The Hoyts Corporation Pty Ltd T/A Hoyts Cinemas Australia
[2023] FWC 2798
•25 OCTOBER 2023
| [2023] FWC 2798 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
The Hoyts Corporation Pty Ltd T/A Hoyts Cinemas Australia
(AG2023/2404)
THE HOYTS CORPORATION PTY LTD OPERATIONAL DIRECTORS EMPLOYEE COLLECTIVE AGREEMENT 2008
| Broadcasting and recorded entertainment industry | |
| COMMISSIONER MATHESON | SYDNEY, 25 OCTOBER 2023 |
Application for termination of the The Hoyts Corporation Pty Ltd Operational Directors Employee Collective Agreement 2008
The Hoyts Corporation Pty Ltd (Applicant) has made an application (Application) pursuant to s.225 of the Fair Work Act 2009 (Cth) (Act) to terminate The Hoyts Corporation Pty Ltd Operational Directors Employee Collective Agreement 2008. (Agreement). A Form F24C – Declaration in relation to termination of an enterprise agreement after the nominal expiry date (Form F24C) was filed in support of the Application.
The Agreement is a collective agreement-based transitional instrument for the purposes of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (TPCA Act). Item 16 of Schedule 3 of the TPCA Act provides that subdivision D of Division 7 of Part 2-4 of the Act (which deals with termination of enterprise agreements after their nominal expiry date) applies in relation to a collective agreement-based transitional instrument.
Legislation
The relevant provisions of the Act are 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
(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)the agreement contains terms providing entitlements relation 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.
…
(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).
…
(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 position of 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.
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.”
Consideration – s.225
Is the Applicant an employer covered by the Agreement?
Having considered the materials before me, I am satisfied that the Application was made by an employer covered by the Agreement and that the Applicant has standing to make the Application.
Has the Agreement passed its nominal expiry date?
I am satisfied the Agreement has passed its nominal expiry date.
Consideration – s.226
Section 226(1)(a) – is the continued operation of the agreement unfair for the employees covered by it
Section 226(1) of the Act sets out the grounds upon which an Agreement may be terminated after its nominal expiry date. Given there was an employee covered by the Agreement, it was unclear as to the grounds upon which the Applicant relied in seeking to have the Agreement terminated. As such I conducted a hearing on 16 October 2023 in which the Applicant and Mr Wrightson, the employee covered by the Agreement, participated.
Section 226(1)(a) of the Act provides that if an application for the termination of an enterprise agreement is made under s.225, the Commission must terminate the agreement if it is satisfied that the continued operation of the agreement would be unfair for the employees covered by it.
The core operative provisions relate to the cashing out of annual leave and appear to enable a portion of annual leave to be ‘cashed out’ at a rate of not less than the employee’s basic periodic rate of pay at the time the election is made. Since the Agreement was made, the statutory and awards frameworks have evolved such that annual leave entitlements form part of the National Employment Standards. In particular, s.93 of the Act requires terms in modern awards and enterprise agreements dealing with the cashing out of annual leave to include certain protections. These include that such cashing out terms require that:
(a)paid annual leave must not be cashed out if the cashing out would result in the employee’s remaining accrued entitlement being less than 4 weeks; and
(b)each cashing out of a particular amount of annual leave must be by a separate agreement in writing between the employer and the employee; and
(c)the employee must be paid at least the full amount that would have been payable to the employee had the employee taken the leave that the employee has foregone.
The Agreement does not contain any safeguards or protections to this effect. I am therefore satisfied that the continued operation of the Agreement would be unfair for the employees covered by it.
Section 226(3) – views of employees, each employer and each employee organisation covered by the agreement
The Commission issued directions requiring:
- that the Applicant provide a copy of an email drafted by the Commission to employees, employee organisations and other employers covered by the Agreement together with documents relevant to the application;
- that the Applicant provide evidence of compliance with this direction.
The email drafted by the Commission explained the considerations the Commission needs to have regard to in deciding whether to terminate the agreement and invited views of those covered by the agreement, including employees, employers and employee organisations. On 4 September 2023 Jodi Paton of the Applicant provided a Statutory Declaration to the Commission confirming compliance with the directions. The Applicant also provided a copy of an email sent to the sole employee it understands may be covered by the Agreement and which invited him to provide his views to the Commission.
During the hearing I gave Mr Wrightson an opportunity to consider the contents of the Agreement and he had no objections to its termination. No objections were raised in relation to the application by any other person.
s.226(4) – bargaining related matters
Question 3 in the Form F24C asks whether the process for making a new enterprise agreement has started to which it was declared that this is not the case. I am satisfied that none of the circumstances described in s.226(4) are present in relation to the current application.
Section 226(5) – other relevant matters
As noted above, the Agreement’s core provisions are centred around the cashing out of annual leave and set out provisions that do not reflect the protections prescribed in the Act regarding these arrangements. Mr Wrightson, the employee covered by the Agreement, could see no detriment associated with the termination of the Agreement.
During the hearing it became apparent that the Agreement was made at time when Mr Wrightson was not covered by it as he was employed in a different part of the Applicant’s business. The Agreement provides a guaranteed minimum payment of $1,500 per week or at least the highest wage rate in the Clerical and Administrative Employees (State) Award (NSW). The parties confirmed that Mr Wrightson’s actual remuneration exceeds the minimum amount Mr Wrightson would be entitled to under the Agreement.
Section 226(1A) – Appropriateness
Section 226(1A) of the Act provides that the Commission must terminate the enterprise agreement under subsection 226(1) only if the Commission is satisfied that it is appropriate in all the circumstances to do so.
Having regard to the requirements of s.226 of the Act and based on the material before the Commission, I am satisfied that the continued operation of the Agreement would be unfair for the employee covered by it and that it is appropriate to terminate the Agreement having regard to all the circumstances.
Pursuant to s.226 of the Act, the Agreement is terminated. In accordance with s.227 of the Act, the termination of the Agreement shall operate from 25 October 2023.
An Order to this effect has been issued concurrently with this decision.
COMMISSIONER
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