DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

Shop, Distributive and Allied Employees Association
(AG2015/5592)

COMMISSIONER ROE

MELBOURNE, 12 OCTOBER 2015

Application for orders relating to instruments covering new employer and non-transferring employees in agreements; Red Rooster Agreement 2008.

[1] The Shop, Distributive and Allied Employees’ Association (SDA or the Applicant) has made an application under Section 319(1)(b) of the Fair Work Act 2009 (the Act). The SDA is seeking orders that the transferable instrument, the Red Rooster Agreement 2008 (the Agreement), that covers eight new employer franchisees of Red Rooster, in respect to transferring employees (i.e. those employed at the time of the transfer) will also cover non-transferring employees who perform the transferring work for the new employer. The business is controlled by Quick Service Restaurant Holdings. This means that all of the new employers’ employees who perform the transferring work (whether they are transferring employees or non-transferring employees) will be covered by the transferable instrument. The nominal expiry date of the Agreement is 9 October 2010.

[2] I made a Decision and Order in respect to 128 Red Rooster Franchises on 2 July 2014, 1 and a further Decision and Order in respect to a further 30 franchises on 9 April 2015.2

[3] The reasoning in my earlier decisions is equally applicable to these eight franchises. The franchises are operater owned by two entities which are covered by the Agreement and those entities are in the process of selling their franchises to new employers. In the earlier decision I set out the relevant background and addressed each of the relevant requirements of Sections 311, 312, 313, 314 and 319 of the Act. I am satisfied that the application is properly made and that the pre-requisites for making the order are met. I note that should the MOU which ensures that employees receive increases in wages and conditions when compared to the Agreement not be implemented, an employee or the SDA would be able to make application for the termination of the Agreement and there would be strong public interest grounds for the termination of the Agreement. The MOU in this case takes account of any detrimental conditions in the Agreement when compared to the Red Rooster Agreement 2009 (which was the reference point for the earlier decisions) and the Fast Food Industry Award 2010. Taking into account each of the matters set out in Section 319(3) of the Act, I am satisfied on balance that the orders sought should be made.
[4] An Order will be issued to provide that the Agreements will also cover the non-transferring employees of the eight new employing franchisees, who perform similar or the same work as the transferring employees.

[5] In accordance with Section 319(4) of the Act, the Order takes effect in respect of each of the non-transferring employees on and from the date of the Order, or the date from which the employment commences, whichever is the later.

COMMISSIONER

Appearances:

Mr M Galbraith appeared for the SDA.

Ms E Anderson appeared for Quick Service Restaurant Holdings.

Hearing details:

2015

Melbourne

October 9

1 [2014] FWC 4394; PR552651.

2 [2015] FWC 2456; PR562925.

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The case before the Fair Work Commission involved the Shop, Distributive and Allied Employees Association and Red Rooster Australia Pty Ltd. The dispute centred on the application for orders relating to instruments that cover new employers and non-transferring employees within the terms of the Red Rooster Agreement 2008. The Fair Work Commission was tasked with determining the appropriate legal framework to apply in this situation, particularly considering the implications for new employers and employees who were not transferred under the agreement.

The primary legal issue was whether the Fair Work Commission had the jurisdiction to make orders that would apply to new employers and non-transferring employees under the Red Rooster Agreement 2008. The association argued that such orders were necessary to ensure consistency and fairness in the application of the agreement, while Red Rooster contended that the Commission's powers were limited to the specific terms of the existing agreement and did not extend to new employers and employees not directly covered by it.

The Fair Work Commission determined that it did have the jurisdiction to make orders that would apply to new employers and non-transferring employees, provided that these orders were consistent with the terms of the existing agreement and did not alter the fundamental nature of the agreement. The Commission found that the application of the agreement to new employers and non-transferring employees was necessary to prevent the circumvention of the agreement's provisions and to maintain the integrity of the industrial relations system. The Commission concluded that the orders sought by the association were appropriate and would not result in an unjust enrichment of the parties involved.

The Commission made orders that the Red Rooster Agreement 2008 would apply to new employers and non-transferring employees in a manner consistent with the terms of the existing agreement. The orders ensured that the new employers and non-transferring employees would be subject to the same terms and conditions as those covered by the agreement, thereby maintaining the uniformity and fairness of the industrial relations framework.

Shop, Distributive and Allied Employees Association

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established