HR Manager misled FWC to get EA approved
Overview
The Fair Work Commission (FWC) is presently considering referring the head of human resources for hospitality giant Mantle Group to the police after finding that he purposefully lied about a pay deal that deprived hundreds of workers of their penalty rates.
A full bench of the FWC has now quashed Mantle Group’s enterprise agreement (EA).
The then approved EA meant that up to 700 workers across several pubs, cafes and restaurants could effectively sign away the hospitality award’s weekend, evening, overtime and public holiday penalty rates.
Background Facts
Mantle Group Hospitality (MGH) operates high-profile pubs and cafes across Brisbane and Sydney.
In 2021, Mantle Group subsidiary the Hot Wok Food Makers Pty Ltd moved workers from zombie deal Staff Services Pty Ltd Certified Agreement that allowed the company to avoid paying penalty rates to its workers for 22 years, to the Hot Wok Food Makers Pty Ltd workplace agreement, which won endorsement from the FWC's then Deputy President Amanda Mansini.
In an Application by an employee covered by the EA in Henry Thom [2022] FWCA 1543 (12 May 2022), Commissioner Jennifer Hunt terminated the Staff Services Pty Ltd Certified Agreement, saying it gave MGH an "enormous competitive advantage over other employers who pay to employees penalty rates in accordance with the relevant awards or their own agreements which satisfy the better off overall test".
On 31 May 2022, the United Workers Union (UWU) appealed DP Mansini’s decision on behalf of other affected employees.
The matter then came before the Full Bench of the FWC in the decision of United Workers' Union (108V) v Hot Wok Food Makers Pty Ltd [2023] FWCFB 4 (12 January 2023).
The UWU alleged that the MGH human resources manager had falsified documents it submitted to the FWC backing the Hot Wok Agreement, and that four of the employees who voted to approve the EA held management positions and would not have been covered by it anyway. In other words, there was no consideration from any affected and covered employees.
It was on this basis that the FWC was of the view that the EA was not genuinely agreed to. The four employees that the HR manager listed as employees who would be covered by the agreement, and had supposedly voted for it, comprised two venue managers, an area manager and a payroll manager.
The full bench confirmed that no classification in the Hot Wok agreement applied to these four employees and the agreement did not cover them. Therefore, there was no basis to these employees having an interest in the EA.
The full bench also found that the Application before DP Mansini contained "false or misleading" details in the F17 form about the agreement information sessions, the voting process and the number of employees covered. In other words, it did not meet the BOOT test. It was on this basis that the bench also quashed DP Mansini's approval of the Hot Wok agreement
The FWC said it will hand the findings to the general manager of the Commission to determine if the HR Manager’s conduct should be referred to the AFP for any criminal investigation or sanctions.
At this stage it also remains unclear as to the quantum of backpay that MGH will have to make and whether they will appeal the decision of the full bench.
Key Takeaways
Employers need to be meticulous about the BOOT test and the information that is included in the F17.
In matters that involve bargaining with Unions, the F17 and the BOOT analysis should be cross checked to ensure the following:
Does the EA comply with and include Terms better than the applicable Award;
Has proper notification been made to employees covered by the EA in terms of coverage and voting;
Are the employee bargaining representatives and/or Unions satisfied with the BOOT process; and
Consult with a lawyer regarding proper due diligence.
Jim Babalis
Special Counsel
T 03 5225 5205
E jbabalis@ha.legal
Sonia McCabe
Senior Associate
T 03 5226 8558
E: smccabe@ha.legal
Matthew Synoradzki
Graduate Lawyer
T 03 5226 8542
E msynoradzki@ha.legal
