Delroy Packing T/A Donnybrook Packing Company, Millwood Holdings Pty Ltd T/A Millwood Holdings Pty Ltd
[2024] FWCFB 125
•5 MARCH 2024
| [2024] FWCFB 125 [Note: A copy the zombie agreement to which this decision relates (AE883080 and AE883078) are available on our website.] |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 7, Item 30(4) - Application to extend default period for enterprise agreements made during the bridging period
Delroy Packing T/A Donnybrook Packing Company, Millwood Holdings Pty Ltd T/A Millwood Holdings Pty Ltd
(AG2023/4987)
DELROY PACKAGING PTY LTD ENTERPRISE AGREEMENT 2009
(AE883080)
MILLWOOD HOLDINGS PTY LTD ENTERPRISE AGREEMENT 2009
(AE883078)
| Agricultural industry | |
| DEPUTY PRESIDENT GRAYSON | SYDNEY, 5 MARCH 2024 |
Application to extend the default period for a zombie agreement
On 6 December 2023, Delroy Packaging Pty Ltd and Millwood Holdings Pty Ltd (Applicants) made an application under subitem 30(4) of Schedule 7 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) to extend the ’default period’ for the Delroy Packaging Pty Ltd Enterprise Agreement 2009 and the Millwood Holdings Pty Ltd Enterprise Agreement 2009 (the Agreements). The Application seeks to extend the default period until 1 July 2024.
The Agreement was made in 2009 in the ‘bridging period’ as defined in the Transitional Act. It is a ‘zombie agreement’ for the purposes of item 30 of Sch 7 to that Act and it will cease to operate on 6 December 2023 unless extended by the Commission.
The main aspects of the statutory framework for applications for the extension of zombie agreements were detailed in the Full Bench decision in Suncoast Scaffold Pty Ltd.[1] The Full Bench there dealt with an application to extend a ‘WR Act agreement’ under item 20A of Schedule 3 to the Transitional Act. The terms of item 20A of Schedule 3 are relevantly the same as item 30 of Schedule 7. The Full Bench’s analysis of those provisions applies equally to item 30 of Schedule 7 and it is not necessary to repeat it here.
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) amended the Transitional Act to add item 30 in Schedule 7. Item 30 provides for the sunsetting on 6 December 2023 of all remaining enterprise agreements made during the bridging period unless extended by the Commission. Subitem 30(6) provides that where an application is made under subitem 30(4) for the period to be extended, the Commission must extend the default period for a period of no more than four years if either:
a)subitem (7) or (8) applies and it is otherwise appropriate in the circumstances to do so; or
b)it is reasonable in the circumstances to do so.
Subitem (7) applies where the application is made at or after the notification time for a proposed enterprise agreement that will cover the employees and bargaining for the proposed enterprise agreement is occurring. Subitem (8) applies if it is likely relevant employees covered by the agreement would be better off overall if the agreement continued to apply.
In the present matter, the Applicants do not contend that either subitem (7) or (8) applies. Rather the Applicant relies on paragraph (b) of subitem (6). It contends that it is reasonable in the circumstances to extend the default period to 1 July 2024.
The Applicants’ Case
The Applicants provided a letter from Russell Delroy, Director, which provides the following:
(a)The Applicants are engaged in the cultivation and packing of fresh produce. They operate in the south-west of Western Australia.
(b)The avocado picking and packing season spans from July to March each year. The peak operating period is between September and February.
(c)A core component of the Applicants’ workforces are workers from the Pacific Islands who are employed under the Commonwealth Government’s Seasonal Worker Program (SWP) (Seasonal Workers). These Seasonal Workers return to their home countries upon the completion of their work.
(d)The SWP requires that offers of employment (underpinned by an industrial agreement) must be made to Seasonal Workers prior to their application being assessed by the relevant Commonwealth body. The underpinning industrial agreement must be valid for the duration of the Seasonal Worker’s employment.
(e)Employment offers for the SWP must be made at least six months prior to the Seasonal Workers’ planned arrival date in Australia to ensure immigration requirements are completed prior to flights and accommodation being arranged.
(f)If the Agreements cease to operate during the current 2023-2024 season, then the Applicants will be unable to meet the requirements under the SWP, which require an industrial agreement to apply to Seasonal Workers for the duration of their employment.
(g)The Seasonal Workers only arrive in Australia just prior to starting work at peak periods. Coupled with their remote living conditions in the Pacific Islands with limited communication access, it was impractical to engage in meaningful bargaining prior to the start of the 2023 season.
(h)Extending the default period for the Agreements will permit the current Seasonal Workers to complete their periods of employment in a way that complies with the SWP. Further, it will allow time to facilitate bargaining discussions with the entire team prior to their departure from Australia.
The Applicants are dedicated to conducting bargaining for new enterprise agreements after the peak season with their entire workforces, including seasonal, casual and permanent workers. They have engaged IR professionals to assist with the bargaining process. Further, the Applicants have commenced internal preparations for bargaining to take place post-peak season.
Consideration
In Suncoast Scaffold Pty Ltd the Full Bench described the ‘reasonable’ criterion in item 20A(6)(b) of Sch 3 to the Transitional Act in this way:
[17] Subitem (6)(b) of item 20A constitutes an independent pathway to the grant of an extension. The ‘reasonable’ criterion in the subitem should, in our view, be applied in accordance with the ordinary meaning of the word – that is, ‘agreeable to reason or sound judgment’. Reasonableness must be assessed by reference to the ‘circumstances’ of the case, that is, the relevant matters and conditions accompanying the case. Again, a broad evaluative judgment is required to be made.
The Commission is required to grant an extension to the default period if the conditions of subitem 6(b) are satisfied. However, there is a discretion as to the length of the extension, subject to the limitation that the extension cannot be for more than four years. Item 30(6)(b) is in the same terms as item 20A(6)(b) of Schedule 3.
The Applicants drew our attention to Application by Tinmarl Pty Ltd as trustee for R & M Patane Family Trust trading as North Queensland Golden Fruit[2] (Tinmarl), which is factually very similar to this matter. In Tinmarl, the Full Bench was satisfied that an extension of the default period was reasonable to ensure that the Applicant could make arrangements to secure seasonal labour for the upcoming mango harvesting season whilst also accommodating negotiations for a replacement agreement.
We are satisfied that in the circumstances of this case it is reasonable to extend the default period for the Agreements until 1 July 2024. This will ensure that the Applicants and Seasonal Workers will remain compliant with the SWP, but also give the Seasonal Workers the opportunity to participate in negotiations and vote for a replacement agreement.
The default period for the Agreements is extended until 1 July 2024. An order to give effect to this decision will be published separately. The Agreements are published, in accordance with item 30(9A)(c) of Sch 7 to the Transitional Act, as annexures to this decision.
DEPUTY PRESIDENT
<AE883080 AE883078 PR772083>
Schedule 1
| Enterprise Agreement Name | Publication ID |
| Millwood HOLDINGS PTY LTD ENTERPRISE AGREEMENT 2009 | AE883078 |
| Delroy Packing Pty Ltd Enterprise Agreement 2009 | AE883080 |
[1] [2023] FWCFB 105 at [3]-[18].
[2] [2023] FWCFB 124
Printed by authority of the Commonwealth Government Printer
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