Termination of Pizza Hut agreements “overwhelmingly positive”

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Inside Franchise Business: Pizza Hut enterprise agreements terminatedMore than 4000 workers at fast food chain Pizza Hut are set to receive industry rates for the first time in 30 years, following a decision handed by the Fair Work Commission (FWC).

The decision comes after an application to terminate the brand’s dated enterprise agreements was lodged by the Shop, Distributive and Allied Employee’s Association (SDA), stating Pizza Hut had failed to implement an annual 3.3 per cent wage increase.

Effective immediately, workers at the chain’s 220 restaurants will move on to the industry award, providing a slight bump to pay rates nationwide.

It’s been a long time coming for Pizza Hut workers, in 2017, the FWC spectacularly revoked an earlier ruling to terminate the agreements, citing an administrative error.

The two parties had agreed to stay the applications pending the outcome of negotiations for a replacement agreement, however, a spokesperson for the SDA said that negotiations had broken down in December 2018, prompting the union to press for immediate termination.

‘Due to negotiations with the SDA, Pizza Hut like other fast food operators pays rates over and above those prescribed in the expired enterprise agreements,” the spokesperson told Inside Franchise Business.

‘However, the company did not pass on the 2016 3.3 per cent annual wage review increase thereby reducing the over award payment. As a result, the SDA moved to terminate the existing agreements. Pizza Hut workers will now return to their relevant award’

Peter Sams, FWC deputy president said upon consideration of the applications, he was satisfied that all requirements of the Fair Work Act 2009 had been met.

“I am satisfied that it would not be contrary to the public interest to terminate the Agreements,” the decision read.

“I have taken into account the views of the employees and the employer as well as the likely effect on both, which appears overwhelmingly positive.”

Pizza Hut Australia agreed with Sams, indicating the move to award would simplify the processes through the brand’s network and further improve the working conditions of its employees.

“Pizza Hut has engaged constructively with the SDA over a long period of time in an attempt to negotiate a new Enterprise Bargaining Agreement (EBA). Despite the SDA’s continuing enthusiasm to negotiate a new EBA, Pizza Hut was of the view that an agreement beneficial to the parties could not be crystallised within an imminent timeframe, and so consented to the termination of its current EBA by the Fair Work Commission and a move onto the Award, which takes effect today, 1 February 2019,” Pizza Hut said in a statement.

The fast-food chain also indicated that it would take a proactive approach in assisting franchisee with the transitional period.

“Our franchisee partners are looking to mitigate the increase in labour costs through benefits unlocked under the Award and a savvy use of their existing labour force.”

“Pizza Hut takes the rights of employees very seriously. We have actively engaged with our franchisee partners to upskill them in their new employment obligations under the Award, and will continue to offer specialised support services and resources to them and their employees.”

Nick Hall

Nick is business journalist at Octomedia, working on View More...
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