Australian Municipal, Administrative, Clerical and Services Union
[2023] FWCFB 206
•8 NOVEMBER 2023
| [2023] FWCFB 206 [Note: A copy of the zombie agreement to which this decision relates (AG816405) 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 for agreement-based transitional instruments
Australian Municipal, Administrative, Clerical and Services Union
(AG2023/3048)
VILLAMANTA LEGAL SERVICES INCORPORATED CERTIFIED AGREEMENT 2002
(ODN AG2002/2663) [AG816405]
Health and welfare services
| DEPUTY PRESIDENT WRIGHT | SYDNEY, 8 NOVEMBER 2023 |
Application to extend the default period for the Villamanta Services Incorporated Agreement 2002
The Australian Municipal, Administrative, Clerical and Services Union (ASU) 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 Villamanta Services Incorporated Agreement 2002 (Agreement). The Agreement was approved on 11 June 2002 in accordance with s.170LT of the Workplace Relations Act 1996. It is an agreement-based transitional instrument to which item 20A applies. Villamanta Disability Rights Legal Service Incorporated (Villamanta), the employer covered by the Agreement, supports the application.
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[1] and we rely upon what is said in that decision.
When an application is made under subitem (4) of item 20A of Sch 3 to the Transitional Act the Commission is required under subitem (6)(a) to extend the default period if the Commission is satisfied that subitem (7), (8) or (9) applies and it is otherwise appropriate in the circumstances to do so.
The ASU has made an application on the basis that subitem (7) applies.
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 a proposed agreement as 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 Notice of Employee Representational Rights (NERR) for the proposed agreement to the coverage clause of the zombie agreement. The third is that bargaining for the proposed agreement is occurring.
The ASU informed the Commission that on 3 August 2023, Villamanta issued a NERR to employees notifying its intention to negotiate a new agreement. The ASU submits that the new agreement will have the same coverage as the zombie agreement. Bargaining meetings have commenced, and three meetings had been held at the time that the ASU filed submissions on 21 September 2023. On the basis of this information, we are satisfied that subitem (7) applies.
As subitem (7) is met, subitem 6(a) requires consideration of whether it is otherwise appropriate in the circumstances to extend the default period. In ISS Health Services, the Full Bench considered it appropriate to do so where the parties sought time to negotiate a replacement agreement and are not simply seeking to extend an agreement for the maximum period for the sake of convenience. The Full Bench also took into account that while the zombie agreement remained in place, the employees would be better off overall than if the modern award applied.
The ASU submitted that it is appropriate to extent the default period in all of the circumstances. It relied on the fact the application is made by consent. The Agreement applies to all 11 employees of Villamanta. Villamanta is a small organisation with no dedicated internal human resources capacity. The ASU has consulted with its members covered by the Agreement, and on 31 August 2023 they unanimously endorsed the extension of the Agreement.
While the ASU would like to conclude bargaining this year, they proposed that a 12-month extension be considered by the Commission to ensure that employees do not feel pressured into resolving bargaining or accepting an unsatisfactory outcome solely due to the termination of the Agreement. The ASU advised in their application that bargaining is likely to be resolved in early 2024.
The ASU also submitted that the relevant employees have more beneficial terms of employment under the Agreement than the Social, Community, Home Care and Disability Services Industry Award 2010 (the SCHADS Award) which is the modern award that will cover the employees at the end of the default period. These more beneficial entitlements include incremental progression, flexible working arrangements, parental leave, sick leave and long service leave.
We are satisfied that it is appropriate in all of the circumstances to extend the default period for the Agreement. The ASU and Villamanta are committed to negotiating a replacement agreement and need time beyond 6 December 2023 to do so. It would be unfair for the employees’ terms and conditions to revert to the Award while bargaining is occurring. This will not only have an adverse impact on their conditions of employment but alter the dynamics of bargaining.
As we are satisfied that subitem 6(a) applies, we are required to extend the default period. As the Full Bench observed in Suncoast Scaffolding Pty Ltd[3] the Commission has a discretion as to the length of the extension, subject to the limitation that the extension cannot be more than four years. The nature of the discretion is such that we are not bound to grant the period of extension sought in the application.[4]
In ISS Health Services Pty Ltd the Full Bench ordered an extension of 12 months in circumstances where subitem (7) applied. The Full Bench considered this sufficient time for a replacement agreement to be finalised in circumstances where there was some complexity in the bargaining, including issues of contested scope. The Full Bench noted that should the parties require assistance to finalise an agreement then s.240 of the FW Act provides the parties with access to the Commission to resolve any disputes that arise. The Full Bench noted that the additional 12 months amounted to an 18-month period in which to conclude an agreement where the NERR in that matter had been issued in June 2023.
As noted above, the Agreement covers only eleven employees. The subject matter of the bargaining is not as complex as other matters that have been before the Commission where longer extensions have been granted.[5] Bargaining has been taking place for three months and according to the ASU is likely to conclude in early 2024. Taking these matters into account, we believe that the twelve-month period sought by the ASU is excessive and may act as a disincentive for the parties to progress bargaining efficiently and reach agreement in relation to a replacement agreement in a timely manner. In the circumstances, we believe that extending the Agreement for a four-month period should allow sufficient time for the parties to finalise a replacement enterprise agreement.
An order extending the default period for the Agreement by 4 months, until 6 April 2024, will be published separately. The Agreement is published, in accordance with subitem 20A(10A)(c), as an Annexure to this decision.
DEPUTY PRESIDENT
[1] [2023] FWCFB 105.
[2] [2023] FWCFB 122 at [4]
[3] [2023] FWCFB 105, [18]
[4] See Suncaost Scaffolding Pty Ltd [2023] FWCFB 105, [18] and Applications by APESMA [2023] FWCFB 137, [31]
[5] See ISS Health Services Pty Ltd [2023] FWCFB 105; Annecto Inc [2023] FWCFB 169; Cancer Council of Victoria [2023] FWCFB199; Endevour Foundation [2023] FWCFB 197
Printed by authority of the Commonwealth Government Printer
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