my assessment is that the Awards provide a more comprehensive range of entitlements than the Agreement.
Conclusion
Having regard to the terms of the Agreement in their entirety as they apply to the employees, the circumstances of the employees and the likely effect on them if the Agreement is terminated, together with the views and circumstances of Mercure Sydney, I consider it is appropriate in all the circumstances to terminate the Agreement. As outlined above, I am also satisfied it is not contrary to the public interest to terminate the Agreement.
Further to the above findings, the Act requires that I terminate the Agreement. In accordance with s.227 of the Act, the termination will take effect from 26 November 2023.
DEPUTY PRESIDENT
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