Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Empire Holdings (QLD) Pty Ltd T/A Empire Hotel and Cloudland
(AG2021/8562)

EMPIRE AND FAMILY EMPLOYEE COLLECTIVE AGREEMENT 2006 - 2011

Application for termination of the Empire and Family Employee Collective Agreement 2006-2011

[1] On 24 November 2021, Empire Holdings (QLD) Pty Ltd T/A Empire Hotel and Cloudland (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Empire and Family Employee Collective Agreement 2006-2011 (the Agreement). The Agreement passed its nominal expiry date on 1 June 2011.

[2] The Agreement was made in 2008, prior to the Act coming into force and is a “collective agreement-based transitional instrument” (CABTI). The application is made pursuant to s.225(b) of 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. For applications brought under schedule 3, item 16, the application is dealt with pursuant to s.225 of the Act, with the same considerations required as if it were an agreement made under the Act.

Application made by the Employer

[3] The Agreement covers the Employer and its employees classified under the Agreement. The application was made on behalf of the Employer by Mr Paul Janssen, General Manager of the Employer. The application was supported by a Form F24C declaration of Mr Janssen.

[4] The application was made in person by Mr Janssen during the course of a hearing in two related applications. These related applications were made by employees who contended that they were covered by the Agreement in September 2021. The Employer objected to the Commission’s jurisdiction to deal with these applications on the basis that each of these employees were not employees covered by the Agreement when their applications were made, being casual employees whose employment commenced at the start of their shift, and ended at the end of their shift. The two relevant employees were not working on the day they each made their respective applications. A number of employees covered by the Agreement wrote to my Chambers during the course of these related proceedings, advising that they supported termination of the Agreement.

[5] These related applications were listed for a jurisdiction hearing on 24 November 2021.

[6] At the jurisdiction hearing held to determine the two related matters, the Employer quite properly conceded that the Agreement had long passed its nominal expiry date, didn’t appropriately compensate employees for penalty rates in the way that the Hospitality Industry (General) Award 2020 (the Award) does, and agreed to make the immediate application on the understanding that due regard would be had to any submissions it wished to make as to an appropriate termination date.

Contemporaneous evidence given

[7] I satisfied myself that the fresh application made on 24 November 2021 was allocated to me and following an adjournment of the jurisdiction hearing in the two related matters, I proceeded to hear oral evidence from Mr Janssen in relation to the application made by the Employer.

[8] Mr Janssen did not have much opportunity to prepare his oral evidence. He stated the following:

•  The Agreement covers approximately 200 employees;

•  One of the venues covered by the Agreement, Cloudland, has seven function rooms;

•  There are bookings for approximately 154 weddings in the next 12 months, together with corporate events, balls and award nights;

•  There are lots of weddings booked in March, April and May 2022;

•  If the Agreement is terminated in the near future, the Employer will wear the cost of the increased wages payable to employees without passing on the cost for those events that have been booked;

•  The busiest times are Thursday to Sunday;

•  The various premises are open until 3:00am;

•  The employer does not have a dedicated HR person, but is starting to onboard an improved record keeping system;

•  There will be a significant administrative effort to move from the Agreement to the Award;

•  All employees have been informed that during the Christmas 2021 and New Year period 2022, employees will receive a flat rate of $50 per hour for public holidays.

[9] Mr Janssen stated the Employer would prefer a termination date in May or June 2022, however was comfortable with the date being 22 May 2022 as it would allow the Employer to staff a reasonably large number of weddings paying the rates within the Agreement.

[10] I inquired if any undertaking might be provided relevant to public holidays in Easter 2022, such as paying a flat rate of $50 per hour for public holidays during this time. No undertaking was given.

Written evidence and Confidentiality Order

[11] I afforded the Employer an opportunity to lodge materials to support its submission that the termination date of the Agreement should be 22 May 2022. The materials were filed on 3 December 2021. I am satisfied the materials contain commercially sensitive information, and I considered it appropriate to issue orders to maintain confidentiality over this information in Order PR736478. 1

Direction to inform employees of evidence filed by the Employer

[12] On 6 December 2021, I made the following Directions:

“The F24C statutory declaration of Mr Janssen provides that there are employees covered by the Empire and Family Employee Collective Agreement 2006-2011 (the Agreement).

The Agreement has been the subject of previous correspondence in applications AG2021/7037, AG2021/7997 and AG2021/7998 – applications by Cashman, Sanchez and Rose, respectively. AG2021/7998 was discontinued. A hearing was held in applications AG2021/7037 and AG2021/7997 on 24 November 2021. At the hearing, Empire Holdings (QLD) Pty Ltd T/A Empire Hotel and Cloudland made its own application for termination of the Agreement and submitted that, if the Agreement is to be terminated, the termination date of the Agreement should be 22 May 2022, having regard for events which are already booked and costed-for.

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.

The Commissioner has reviewed the application materials and issues the below directions:

Directions

1. The Applicant is directed to communicate in writing to each of the employees covered by the Agreement, forwarding this email to them and inviting them to correspond by email with chambers in the event they wish to provide their views, including any views as to the proposed termination date of 22 May 2022.  The Applicant is directed to provide this email to employees covered by the Agreement by no later than 4:00PM (AEST) Thursday, 9 December 2021.  For employees who don’t have email, it should be placed on the staff notice board in the meal rooms (or another accessible place) with the chambers mail and telephone contacts.

2. The Applicant is directed to provide an email to chambers explaining compliance with direction [1], and setting out the number of employees covered by the agreement, by no later than 4:00PM (AEST) Friday, 10 December 2021. 

Employees covered by the Agreement may provide their views as to the application and the likely effect of termination of the Agreement, and any views as to the proposed termination date of 22 May 2022, by no later than 4:00PM (AEST) Friday, 17 December 2021 by emailing [my chambers]  All views of employees must be open and provided to the Commission and to the employer Applicant.  For the sake of clarity for employees covered by the Agreement, the Commissioner advises the following:

A.            At the hearing before the Commissioner on 24 November 2021, the Applicant employer made an application to terminate the Agreement, and requested it not occur until 22 May 2022.  If the Agreement is terminated, the terms of the Hospitality Industry (General) Award 2020 will apply.   A link to the Award is provided:

https://www.fwc.gov.au/documents/documents/modern_awards/award/ma000009/default.htm

B.            If the Agreement is terminated, the rates of pay payable to employees covered by the Award can be found at Schedule B – Summary of Hourly Rates of Pay.

C.            The Applicant employer’s submissions and evidence to the Commission is that there is a large number of events, including weddings that have been costed, and any move to the Award will be a cost worn by the Applicant employer, and would be unable to be passed on to customers who have booked events, including weddings. The Applicant employer has provided detailed information to the Commission relating to the events to occur in 2022.  These documents are subject to a Confidentiality Order of the Commission (attached).  If any interested employee wishes to view the documents, the Commissioner may convene a hearing to determine if the documents are to be provided and ensure the Confidentiality Order is met by the person who wishes to view the documents.  

D.            The Commissioner notes that the effect of the Agreement being terminated, and the Award applying would be on all employees covered, not just those who perform work related to any events, including weddings.

Employees are reminded; if you wish to provide any views as to whether the Agreement should be terminated, and if so, on which particular date, views are required to be provided by no later than 4:00PM (AEST) Friday, 17 December 2021 by emailing [my chambers].  All views of employees must be open and provided to the Commission and to the employer Applicant. 

[13] On 10 December 2021, the Employer confirmed that it had forwarded the above correspondence to employees covered by the Agreement.

[14] I received views from three employees. The first employee submitted that the termination date should be 31 December 2021. The employee stated the following:

“Empire holdings has a large team in the office and is 100% capable of costing new budgets for 2022 after taking into account new employees wages.

On top of this the company has just opened a new venue, Valley hops brewing, I believe if Empire holdings is capable of being self-insured and opening a new venue without problem during a time when many other businesses couldn't afford to stay open, Empire holdings is more than 100% capable of paying employees an industry standard wage….” [with minor editing].

[15] The second employee stated the following:

“I strongly believe it is unjust to keep the EBA agreement until May 2022 as the previously budgeted weddings do not affect the majority of the staff. My team  and I do not work in functions and deem this unfair as we work regular shifts in their main venues and should be paid accordingly.” 

[16] The third employee stated the following:

“I believe that paying all employees the award wages should be mandatory. Regardless of any events that are booked and coming up in the near future, the company is large enough to pay their employees penalty rates for working weekends, late nights and public holidays.

The termination of the agreement should happen as soon as possible not in another five months, especially considering we are heading into Christmas time. Myself and I’m sure many other employees would agree, that we would rather be spending time with family than working a job that doesn’t pay fairly. We deserve to be paid the industry award wages.”

Relevant evidence of the Employer

[17] The Employer supplied evidence relevant to rates of pay paid to employees covered by the Agreement. The ‘Agreement’ column is the rate paid for all hours of work for casual employees, including on weekends and on public holidays. I have included in this table the rates of pay payable for Saturday, Sunday and Public Holidays for casual employees:

Casual Position	Agreement	Award	Saturday	Sunday	Public holidays
Bar attendant	$27.96	$27.15	$32.58	$38.01	$54.30
Bar attendant - senior	$28.92	$28.08	$33.69	$39.31	$56.15
Cleaner	$27.96	$26.15	$31.38	$36.61	$52.30
F&B attendant introductory	$26.17	$25.41	$30.50	$35.58	$50.83
F&B attendant	$26.93 minimum	$26.15	$31.38	$36.61	$52.30

[18] I did not include in the table above the additional payments for work performed Monday to Friday, 7:00pm to midnight and midnight to 7:00am. These rates are an additional $2.37 per hour or part thereof and an additional $3.55 per hour or part thereof respectively:

[19] As is clear, the Agreement rate is a relatively small amount in excess of the Award rate, paid for all hours of work. It should be noted, however, that a significant proportion of hours worked by many casual employees covered by the Agreement are performed after 7:00pm Monday to Friday, on Saturdays and Sundays, and occasionally on public holidays. Accordingly, while there is an over-award component paid to employees for their ordinary hours worked Monday to Friday, 7:00am – 7:00pm, it is not a substantial payment to properly compensate for the higher rates of pay the employees are missing out on if they were employed under the Award.

[20] Evidence was supplied of confirmed bookings for weddings, conferences and other events across the Employer’s relevant venues, Cloudland, Empire Hotel, Press Club and the Warehouse through until June 2022. Most weekends have at least one booking on a Friday, Saturday and Sunday, with some weeks with additional bookings. Wedding bookings are typically in vicinity of 60-170 people, while some events are up to 1000 people.

[21] In January 2022, there are some weekend nights where there are no events booked including:

[22] As I understand it, Cloudland, Empire Hotel and Press Club feature bars open to the general public, whereas The Warehouse is a dedicated function facility. Naturally, there are significant numbers of other staff, not associated with any function, performing work at Cloudland, Empire Hotel and Press Club, whether the function rooms are being used or not. When functions reach their finish time, I understand patrons then can access the public bars to continue on, if they wish.

[23] A large contingent of employees are working for around $27-$28 per hour for all casual hours worked by them, whether they are assisting with a function or not, or even when there are no functions in the locations. When employees work on a Saturday, they are being deprived of approximately $5 per hour when compared with the Award. When employees work on a Sunday, they are being deprived of approximately $10 per hour when compared with the Award. When employees work on a public holiday, they are being deprived of approximately $24+ per hour when compared with the Award.

Termination of an enterprise agreement after its nominal expiry date

[24] As earlier noted, item 16 of Schedule 3 to the Transitional Act provides that Subdivision D of Division 7 of Part 2-4 of 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.

[25] Subdivision D of Division 7 of Part 2-4 of the Act provides for the termination of an enterprise agreement after its nominal expiry date. This subdivision consists of ss.225, 226 and 227, the terms of which 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

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))

[26] I will first consider whether I am satisfied that termination of the Agreement is “not contrary to the public interest”.

[27] 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)

[28] The Agreement was made 15 years ago and has significantly less beneficial terms and conditions to employees than those contained within 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 supports termination of the Agreement (by virtue of this application), 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 who provided views were that termination of the Agreement would result in them being better off. The employees who provided views were all eager for the Agreement to be terminated sooner, rather than later.

[33] The likely effect on the Employer is that it will need to comply with the Award and provide annual wage increases pursuant to the Award to employees who are paid at Award rates only. I accept these increases will be substantial, particularly given the increased patronage of the Employer’s venues late at night and on weekends when significantly higher rates of pay will need to be paid.

[34] The likely effect on employees will be that they may see a reduction in their ordinary rate of pay where it currently exceeds the Award rate, however they will become entitled to penalty rates within the Award. The penalty rates are substantially greater than any relatively recent benefit they derived from a flat rate of pay paid to them. The employees will enjoy parity of pay with the Award and with a large number of employees within their industry. They will be appropriately compensated for working late nights, weekends and public holidays.

[35] 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

[36] The primary issue for determination in this application is not so much whether the Agreement should be terminated, but rather, when?

[37] 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.’

[38] I accept it is a significant change for the Employer to accommodate in its business; to pay penalty rates pursuant to the Award. I am satisfied the Employer will need to take some time to adjust its proposed rosters, costings, and future costs of events. I accept that the administrative effect of termination of the Agreement is not insignificant.

[39] This is the Employer’s application, made on the understanding that appropriate regard will be had for the evidence it has presented to the Commission. The Employer has nominated 22 May 2022 for the termination to take effect.

[40] The employees who provided views supported an earlier termination than that proposed by the Employer.

[41] I have had regard to the fact that the related applications made by casual employees in September 2021 have put the Employer on notice since then that there is agitation for change, to move to the Award. If the applications made by those relevant employees were not within jurisdiction, the Employer was on notice that it would take a single casual employee, whilst working on shift to make an application to the Commission to potentially satisfy the Commission’s jurisdiction to determine an application to terminate the Agreement.

[42] It is true that employees are becoming more aware of the effects of “zombie agreements”, often denying employees some benefits within modern awards including penalty rates, when the agreements were made pre-2009. It is not surprising that employees are making s.225 applications to have very old agreements terminated. If employers are enjoying a comparative benefit in reduced wages by application of very old agreements, which do not provide for penalty rates near-equivalent to the modern award that would otherwise apply, the clock is essentially ticking for those agreements.

[43] Having regard to the materials filed by the Employer, and the views of the Employer and the employees, I consider it is appropriate to terminate the Agreement effective Monday, 31 January 2022. Having reviewed the evidence of the Employer, I am not satisfied that the bookings in place within its function rooms militate against the loss in wages experienced by its 200 large workforce when they work beyond 7:00pm Monday to Friday, on the weekend or on public holidays. This is especially so when on some dates there are no events booked at all.

[44] While the Employer will have to experience an increased wages bill, particularly with functions pre-paid and the Employer’s stated preparedness to not increase charges to customers of those functions, I consider that the burden should rest with the Employer when compared with the loss to employees of substantial hourly rates for work on weekends and public holidays.

[45] In coming to this decision, I have had regard to the amount of time I reasonably consider the Employer requires to make the necessary changes to pay in accordance with the Award. I am satisfied the Employer can adapt to make the change to pay in accordance with the Award by this date.

Conclusion

[46] 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.

[47] For the reasons given above, in consideration of the material before me relevant to ss.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[48] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[49] For the reasons given above, the termination will take effect from 31 January 2022.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<AC300867  PR737390>

 1   PR736478.

 2   [2019] FWCA 8563 at [16].