[2010] FWA 8297

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Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Springfield Gourmet Pty Ltd



Preferred hours clause - whether exceptional circumstances - causal connection with public interest test.

[1] An application pursuant to s.185 of the Fair Work Act 2009 (“the Act”) was made by Springfield Gourmet Pty Ltd (“the Applicant”) for the approval of a single enterprise agreement known as the Hell Pizza Queensland Enterprise Agreement 2009 (“the Agreement”).

[2] Prior to the hearing of this application there had been a considerable iteration between Fair Work Australia (“FWA”) and the Applicant about some features of the Agreement. Most of these matters were resolved by the provision of undertakings.

[3] One significant issue, however, required resolution by way of a hearing process (and further iteration thereafter). That issue concerned whether or not casual employees, as provided for under the Agreement, could nominate to perform duties in the morning and night and weekends at the ordinary casual hourly rate of pay. These were hours the casual employees were said to prefer for reason of their educational commitments at other times.

[4] It appears to have been accepted by the Applicant, who was legally represented, that the decision of the Full Bench in Appeals by Bupa Care Services P/L & Ors against decisions of Smith C of 5 January 2010 [[2010] FWA 16] and McKenna C of 20 January 2010 [[2010] FWA 339] – Re: approval of enterprise agreements [2010] FWAFB 2762 (15 April 2010) had the effect of creating an obstacle to an agreement incorporating such terms being approved for reasons of not meeting the No Disadvantage Test (“NDT”), at least where no other substantive offset was provided.

[5] That is, absent any substantive offset (which, it appears, cannot be a subjective apprehension of a benefit) the casual employees must be paid in accordance with Clause 6.5.2 of the Retail Take-Away Food Award - South-Eastern Division 2003 (“the reference instrument”), which prescribe the applicable penalty regime for work performed outside of ordinary hours.

[6] In these circumstances the Applicant's legal representative invited me to approve the Agreement pursuant to s.189 of the Fair Work Act 2009 (“the Act”). In this regard the Act reads as follows:

[7] The central query I put to the Applicant was whether, in the factual milieu relevant to the application, there were exceptional circumstances evident because of which it would not be contrary to the public interest to approve the agreement for purposes of s.189(2) of the Act.

[8] The critical provisions of the Agreement include clause 3 (Night and Morning Work) and clause 4 (Saturday and Sunday Work). They are the critical clauses because they provide for an employee to express a preference for working these hours and to be paid at the ordinary rate of pay (or “applicable hourly rate”).

[9] It was put to me that permanent employees are not readily available for work at socially inconvenient times such as evenings and weekends, and that casual employees are more readily able to work those hours as they enable the casual employee to accommodate their day time activities (which the evidence suggests involve post-secondary studies).

[10] However, if they sought to work these hours subject to the penalty provisions in the reference instrument, the Applicant contends that the casual employees would be displaced by permanent employees. This is because the hourly rate for a permanent employee would be significantly less than the hourly rate for the casuals for the same hours worked.  The submission is that “at these rates the casuals effectively “price” themselves out of the market”.

[11] The exceptional circumstances put to me as a matter of evidence are that casual employees will not otherwise be able to work their preferred hours (being evening or weekend work because they would be priced out of the labour market by permanent employees). In the current circumstances, this means they would not be able to accommodate their study patterns with their opportunity to earn income.

[12] The submissions put to me suggest that the employer itself does not face exceptional circumstances that make in not contrary to public interest to approve the agreement.

[13] Nor does the evidence before me does not suggest that the pricing of casual labour is generally problematic in the industry. That is, I am not aware that generally in this segment of the fast food industry that casual employees do not access penalties or that there are no casual employees engaged and paid as such in the industry segment. What I do know from the evidence as led is that there is labour price competition between casual and permanent employees for this particular employer.

[14] But that in itself is not an exceptional circumstances for reason that as it is not uncommon for employers to resolve at their own initiative issues about price sensitivities between the modes of labour they deploy across their hours of business.

[15] Further, I have no information that the employer’s financial position is in some manner distressed, such that it requires relief from its labour costs to retain profit to ensure its viability or to build turnover for an interim period. No commercial or financial information has been put before me at all. The financial circumstances of the employer therefore cannot ground a claim of there being exceptional circumstances for the purposes of s.189(2) of the Act.

[16] Nor are there any structural issues that are relevant in the industry segment. Unlike segments of the horticultural industry, this segment of the fast food industry seemingly is not beset by significant fluctuations in demand for labour caused by contingent circumstances bearing on labour demand caused by weather and buyer preferences (as to degrees of colouration and ripeness of product). Nor is there any evidence of historical patterns of regulation that provide for preferred hours etc. that have been approved by other tribunals and administrative bodies that have created particular labour costs structures over time. Such circumstances might warrant consideration of an adjustment period, for example, by way of s.189 of the Act.

[17] I am aware generally only that there might be a normal weekly demand cycle for pizzas (though nothing has been put to me in this regard).

[18] The argument that is directly before me is that the beneficiary of the proposed arrangement is not the employer but the casual employees themselves, who by working at reduced rates can displace permanent employees from working their (the casuals’) preferred hours of work and thereby accommodate their work and study patterns.

[19] Can these circumstances be said to have the character of being be exceptional circumstances?

[20] There does not appear to me to be anything exceptional in the circumstances of young people engaged as casual employees seeking to work hours that are convenient to themselves. This is the nature of casual work and would be not be uncommon across this industry segment. I could describe the circumstances as being exceptional, therefore.

[21] Further, absent any particular financial circumstances facing the employer (with which I have dealt above) there is nothing exceptional in employees offering to perform duties at times convenient to themselves during which might be in labour price competition with permanent employees (should such labour be available in those same hours).

[22] Indeed, there may be a countervailing argument that the arrangements envisaged in the Agreement may have an equally disadvantageous effect on permanent full time or permanent part time employees.

[23] I make the observation, finally, that to accede to the application might merely have the result of providing a labour cost advantage to one employer in the industry and not others, despite their being no discernible “exceptional circumstances” that differentiates them.

[24] It appears to me that s.189(2) of the Act requires that the identified “exceptional circumstances” must be such that the approval of the agreement is not contrary to the public interest. That is, FWA’s satisfaction that the approval of the agreement is not contrary to the public interest is not a consideration in its own right, but one which is causally connected to the exceptional circumstances arising from the factual milieu relevant to the application.

[25] As I have found the application is absent any exceptional circumstances, FWA cannot find that the approval of the agreement is not contrary to the public interest.

[26] I took the liberty of informing the Applicant prior to the publication of this decision of its prospective content and invited a further consideration as to whether undertakings in conformity with s.190 of the Act might be warranted.

[27] The outcome of this process is recognised by further decision in [2010] FWAA 8644.



Mr C. Mossman of BCI Lawyers for the Applicant

Hearing details:



September 24.

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