FWC denies extension for 14-year-old zombie deal

As D-day looms for zombie agreements (individual and collective workplace agreements made before 1 January 2010), several recent decisions of the Fair Work Commission (FWC) have reinforced the challenges facing employers who are hopeful of extending the life of these aging instruments beyond 6 December 2023.

In June, a Full Bench of the FWC refused a four-year extension to a 2009 agreement being applied by a scaffolding company, which presently covers both administration and construction classifications, despite the employer submitting that the 12 employees captured were “better off” under the agreement than the Clerks or Building awards, and reporting that workers were “satisfied” with their agreement arrangements.

Contrary to the employer’s arguments, the Full Bench assessed that whilst the ordinary hourly rates were more beneficial under the agreement, when viewed as a whole, most workers – particularly those in construction trade roles – would be “worse off” as compared to the award, especially if working a standard pattern of hours (to the construction industry), such as a 50-hour week. This disparity arose because the 14-year-old agreement excluded trade workers from additional penalties including overtime and all allowances (other than a below-award sum for overtime meals) and permitted the employer to average ordinary hours over a year, compared with the award’s monthly maximum. In addition, the casual minimum engagement within the agreement was lower than both the Clerks (3 hours) and Building awards (4 hours) whilst the casual loading was reflected as just 23%.

With the employer failing to produce any “independent evidence” that employees were “satisfied with the current arrangement”, and noting that the employer no longer employed any of the workers captured by the agreement when it was made in early-2009 (when the building and clerks awards “did not yet exist”), the Full Bench determined it was “not justifiable” to “deprive” current employees of “access to award entitlements” by extending the zombie deal beyond 6 December 2023.

Suncoast Scaffold Pty Ltd as trustee for The Warren Family Trust [2023] FWCFB 105 (16 June 2023)

In July, an FWC Full Bench also declined to extend two zombie agreements applicable to casual employees performing 12-hour shifts, without overtime, in the mining sector, finding it “unlikely” the employees, viewed as a group, “would be better off overall under the agreements than if the [relevant] award applied”.

Applications by Patterson Enterprises Pty Ltd [2023] FWCFB 129 (26 July 2023)