Teneal Roache
[2021] FWCA 5353
•13 SEPTEMBER 2021
| [2021] FWCA 5353 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 16 Sch. 3—Termination of transitional instrument
Teneal Roache
(AG2021/5865)
PARRY DEVELOPMENTS PTY LTD EMPLOYEE COLLECTIVE AGREEMENT 2008
Restaurants | |
COMMISSIONER HUNT | BRISBANE, 13 SEPTEMBER 2021 |
Application for termination of the Parry Developments Pty Ltd Employee Collective Agreement 2008 – agreement terminated.
[1] On 29 June 2021, Ms Teneale Roache, an employee of Parry Developments Pty Ltd, lodged a Form F28 - Application for termination of collective agreement-based transitional instrument with the Fair Work Commission (the Commission) to terminate the Parry Developments Pty Ltd Employee Collective Agreement 2008 (the Agreement). 1 The Agreement passed its nominal expiry date in 2013.
[2] The application is made pursuant to s.225(b) of the Fair Work Act 2009 (the Act) and under Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act). The application of these sections is discussed below.
[3] The Agreement covers employees of Parry Developments Pty Ltd (the Employer) which operates a number of Subway stores under franchise arrangements. Mr Ronald Parry, Director, represented the Employer.
[4] At the time of making the application, Ms Roache was an employee covered by the Agreement. Accordingly, she has standing to bring the application. Ms Roache later resigned her employment with the Employer; however, it doesn’t affect the jurisdiction of the Commission to determine the application.
[5] The application was supported by a Form F24C statutory declaration of Ms Roache dated 29 June 2021, in which she contended that termination of the Agreement would not be contrary to the public interest. She declared:
“I believe that the termination of the Agreement is not contrary to the public interest because employees are being made to work for a flat minimum wage, with no weekend penalty rates or up-to-date allowances in place to benefit them. Employees and store managers are forced into overtime work, as well as losing their days off, because of such a high employee turnover rate. This is all due to the significantly reduced entitlements and undermining standards set by the Collective Agreement in place, as compared to other workplaces in the same award industry.”
[6] She had the following to say regarding the effect the termination of the Agreement would have on employees covered by the agreement:
“I strongly believe that the termination of this Collective Agreement would highly benefit myself and all other employees under its contract, by giving all current and future employees the opportunity to an up-to-date, fair and just workplace. Termination of this Agreement would make way for potential opportunities; such as weekend penalty rates, as well as extra allowances such as special clothing (required uniform), laundry, cold room work and overtime meals (allowances).”
[7] Ms Roache included with her application a copy of a letter dated 18 June 2021 which she sent to store managers employed by the Employer, together with employees covered by the Agreement. It is not necessary to reproduce the letter in this decision, however I note Ms Roache advised she was making an application to the Commission to terminate the Agreement, with the reasons why she was doing so.
[8] Ms Roache also included with her application the anonymised views of two employees said to be covered by the agreement. These two employees supported the termination of the agreement and referred to a number of matters including, relevantly, their wages under the Agreement.
[9] On 2 July 2021, I issued directions to the Employer to forward to employees covered by the Agreement an email from my chambers inviting views as to the application and the likely effect of termination of the Agreement. The Employer complied with the directions.
[10] On 7 July 2021, Mr Parry provided the Employer’s views to the application, submitting that the Agreement has afforded the Employer and employees covered by the Agreement a great deal of flexibility over the many years of its operation. It was stated that the Employer may need to reconsider the opening hours of stores if the Fast Food Industry Award 2010 (the Award) will apply if the Agreement is terminated.
[11] In the event the Agreement is terminated, the Employer requested an appropriate period of time to provide a transition from the Agreement to the Award, to adapt to what, it said, would be a new business model. The Employer proposed a period of 6-8 weeks to allow for necessary changes to be accommodated.
[12] On 11 and 12 July 2021, my Chambers received correspondence from six employees covered by the Agreement. The correspondence was not copied to the Employer as per the directions. Ms Roache also provided correspondence from another staff member, who wished to remain anonymous, supporting termination of the Agreement. I did not consider it appropriate or necessary to have regard to the response as it was made anonymously. In any event, the correspondence to Chambers from identified employees covered by the Agreement was overwhelmingly in favour of the termination of the Agreement.
[13] I considered the employee responses and noted that only one opposed termination of the Agreement. The responses of employees supporting termination of the Agreement included some irrelevant matters, not appropriate to be considered in this application. Of relevance to this application, employees raised a number of concerns around wages, weekend penalty rates, and uniforms.
[14] On 11 August 2021, having considered the responses provided by the employees, correspondence was sent from my Chambers to the parties as follows:
“Having reviewed the responses received from employees covered by the Agreement to chambers, the Commissioner advises there are five detailed responses providing views supporting termination of the Agreement, and one view opposing termination of the Agreement.
If those views are to be provided to the Applicant and the Respondent, it will be necessary to heavily redact parts of each of those statements.
The Commissioner notes the Respondent’s views were provided on 7 July 2021, where it was suggested that if the Agreement is approved for termination, the Respondent would request a period of six weeks to make the necessary changes to conditions.
Noting the sizeable delay since the Respondent’s views were provided, does the Respondent have any views as to whether it would be prepared to consent to the termination of the Agreement? The Commissioner advises that ultimately it is her decision, which she would make having heard the views of the parties, and if necessary, having convened a hearing. If, however, the Respondent consented to the termination of the Agreement with, for example, a date of 1 September 2021, the Commissioner’s preliminary view is it would then be unnecessary to convene a hearing, noting the considerable support for termination of the Agreement by the employees who have corresponded with chambers.
The Respondent is requested to provide its position as to:
(a) Whether it consents to the application to terminate the Agreement; and
(b) If it does consent, does it consent to a termination date of 1 September 2021, with the relevant award applying thereafter?
The Respondent is requested to provide its position by no later than 4:00pm Thursday, 12 August 2021.
The Applicant is welcome to provide any views relevant to the above matters.”
(emphasis in original)
[15] On 13 August 2021, upon provision of a short extension of time, Mr Parry wrote to my Chambers on behalf of the Employer as follows:
“We sense from this letter, that our Agreement will be terminated regardless of what our position to it is.
We still stand by the fact that a majority of our employees will be disadvantaged. They enjoy the freedoms we have given and the freedoms they enjoy by working weekends and the flexibility of hours. This will impact greatly senior staff, whereby we will need to cut hours drastically or pull back to scant casual hours. We look after our managers paying over the award rate. We also pay above the award rate for our 15 year old staff members as well. We pay overtime after an 8 hour day, not the required 10 hours. And always have.
At the time of the application to terminate the agreement, we employed 57 employees. We believe that the 5 responses in favour of the termination, is not overwhelming, at less than 10 percent. We also learnt after the deadline, we had other employees who were responding against the termination, but inadvertently missed the deadline, We remained neutral and did not endeavour to sway any of our employees in any way. We only heard about the missed responses by another employee.
The termination of this agreement , will impact negatively many staff members, more than The Applicant herself realises. The applicant herself, has since resigned of her own accord.
With great reluctance, as we see it’s a foregone conclusion, that you will terminate this anyway, we consent to the termination of said agreement.
As stated in our initial response, we have no full idea what whole impact the Award will have on us, apart from the inflexibility and financial restraints to our business and our current employees, due to the foreseeable reduction in rostered hours. Many current Part Time Employees, will therefore be at a disadvantage compared to what they are afforded now. We need to juggle within financial constraints to allow our businesses to be viable . In the occasion that our Collective Agreement may cease, we would appreciate the maximum time allowed to transition, to work through our whole business model. This will be like starting over for us. We need to plan ahead well. We need to communicate clearly to all employees to be fair to them. If, our agreement is to cease, we would appreciate a fair and honourable amount of notice for all parties concerned. We envision a leeway of 6-8 weeks to undertake changes for a smooth transition from the Date the Commissioner hands the decision down.
1. Understanding the Fast Food Award in its entirety
2. Developing a new roster system that is viable to sustain our business.
3. Communicate to all employees, with discussions to work through updated availabilities and changes that will be required under the new model.
4. Discuss with employees regarding converting from Part Time to Casual positions where required.
5. The need to write new policies that reflect the change to the Fast Food Award
6. This time frame will also give our many employees time to adjust, and rearrange their lives, as we know this will ultimately negatively impact them.
Please consider our views, and consider the flexibility that our employees have under our current Collective Agreement.
[16] On 13 August 2021, my Chambers wrote to the parties as follows:
“The Commissioner advises that no determination has been made on the matter.
If the Respondent wants to oppose the termination of the agreement, the Respondent will be required to file witness statements and submissions by no later than 4:00pm (AEST) Friday, 20 August 2021 and if necessary, a hearing will be listed.
If the Respondent is aware of any employees who may wish to write to chambers, they are welcome to do so up until 4:00pm (AEST) Wednesday, 18 August 2021.
Having regard to the above, if the Respondent does wish to consent to termination of the Agreement, the Respondent should nominate a date for the termination to take effect, and the Applicant will be asked to provide her views on that proposed date.”
[17] My Chambers did not receive any further employee responses after sending the above email on 13 August 2021.
[18] On 19 August 2021, Mr Parry wrote to my Chambers as follows:
“In response to previous communication:-
(a) We the respondent, consent to the termination of the agreement.
(b) We nominate for this to take effect from Wednesday, 6th October 2021, due to the reasons we have previously put forward.”
[19] On 20 August 2021, my Chambers wrote to the parties as follows:
“The Commissioner advises that the Applicant has until 4:00pm (AEST) Tuesday, 24 August 2021 to provide her views as to the date proposed by the Respondent on which the termination would take effect.
The Commissioner has formed a preliminary view that she would be prepared to terminate the agreement on the date nominated by the Respondent.”
[20] On 24 August 2021, Ms Roache provided the following response:
“As the Applicant of the case matter at hand, I wish to advise the Chambers that I accept the Respondent’s nominated date of termination of the Agreement to take effect on Wednesday, 6th October, 2021. I believe this is an acceptable time frame given the circumstances provided by the Respondent.
I would like to take this time to express my thanks to the Respondent for his cooperation.
I truly believe this will be one of the greatest changes to take effect at this business, to keep things fair and up-to-date for all involved.”
Legislative provisions
[21] Item 16 of Schedule 3 of the Transitional Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (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.
[22] Chapter 2, Part 2-4, Division 7, Subdivision D is as follows:
“225 Application for termination of an enterprise agreement after its nominal expiry date
If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
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.
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.”
Not contrary to the public interest (s.226(a))
[23] I will first consider whether I am satisfied that termination of the Agreement is “not contrary to the public interest”.
[24] In his decision to approve the termination of the McDonald’s Australia Enterprise Agreement 2013, Deputy President Colman observed that: 2
“Section 226(a) does not require the Commission to be satisfied that the termination of an enterprise agreement is in the public interest. It sets a lower requirement. The Commission must be satisfied that it is not contrary to the public interest to terminate the agreement.” (emphasis is in the original)
[25] The Agreement provides a simple flat rate of pay to be paid for all hours of work, except public holidays when worked. It does not provide for any penalty rates for work outside of a span of ordinary hours or for weekend work. For work performed on public holidays the payment is 150% of the employee’s rate of pay as opposed to 225% in the Award.
[26] Further, the Agreement does not provide for paid annual leave or paid personal leave for part-time employees. It permits paid annual leave and paid personal leave for full-time employees only. Casual employees are excluded from the Agreement.
[27] The above terms were permitted to be included within collective agreements under the legislative provisions prior to the Act coming into force.
[28] I am satisfied that as a whole, the Agreement provides for terms and conditions of employment that are significantly less favourable to employees than those in the Award. I am satisfied it is not contrary to the public interest to terminate the Agreement.
Appropriate (s.226(b))
[29] I must consider whether it is “appropriate” to terminate the Agreement, taking into account all the circumstances, including the views of the employees, each employer and each employee organisation covered by the Agreement, and the circumstances of those employees, employers and organisations, including the likely effect that the termination will have on each of them.
[30] While I note the Employer consents to termination of the Agreement, the jurisdiction requires the Commission to be satisfied it is appropriate to terminate the Agreement taking into consideration the views of the Employer and the employees covered by the Agreement, together with the circumstances and the likely effect the termination will have on each of them.
[31] There are no employee organisations covered by the Agreement.
[32] The views of the employees, bar one, are overwhelmingly in support of termination of the Agreement. Without payment to part-time employees of paid annual leave and paid personal leave, some employees work as a part-time employee, at part-time hourly rates of pay, but without any benefits other than paid compassionate leave and unpaid carer’s leave. Some employees expressed a view to the Commission that they appear to be employed like a casual employee, but without a casual loading.
[33] The views of the Employer have been made clear. The Employer considers it will have to alter its business model to accommodate the increase in the rate of pay for work outside of the ordinary span of hours in the Award, and for weekend and public holiday penalty rates. It would prefer that this application had not been made, however now does not oppose the application if the termination date is 6 October 2021.
[34] I appreciate the Employer will have to increase wage rates to its employees working outside the span of ordinary hours in the Award, on weekends and on public holidays. Further, it will need to begin to provide for paid annual leave and paid personal leave for part-time employees. The likely effect on the Employer is a higher annual wages bill. It will, however, be on equal terms to all other employers operating under the Award, many of whom have been doing so since the Award came into operation on 1 July 2010.
[35] The likely effect on the Employer is that it will need to reconsider its staffing levels on the days and hours of the week where penalty rates are payable.
[36] The likely effect on employees will be an increase in the rate of pay received for work performed outside the span of ordinary hours, on weekends and public holidays. For employees employed as part-time employees, they will begin to accrue annual leave and be entitled to payment for personal leave.
[37] The Employer’s consideration of staffing levels on weekends, public holidays and periods outside the span of ordinary hours may have an impact on the number of hours offered to employees, by reducing their hours of work. I consider the potential impact on employees is outweighed by the higher rate of pay they will receive for the work performed on those days or hours.
[38] Casual employment will be permitted pursuant to the Award.
[39] Taking into account the views of the persons (including the Employer) referred to in s.226(b) that have been presented to the Commission, and the circumstances of those persons, as well as the effect that termination will have on each of them, I consider that it is appropriate to terminate the Agreement.
The operative date of the termination
[40] Section 227 provides that, if an enterprise agreement is terminated under s.226, the termination ‘operates from the day specified in the decision to terminate the agreement.’
[41] I accept it is a significant change for the Employer to accommodate in its business; to pay pursuant to the Award rather than a flat rate of pay (other than a reduced loading on public holidays). I am satisfied the Employer will need to take some time to adjust its proposed rosters and costings. I also note the Employer owns several Subway stores, not just one, so the administrative effect of termination of the Agreement is not insignificant.
[42] Further, the Employer may wish to have discussions with employees as to whether they may wish to consider casual employment as opposed to part-time employment. It is noted that an employee currently employed as a part-time employee must not be forced to become a casual employee, and all discussions regarding the effect of the application of the Award must be respectful and lawful.
[43] For these reasons, I am agreeable to the proposition put by the Employer and not opposed by Ms Roache to declare the operative date of the termination as 6 October 2021.
Conclusion
[44] For the reasons given above, in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.
[45] For the reasons given above, in consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.
[46] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.
[47] For the reasons given above, the termination will take effect from 6 October 2021.
COMMISSIONER
<AC313655 PR733301>
Printed by authority of the Commonwealth Government Printer
1 AC313655; [2019] FWCA 8563 at [16].
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