Shop, Distributive and Allied Employees Association
[2022] FWCA 1791
•31 MAY 2022
| [2022] FWCA 1791 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Shop, Distributive and Allied Employees Association
(AG2022/1043)
Red Rooster Agreement 2009
| Restaurants | |
| COMMISSIONER MCKINNON | SYDNEY, 31 MAY 2022 |
Application for termination of the Red Rooster Agreement 2009.
The Shop, Distributive and Allied Employees Association has applied to terminate the Red Rooster Agreement 2009 (the Agreement). The Agreement covers and applies to Red Rooster Foods Pty Ltd, the Shop, Distributive and Allied Employees Association and employees throughout Australia.
Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated under section 225 of the Act:
“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.”
The Agreement expired on 30 September 2013. The relevant modern award that would otherwise apply to employees covered by the Agreement is the Fast Food Industry Award 2010 (the Award). There is general consensus that provisions of the Agreement have not kept pace with developments in the Award since that time.
The Shop, Distributive and Allied Employees Association and Craveable Brands Pty Ltd, the ultimate holding company of Red Rooster Foods Pty Ltd, were jointly involved in the pursuit of this application. Each supports termination of the Agreement. Red Rooster Foods Pty Ltd supports the application in that regard.
Employees were given an opportunity to provide their views on the application. Of those who responded, one employee did not understand the information provided, while one agreed that the Agreement should terminate and one other (who is now a former employee) stated they had left the business because they were being “underpaid”. Clearly, this is only a small sample of the relevant employee population. The large majority of employees did not take up the opportunity provided. My impression, both from the lack of response and the views provided, is that employees either do or will support termination of the Agreement because the result will be improved terms and conditions of employment.
Craveable Brands has undertaken a significant information and consultation process involving Red Rooster franchisees to explain the proposed termination of the Agreement and related benefits for the business as a whole. Elected members of the Red Rooster Franchise Advisory Council attest to a general level of support and/or lack of opposition to the application among employers who are covered by the Agreement as Red Rooster franchisees.
The likely effect of terminating the Agreement for employees is that their overall terms and conditions of employment will be improved, including in relation to overtime and penalty rates. There are some more beneficial terms in the Agreement that will cease to apply. In their place, Red Rooster has entered into a Memorandum of Understanding with the Shop, Distributive and Allied Employees Association dated 28 April 2022. The Memorandum preserves some of the entitlements that would otherwise be displaced. Separately, a Rostering and Leave Additional Entitlements policy will supplement the Award.
For both the respondent employers and the Shop, Distributive and Allied Employees Association, termination of the Agreement will reduce the potential for reputational risk to arise in connection with an outdated enterprise agreement. It will also provide the certainty, simplicity and related operational benefits that flow from having a single modern instrument governing terms and conditions of employment for Red Rooster employees across the network.
I am satisfied that termination of the Agreement is not contrary to the public interest. It is appropriate that the Agreement be terminated so that the terms and conditions of employment for employees working at Red Rooster are no less than the minimum safety net established by the National Employment Standards and the Award and so that there is consistency of terms across Red Rooster franchises.
The Agreement is terminated with effect from 1 June 2022.
COMMISSIONER
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