Stevan Djukic

[2021] FWCA 3686

[2021] FWCA 3686

The attached document wholly replaces the document previously issued with the code [2021] FWC 3677 on 25 June 2021 to correct document referencing.

Associate to Deputy President Lake

Dated 25 June 2021

[2021] FWCA 3686

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Stevan Djukic
(AG2020/2495)

HAMILTON ISLAND ENTERPRISES LIMITED EMPLOYEE COLLECTIVE AGREEMENT 2009

Hospitality
DEPUTY PRESIDENT LAKE	BRISBANE, 25 JUNE 2021

Application for termination of an enterprise agreement after its nominal expiry date.

[1] Stevan Djukic (the Applicant) has made an application for the Fair Work Commission (the Commission) to terminate the Hamilton Island Enterprises Limited Employee Collective Agreement 2009 (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (the Act).

[2] The employer covered by the Agreement is Hamilton Island Enterprises Limited (HIE). There are 624 employees covered by the Agreement, of which the Applicant is one. There are no employee organisations covered by the Agreement.

[3] The Agreement had a nominal expiry date of 27 February 2014.

[4] The Applicant completed and filed a Form F24C – Statutory declaration in support of the application, submitting that he seeks termination of the Agreement on the basis that employees would be better off if they were covered by the Hospitality Industry (General) Award 2020 (the Award). Further, he alleged that he had been told that some classes of employees are covered by the Award, while others were covered by the Agreement, creating an inequitable workplace.

[5] On 12 November 2020, I issued directions inviting the Applicant and HIE to make submissions in response to the application. On 18 November 2020, HIE indicated that it opposed the application to terminate the Agreement. A conference was held on 25 November 2020 and further directions for the filing of material were made the following day. There was correspondence regarding the materials to be provided to HIE employees regarding the application. That was settled and the communication strategy finalised. Further conferences were held to ensure this was done sufficiently.

[6] A presentation pack was developed and agreed upon by all the parties which outlined what the application was about and the implications. The Respondent undertook to run a series of meeting with affected staff to explain the application and this was undertaken in March 2020 during a quieter period for the resort. Following the briefing sessions, a further conference was held to discuss the outcome of the consultation with the staff.

[7] On 3 June 2021, HIE’s legal representative contacted my Chambers to indicate that HIE no longer opposed the application to terminate the Agreement. Accordingly, I sought the parties’ submissions in relation to what date the termination should come into effect. I received submissions in response to that email from HIE on 16 June 2021. I have had no response from the Applicant.

[8] This matter is to be determined on the papers.

The Applicant’s submissions

[9] The Applicant filed and relied on the F24C – Declaration in relation to termination of an enterprise agreement after the nominal expiry date, dated 21 August 2020. In that statement, the Applicant argued that termination of the agreement is not contrary to the public interest and that employees would be much better off if they were covered by the relevant Award. The Applicant sets out his significant analysis of each of the relevant clauses.

[10] Given the application to terminate is not opposed by HIE, it is not necessary repeat Applicant’s analysis in detail here. Suffice to say, by terminating the Agreement, the Applicant submits that employees would be getting paid according to the current Award which on his view was the correct approach. He argued that this would in turn improve the situation for employees and elevate staff morale.

[11] The Applicant did not make any formal submissions in respect of the date upon which the termination should take effect.

Employer’s submissions

[12] As stated above, on 3 June 2021, HIE indicated that they consented to the termination of the Agreement on the basis that it is provided with a reasonable period to prepare and plan for this significant change.

[13] HIE submits that the effective date of termination of the Agreement should be 11.59pm on 1 February 2022, with 1 February 2022 being the last day the Agreement will apply to those employees covered by it. This will result in the applicable modern awards commencing operation at HIE to employees covered by the Agreement on 2 February 2022. This will allow the applicable modern awards to start on the day of a new work cycle.

[14] In support of this submission, HIE relies on the statutory declaration made by Glenn Bourke, Chief Executive Officer of HIE, on 15 June 2021. In that statutory declaration, Mr Bourke states that it was his assessment that HIE would require until at least until 1 February 2021 to prepare and plan for the commencement of the application of up to eight modern awards.

[15] In preparation for the termination of the Agreement, Mr Bourke states that HIE will need to review current rosters and determine whether those rosters will be compliant with, and financially viable under, the relevant modern Awards. If the existing rosters are not viable under the Awards, HIE will need time to plan its business operations and amends its rosters. Mr Bourke’s evidence was that:

“It cannot be understated the work that will need to be done to consider and understand the financial impacts of moving to the Modern Awards, and the flow on effects for the rest of the business and for related businesses that also supply goods and services to Hamilton Island.

The change from a loaded rate of pay that applies each day of the week under the [Agreement], to paying weekend and public holiday penalty rates will be a significant change for the business. This may mean that HIE needs to consider changing the operating hours of some of its businesses and outlets together with the range of products and services it makes available to the community, guests and residents of Hamilton Island. HIE may also need to consider changing the prices and rates it charges in its businesses and outlets.

HIE does not have the answer to these questions yet, and it anticipates that it will take significant intellectual and commercial investigation to undertake this body of work. Ultimately, HIE will need to determine how it can remain profitable moving from the [Agreement] to the Modern Awards in order to retain the viability of Hamilton Island and its community.”

[16] HIE will also need to implement a new time and attendance software system, which is itself a time-consuming process that is only part way through. The new system will be used to cover all HIE’s employees who are covered by 23 Awards (including the eight awards that will come into effect for the employees presently covered by the Agreement).

[17] Mr Bourke also gave evidence of the high occupancy rates expected until after 20 January 2022. The high occupancy rates put the business under extreme pressure, particularly with the additional requirements to comply with the COVID requirements. While planning and preparing for the termination of the Agreement will be a priority, Mr Bourke states, in reality this will need to be done while also juggling the business operations of HIE.

[18] The changes will likely also require an increased workforce, as well as additional housing for those staff.

[19] Given the weekly cycle – which ends on a Tuesday – used for employees covered by the Agreement, and the factors outlined above, HIE proposes that the first day of the operation of the Awards be 2 February 2022.

Consideration

[20] 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. The materials filed satisfy me that this is so and that termination of the Agreement will not be contrary to the public interest. The Agreement has passed its nominal expiry date, and there will be no adverse effect on employees if the application is granted.

[21] 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, I order that the Agreement be terminated.

[22] I order that the termination will operate from 2 February 2022.

DEPUTY PRESIDENT

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