Guzman Y Gomez’s proposed enterprise agreement may have failed the Fair Work Commission’s (FWC’s) Better Off Overall Test (BOOT).

Fair Work Commissioner Donna McKenna, who reviewed the company’s enterprise agreement bid, said that its proposal to pay seven cents an hour above the fast food industry minimum wage “does not have … enough countervailing benefits (indeed it has a range of detriments)” and suggested that it would need “substantial changes” to pass the BOOT.

Commissioner McKenna also expressed concerns that the agreement would treat part-time employees as “quasi-casual … in a way that stands in sharp relief with the operation of the Fast Food Industry Award concerning such matters”.

She also noted that “there were no employee bargaining representatives and nothing to suggest there was any bargaining. Of the approximately 1,688 employees who would be covered by the Agreement, 1043 are from non-English speaking backgrounds; 716 are part-time employees; 829 are casual employees; and 538 are aged under 21 years (including school children, given the arrangements for their minimum shifts). Others are visa holders, given the references to their hours of work in the context of visa-related stipulations”.

The new deal proposed by Guzman Y Gomez was to replace a nominally expired enterprise agreement from 2012.

In June this year, a group of employees covered by that agreement requested that the FWC terminate it as some of their colleagues “who had been employed following the transmission of business, were employed under seemingly superior conditions in the Fast Food Industry Award … and … the 2012 Agreement employees were the ones who invariably were rostered to work on weekends and public holidays, and with pay and conditions inferior to those in the Fast Food Industry Award”.

Senior Deputy President Jonathan Hamberger who heard the application complimented the employees, saying “You’ve acted quite properly, not only in your own interests, but actually in the interests of your colleagues”.

However, he noted that it was “important from a business point of view that the employer be given an opportunity to move – not to have to put everybody onto the award just for a few weeks and then have to put everybody back on a new agreement, assuming the new agreement is one that the employees are happy with”.

“If the employees aren’t happy with it, then they will end up under the award, basically” he said.

He gave Guzman Y Gomez five months, until November 15, to come up with a new agreement “that largely mirrors the award with all the award penalties”.

The hearing continues.