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

ENDEAVOUR FOUNDATION UNION COLLECTIVE AGREEMENT 2009

Application to extend the default period for the Endeavour Foundation Union Collective Agreement 2009

[1] 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) Act 2009 (Cth) (Transitional Act), to extend the default period for the Endeavour Foundation Union Collective Agreement 2009 (Agreement). The Agreement was made under the Workplace Relations Act 1996 (Cth) and is an agreement-based transitional instrument to which item 20A applies.

[2] The application seeks to extend the Agreement for a period of 12 months, until 6 December 2024. Endeavour Foundation (Endeavour), the employer covered by the Agreement, supports the application.

[3] 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 commonly 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.

[4] Relevantly, 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) 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.

[5] The application is advanced on the basis that subitems (7) applies and it is otherwise appropriate in the circumstances to extend the default period.

[6] 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 must be occurring.

[7] The parties advised the Commission that on or about 17 August 2021, Endeavour issued a NERR to employees notifying of its intention to negotiate a new agreement. A copy of the NERR was provided to the Commission.

[8] After the NERR was issued, bargaining commenced with the ASU and employee bargaining representatives but ultimately reached an impasse in or about July 2022. Bargaining resumed on or about July 2023. Bargaining meetings occurred on 4 September and 3 October 2023.

[9] The NERR refers to an enterprise agreement covering employees who perform direct service delivery or predominately provide direct service delivery to people with disabilities. The NERR was issued to Endeavour's employees in Queensland, New South Wales and Victoria. The Agreement applies to Endeavour's employees in Queensland who perform direct service delivery or predominately provide direct service delivery to people with disabilities.[3] Endeavour's evidence was that approximately 90 per cent of the employees to be covered by the proposed agreement referred to in the NERR are covered by the Agreement and that the proposed agreement includes all of the coverage of the Agreement.[4]

[10] The parties have scheduled further bargaining meetings to take place on 2, 16 and 30 November and 14 December 2023 and have committed to meet on a fortnightly basis thereafter to progress bargaining discussions.[5]

[11] The uncontested material provided by the parties is sufficient to allow us to form a view as to the requirements of subitem (7). First, the NERR shows that the company agreed to bargain or initiated bargaining in August 2021 and that there was a notification time for a proposed agreement. The application for extension of the Agreement was filed after the notification time for a proposed agreement. Second, the group of employees covered by the proposed agreement, as described in the NERR, is substantially the same as the coverage of the Agreement. Finally, the parties agree that bargaining has commenced and is currently occurring. On this basis, we are satisfied that subitem (7) applies.

[12] 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.

[13] The ASU submitted that it is appropriate to extend the default period in all of the circumstances. It contended that the zombie agreement contains some provisions which are of high value to the employees to whom it applies. These include clause 6.1.5 Roster Consultation, clause 4 Dispute Resolution, clause 9.1.1 Annual Leave (as it relates to shift workers) and clause 9.11 Paid Parental Leave. The ASU said that in the termination of the Agreement before a replacement agreement can be concluded would leave employees worse off.

[14] Endeavour argued that it was relevant to note that the application had been made by the union with coverage of those employees covered by the Agreement. They said that this was not a case where the parties were seeking to have a zombie agreement continue to operate for the maximum period of time. Rather, both sides were actively bargaining for a replacement instrument. Endeavour said that it was highly unlikely that bargaining would be concluded, and a new agreement approved, before 6 December 2023.They said that reverting to the applicable awards would be burdensome on the company's resources since it would involve a costly overhaul of industrial and payroll arrangements for a potentially short-lived period until a replacement agreement is finalised and approved. They said this would delay bargaining and potentially reduce resources that could be committed to any new agreement.

[15] We are satisfied that it is appropriate in all of the circumstances to extend the default period for the Agreement. The application is made by consent. The ASU and Endeavour are committed to negotiating a replacement agreement and need time beyond 6 December 2023 to do so. It would also be unfair for the employees if their terms and conditions were to revert to the relevant awards whilst bargaining is occurring. This could not only have an adverse impact on their conditions of employment but also potentially affect the dynamics of the bargaining process.

[16] 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[6] the Commission has a discretion as to the length of the extension, subject to the limitation that the extension cannot be for 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.[7] The extension sought by the ASU in the application was 12 months.

[17] 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 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, as the NERR in that matter had been issued in June 2023.

[18] In this matter, we have had regard to the history of the bargaining process, including the fact that previous negotiations have proved difficult and the acceptance by the parties that more time is necessary to accommodate what is likely to be a protracted negotiation covering a range of contentious issues. We note also that the proposed agreement will cover a group of employees who would otherwise be covered by four different awards which may also add complexity to the bargaining process. We take into account the submission of Endeavour that the employees who will be covered by the proposed agreement are spread across more than 40 different sites, including remote sites in regional Queensland and that over 1,000 employees work in 161 client residences which are a combination of company owned and private residences. These are factors which can make the logistics of bargaining more challenging. We have also had regard to the associated costs and disadvantages of reverting to award provisions for a potentially short period. Finally, we regard the risk of bargaining not concluding before December 2024 to be a real one in this case. This weighs against extending the default period for a shorter period than that requested by the parties.

[19] In all the circumstances we propose to extend the default period for this agreement by a period of 12 months which should, in our view, allow sufficient time for the parties to finalise a replacement enterprise agreement.

[20] An order extending the default period for the Agreement by 12 months to 6 December 2024 will be published separately. The Agreement is published, in accordance with subitem (10A)(c), as an Annexure to this decision.

[1] [2023] FWCFB 105.

[2] [2023] FWCFB 122 at [4].

[5] Ibid paragraphs 17 and 18 and ASU Submissions paragraphs 9 and 10.

[6] [2023] FWCFB 105 at [18].

[7] See Suncoast Scaffolding Pty Ltd and Applications by APESMA [2023] FWCFB 137 at [31].

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