Sydney Educational Broadcasting Ltd (2SERFM)
[2024] FWCFB 187
•22 MARCH 2024
| [2024] FWCFB 187 |
| 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
Sydney Educational Broadcasting Ltd (2SERFM)
(AG2023/4935)
2SER ENTERPRISE AGREEMENT 2009
| Entertainment and broadcasting industry | |
| DEPUTY PRESIDENT SLEVIN | SYDNEY, 22 MARCH 2024 |
Application to extend the default period for the 2SER Enterprise Agreement 2009
On 6 December 2023, Sydney Educational Broadcasting Ltd (2SERFM) (the Applicant) made an application under subitem 30(4) of Sch 7 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) to extend the ‘default period’ for the 2SER Enterprise Agreement 2009 (the Agreement). The application seeks to extend the default period until 6 December 2025.
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 Sch 3 to the Transitional Act. The terms of item 20A of Sch 3 are relevantly the same as item 30 of Sch 7. The Full Bench’s analysis of those provisions applies equally to item 30 of Sch 7 and it is not necessary to repeat it here.
When an application is made under subitem (4) of item 30 of Sch 7 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. Put briefly, subitem (7) applies if, at the time of the application, the applicant is bargaining for a replacement agreement. Subitem (8) applies to individual agreement-based transitional instruments. And subitem (9) applies if it is likely the employees covered by the Agreement would be better off overall if the Agreement continued to apply rather than the applicable modern award. This is the better off overall test (BOOT).
The Commission must also extend the default period under subitem (6)(b) if satisfied it is reasonable in the circumstances to do so.
The Applicant’s Case
The application as lodged states that bargaining is occurring for a new enterprise agreement that would cover the employee or group of employees covered by the Agreement. No further information or material in support of this contention was provided.
The Commission wrote to the Applicant seeking further information regarding bargaining as well as any material in support of the application. On 22 January 2023, the Applicant provided the following information:
(a)The Applicant has recently engaged an eternal HR consultant to support the company through updating its workplace agreement. The Applicant is yet to determine whether its employees would be better off under the relevant modern award or the Agreement.
(b)There are only two employees covered by the Agreement.
(c)There is one bargaining representative and they consent to the extension of the default period sought by the Applicant.
The Applicant also informed the Commission that it is “too early in the process” to provide a copy of the notice of employee representational rights (NERR) or a chronology of negotiations to date. We take this to mean that the NERR has not been issued and bargaining meetings for a replacement agreement have not taken place.
Consideration
For the purposes of subitem 6(a) of item 30 there is no indication that bargaining for a replacement agreement is occurring, so subitem (7) cannot apply. The Agreement is not an individual agreement-based transitional instrument so subitem (8) does not apply. There has been no material provided to satisfy us that the employees would be better off overall if the Agreement continued to apply to them than if the Award applied so subitem (9) does not apply. Consequently, we cannot extend the default period under subitem 6 (a).
For completeness, we now turn to consider the Applicant’s arguments in the context of whether it is reasonable in the circumstances to grant an extension of the default period pursuant to subitem (6)(b). 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.
While each application will turn on its own circumstances, recent Full Bench decisions provide some guidance as to how the broad evaluation judgment required by subitem 6(b) is to be exercised:
In Peter Frick,[2] the Full Bench considered that the default position of the statute to automatically terminate transitional instruments on 6 December 2023 suggests a policy preference for employees covered by transitional instruments to be regulated by contemporary instruments.[3]
In Kalfresh Management Services Pty Ltd,[4] the Full Bench expressed the view that where an agreement contains inferior and outdated terms and conditions, this weighs strongly against a conclusion that it is reasonable in the circumstances to extend a default period.[5]
In Karpay Pty Ltd,[6] the Full Bench refused to extend an Agreement where it was contended that an extension was required as there was some complexity in introducing software to manage the new arrangements under the relevant modern award. The Full Bench balanced the harshness associated with the employees enduring ongo8ing inferior penalty rates in the agreement with the inconvenience claimed by the applicant. The failure of the employer to commence bargaining for a replacement agreement was also a factor.
With these considerations in mind, we are not satisfied that it is reasonable to extend the default period for the Agreement. The application seeks an extension of the default period on the basis that the Applicant needs time to decide whether to negotiate a replacement agreement at all. This is not a compelling reason to extend the default period.
As we are not satisfied that it is reasonable in the circumstances to extend the default period of the Agreement, the application is dismissed.
As our decision is to refuse to extend the default period under subitem 30(4) of Sch 7 and our decision is made after the sunset date in the Transitional Act, subitem (10)(e) provides that we must extend the default period to the day of this decision or specify a day that is not more than 14 days after the day of this decision. We have decided that, to enable the Applicant to make the necessary administrative arrangements to give effect to the sunsetting of the Agreement, the default period is extended to 5 April 2024.
DEPUTY PRESIDENT
[1] [2023] FWCFB 105 at [3]-[18].
[2] [2023] FWCFB 137.
[3] Ibid, [32].
[4] Kallium Management Services Pty Ltd As Trustee For The Kalium Labour Trust T/A Kalfresh Pty Ltd [2023] FWCFB 217.
[5] Ibid, [14].
[6] [2023] FWCFB 240.
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