Ananke Holdings Pty Ltd T/A Sofitel Sydney Wentworth [2023] FWC 680

1 Fair Work Act 2009 s.222 - Application for approval of a termination of an enterprise agreement Ananke Holdings Pty Ltd T/A Sofitel Sydney Wentworth (AG2022/5510) DEPUTY PRESIDENT CROSS SYDNEY, 21 MARCH 2023 Application for termination of the Sofitel Sydney Wentworth Enterprise Agreement 2011 [1] This is an application filed on 21 December 2022 (the Application), by Ananke Holdings Pty Ltd T/A Sofitel Sydney Wentworth (the Applicant), pursuant to s.222 of the Fair Work Act 2009 (Cth) (the Act) to terminate the Sofitel Sydney Wentworth Enterprise Agreement 2011 (the Agreement). The Agreement has not yet reached its nominal expiry date of 23 May 2023. Legislation [2] The relevant provisions of the Act governing this application are set out at ss.220-224 as follows: 220 Employers may request employees to approve a proposed termination of an enterprise agreement (1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it. (2) Before making the request, the employer must: (a) take all reasonable steps to notify the employees of the following: (i) the time and place at which the vote will occur; (ii) the voting method that will be used; and (b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination. (3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method. [2023] FWC 680 DECISION -- 1 of 8 -- [2023] FWC 680 2 221 When termination of an enterprise agreement is agreed to Single-enterprise agreement (1) If the employees of an employer, or each employer, covered by a single-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees who cast a valid vote approve the termination. Multi-enterprise agreement (2) If the employees of each employer covered by a multi-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees of each individual employer who cast a valid vote have approved the termination. 222 Application for the FWC’s approval of a termination of an enterprise agreement Application for approval (1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination. Material to accompany the application (2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application. When the application must be made (3) The application must be made: (a) within 14 days after the termination is agreed to; or (b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows. 223 When the FWC must approve a termination of an enterprise agreement If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if: (a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and -- 2 of 8 -- [2023] FWC 680 3 (b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and (c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and (d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement. 224 When termination comes into operation If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination. Background Facts [3] Mr Sam Panetta, General Manager of the Applicant, filed with the application a declaration in support of termination of the enterprise agreement. The declaration provided that on 22 November 2022, the Applicant: (a) Sent an email to all employees covered by the Agreement attaching a notification letter advising them of the Respondent’s proposal to terminate the Agreement, and inviting employees to attend one of four group consultation sessions; and (b) Sent an email to the United Workers Union (the UWU), a bargaining representative covered by the Agreement, attaching a letter advising the UWU that the Respondent had started the process of exploring whether its employees who are covered by the Agreement would support an application to terminate the Agreement to the Fair Work Commission. [4] In late November 2022, the Respondent held group consultations for employees who would be covered by the Hospitality Industry (General) Award 2020 (HIGA), if the Agreement was terminated. Employees, whether they attended those sessions or not, were each sent by email: • an individual impact letter sent to each employee specific to their situation; • detailed Agreement to HIGA Comparison Table Document; and • the PowerPoint presentation presented in the group consultation. [5] New employees who commenced after the above consultation sessions were sent by email: • an individual impact letter specific to their situation; • a detailed Agreement to HIGA Comparison Table Document; and • the PowerPoint presentation which was presented in the group consultation sessions. -- 3 of 8 -- [2023] FWC 680 4 [6] In seeking the approval of employees for the termination of the Agreement, the Applicant indicated to employees that it would propose to preserve certain entitlements for existing employees (the Preserved Entitlements), being: (a) A base pay rate of 2% above that of HIGA; (b) An additional 25% penalty rate for work on Sundays for full time and part time employees; (c) An additional 25% penalty rate for work on Public Holidays for all employees; (d) A 5% loading for flexible part time ambassadors; (e) The existing and more favourable additional payment for work performed between 7:00pm and midnight and midnight and 7:00am. [7] The Applicant also indicated to employees that it would propose to preserve certain policy entitlements for existing employees (the Policy Entitlements), being: (a) The paid parental leave scheme of up to 10 weeks’ pay; (b) A third day of compassionate leave; and (c) Two days of paid exam leave per annum. [8] Details of the vote for termination of the Agreement, held between 8 and 11 December 2022, were as follows: How many employees are covered by the Agreement? 166 How many employees case a valid vote? 116 How many employees voted to approve the termination of the agreement? 107 [9] On 25 January 2023, I issued directions allowing any employee or union covered by the Agreement, who wished to make any submission in relation to the Applicant’s application to terminate the Agreement pursuant to s.222 of the Act, to email my Chambers with their submissions, by 4:00pm 8 February 2023. [10] No individual employee submissions were received by my Chambers. [11] On 8 February 2023, the UWU filed submissions broadly supporting the Application, but, in order to be satisfied that there were no reasonable grounds for believing that employees had not agreed to the termination of the Agreement, submitting that it would be appropriate for -- 4 of 8 -- [2023] FWC 680 5 the Commission to seek and accept undertakings, to be identified in the Commission’s decision, from the Applicant that the Applicant will continue to treat: (a) the provisions of the Agreement giving rise to the Preserved Entitlements as applicable to employees who are, at the time of the termination, employed by the Applicant; and (b) the Policy Entitlements in its policies in respect of all of its employees unless and until the Applicant makes a new enterprise agreement with its employees. [12] The Applicant resisted the requirement for undertakings and submitted that the individual impact letters provided to employees created contractually binding obligations on the Applicant if the Agreement is terminated by the Commission, and it intended to incorporate the individual impact letters into employees' letters of offer, which would be reissued to employees if this Application was granted. The Applicant submitted the individual impact letters created contractually binding obligations. [13] On 6 March 2023, I indicated that I would require the provision of undertakings, for reasons that would be provided in this decision. My reasons for requiring appropriate undertakings were: (a) I am not persuaded that reliance on contracts for enforcement of the Preserved Entitlements and the Policy Entitlements by way of the individual impact letters is possible, in circumstances where at least nine recipients of such letters declined to accept the contractual terms of the Application by voting against it; and (b) The provision of appropriately worded undertakings is the clearest and most efficient way of expressing the universal representations made to employees regarding the Preserved Entitlements and the Policy Entitlements. [14] The parties were requested to, if possible, provide agreed undertakings to the Commission. On 16 March 2023, the attached Undertaking (Annexure 1) was provided. [15] Based on the material that is before me, including the Statutory Declaration sworn by Mr Sam Panetta, and the Undertaking, I am satisfied that the requirements of s.223 of the Act have been met. [16] I am satisfied as to each of the matters contained in section 222 and 223 of the FW Act. [17] Accordingly, it is appropriate to terminate the Agreement. I approve its termination. [18] The termination will come into effect from the end of pay period 26 March 2023, with 27 March 2023 being the first day that applicable modern award would apply. -- 5 of 8 -- [2023] FWC 680 6 DEPUTY PRESIDENT Printed by authority of the Commonwealth Government Printer <PR760482> -- 6 of 8 -- [2023] FWC 680 7 Annexure 1 -- 7 of 8 -- [2023] FWC 680 8 -- 8 of 8 --