Shop, Distributive and Allied Employees' Association v Lokrum Pty Ltd trading as Grill'd Norwood
[2025] FWCFB 125
•24 JUNE 2025
| [2025] FWCFB 125 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Shop, Distributive and Allied Employees’ Association
v
Lokrum Pty Ltd trading as Grill’d Norwood
(C2025/4988)
| VICE PRESIDENT GIBIAN | SYDNEY, 24 JUNE 2025 |
Appeal against decision of Commissioner Platt in [2025] FWCA 1732 in Matter Number AG2025/1283 made on 26 May 2025 – Termination of expired enterprise agreement under s 226 of the Fair Work Act 2009 (Cth) – Application by Employee X – Date on which termination will operate delayed by approximately three months – Appeal against decision to delay termination of agreement – Disadvantage to employees – Whether error in exercise of discretion – Permission to appeal granted – Appeal dismissed.
Introduction
Lokrum Pty Ltd (as trustee for The McClure Family Trust) trading as Grill’d Norwood operates a burger restaurant in Adelaide as part of the Grill’d franchise network. The terms and conditions of employment of full time and part time employees employed to perform work at the restaurant are governed by the Grill’d Norwood Enterprise Agreement 2014 (the Agreement). The Agreement passed its nominal expiry date on 24 July 2018.
Almost seven years later, on 29 April 2025, an application was made under s 225 of the Fair Work Act 2009 (Cth) (the Act) to terminate the Agreement. The application was made by an employee referred to as “Employee X” and supported by a declaration made by an official of the Shop, Distributive and Allied Employees’ Association (the SDA). Lokrum did not oppose the Agreement being terminated but requested that termination of the Agreement take effect 90 to 120 days after the date of any decision. The application was dealt with by Commissioner Platt. In a decision published on 26 May 2025, the Commissioner terminated the Agreement. The Commission determined, under s 227 of the Act, that the termination would operate from 4pm on 13 August 2025.[1]
On 29 May 2025, the SDA applied for permission to appeal, and to appeal, the decision of the Commissioner to delay the effective date of the termination of the Agreement. The SDA applied for expedition of its appeal. The appeal was listed quickly given that, unless the appeal was dealt with reasonably quickly, it would become inutile or, at least, the utility of the appeal would be greatly reduced. For the reasons that follow, permission to appeal should be granted but the appeal dismissed. No error has been demonstrated in the exercise of discretion by the Commissioner to set the date upon which termination of the Agreement is to take effect.
Background
As we have observed, the Agreement passed its nominal expiry date in July 2018. The Agreement nonetheless continues in operation until an order terminating the Agreement commences operation or it ceases to apply to any employee.[2] The Agreement continues to apply to relevant employees to the exclusion of any modern award that would otherwise apply to the employees in relation to that employment.[3]
The grounds for seeking termination of the Agreement were set out in the declaration of Ali Mohammad Amin filed with the application. The grounds included that the Agreement undercuts minimum award conditions, causes financial disadvantage to employees compared to the relevant modern award and that the cohort covered by the Agreement is vulnerable. The declaration in support of the application asserted that those factors mean that it is unfair for the employees covered by the Agreement to remain subject to outdated and inferior terms and conditions when compared to the minimum safety net operating under the Fast Food Industry Award 2020 (the Fast Food Award). The SDA also submitted that the application should be expedited and promptly allocated to a Commissioner given the significant and ongoing disadvantage being suffered by the employees covered by the Agreement.
Lokrum filed a declaration made by Brea Alison McClure dated 14 May 2025 in response to the application. The response contested a number of the assertions made in the application. It also stated that the employer had initiated bargaining for a new enterprise agreement on the same day, that is, 14 May 2025. Some explanation was provided for the delay in commencing bargaining. In short, it was said that Lokrum had been awaiting the outcome of bargaining for a new enterprise agreement to cover employees of Grill’d Pty Ltd working at company owned stores. The declaration indicated that Lokrum was now offering its staff a proposed enterprise agreement in substantially similar terms to the proposed agreement relating to company owned stores and required a period of time to engage in bargaining with its workforce. It anticipated that a period of at least 90 days would be required to engage in bargaining and asserted that termination of the Agreement at short notice would cause uncertainty for employees and operational difficulties for the employer. The declaration stated that Lokrum did not oppose termination of the Agreement but requested that termination take effect 90 to 120 days from the date of any decision.
In addition, a declaration made by the Restaurant Manager at Grill’d Norwood, Cassie Hinks, was filed together with Lokrum’s response. Ms Hinks indicated that employees have received increases to their rate of pay notwithstanding that the Agreement contained no further pay rises, pointed out that the Agreement does not cover casual employees and contested assertions that employees are all young as suggested by the SDA. Ms Hinks states that her preference would be that employees at Grill’d Norwood have the opportunity to complete the bargaining process before any decision is made to terminate the Agreement. Ms Hinks claimed the Agreement provides flexibility not available under the Fast Food Award although did not specify in what respects she has greater flexibility under the Agreement.
On 16 May 2025, the Commissioner’s associate sent an email to the parties, and communicated, on a provisional basis, the following in relation to the termination date for the Agreement:
The Commissioner proposes to approve the termination application with a delayed termination of 90-120 days.
The SDA communicated to the chambers of the Commissioner on the same day that it wished to express a view on the delayed termination and opposed the length of time sought by Lokrum. The SDA proposed that it would file written submissions by 19 May 2025.
The SDA, on behalf of Employee X, filed written submissions on 19 May 2025 in relation to the proposal to delay operation of the termination of the Agreement. In summary, the SDA submitted that the discretion in s 227 should be exercised in a manner which gives effect to the objects of the Act and, in particular, referred to the object of “ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders”. It submitted that the continued operation of the Agreement was inconsistent with that object because it represented an unfair arrangement of below award conditions. The SDA referred to the decision of the Full Bench in Gangell v Lobethal Abattoirs Pty Ltd T/A Thomas Foods International[2018] FWCFB 4344 in support of the proposition that it would be prima facie contrary to the object of the Act to permit an agreement to continue to operate in circumstances where its provisions are less beneficial than those provided by the relevant modern award.[4] In relation to the state of bargaining, the SDA submitted that the Commission should not countenance employees being put in a position where the consequence of voting down any proposed new agreement would be to perpetuate sub-award conditions.
Lokrum filed written submissions dated 23 May 2025. Lokrum submitted that a delay of the termination of the Agreement of 120 days was appropriate. It advanced five reasons in support of that outcome: that the objects of Part 2-4 of the Act support the Commission having regard to fairness to an employer in the operation of its commercial enterprise; that Lokrum wishes to have the opportunity to bargain for a new agreement from a position of established and clarified rights and entitlements; that a current manager and employee, Ms Hinks, has notified that she wants to maintain the status quo while bargaining is occurring; that, if termination occurs within the bargaining period, Lokrum and its employees may be subject to a revolving regime of industrial coverage in which they revert to the Fast Food Award for a short period and then move to a new agreement and that this would be an administrative and management headache; and that if bargaining does not result in a vote in favour of a new agreement, the Agreement will terminate and employees will then be covered in the short to medium term by the Fast Food Award.
The Commissioner handed down his decision in relation to the application promptly on 26 May 2025. The substance of the Commissioner’s decision is in the following terms:[5]
[7] Based on the information received, I am satisfied pursuant to s226(1)(a) that the continued operation of the Agreement would be unfair for the employees covered. Both parties agree that the Agreement should be terminated. The only dispute concerns the operative date.
[8] I note that the Respondent’s agreement to bargain occurred very recently. There is merit in permitting the parties a reasonable opportunity to conclude an agreement. Whilst the Respondent’s bargaining approach may be informed by the experience of other members of the Grill’d organisation, it is a legally separate process. The Respondent in this matter is a Grill’d franchisee.
[9] Having considered the material before me, I am of the view that three months from the commencement of bargaining is an appropriate period.
[10] I am satisfied having regard to s 226(1A) of the Act, that it is appropriate in all circumstances to terminate the Agreement.
[11] In accordance with s 227 of the Act, the termination will come into effect from 4:00pm (SA) on 13 August 2025.
It should be observed that the period allowed by the Commissioner before the termination takes effect is three months from the commencement of the bargaining for a new agreement on 14 May 2025 rather than three months from the date of the decision.
The SDA seeks permission to appeal, and to appeal, from the decision. The SDA relies on two grounds of appeal. First, it contends that the Commissioner failed to afford procedural fairness by failing to consider the submissions made on behalf of Employee X or, in the alternative, failed to give reasons or adequate reasons for rejecting the contentions of Employee X. Second, the SDA contends that the Commissioner erred by failing to take into account, or failing to give due weight to, the objects of the Act and Part 2-4 and by failing to take into account, or failing to give due weight to, the impact on enterprise bargaining and interaction with the enterprise bargaining provisions of the Act.
Section 604(1) of the Act permits a “person who is aggrieved by a decision” of the Commission to appeal the decision. The SDA was not the applicant in the proceedings before the Commissioner. It was not able to apply to terminate the Agreement because it is not an employee organisation covered by the Agreement for the purposes of s 225(c) of the Act. It, nonetheless submits that it is “aggrieved” by the decision because it has an interest in the decision beyond that of the general public. The SDA says that is so because it is entitled to represent the industrial interests of employees in the fast food industry, it is a bargaining representative to the proposed new agreement and has an interest in the proper interpretation and application of s 227 of the Act. Lokrum does not dispute that the SDA is a “person aggrieved” and is able to appeal under s 604(1).
We accept that the SDA is a person who is aggrieved by the decision of the Commissioner for the purposes of s 604(1) of the Act. The phrase “person aggrieved” has been construed to extend to “a person who can show a grievance which will be suffered as a result of the decision complained of beyond that which he or she has as an ordinary member of the public”.[6] The interest required to be a “person aggrieved” need not be a legal, financial or proprietary interest in the subject matter of the proceedings and may take any of a variety of forms, although the interest must not be remote, indirect or fanciful, or merely that of an intermeddler or busybody.[7]
The Commission has accepted, on a number of occasions, that an employee organisation will commonly have standing to appeal from a decision concerning the approval of an enterprise agreement even if it was not a bargaining representative with respect to the making of the agreement. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Main People Pty Ltd[2014] FWCFB 8429, for example, the Full Bench said:[8]
The appellants have the right to represent employees under the terms of the Agreement. Moreover, given the nature of the respondent's business, and the industry within which it operates, we are satisfied that it is likely that some members of the appellants will be employed by the respondent in the future, in classifications covered by the Agreement. In the circumstances of this case we consider that this gives the appellants an interest in the decision to approve the Agreement beyond that of an ordinary member of the public. Accordingly, we are satisfied that the appellants have standing to appeal the decision to approve the Agreement.
The same conclusion must follow with respect to a decision as to whether to terminate an enterprise agreement or the time from which the termination of an agreement will operate. The SDA has members to whom the Agreement applies and is entitled to represent the industrial interests of all employees to which it applies. The SDA is a bargaining representative in relation to bargaining for a replacement agreement. It has an interest beyond an ordinary member of the public and is entitled to appeal the decision of the Commissioner under s 604(1) of the Act with permission of the Commission.
We believe it is appropriate to grant permission to appeal in this matter. Although we have not ultimately accepted the submission of the SDA in that regard, it has an arguable case that the Commissioner failed to consider the submissions advanced on behalf of Employee X at first instance given the brevity of the Commissioner’s reasons. In addition, the application of s 227 of the Act when determining the time from which the termination of an enterprise agreement will operate has been subject of little direct consideration by the Full Bench, particularly after the amendments made to s 226 by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth). For both those reasons, it is in the public interest for permission to appeal to be granted for the purposes of s 604(2) and, in any event, that it is appropriate for the Full Bench to exercise its discretion to grant permission to appeal.
It is necessary then to consider the two grounds of appeal advanced by the SDA. It is to that we now turn.
Statutory provisions
An enterprise agreement commences operation 7 days after it is approved or such later day as is specified in the agreement.[9] It ceases to operate only when a termination of the agreement comes into operation under ss 224 or 227 or it ceases to apply to any employee.[10] An enterprise agreement can be terminated by agreement between the employer and relevant employees subject to approval by the Commission.[11] Alternatively, an employee, employer or employee organisation covered by an agreement can apply to the Commission to terminate the agreement after its nominal expiry under s 226 of the Act. As we have observed, that section was repealed and a new section substituted by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth). Section 226 now provides as follows:
226 Terminating an enterprise agreement after its nominal expiry date
(1) 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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or
(b)the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or
(c)all of the following apply:
(i) the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement;
(ii) the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement;
(iii) if the agreement contains terms providing entitlements relating to the termination of employees’ employment—each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement.
(1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.
(2) This subsection covers a termination of the employment of an employee:
(a)at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b)because of the insolvency or bankruptcy of the employer.
(3) In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:
(a)the employees (unless there are no employees covered by the agreement);
(b)each employer;
(c)each employee organisation (if any).
Note: The President may be required to direct a Full Bench to perform a function or exercise a power in relation to the matter if any of the employers, employees, or employee organisations, covered by the agreement oppose the termination (see subsection 615A(3)).
(4) In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to:
(a)whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and
(b)whether bargaining for the proposed enterprise agreement is occurring; and
(c)whether the termination of the existing agreement would adversely affect the bargaining positionof the employees that will be covered by the proposed enterprise agreement.
(5) In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.
In short, the Commission must terminate an agreement on application if satisfied that one of the circumstances in s 226(1)(a), (b) or (c) exists. The Commission must also be satisfied that it is appropriate in all the circumstances to terminate the agreement for the purposes of s 226(1A) and must have regard to the matters set out in s 226(3), (4) and (5).
The time from which the termination of an enterprise agreement operates is dealt with in s 227 in the following simple terms:
227 When termination comes into operation
If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement
Section 227 was not amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth). The Parliament was content to leave the timing of the termination of an agreement to the exercise by the Commission of what the parties both described as an open discretion. The factors that may be taken into account in the exercise of that discretion are unconfined, except insofar as the subject-matter, scope and purpose of the legislation gives rise to an implied limitation or requirement.[12] Although not expressly required to be considered, the matters to which reference is made in s 226 are likely to be relevant to the timing of the termination of an agreement.
Ground 1 – Denial of procedural fairness/Adequacy of reasons
Ground 1 contains two complaints. The first is that Employee X was denied procedural fairness by reason of the Commissioner failing to have regard to submissions made by the SDA. The second is that the Commissioner failed to give reasons, or adequate reasons, for not accepting the submissions of the SDA. Those complaints are distinct but, obviously enough, related. Whether a decision-maker has considered submissions advanced in proceedings will involve an examination of any reasons given for the decision albeit in the context of the matter to be decided and the materials put before the decision-maker.
It is appropriate to make some general observations about the obligation of the Commission to address submissions advanced to it in any reasons it provides. Some relevant principles are as follows:
(a)A failure on the part of a decision-maker to take into account a “submission centrally relevant to the decision being made” can give rise to appealable error and, indeed, jurisdictional error.[13] Though the level of engagement and the degree of effort required by a decision-maker to consider a submission adequately will necessarily depend upon the length, clarity and degree of that submission, the standard expected is that a decision-maker will read, identify, understand and evaluate the submission, by bringing their mind to bear upon the argument that has been put forward.[14]
(b)A failure to deal in published reasons with an issue raised by the evidence or the contentions advanced by a party, might give rise to an inference that it has been overlooked.[15] However, it should not be lightly concluded that a decision-maker failed to take into account a matter raised before them. It “is a mistake to conclude simply from the fact that a Tribunal does not refer, or does not refer in detail, to some particular aspect of the case that it has escaped [the Tribunal’s] attention”.[16] An inference that a matter has been overlooked should not too readily be drawn where the reasons are otherwise comprehensive and the issue has at least been identified at some point.[17]
(c)Although the reasons of a decision-maker must articulate the essential grounds for reaching the decision and address material questions of fact and law in a manner which discloses the steps which lead to a particular result, “the reasons need not be lengthy or elaborate and need not spell out every detail in the reasoning process or deal with every matter of fact or law which was raised in the proceedings.”[18] A decision-maker is not expected to set out every consideration which passes through the decision-maker’s mind[19] or to refer to “every piece of evidence and every contention” made by a party.[20]
(d)The reasons of a decision-maker are to be read fairly and as a whole and not with an eye attuned to the detection of error.[21] However, although the reasons of a decision-maker are to be read fairly, eyes should not be so blinkered as to avoid discerning an absence of reasons or reasons devoid of any consideration of a submission central to a party’s case.[22]
(e)It is relevant when considering the reasons of a member of the Commission that the Commission is under an obligation, imposed by s 577 of the Act, to deal with the application in a manner that was “fair and just” and “quick, informal and avoid unnecessary technicality”.[23] The Commission has a statutory mandate to get to the heart of matters as directly and effectively as possible,[24] particularly in the context of dealing with a matter concerning bargaining which is intended to be dealt with expeditiously.
We will bear those observations in mind in considering the reasons of the Commissioner in the present case.
The reasons of the Commissioner are admittedly brief. The reasons could have been more detailed and addressed more specifically the contentions made by the SDA. However, it is important to understand the context in which the decision was made. The major subject of the application was whether the Agreement should be terminated. That outcome was not opposed. The remaining issue the Commissioner was required to determine as to when the termination would operate is important, but residual in nature. It involved the exercise of an open discretion which did not require the Commissioner to consider any identified criteria or considerations dictated by the Act. The SDA asked that the matter be dealt with expeditiously and the Commissioner accommodated with that request. The reasons of the Commissioner must be understood in that context.
The material before the Commissioner, and the issues to be considered, were of a limited compass. The SDA had filed, on behalf of Employee X, the application, the declaration by Mr Amin and one set of written submissions. The contentions as to why the Agreement should be terminated immediately were essentially twofold, namely, that the prima facie position is that the continued operation of the Agreement is contrary to the object of the Act because it would continue below award conditions and that bargaining for a new agreement should not occur against a backdrop that is “unfair”. Lokrum, on the other hand, contended that it, and the employees, should have an opportunity to conclude a new agreement prior to the Agreement being terminated for various reasons.
We do not accept that the proper inference to be drawn is that the Commissioner failed to consider the submissions made by the SDA. First, the Commissioner said that he reached his conclusion “[h]aving considered the material before me” at paragraph [9] of the decision. Although such a statement might not always be an answer to the contention that a matter was overlooked, it should be given weight. Second, the Commissioner recorded the assertions of the SDA that the Agreement provided for conditions which are inferior to those in the Fast Food Award at paragraph [5]. It should not be inferred that the Commissioner failed to consider that matter, or the submission of the SDA that it favoured immediate termination, when considering the date from which the termination should operate. Third, the Commissioner acknowledged the concern of the SDA about the impact on bargaining of the continued operation of the Agreement, albeit obliquely, at paragraph [5]. That contention was made in the declaration of Mr Amin to which the Commissioner expressly referred. Fourth, the inference to be drawn from the Commissioner’s conclusion at paragraph [8] that “[t]here is merit in permitting the parties a reasonable opportunity to conclude an agreement” is that he accepted the position advanced by Lokrum as described in paragraph [6] of the decision notwithstanding the matters relied upon by the SDA. Fifth, the Commissioner arrived at an outcome between the positions of the parties. He determined that the appropriate period was less than that contended for by Lokrum (120 days from date of decision) and, rather, that the period should be three months from the commencement of bargaining (79 days from date of decision). That is suggestive of consideration of the position of both parties.
For those reasons, we do not accept that the Commissioner failed to consider the submissions made by the SDA. For similar reasons, we do not accept that the Commissioner failed to give reasons or adequate reasons for his decision. In that respect, ground 1 in the notice of appeal alleges that the Commissioner failed to give reasons, or adequate reasons, for rejecting the contentions made on behalf of Employee X. The ground does not frame the question correctly. The question is whether the Commissioner gave adequate reasons for his decision. As we have said, the reasons of the Commissioner could have been more detailed and expansive. However, in the context of the decision he was called upon to make and the circumstances in which it was made, the reasons are sufficient to articulate the essential grounds upon which he reached his decision as to the timing of the termination of the Agreement. The essential reason was that the Commissioner considered that there was merit in the parties having a reasonable opportunity to conclude a replacement agreement prior to the termination of the Agreement commencing operation.
We reject ground 1 in the notice of appeal.
Ground 2 – Error in exercise of discretion
Ground 2 alleges error in the discretionary decision of the Commissioner setting the date on which termination of the Agreement would take effect. The ground is framed in the notice of appeal as a failure to take into account, or give due weight to, the objects of the Act and of Part 2-4 and the impact on enterprise bargaining and interaction with the enterprise bargaining provisions of the Act. In its terms, the ground must be rejected for the reasons given with respect to ground 1. We do not accept that the proper inference to be drawn from the decision of the Commissioner in the circumstances in which it was made is that the Commissioner did not take into account the submissions of the SDA with respect to the objects of the Act, and of Part 2-4, and the impact of the operation of the Agreement on bargaining.
As it was developed in written and oral submissions, ground 2 was articulated as involving a contention that proper consideration of the object of the Act, and the objects of Part 2-4, and the impact of the continued operation of the Agreement on bargaining dictated a conclusion that the Agreement should be terminated with immediate effect. As we understand the submission, the SDA submits that those considerations mean that the decision of the Commissioner to delay operation of the termination until 13 August 2025 was outside the range of reasonable discretionary decisions or entailed a misunderstanding of the nature of jurisdiction being exercised. If that submission is correct, it would demonstrate error in the Commissioner’s discretionary decision. However, we do not believe an error of that nature is to be found in the Commissioner’s decision.
The first matter raised by the SDA is that the continued operation of the Agreement is antithetical to the object of the Act and the objects of Part 2-4 because it contains conditions inferior to those in the Fast Food Award. Section 578 requires that in performing functions or exercising powers the Commission must take into account the object of the Act. The SDA specifically refers to the object in s 3(a) of “providing workplace relations laws that are fair to working Australians”, in s 3(b) of “ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through … modern awards” and the object of Part 2-4 in s 171(a) to “provide a simple, flexible and fair framework that enables collective bargaining in good faith”. In short, the SDA says that the finding of the Commissioner that continued operation of the Agreement was unfair to employees and the fact that it contains terms and conditions which are inferior to the relevant modern award required the expeditious cessation of the operation of the Agreement.
If an enterprise agreement provides for terms and conditions of employment that are, for some or all of the employees covered by the agreement, inferior to a relevant modern award, that is an important consideration which is likely to favour the conclusion that the agreement should be terminated quickly. We agree with the observation of the Full Bench in Gangell v Lobethal Abattoirs Pty Ltd (t/as Thomas Foods International)[2018] FWCFB 4344 that:[25]
Subject to the application of all of the relevant considerations, it would be prima facie contrary to the object of the Act to permit an agreement that has passed its nominal expiry date to continue to operate in circumstances where its provisions as a whole are less beneficial than those provided by the relevant modern award.
In a practical sense, if an enterprise agreement contains conditions less advantageous to employees than the relevant modern award, there will need to be some other persuasive consideration which justifies the agreement not being terminated quickly. In our view, the fact that an enterprise agreement provides inferior conditions compared to a relevant modern award is a weighty matter that favours its expeditious termination. However, even understood in the context of the object of the Act and of Part 2-4, the Act does not necessarily require immediate termination in all cases.
While the Commission is required to exercise any otherwise unconfined discretion in a way that is not antagonistic to the objects of the Act, the primary means by which the legislature sought to achieve them was to enact the detailed provisions of the Act itself.[26] One ground upon which the Commission is required to terminate an enterprise agreement arises if it is satisfied that the continued operation of the agreement would be unfair to employees for the purposes of s 226(1)(a). Even if the Commission is satisfied that the continued operation of an agreement is unfair to employees, the agreement is not required to be terminated immediately or at all. The Commission must, in addition, be satisfied that it is appropriate in all the circumstances to terminate the agreement for the purposes of s 226(1A) and must set a date upon which termination will take effect under s 227. The Act contemplates that an agreement may continue in operation for some period even if it is found to be unfair to employees.
The fact that the Agreement contains inferior conditions was a matter of significance to which the Commissioner was required to have regard when determining the date from which termination of the Agreement should operate. The members of the Full Bench may well have concluded that the Agreement should have been terminated more expeditiously. However, the object of the Act, or the objects of Part 2-4, did not require the Commissioner to set the date earlier than he did. So long as the object of the Act, and the importance of safety net conditions in modern awards, were considered, we do not believe the determination of the Commissioner that the termination of the Agreement should operate from 13 August 2025 was outside the range of permissible discretionary decisions available to him.
The second matter to which the SDA refers is the impact of the continued operation of the Agreement on bargaining. The SDA contends that the scheme of the Act manifests an intention to ensure that employees are able to bargain from a position of either a safety net modern award or an agreement which leaves them better off. It submits that the relevant employees should not be required to bargain for an agreement from an unfair starting point or forced to choose whether to approve a new agreement in circumstances in which voting against a new agreement would condemn the employees to conditions which are inferior to the relevant modern award until the termination of the Agreement takes effect.
The effect on bargaining is a matter to which the Commission is expressly required to have regard, under s 226(4)(c), in deciding whether to terminate an agreement. That requirement is directed primarily at circumstances in which terminating an agreement will disadvantage employees in bargaining. The revised explanatory memorandum to the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Cth) indicates, in relation to s 226(4), that:[27]
This would require the FWC to consider the effect that terminating an enterprise agreement may have on the affected employees’ bargaining position during negotiations for a new enterprise agreement. It is intended to prevent an enterprise agreement being terminated as a bargaining tactic, which would be unfair for the employees covered by the agreement (particularly in terms of their bargaining position).
Any impact on bargaining of the timing of the termination of an agreement is likely to be relevant to the exercise of discretion required by s 227. In this matter, the asserted impact on bargaining was a matter to which the Commissioner was required to have regard. However, it is not a matter which is susceptible to only one characterisation. Lokrum had a different view of the impact on bargaining. It submits that the decision of the Commissioner means that it is under pressure to reach a new agreement before 13 August 2025 and has an incentive to make concessions to achieve that outcome.
The unusual circumstances created by the impending, but not immediate, termination of the Agreement is a matter which should be carefully explained to employees in the event they are asked to approve a new agreement. Any failure to adequately explain the consequences of making a new agreement, or not doing so, is likely to be relevant to whether any agreement was genuinely agreed to by the employees. However, we do not believe that the impact on bargaining asserted by the SDA required the Commissioner to decide that the termination of the Agreement take effect at an earlier date. On the material before the Commissioner, it is unclear what impact a delay in the termination of the Agreement will have on bargaining. That was a matter to be considered as part of the exercise of the discretion conferred on the Commissioner in the circumstances of this case. The proper inference to be drawn from the circumstances is that the Commissioner considered that matter. Again, whether or not the members of the Full Bench might have reached a different conclusion, we do not believe the decision was outside the permissible range of discretionary decisions for this reason.
We also reject ground 2 in the notice of appeal.
Conclusion and disposition
For these reasons, permission to appeal should be granted, but the appeal dismissed. The Full Bench makes the following orders:
(a)Permission to appeal is granted; and
(b)The appeal is dismissed.
VICE PRESIDENT
Appearances:
P Dean, of counsel, instructed by A Amin for the Shop, Distributive and Allied Employees’ Association.
N Harrington, of counsel, instructed by Mills Oakley for Lokrum Pty Ltd.
Hearing details:
19 June 2025.
Sydney (in person).
[1] Grill’d Norwood Enterprise Agreement 2014 [2025] FWCA 1732 at [11].
[2] Fair Work Act 2009 (Cth), s 54(2).
[3] Fair Work Act 2009 (Cth), s 57(1).
[4] See, particularly, Gangell v Lobethal Abattoirs Pty Ltd T/A Thomas Foods International[2018] FWCFB 4344 at [23]-[25].
[5] Grill’d Norwood Enterprise Agreement 2014 [2025] FWCA 1732 at [7]-[11].
[6] Tweed Valley Fruit Processors Pty Ltd v Ross (1996) 65 IR 393 at 415 (Wilcox CJ and Marshall J) referring to Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 54 FLR 421 at 437 (Ellicot J).
[7] Australian Workers’ Union v Baiada Farms Pty Ltd[2021] FWCFB 6029; (2021) 311 IR 289 at [22] and the authorities referred to therein.
[8] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Main People Pty Ltd[2014] FWCFB 8429 at [7]. See also Construction, Forestry, Mining and Energy Union v CSRP Pty Ltd[2017] FWCFB 2101; (2017) 270 IR 1 at [11]-[13] and Construction, Forestry, Maritime, Mining and Energy Union v Norman McMahon Patches Pty Ltd (t/as Patches Asphalt)[2023] FWCFB 55 at [17].
[9] Fair Work Act 2009 (Cth), s 54(1).
[10] Fair Work Act 2009 (Cth), s 54(2).
[11] Fair Work Act 2009 (Cth), s 219(1).
[12] Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 at 39-40 (Mason J).
[13] Soliman v University of Technology, Sydney [2012] FCAFC 146; (2012) 207 FCR 277 at [55] (Flick J).
[14] Plaintiff M1 2021 v Minister for Home Affairs [2022] HCA 17; (2022) 275 CLR 582 at [24]-[25] (Kiefel CJ, Keane, Gordon and Steward JJ); Qube Logistics (Rail) Pty Ltd v Australian Rail, Tram and Bus Industry Union [2025] FCAFC 73 at [157] (Katzmann, Wheelahan and Raper JJ).
[15] WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184; (2003) 236 FCR 593 at [47] (French, Sackville and Hely JJ); Lo v Chief Commissioner of State Revenue [2013] NSWCA 180; (2013) 85 NSWLR 86 at [10] (Basten JA); D'Amore v Independent Commission against Corruption [2013] NSWCA 187 at [230] (Basten JA).
[16] Steed v Minister for Immigration and Ethnic Affairs (1981) 37 ALR 620 at 621; Wattie v Industrial Relations Secretary on behalf of the Secretary of the Department of Justice (No 2) [2018] NSWCA 124 at [152] (McColl JA).
[17] WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184; (2003) 236 FCR 593 at [47] (French, Sackville and Hely JJ); Jabari v Minister for Immigration, Citizenship, Migrant Services and Multicultural [2023] FCAFC 98; (2023) 298 FCR 431 at [55](5) (Katzmann, Jackson and McEvoy JJ).
[18] Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 271-272 (McHugh JA); Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 386 (Mahoney JA); Barach v University of New South Wales [2010] FWAFB 3307; (2010) 194 IR 259 at [16]; Tenterfield Care Centre Ltd v Wait[2018] FWCFB 3844 at [27].
[19] Steed v Minister for Immigration and Ethnic Affairs (1981) 37 ALR 620 at 621.
[20] WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184; (2003) 236 FCR 593 at [46] (French, Sackville and Hely JJ); Linfox Australia Pty Ltd v Fair Work Commission [2013] FCAFC 157; (2013) 240 IR 178 at [47] (Dowsett, Flick and Griffiths JJ).
[21] Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 291; Technical and Further Education Commission (t/as TAFE NSW) v Pykett[2014] FWCFB 714; (2014) 240 IR 130 at [45]; Tenterfield Care Centre Ltd v Wait[2018] FWCFB 3844 at [29].
[22] Soliman v University of Technology, Sydney [2012] FCAFC 146; (2012) 207 FCR 277 at [57] (Flick J).
[23] Milonas v Telstra Corporation Limited t/a Telstra[2018] FWCFB 1683 at [19]-[20].
[24] Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; (2011) 192 FCR 78 at [25] (Buchanan J); Milonas v Telstra Corporation Limited t/a Telstra[2018] FWCFB 1683 at [19]-[20].
[25] Gangell v Lobethal Abattoirs Pty Ltd (t/as Thomas Foods International)[2018] FWCFB 4344 at [25].
[26] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Aurizon Operations Ltd [2015] FCAFC 126; (2015) 233 FCR 301 at [23] (Jessup, Tracey and Reeves JJ); Australian Municipal, Administrative, Clerical and Services Union v Central Goldfields Shire Council [2024] FWCFB 444; (2024) 335 IR 110 at [75].
[27] Revised explanatory memorandum to the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Cth) at [662].
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