Recently we have been involved in the process for modernising
the Pizza Hut – SDA National Employee Relations Award
2000 on behalf of Yum! Restaurants Australia
The Shop Distributive and Allies Employee Association
('SDA') have opposed this application. One
of the first objections raised, which the Full Bench of Fair Work
Australia ('FWA') decided to deal with as
a separate matter, was a jurisdictional challenge on the basis that
Yum and various franchisees of Pizza Huts did not operate a common
The SDA contended that a franchisor could not carry on a single
enterprise with itself and its franchisors. Yum asserted that it
and Pizza Hut franchisees are employers who carry on a business,
project or undertaking within the meaning of Schedule 6 Item 3,
Sub-Item (2) of the Fair Work (Transitional Provisions and
Consequential Amendments) Act 2009 ('the
Relevantly, the Transitional Legislation provides that an
enterprise award-based instrument is an award-based transitional
instrument if the award or State reference transitional award
covers employees in a single enterprise, one or more enterprises
(if the employers all carry on similar business activities under
the same franchise), franchisees of the same franchisor and related
If two or more employers carry on a business, project or
undertaking as a joint venture or common enterprise, the employers
are taken to be one employer.
The Full Bench found that the evidence established that Pizza
Hut franchise agreements grant a right to use the systems, manuals,
trade marks and names of Pizza Hut and further that Yum has a real
interest in the success of the franchisee's business as its
income is tied to sales achieved by franchisees.
The Full Bench then applied the test in Australian Softwood
Forest Pty Limited v Attorney General (NSW); Ex Rel Corporate
Affairs Commission2. In that case Justice Mason found:
"An enterprise may be
described as common if it consists of two or more closely connected
operations on the footing that one part is to be carried out by A
and the other by B, each deriving a separate profit from what he
does, even though there is no pooling or sharing of receipts of
profits. It will be enough that the two operations constituting the
enterprise contribute to the overall purpose that unites them.
There is then an enterprise common to both participants and,
accordingly, a common enterprise"
The Full Bench dismissed the jurisdictional objection, and the
matter proceeded to hearing on the basis of the substantive issues
raised in the application.
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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