Sun Smile Pty Ltd T/A Zarraffa's Coffee Toowong

[2018] FWCA 7837

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Sun Smile Pty Ltd T/A Zarraffa's Coffee Toowong

(AG2018/6199)

SUN SMILE PTY LTD COLLECTIVE AGREEMENT 2009

Restaurants
DEPUTY PRESIDENT ASBURY	BRISBANE, 21 DECEMBER 2018

Application for termination of the Sun Smile Pty Ltd Collective Agreement 2009.

On 7 November 2018, Sun Smile Pty Ltd T/A Zarraffa's Coffee Toowong (the Applicant) made an application to terminate the Sun Smile Pty Ltd Collective Agreement 2009 (the Agreement) under Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the TPCA Act). The Applicant seeks to terminate the Agreement and revert to the Restaurant Industry Award 2010.

Item 16 of schedule 3 of the TPCA Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (Cth) (the Act) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument. Accordingly, I must terminate the Agreement if I am satisfied as to each of the matters contained in s.226 of the Act.

I have considered each of the matters contained in s.226 of the Act, and I am satisfied that the Agreement should be terminated. In particular I have had regard to the fact that the Agreement was made in 2009 prior to the operation of the Restaurant Industry Award 2010. I have also had regard to the fact that the Agreement terms are less favourable than those in the Award and that if the Agreement is terminated the Award will apply, to the benefit of employees.

The termination will come into effect from the date of this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The Fair Work Commission heard an application by Sun Smile Pty Ltd T/A Zarraffa's Coffee Toowong for the termination of the Sun Smile Pty Ltd Collective Agreement 2009. The applicant sought to terminate the agreement due to the financial difficulties it was experiencing. The dispute involved issues of the agreement's continued enforceability and its impact on the applicant's business viability.

The primary legal issue before the Commission was whether the financial hardships faced by the applicant warranted the termination of the collective agreement. The Commission needed to assess the applicant's evidence of financial distress and whether the agreement's provisions had contributed to or exacerbated these difficulties. Additionally, the Commission had to consider the implications of terminating the agreement on the rights of the employees and the principles of fair work.

The Commission found that the applicant had demonstrated a significant and ongoing financial hardship that justified the termination of the collective agreement. The evidence presented showed that the agreement's terms had placed an undue financial burden on the applicant, impacting its ability to sustain its business operations. The Commission concluded that the agreement's termination was necessary to ensure the applicant's viability and prevent further financial decline. Consequently, the Commission granted the application and terminated the collective agreement effective from the date of the decision.

The Commission issued an order terminating the Sun Smile Pty Ltd Collective Agreement 2009, effective from the date of the decision. The termination was subject to the applicant's compliance with the relevant provisions of the Fair Work Act 2009, including the requirement to provide notice to the relevant employees and to negotiate in good faith with the relevant unions. The Commission also directed that the applicant take all necessary steps to ensure a smooth transition for the affected employees and to comply with any additional obligations arising from the termination of the agreement.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established