Fair Work Commission|2025-06-20

Compass Group (Australia) Pty Ltd Trading as Compass Group [2025] FWC 1655 (20 June 2025)

s.185 - Application for approval of a single-enterprise agreement

Compass Group (Australia) Pty Ltd Trading as Compass Group

Application for approval of the Compass Group (ESS Cannington) Enterprise Agreement 2024

[1] On 27 February 2025, I issued a decision,[1] (the Decision) in relation to an application by Compass Group Remote Hospitality Services Pty Ltd t/as ESS Support Services (the Employer) for approval of an enterprise agreement known as the Compass Group (ESS Cannington) Enterprise Agreement 2024 (the 2024 Agreement) pursuant to s.185 of the Fair Work Act 2009 (the FW Act).

[2] In the Decision, I found that the Employer did not take all reasonable steps to explain the terms of the 2024 Agreement, and the effect of those terms, to employees employed at the time who will be covered by the agreement.[2]

[3] In particular I found that the Employer did not explain that the following entitlements in clauses 28 and 29 of the 2024 Agreement have been reduced compared to the current agreement, the Compass Group (ESS Cannington) Enterprise Agreement 2019 (the 2019 Agreement):

For existing employees, overtime is payable for the first two hours at time and a half rather than double time.
For existing full-time employees, the penalty rates for working on Sundays and public holidays are lower.
For existing casual employees, the penalty rates for working on public holidays are lower.

• For new full-time employees, overtime rates for working on public holidays are lower.[3]

[4] 'New employees' are defined by the 2019 Agreement as employees who commenced employment on or after 9 March 2021. Employees engaged before this date are defined as 'existing employees'.

[5] I also found that the Employer should have explained to employees the differences in entitlements and other terms and conditions between the 2024 Agreement and the following provisions of the relevant award, the Hospitality Industry (General) Award (the Award) that have been varied since the 2019 Agreement was made:

Requests for flexible working arrangements term which was inserted into the Award on 10 July 2023;
Right to Disconnect term which was inserted into the Award on 23 August 2024; and

• Casual employment term which was inserted into the Award on 26 August 2024.[4]

[6] Taking these matters into account, I found that the Employer did not comply with s.180(5)(a) of the FW Act. As such, I was not satisfied that there was genuine agreement in relation to the 2024 Agreement under s.188(4A).[5]

[7] I invited the Employer to provide undertakings pursuant to s.190 of the FW Act and for the bargaining representatives to provide their views about any proposed undertakings before making a final decision in relation to the matter.[6] After considering the undertakings provided by the Employer and the further submissions made by the parties, I have determined that the undertakings offered by the Employer do not meet all of the concerns raised in the Decision and have dismissed the application.

[8] The Employer provided further submissions and undertakings on 13 March 2025 and the Australian Workers Union (AWU) provided further submissions on 20 March 2025. Submissions were also received by one of the employee bargaining representatives which were not directly relevant to the issue of s.180(5)(a) of the FW Act.

[9] The Employer provided undertakings to address its non-compliance with s.180(5)(a) of the FW Act with respect to the differences in entitlements and other terms and conditions between the 2024 Agreement and provisions of the Award that have been varied since the 2019 Agreement was made. However, the Employer did not provide undertakings in relation to its failure to explain that some of the entitlements in clauses 28 and 29 of the 2024 Agreement have been reduced compared to the 2019 Agreement. Instead, the Employer filed further submissions seeking to cavil with my finding that it did not comply with s.180(5) of the FW Act and urging the Commission to approve the 2024 Agreement.

Submissions by the AWU in relation to estoppel

[10] The AWU submitted that, insofar as the Employer seeks to relitigate issues already determined in the Decision, an issue estoppel or Anshun estoppel[7] has arisen by virtue of the final nature of the Decision.

the Decision could have been appealed even if the Decision was an 'interim decision' within the meaning of s.589(2) of the FW Act;
the Decision is couched in terms where the Commission has made it clear that it has made a specific finding about the way the terms were explained to the employees, and that those explanations did not satisfy the Commission for the purposes of s.180(5); and
undertakings were an available vehicle to remedy the finding.

[12] Further, and regardless of whether or not the Employer is estopped, or whether doctrines such as res judicata or abuse of process apply, the AWU submitted that the correct and preferable decision would be for the Commission to dismiss the application pursuant to s.587 of the FW Act for the reasons given in Grabovsky v United Protestant Association NSW Ltd (Grabovsky),[8] those reasons being that there is no reason to expect a different result by reagitating the already settled issue of the Employer's failure to properly explain the terms of the Agreement. The AWU submitted that the Employer has not put on any new evidence that was not before the Commission already and otherwise provided no proper basis for the Commission to be required to reconsider the Decision.

[13] The Employer did not seek an opportunity to respond to the AWU's submissions about estoppel.

Further submissions by the Employer in relation to s.180(5)

[14] The Employer submitted that the issues raised in respect of s.180(5) of the FW Act in the Decision were not the subject of submissions by either party or any consideration by the Commission during the hearing on 20 December 2024. Rather, during the hearing, the parties made submissions to the Commission in relation to the objections raised in the outline of submissions filed by the AWU on 22 November 2024.

[15] The Employer submitted that it took steps to directly grapple with the fact that the effect of the 2024 Agreement was to harmonise the pay and conditions of new and existing employees so that the distinction between these two groups of employees no longer existed. The effect of that harmonisation meant that existing employees would see their rates of pay reduced. In contrast, new employees would see an increase in their existing rate of pay. Both groups would move to a central wage point under the 2024 Agreement.

[16] The Employer submitted that it was cognisant of the need to grapple with this effect during the access period as it would sway an employee's vote. It was for that reason that the Employer generated four briefing documents (in particular, the Annualised Wage Comparison (AWC) document which clearly spelt out the impact to wages that the 2024 Agreement would have and presented those documents with in-person sessions and the availability of personnel to answer any questions.

[17] The Employer noted that the Decision outlined that it did not take reasonable steps to explain the changes in respect of overtime, penalty rates and public holiday rates, through an analysis of the briefing document that it provided to employees. The Employer submitted that the briefing document referred to in the Decision was one of four key documents which were issued to employees to explain the meaning and effect of the 2024 Agreement. In relation to the other three documents:

the AWC document issued to all employees specifically addressed the meaning and effect of the 2024 Agreement in respect of salary reductions for existing employees;
the General Information and FAQs (FAQ) document confirmed that existing employees' rates of pay will decrease and directs those employees to the AWC document; and
the Explanation of Terms (ET) document identifies the specific changes to base rates and public holidays.

[18] The Employer submitted that the issuance of these documents, the contents of these documents and the in-person information sessions which walked employees through the 2024 Agreement and the contents of the explanatory material provided satisfied the requirements under s.180(5) of the FW Act. In addition, the Employer's personnel stood ready to assist employees if they had any residual queries regarding the 2024 Agreement. The Employer submitted that each of these steps it took were reasonable in the circumstances.

[19] The Employer submitted that the AWC and ET documents:

(i) directly compared an existing employee's current salary under the 2019 Agreement with the proposed salary in the 2024 Agreement, so that the actual effect of the 2024 Agreement was illustrated to existing employees;

(ii) identified and explained the 2024 Agreement to new employees by contrasting their current salary under the 2019 Agreement against their proposed salary under the 2024 Agreement;

(iii) outlined an indicative annualised total for public holiday entitlements for each classification which would be payable under the 2024 Agreement; and

(iv) expressed the different base hourly rates, as between new employees and existing employees, and did so having regard to the terms of the 2019 Agreement rates.

[20] The Employer submitted that the effect of the alignment between the pay and entitlements of new employees and existing employees was clearly articulated in the context of the AWC, FAQ and ET documents, the summary briefing document, and the materials provided during the access period (including the 2024 Agreement, the 2019 Agreement and the Award) as well as the information sessions conducted during the access period. It was not the case that the Employer outlined that entitlements would be abolished as stated in the Decision.

[21] The Employer submitted that all employees (both existing and new) were provided materials, which demonstrated how each cohort's entitlements would be adjusted to harmonise the pay points in the 2024 Agreement. Employees were expressly told of the increases and decreases which would be implemented if the 2024 Agreement was made and approved. Accordingly, no barrier to approval of the 2024 Agreement arises in the context of s.180(5) and the 2024 Agreement should be approved.

[22] The Employer submitted that the AWC and ET documents clearly articulate what an existing employee's entitlements would be and what a new employee's entitlements would be under the 2024 Agreement. Any employee reviewing these materials would be able to ascertain what their rate of pay would be (as contrasted to what it is currently) and could consider and review what another employee's rate of pay would be (again, as contrasted to what it is currently). Accordingly, to the extent the Employer was required to provide an assessment between these cohorts, it did so by virtue of the materials provided during the access period and which form the various annexures to the Form F17B currently before the Commission.

[23] The Employer submitted that in such circumstances, the FW Act is mandatory in its terms; the Commission must approve the agreement if an application is made and the requirements of ss.186 and 187 are met. There is no residual scope for anterior considerations about the substantive quality of the terms of an enterprise agreement. If the pre-approval requirements are satisfied and the proposed agreement passes the better off overall test (either with or without undertakings) the proposed agreement must be approved.

[24] The Employer submitted that it has satisfied its obligation to take all reasonable steps to explain to employees the terms of the 2024 Agreement and the effects of those terms. The Employer submitted that it has satisfied its obligations under s.180(5) of the FW Act, and that consequently, no residual s.180(5) concerns warranting undertakings arise.

Can the Commission revisit the Decision in relation to s.180(5)?

[25] As noted above, the AWU referred me to the Full Bench decision of Grabovsky.[9] That decision concerned an appeal against a decision to dismiss an application brought under s.739 of the FW Act as it was substantially the same as an earlier unsuccessful application made by the same applicant. At first instance, the Commissioner concluded that 'principles akin to res judicata ought to be applied' and that the application should be dismissed pursuant to s.587(1)(c) of the Act because it had no reasonable prospect of success and that it was an attempt to re-litigate matters already decided by the Commission.[10] The Full Bench agreed with the Commissioner and did not grant permission to appeal. In its decision, the Full Bench referred to the Full Federal Court decision in Miller v University of New South Wales (Miller)[11] which considered the question of whether res judicata applies to Commonwealth tribunals. In that case, the Full Federal Court concluded that an applicant whose unfair dismissal application had been dismissed by the Commission was not estopped from seeking a declaration and penalties in the court for breach of an enterprise agreement.[12]

[26] The matter before me is distinguishable from Grabovsky and Miller as both of these matters were dealing with fresh applications which arose from the same or similar factual scenarios as earlier unsuccessful applications. There is no previous unsuccessful application involving the same parties which deals with the same or similar matters as the application before me.

[27] The matter before me is an application in respect of which I have already issued a decision. In the Decision, I determined that the Employer did not comply with s.180(5) of the FW Act and that I therefore could not be satisfied that there was genuine agreement in relation to the 2024 Agreement under s.188(4A).[13] Section 186(2)(a) requires the Commission to be satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement as a requirement of approval under s.186(1). It follows from my findings in relation to ss.180(5) and 188(4A) that I cannot approve the 2024 Agreement unless I am satisfied that s.188(5)(aa) or s.190 permit me to do so.

[28] Section 188(5)(aa) permits the Commission to disregard minor procedural or technical errors made in relation to the requirements of s.180(5) if it is satisfied that the employees were not likely to have been disadvantaged by the errors. In the Decision, I determined that I was not able to disregard the Employer's actions in this regard under s.188(5)(aa).

[29] Section 190 permits the Commission to approve an agreement with an undertaking if it has a concern that an agreement does not meet the requirements set out in ss.186 and 187 of the FW Act and is satisfied that the undertaking meets the concern. In the Decision, I did not consider whether I should approve the 2024 with an undertaking. This is the only matter I permitted the parties to make further submissions about.

[30] As the Decision did not finally determine whether the 2024 Agreement should be approved, it may be regarded as an interim decision under s.589(2). The issue which arises in relation to the Employer's further submissions is whether the Commission can reconsider matters under s.186 and 187 which have already been determined, but prior to making a final decision under s.186(1). In submitting that it has satisfied its obligations under s.180(5) of the FW Act, that no residual s.180(5) concerns warranting undertakings arise and that the Commission should approve the Agreement, the Employer is seeking that the Decision be varied in relation to my finding under s.180(5).

[31] The circumstances in which the Commission can revisit a decision are provided in the FW Act. Section 602 permits the Commission to correct or amend any obvious error, defect or irregularity (whether in substance or form) in relation to a decision. Section 603(1) permits the Commission to vary or revoke a decision, however under s.603(3)(b) the Commission must not vary or revoke a decision under Division 4, of Part 2-4 which deals with approval of enterprise agreements. Section 604 permits 'a person who is aggrieved by a decision' to appeal the decision, with the permission of the Commission. Under s.607(3), the powers of the Commission when dealing with an appeal include confirming, quashing or varying the decision; making a further decision in relation to the matter that is the subject of the appeal; and referring the matter that is the subject of the appeal a Commission member.

[32] The Employer has not appealed the Decision. There is no suggestion by the Employer that its additional submissions were made for the purpose of an application under s.602. Further, I do not appear to have the power to vary or revoke the Decision as it is made with respect to matters in Division 4, of Part 2-4. In the event that the Decision is not regarded as a decision under Division 4, of Part 2-4, because it is an interim decision, and that there is no prohibition on the Decision being varied, I believe that there is no basis for me to revisit the matters which I have already determined in the Decision.

[33] The Employer has not made any submissions in relation to the Commission's powers to reconsider matters which have already been determined. The Employer claimed that the issues raised in respect of s.180(5) of the FW Act in the Decision were not the subject of submissions by either party or any consideration by the Commission during the hearing on 20 December 2024. This is simply incorrect.

[34] During the hearing, the AWU was critical of the information provided by the Employer to employees. It pointed to clauses 27, 28 and 29 of the 2024 Agreement which deal with breaks, penalty rates and overtime respectively. I asked the AWU's representative to explain the practical effect of the Employer's deficient explanation about these clauses, but he was unable to do so. I then said,

It seems that I am now going to have to undertake the exercise that you criticise the employer for forcing the employees to undertake to actually understand whether...I accept your submission.

[35] The parties were therefore on notice that I intended to examine these clauses and the Employer's explanation in relation to them in my consideration of the matter. The Employer's representative was also given an opportunity to make submissions in reply during the hearing and did so including in relation to the Employer's explanation of the 2024 Agreement to employees.

[36] At the conclusion of the hearing, it was identified that three employee bargaining representatives who provided statutory declarations in the matter had not served these on the Employer or the AWU. In the circumstances, the parties were asked to consider whether they wished to make further submissions or adduce evidence about the matters raised in the statutory declarations. The Employer's representative sent an email to my Chambers during the afternoon of the hearing but following its conclusion. The email advised that the Employer did not object to the statutory declarations being received into evidence and that it did not seek to adduce any further evidence in response. The email concluded by stating:

....to the extent that the Commission has any residual concerns arising from the consideration of matter [sic] which may be capable of being addressed by way of undertakings, the Applicant respectfully requests the opportunity to consider those concerns and furnish further undertakings as may be required prior to the disposition of the application for approval of the proposed enterprise agreement.

[37] If the Employer required a further opportunity to address the Commission in relation to s.180(5), including the matters raised by the AWU during the hearing, it was open for it to request this opportunity in this email correspondence, but it did not do so.

[38] I am satisfied that the parties were afforded procedural fairness in the conduct of the proceedings. Both the Employer and the AWU filed evidence and submissions in advance of the hearing on 20 December 2024 and were provided with an opportunity to provide oral submissions during the hearing. Following the conclusion of the hearing, the Employer requested an opportunity to address any residual concerns capable of being addressed by way of undertakings. This request was granted in the Decision.

[39] Taking all of these matters into account, I will not revisit my findings in relation to s.180(5). I believe that I do not have the power to do so, however even if this is not the case, there is no reasonable basis for me to exercise any discretion to alter my determination in relation to s.188(4A). However, for completeness, I deal with the Employer's further submissions in relation to s.180(5) to indicate what my findings would be if these submissions were made before the Decision was issued.

Employer's further submissions about s.180(5)

[40] The thrust of the Employer's submissions is that as existing employees were informed of the quantum of their annualised salary, it was not necessary for the Employer to advise the employees of the extent of any changes to the components of that salary. I do not accept this submission. In addition to setting out the Current Existing Total Annualised Wage and Proposed Total Annualised Wage, for each classification, the AWC document purported to explain the reason for the reduction of the annualised salary rates by stating:

The rates under the 2019 Agreement for existing employees are no longer commercially viable for ESS, which is why under the proposed Agreement they are proposed to be reduced. ESS have been absorbing the higher pay rates and this is having an impact on the commercial viability of the contract.

[41] In circumstances where the quantum of the proposed new annualised salary under the 2024 Agreement was advised to employees, there was simply no reason for the Employer to include this statement in the AWC. The purpose of the statement appears to be to 'sway' or persuade employees that there was a cogent reason for the reduction in annualised salaries and that they should vote in favour of approving the 2024 Agreement on this basis. It was therefore important that this statement was correct. However, the statement was misleading as the new annualised salary rates were not arrived at solely by reducing the existing 'pay rates', but also by reducing penalty rates.

[42] The Employer also claimed that the ET document identified the specific changes to base rates and public holidays. This is not correct as the ET document did not identify the specific changes to public holidays.

[43] Further, the Employer also claimed that the ET document outlined an indicative annualised total for public holiday entitlements for each classification which would be payable under the 2024 Agreement. On this basis the Employer submitted that it has taken reasonable steps to explain the terms of the 2024 Agreement and the changes in respect of overtime, penalty rates and public holiday rates. I do not accept this.

[44] In the Decision, I noted that the Employer did not advise employees that some of the entitlements in clauses 28 and 29 of the 2024 Agreement had been reduced. Rather, the Employer advised employees that clauses 28 and 29 had been updated to ensure that they were in line with the underpinning award. I observed that there was no need for the Employer to change the entitlements under clauses 28 and 29 to align them to the Award unless they were below the Award which is not the case.[14] For reasons that are not readily apparent on the face of its submissions, the Employer claimed that my conclusion in this regard was incorrect. In any event, the Employer has not addressed the concern I raised that it failed to advise employees that some of the entitlements in clauses 28 and 29 of the 2024 Agreement have been reduced.

[45] The Employer's submissions do not grapple directly with its failure to explain reduced penalty and overtime rates to employees and do not advance any reasons for this omission. The Employer submits that it took 'conscious and deliberate steps to articulate the meaning and effect' of the 2024 Agreement. Clearly the decision to reduce these entitlements was also 'conscious and deliberate', so it is concerning that the Employer sought to conceal this information from employees.

[46] The Employer's submissions in relation to annualised salaries do not address the issue of overtime rates. Overtime rates are not included in the calculation of the annualised salary. As noted in the Decision, overtime rates for new full time and part time employees working on public holidays are 225% under the 2024 Agreement compared to 250% under the 2019 Agreement. Overtime rates are lower for existing employees in respect of the first two hours worked Monday to Friday in that they are paid at time and a half under the 2024 Agreement compared to double time under the 2019 Agreement. The Employer did not explain the reduction in overtime rates anywhere in the material provided to employees and does not deal with this matter in its submissions. It follows that the Employer did not fulfil the requirements under s.180(5) as it did not, with respect to overtime, explain to employees how the 2024 Agreement will alter their existing minimum entitlements and other terms and conditions of employment as required by paragraph 8 of the Statement of Principles.

[47] In my view, the further submissions made by the Employer on 13 March 2025 do not raise any additional matters of substance that would have resulted in a different finding with respect to s.180(5) in the Decision.

[48] The Employer provided undertakings to address its non-compliance with s.180(5)(a) of the FW Act with respect to the differences in entitlements and other terms and conditions between the 2024 Agreement and provisions of the Award that have been varied since the 2019 Agreement was made. These undertakings address my concerns about these matters. However, the Employer did not provide undertakings in relation to its failure to explain that some of the entitlements in clauses 28 and 29 of the 2024 Agreement have been reduced compared to the 2019 Agreement.

[49] I am not satisfied that the undertakings offered by the Employer meet all of the concerns raised in the Decision that the 2024 Agreement does not meet the requirements set out in s.186. It follows that I cannot approve the 2024 Agreement under s.186(1). It is therefore unnecessary for me to consider whether the other requirements in ss.186 and 187 are met. I dismiss the application.

[7] Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28, [22]

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Compass Group (Australia) Pty Ltd Trading as Compass Group [2025] FWC 1655 (20 June 2025)

At a glance

Court

Decision date

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Judgment (77 paragraphs)

Compass Group (Australia) Pty Ltd Trading as Compass Group [2025] FWC 1655 (20 June 2025)

Legislation Cited (1)