Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Sch. 3, Item 20A(4) - Application to extend default period for agreement-based transitional instruments

KIRINARI COMMUNITY SERVICES LIMITED HUME RIVERINA BRANCH - CERTIFIED AGREEMENT 2006-2008

Application to extend the default period for the Kirinari Community Services Limited Hume Riverina Branch - Certified Agreement 2006-2008

[1] The Health Service Union (the HSU) has applied under item 20A(4) of Schedule 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) to extend the default period for the Kirinari Community Services Ltd Hume Riverina Branch Certified Agreement 2006-2008 (Agreement) until 6 December 2024.

[2] This is the second application by the HSU to extend the default period of the Agreement. In a decision issued on 7 September 2023 we considered that it was reasonable in the circumstances to extend the operation of the Agreement to 6 April 2024[1]. In that decision we set out the relevant principles to be applied in applications to extend the default period for zombie agreements. We also set out the relevant background associated with the Agreement. We do not repeat those matters here.

[3] We determined in our earlier decision it was likely, as at the time the application was made, that employees under the Agreement, viewed as a group, would not be better off if the Agreement continued to apply to them than if the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) applied. The HSU however sought to bargain for a replacement agreement and we determined that it was reasonable in the circumstances to extend the Agreement to continue to operate while negotiations proceeded. Bargaining had not commenced when we made the earlier decision.

[4] The current application is made on the basis that subitem 20A(6)(a) of Schedule 3 applies. The HSU submits that subitem (7) applies, as bargaining for a proposed agreement has commenced, the proposed agreement will cover the same employees covered by the zombie agreement, and bargaining is occurring. The HSU also submits that it is otherwise appropriate to do so.

[5] The HSU submits that bargaining has not progressed as quickly as the HSU had hoped. The HSU describes the bargaining as protracted and seeks time to conclude a replacement agreement.

[6] Kirinari Community Services Ltd (Kirinari) is the employer covered by the Agreement. Kirinari was also covered by two other zombie agreements which were the subject of applications for extension: Kirinari Community Services Limited Enterprise Agreement 2006 - 2009 - Northern New South Wales Branch (Northern NSW Agreement) and Kirinari Community Services Ltd Enterprise Agreement 2006- 2009 - Blue Mountains and Riverina Branches (Excluding Albury) (Blue Mountains Agreement)). On 13 November 2023, we declined to extend the default periods of those two Agreements[2]. The consequence of that decision is that from 6 December 2023, employees previously covered by these two agreements have been covered by the SCHADS Award. The employees under the Agreement are therefore the only Kirinari employees covered by a zombie agreement.

[7] The replacement agreement that is the subject of negotiations is an agreement that will apply to the Kirinari employees who are currently covered by the Agreement and employees who were covered by the two other zombie agreements that terminated in December 2023. Negotiations commenced in November 2023 and are ongoing. Issues have arisen about coverage of the agreement.

[8] The Australian Municipal, Administrative, Clerical and Services Union (ASU) is also a bargaining representative for the replacement agreement. It has members who continue to be covered by the Agreement. The ASU supports the application on the basis that its members' preference is to retain the current terms and conditions under the Agreement until such time that a replacement agreement is in place. It contends that the Agreement contains conditions that are both superior and inferior to the SCHADS Award. The ASU argued that extending the Agreement will minimise disruptions or changes to terms and conditions while these issues are addressed during bargaining.

[9] Kirinari opposes the application. It does not contest that bargaining for a replacement agreement is occurring but submits that it is not appropriate to extend the Agreement. Kirinari submits that it would be more efficient for Kirinari from an administrative and payroll perspective to have all of its employees covered by the SCHADS Award. Kirinari has adjusted its administrative and payroll practices to be in line with the SCHADS Award terms and conditions and would like to move the employees covered by the Agreement onto those arrangements.

[10] Kirinari submits that it would be fair for employees to be covered by the same up-todate terms and conditions of employment. Further, Kirinari contends that it will provide employees with greater flexibility if they wish to move to undertake work in other areas of Kirinari's operations outside of the Hume Riverina region.

[11] Kirinari states negotiations conducted to date for a new enterprise agreement have been based on the minimum terms and conditions provided by the SCHADS Award. Transitioning the remaining employees to the SCHADS Award will mean employees are familiar with the rostering arrangements and other terms and conditions provided by the SCHADS Award.

[12] There are two matters to be considered here in applying the test in subitem 20A(6)(a) of Schedule 3. The first is whether for the purposes of subitem (7), bargaining for a proposed agreement has commenced, the proposed agreement will cover the same or substantially the same group of employees covered by the zombie agreement, and bargaining is occurring. There is no contest that subitem (7) applies and we find that it does. The second matter is whether in the circumstances it is otherwise appropriate to extend the default period.

[13] In Suncoast Scaffold Pty Ltd the Full Bench described the 'appropriateness test' in this way[3]:

Under subitem (6)(a) of item 20A, in addition to being satisfied that subitem (7), (8) or (9) applies, the Commission must also be satisfied that 'it is otherwise appropriate in the circumstances' for the default period to be extended. 'Appropriate', on its ordinary meaning, connotes that it is 'suitable' or 'fitting' to grant the extension. 'In the circumstances' connotes the relevant matters and conditions accompanying the particular case. The inclusion of the adverb 'otherwise' indicates that appropriateness must be assessed by reference to circumstances other than those addressed by subitem (7), (8) or (9), as applicable. A broad evaluative judgment is required to be made.

[14] In our earlier decision to extend the Agreement we noted that the parties were yet to commence bargaining, and that the bargaining that was proposed was complex as it involved a consolidated agreement to cover employees in both New South Wales and Victoria. We also noted that the two unions involved had different industrial coverage, adding to the complexity. We considered at the time an extension to 6 April 2024 was sufficient to allow an agreement to be finalised. In the event, the parties have been unable to complete an agreement in that timeframe.

[15] In these circumstances we are mindful of the decision in Applications by the Association of Professional Engineers, Scientists and Managers, Australia (APESMA)[4], where the Full Bench observed that the default position of the statutory scheme to automatically terminate transitional instruments on 6 December 2023 suggests a policy preference in the legislative scheme for employees covered by transitional instruments to become regulated by instruments made under the FW Act. Here the parties intend to replace the Agreement with an enterprise agreement negotiated under the FW Act. As the Full Bench also noted in APESMA, there are various mechanisms under the FW Act to assist parties in reaching agreement, including s. 240 should a dispute arise during bargaining. By this provision, and other provisions in the FW Act, the Commission is given a role in facilitating agreement making.

[16] Kirinari's contention is that it would prefer to now have all employees on the SCHADS Award and so it would not be appropriate to extend the Agreement again. We note that this would result in the employees moving from the Agreement to the SCHADS Award at a time when it is expected a replacement agreement will be reached in the near future. This may also disturb the basis upon which the current bargaining is proceeding. We are therefore not convinced by Kirinari's argument. We are satisfied that it is appropriate to extend the default period for the Agreement.

[17] As we are satisfied that it is appropriate to extend the default period with respect to the Agreement we are required under subitem (6) to do so; however, we have a discretion as to the length of the extension (subject to the limitation of a four-year maximum extension) and we are not bound to grant the period of extension sought in the application[5].

[18] We consider that more progress should have been made in bargaining since our earlier decision. We also note that the parties have not sought assistance from the Commission to facilitate finalising an agreement. In those circumstances we consider that an extension of a further period of approximately four months should be sufficient to either finalise an agreement or seek assistance in doing so. Consequently, we will grant the application and extend the default period to 20 November 2024.

[19] Pursuant to item 20A(6) of Sch 3 of the Transitional Act the default period for the Agreement is extended to 20 November 2024.

[20] The Agreement is published, in accordance with item 20A(10A)(c), on the Fair Work Commission's website.

[1] [2023] FWCFB 158

[2] [2023] FWCFB 210

[4] [2023] FWCFB 137

[5] See Suncoast Scaffolding [2023] FWCFB 105 at [18]

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