Yum! Restaurants Australia Pty Ltd v Full Bench of Fair Work Australia

The applicants, Yum! Restaurants Australia Pty Ltd and KFC Australia Pty Ltd, sought judicial review of decisions by the Full Bench of Fair Work Australia dismissing their applications to modernise their existing enterprise awards and granting the application by the Shop, Distributive and Allied Employees Association (SDA) to terminate those awards. The applicants argued that the Full Bench failed to apply the 'modern enterprise awards objective', took into account irrelevant considerations, and failed to consider relevant considerations when exercising its discretion, resulting in jurisdictional error. The applicants contended that the Full Bench was required to recognise that modern enterprise awards could provide terms and conditions tailored to reflect employment arrangements that had been developed in relation to the relevant enterprises. The Court considered the interpretation of Schedule 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) and whether the Full Bench was required to apply the modern enterprise awards objective when determining whether or not to make a modern award or to terminate the existing awards. The Court found that while the modern enterprise awards objective is not specifically referred to in Item 4(5) of Schedule 6, the Full Bench was required to consider the terms and conditions applying in the industry and the extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment. However, the Court held that the Full Bench was not making a modern enterprise award under Division 2 of Schedule 6, but rather deciding whether or not to make a modern enterprise award under such division. As such, the requirement to have regard to the requirements of Item 6 (i.e., the modern enterprise awards objective) did not arise. The applicants' submissions that such a distinction is artificial and has no substance were rejected. The Court held that the applicants had failed to establish that they were unique from other fast food employers and thus required a separate modern award. The Full Bench's conclusions were essentially the same for both Yum and KFC. The Court dismissed the applications for judicial review and affirmed the Full Bench's decisions to terminate the existing Pizza Hut and KFC awards. The Court ordered that the applications be dismissed.