Australian Municipal, Administrative, Clerical and Services Union
[2023] FWCFB 188
•17 OCTOBER 2023
| [2023] FWCFB 188 [Note: A copy of the zombie agreement to which this decision relates (AC308492) 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
(AG2023/2961)
P T GARUDA INDONESIA LTD UNION COLLECTIVE AGREEMENT 2007
| Airline operations | |
| DEPUTY PRESIDENT WRIGHT | SYDNEY, 17 OCTOBER 2023 |
Application to extend the default period for the P T Garuda Indonesia Ltd Union Collective Agreement 2007
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 P.T. Garuda Indonesia Ltd Union Collective Agreement 2007 (Agreement). The Agreement was approved on 27 July 2007 in accordance with s.170LT of the Workplace Relations Act 1996. It is an agreement-based transitional instrument to which item 20A applies. P.T. Garuda Indonesia Ltd (Garuda), 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.
Relevant to this matter, 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 initially made an application on the basis that subitems (7) and (9) apply and it is otherwise appropriate in the circumstances to extend the default period. At the initial hearing the ASU was content to proceed on the basis of only subitem (7) applying.
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 29 June 2023, Garuda agreed to renegotiate an enterprise agreement. On 7 August 2023, Garuda issued a NERR to employees notifying its intention to negotiate a new agreement. The NERR was provided to the Commission. The NERR refers to an enterprise agreement covering employees that are covered by the Agreement. Garuda is an international airline based in Indonesia. The company has engaged local representation to assist in bargaining. At the hearing Garuda confirmed that a draft agreement had been developed and negotiations were set down for 5 October 2023 and 19 October 2023. On the basis of this information, we are satisfied that subitem (7) applies.
As subitem (7) is met, subitem 6(a) requires a 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. Further, as Garuda is an international airline with its head office in Indonesia and has engaged local representation to assist in negotiations, the negotiations for the replacement agreement may extend beyond the default period. It also submitted that the employees receive a higher rate of pay and have more beneficial terms of employment under the Agreement than the Airline Operations – Ground Staff Award 2020 which is the modern award that will cover the employees at the end of the default period.
We are satisfied that it is appropriate in all of the circumstances to extend the default period for the Agreement. The ASU and Garuda are committed to negotiating a replacement agreement and need time beyond 6 December 2023 to do so. The negotiations will take longer due to Garuda’s head office being based in Indonesia. It would also be unfair for the employees’ terms and conditions to revert to the Award whilst bargaining is occurring. This will not only have an adverse impact on their remuneration 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]
The extension sought by the ASU in this application is 12 months. At the hearing of the matter the ASU agreed that 6 months should be adequate. Garuda also agreed that 6 months should be sufficient.
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.
In this matter, given the parties’ view that 6 months should be sufficient to conclude a replacement agreement, we will order a 6-month extension of the default period. We believe this to be appropriate in all of the circumstances of this case. 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]. Six months should allow sufficient time for the parties to finalise a replacement enterprise agreement.
An order extending the default period for the Agreement by 6 months, until 6 June 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 at [18]
[4] See Suncaost Scaffolding Pty Ltd id and Applications by APESMA [2023] FWCFB 137 at [31]
[5] See ISS Health Services Pty Ltd [2023] FWCFB 105 and Annecto Inc [2023] FWCFB 169
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< AC308492 PR767315>
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