Application by Australian Workers' Union
[2024] FWCFB 4
•12 JANUARY 2024
| [2024] FWCFB 4 Note: A copy the zombie agreement to which this decision relates (AC325715) is available on our website.] |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch 3, Item 20A(4)—Application to extend default period enterprise agreement made during bridging period
Application by Australian Workers’ Union
(AG2023/4089)
OZPAK COLLECTIVE AGREEMENT 2009
| Wine industry | |
| DEPUTY PRESIDENT WRIGHT | SYDNEY, 12 JANUARY 2024 |
Application to extend the default period for the Ozpak Collective Agreement 2009
The Australian Workers’ Union (AWU) has applied, pursuant to item 20A(4) of Sch 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Cth) (Transitional Act), to extend the default period for the Ozpak Collective Agreement 2009 (Agreement). The application seeks to extend the Agreement for a period of 12 months until 6 December 2024.
The Agreement is a ‘collective agreement-based transitional instrument’ for the purposes of item 2(5)(c)(i) of Sch 3.
Item 20A of Sch 3 to the Transitional Act provides for the automatic sunsetting of agreement-based transitional instruments by the end of the default period on 6 December 2023, subject to the capacity to apply to the Commission for an extension of that period for up to four years in prescribed circumstances. The agreements to which these provisions apply are known as zombie agreements. The main features of item 20A of Sch 3 are described in detail in the Full Bench decision in Suncoast Scaffold Pty Ltd (Suncoast)[1] and we rely upon what is said in that decision.
The application is made under subitem (4) of item 20A of Sch 3 to the Transitional Act, on the basis that the Commission can be satisfied under subitem (6)(a) that subitem (7), applies and it is otherwise appropriate in the circumstances to do so. Subitem (7) applies if bargaining for an enterprise agreement to replace the zombie agreement is occurring.
Background
The employer, Ozpak Pty Ltd (Ozpak) issued a Notice of Representational Rights (NERR) to employees covered by the Agreement on 20 September 2023. The NERR proposed bargaining for an agreement that will cover the same or substantially the same group of employees as the zombie agreement.
Bargaining commenced in October 2023 towards an enterprise agreement that will cover the same, or substantially the same, employees that are covered by the Agreement. It is proposed that a new agreement will cover 45 of the 54 employees currently covered by the Agreement. The 9 employees who are not proposed to be covered are senior managers.
The AWU is representing the employees in the negotiations. There are also a number of employee bargaining representatives.
Ozpak circulated a proposed agreement to employees and the AWU in October 2023. The AWU also provided its log of claim in late October 2023. There were discussions about the proposed agreement in October and November 2023. The AWU provided a list of 38 matters that had been the subject of negotiations and included the status of those matter as of 14 November 2023. Of those, a number were agreed, others were to be the subject to further discussions, but the majority were not agreed. Ozpak was yet to respond to the AWU wage claim, and the AWU pointed to wages as a matter that will have a significant impact on the course of the bargaining.
If the Agreement is not extended the Wine Industry Award 2020, Manufacturing and Associated Industries and Occupations Award 2020 and Clerks – Private Sector Award 2020 (the Awards) would apply. The AWU submits that the employees are better off under the Agreement than the Awards. Ozpak submits that the employees would be better off on the Awards. Ozpak has not provided the current rates of pay of employees. The rates in the Agreement were over the award rates when the Agreement was approved, and the Agreement required that the rates increase in accordance with the CPI on 1 July every year. The AWU submits that while Ozpak has not provided it with the current rates, it believes that the employees it represents are paid a minimum of $4.00 an hour above award rates. Ozpak does not contend that the employees are not better off on the Agreement in terms of wages. Given that concession and in the absence of Ozpak providing us with the rates paid under the Agreement we accept the AWU’s submission that the Agreement rates are above the Award.
Ozpak’s primary contention is that certain conditions are less than the equivalent Award terms. It points in particular to weekend penalty rates, minimum hours for part time employees, spread of ordinary hours, and some allowances being less than the equivalent allowances in the Awards. The AWU points to a 200% penalty for all overtime, which, it says, would apply to weekend work, as well as to better accident pay provisions, a 3 month probationary period, a term requiring the reimbursement of expenses, wage performance review mechanisms, an additional day for bereavement leave, and rights provided by training, equal opportunity and anti-discrimination terms in the Agreement as other conditions that are better than conditions provided for in the Awards.
A 12-month extension of the default period for the Agreement is sought by the AWU to ensure certainty over the terms and conditions for employees during the negotiations. The AWU submit that all employee representatives support the extension of the default period for the Agreement. Ozpak opposes the 12-month extension but supports a three month extension to allow bargaining to be completed. The AWU submitted that if the Commission considered 12 months too long, then an 8-month extension would be appropriate.
Consideration
The Full Bench in ISS Health Services Pty Ltd[2] described the three requirements for subitem (7) to apply. The first is the requirement that the application is made at or after the ‘notification time’ for the proposed replacement agreement. Notification time is defined in s.173(2) of the Fair Work Act 2009 (FW Act). The second is that the proposed agreement must cover the same or substantially the same group of employees as the zombie agreement. The Full Bench stated that this could be established by comparing the NERR for the proposed agreement to the coverage clause of the zombie agreement. The third is that bargaining for the proposed agreement has commenced.
The application satisfies these three requirements, so subitem (7) applies. We must therefore extend the default period under subitem (6)(a) if we consider it is appropriate to do so. As negotiations have commenced and are progressing, we think it is appropriate in this case that the industrial arrangements remain undisturbed while those negotiations take place. On the material provided we accept that the employees would be better off if the Agreement continued to apply while the negotiations run their course. We are also concerned that if the Agreement were to terminate this would provide Ozpak with an advantage in the bargaining process as it would give rise to a change in the employees’ terms and conditions, most likely to their detriment, and distract employees from the task of bargaining for a replacement agreement.
Having found it is appropriate to extend the default period we must consider the length of the extension. We have a broad discretion in this regard, save that the extension cannot be longer than 4 years. The AWU asks that the Agreement be extended by 12 months, or, in the alternative, 8 months. Ozpak has asked that it be extended by 3 months. Ozpak notes that should a further extension be needed a further application can be made.
The purpose of the provisions relating to the sunsetting of zombie agreements is that outdated agreements be replaced with modern industrial instruments. The parties here are negotiating towards a replacement agreement. Those negotiations are progressing but need time to be finalised. Here the circumstances include that the workforce is not large, the parties have already made some progress in identifying the issues to be negotiated, and, while there are some contentious issues, including wage rates, the Act provides access to the Commission to assist in dealing with any disputes that arise. In the circumstances we agree with the AWU that an 8-month extension provides an appropriate timeframe within which these matters can be resolved, if necessary, with the assistance of the Commission, and an agreement can be finalised.
We have decided to extend the default period for the Agreement to 6 August 2024. An order to this effect has been published with this decision.
The Agreement is also published, in accordance with subitem 20A(10A) of Sch 3 of the Transitional Act, as an Annexure to this decision.
DEPUTY PRESIDENT
[1] [2023] FWCFB 105.
[2] [2023] FWCFB 122 at [4]
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