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 Ltd T/A Kirinari Community Services Ltd

Kirinari Community Services Ltd T/A Kirinari Community Services Ltd

KIRINARI COMMUNITY SERVICES LTD ENTERPRISE AGREEMENT 2006 - 2009 - BLUE MOUNTAINS AND RIVERINA BRANCHES (EXCLUDING ALBURY)

KIRINARI COMMUNITY SERVICES LIMITED ENTERPRISE AGREEMENT 2006 - 2009 - NORTHERN NEW SOUTH WALES BRANCH

Application to extend the default period for the Kirinari Community Services Limited - Northern New South Wales Certified Agreement 2006-2009 and the Kirinari Community Services Limited - Blue Mountains and Riverina Branches (Excluding Albury) Certified Agreements 2006-2009

[1] Kirinari Community Services Limited (Kirinari) 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 Kirinari Community Services Limited Enterprise Agreement 2006-2009 - Northern New South Wales Branch (Northen NSW Agreement) and the Kirinari Community Services Limited Enterprise Agreement 2006-2009 - Blue Mountains and Riverina Branches (Excluding Albury) (Blue Mountains Agreement) (together, the Agreements). The Agreements were approved on 24 March 2006 in accordance with s.170LT of the Workplace Relations Act 1996. They are agreement-based transitional instruments to which item 20A applies. The parties to the Agreements are Kirinari and the Australian Municipal, Administrative, Clerical and Services Union (ASU). The ASU opposes the applications.

[2] 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 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.

[3] When an application is made under subitem (4) of item 20A of Sch 3 to the Transitional Act, the Commission is required by subitem (6) to extend the default period of an Agreement for a period of no more than 4 years if the Commission is (a) satisfied that subitem (7), (8) or (9) applies and it is otherwise appropriate in the circumstances to do so; or (b) it is reasonable in the circumstances to do so.

[4] Kirinari applies for an extension on the basis that it 'reasonable in the circumstances' within the meaning of subitem 6(b) to extend the default period of the Agreements.

[5] The applications before us are related to our decision in relation to the application to extend the Kirinari Community Services Ltd Hume Riverina Branch Certified Agreement 2006-2008 (the Hume Riverina Agreement).[2] The parties bound by the Hume Riverina Agreement are Kirinari and the Health Services Union of Australia (HSU). In that matter, the HSU applied to the Commission on 15 May 2023 to extend the Agreement by a period of two years. That application was supported by Kirinari but opposed by the ASU.

[6] On 7 June 2023, Kirinari made applications to extend the Northen NSW Agreement and the Blue Mountains Agreement on the basis that it would be reasonable to do so if the Commission extended the default period of the Hume Riverina Agreement. In the applications, Kirinari indicated that it intended that the three agreements would be replaced by a single enterprise agreement which would apply to all of its employees. These applications were adjourned pending the outcome of the application to extend the Hume Riverina Agreement.

[7] The HSU covers disability support workers in Victoria and the ASU covers disability support workers in NSW. The Hume Riverina Agreement applies to employees working in specific geographical areas located in Victoria and NSW whereas the Northen NSW Agreement and the Blue Mountains Agreement cover employees working in NSW only.

[8] The application to extend the Hume Riverina Agreement was advanced by the HSU on the basis that subitem (9) of item 20A had been met and it was otherwise appropriate in the circumstances to extend the default period. In the alternative, the HSU submitted that subitem (6)(b) was also satisfied and it was reasonable in the circumstances to extend the default period.[3]

[9] In our decision, we considered that the inferior provisions of Hume Riverina Agreement, particularly in relation to overtime and weekend and shift penalties, weighed against a conclusion that the employees are better off under the agreement. We concluded that, as at the time the application was made, employees under the Hume Riverina Agreement, viewed as a group, would not be better off if the Hume Riverina Agreement applied to them than if the award applied.[4]

[10] In considering whether it would be 'reasonable in the circumstances' within the meaning of subitem 6(b) to extend the default period, we took into account a number of matters including the intention of all parties to negotiate a single consolidated agreement to cover employees in New South Wales and Victoria, that bargaining for a new agreement will commence before 6 December 2023 and that bargaining is likely to be logistically and industrially complex given that Kirinari has two other zombie agreements that are due to expire on 6 December 2023.[5]

[11] We also noted that there were considerations that weighed against an extension. The parties had been on notice since at least late 2022 that the Agreement was likely to cease to operate on 6 December 2023, but beyond preliminary discussions, had not formally commenced bargaining for a replacement agreement. Moreover, our conclusion that employees as a group are not better off overall under the Agreement weighed heavily against an extension of the default period.[6] We decided on balance that it was reasonable in the circumstances to extend the default period but that the extension should be of a limited duration only of four months.[7]

Applications to extend the Northern NSW and Blue Mountains Agreements

[12] The ASU filed submissions on 21 and 22 September 2023. The ASU submitted that it had identified a significant number of workers who are directly and significantly disadvantaged by the operation and therefore the extension of the Agreements. The ASU argued that an extension of four months, in line with the decision in relation to the Hume Riverina Agreement, is likely to result in specific workers, if not the workforce more broadly, being thousands or potentially tens of thousands of dollars worse off than they would be under the Social, Community, Home Care and Disability Services Industry Award (the Award) which is the modern award that covers the employees.

[13] The ASU said that it was increasingly concerned that the extension will not necessarily produce a successor agreement and that any extension will only prolong the disadvantage currently being experienced by employees covered by the Agreements. The ASU remains committed to achieving a successor agreement however, they are concerned that Kirinari is not. These concerns are informed by the fact that bargaining has still not been instigated by Kirinari and that there continues to be an ongoing pattern of reluctance or avoidance from Kirinari to meaningfully engage with the ASU and its members in relation to this matter. Between February and September 2023, Kirinari has declined or cancelled six scheduled or requested meetings with the ASU, including a meeting scheduled as recently as 15 September 2023.

[14] Through consultation and interviews with ASU members, the ASU has formed a view that Kirinari is attempting to delay bargaining or movement to the Award to avoid superior pay and conditions for workers. They said any payroll inconvenience to Kirinari is outweighed by the extension of disadvantage to ASU members. To extend the Agreements would be to undermine the purpose of the relevant legislation and incentivise delay. The ASU does not therefore see any evidence that Kirinari intends to engage in a process that would redress the current disadvantage to workers by December 2023, or April 2024.

[15] The ASU points to disability support workers at Kirinari being between $8.05 and $8.78 worse off per hour worked on Sundays under the Agreements compared to the Award. Further, under the Award, disability support workers are entitled to overtime for work beyond 8, or by agreement 10, hours in one shift. The Agreements do not contain this provision and workers continue to work beyond these hours at single time. Employees at Kirinari are consistently working significant periods of overtime. Some workers are performing shifts of up to and beyond 24 hours without appropriate breaks or overtime payments.

[16] The ASU provided the following worked examples from workers who they say are directly disadvantaged by the Agreements' inferior provisions compared to the Award:

1. A worker who shared the roster of a house with one other worker, with the result that they each regularly worked shifts that would attract overtime on the Award for shifts longer than 10 hours and were not provided adequate breaks, is worse off by $732.17 per shift or by $38,067.64 for 52 shifts.

2. A worker performing a regular, ongoing shift in which there is a one hour 'break' between a sleepover and a day shift, and they do not get paid overtime upon returning to work, is worse off by $101.31 per shift or by $5,268.12 per 52 shifts.

3. A worker performing a regular, ongoing shift is worse off by $169.10 per shift or $8,793.20 per 52 shifts due to not receiving Sunday rates and overtime.

4. A worker performing a regular seven-hour Sunday shift is worse off by $3,195.92 per 52 shifts.

5. A worker performing a regular ten-hour Sunday shift is worse off by $2,282.80 per 26 shifts.

6. A worker performing long hours without overtime during a two-month period where there was severe understaffing was worse off by $1,443.39 per fortnight.

[17] Kirinari filed submissions on 27 September 2023. Kirinari seeks to extend the default period of the Agreements to 6 April 2024 to align with the decision of the Full Bench in relation to the Hume Riverina Agreement.

[18] Kirinari submitted that the Northern NSW Agreement and Blue Mountains Agreement contain terms which are substantially similar to each other. These terms are also substantially similar to the Hume Riverina Agreement. It would be fair for all employees covered by all three agreements to continue to be covered by substantially the same terms and conditions and would avoid the incongruous situation whereby one group of employees continue to be covered by a zombie agreement while other employees are covered by the Award.

[19] It will create confusion and uncertainty if employees are to transition to be covered by the Award and then to transition again to be covered by a new enterprise agreement. Extending the Agreements will allow the HSU, ASU and Kirinari sufficient time to negotiate a new consolidated enterprise agreement which will apply to all relevant employees across all locations.

[20] It will be inefficient and overly burdensome for Kirinari to transition some employees to the Award while Kirinari negotiates a new enterprise agreement which would cover all employees.

[21] If the default periods for the Agreements are not extended, this will impact Kirinari's operations. Kirinari will be required to review its shift and other working arrangements so that they comply with the Award, then it is likely that Kirinari will be required to undertake another review when a new enterprise agreement is negotiated.

[22] In these circumstances as outlined above, the Commission should be satisfied that it would be reasonable to extend the default periods for the Agreements.

[23] Kirinari submits the ASU modelling which it contends demonstrates that employees are worse off under the Agreements include a yearly result (i.e. 52 weeks/shifts or 26 shifts). Kirinari is not seeking for the default period to be extended for 52 weeks; the extension sought is for a four-month period to 6 April 2024. Further, the ASU's modelling is based on shift arrangements which may change should the default periods not be extended, and the Award applies to employees.

[24] Kirinari remains committed to the negotiation of a new enterprise agreement to cover all its operations, including the employees covered by the Agreements. The bargaining process has now commenced with Kirinari issuing the Notice of Employee Representational Rights to employees.

[25] The applications are advanced by Kirinari on the basis that it 'reasonable in the circumstances' within the meaning of subitem 6(b) to extend the default period of the Agreements. In Suncoast Scaffold Pty Ltd the Full Bench said that reasonableness in this context must be assessed by reference to the relevant matters and conditions accompanying the case and that a broad evaluative judgment is required to be made.[8]

[26] It was relevant to our consideration of whether it was reasonable for the default period of the Hume Riverina Agreement to be extended that both parties to that agreement, namely the HSU and Kirinari, supported the extension. This is in contrast to the current applications before us where the ASU, who is party to the Agreements, opposes the extension, and there is no other evidence or submissions from or on behalf of any employees that indicate that they hold a different view.

[27] In our consideration of the 'better off overall test' in relation to the Hume Riverina Agreement, we noted the HSU's argument that the Commission's analysis accorded insufficient weight to the superior leave entitlements provided for by that Agreement. In response, the ASU said that its members did not place significant weight on the value of the leave entitlements in the Agreement and that less favourable overtime provisions and lower weekend penalty rates left workers significantly worse off overall. The ASU submitted that a survey of their members at Kirinari had indicated that 64.3% reported working shifts of longer than 12 hours and 85% reported working on weekends and that both cohorts had experienced disadvantage because of the inferior terms of the Agreement.[9]

[28] We note the submissions of the ASU, which are to the effect that Kirinari is attempting to delay bargaining or movement to the Award to avoid superior pay and conditions for workers. According to the ASU, this is evidenced by Kirinari not initiating bargaining and avoiding meaningful engagement with the ASU and its members including through cancelling meetings as recently as 15 September 2023. Kirinari does not dispute the ASU's assertion that employees will be financially worse of if the Agreements continue to apply but says that shift arrangements may change should the default periods not be extended.

[29] Kirinari does not dispute cancelling meetings with the ASU. It says that it remains committed to the negotiation of a new enterprise agreement to cover all its operations, including the employees covered by the Agreements, but does not provide a timeframe for the negotiations or any commitment that the negotiations will be concluded, and a new agreement made by 6 April 2024. It says that the bargaining process has now commenced with the Notice of Employee Representational Rights having been issued to employees. The date that this occurred has not been provided, so we assume it was sometime between 22 and 27 September 2023 when the parties filed their respective submissions. No schedule of bargaining meeting dates has been provided.

[30] We do not accept Kirinari's submission that unfairness arises amongst employees if the default periods of the Agreements are not extended. It is clear from the submissions made by the parties in relation to the Hume Riverina Agreement and in the current applications that there is a diversity of employee views between the three different geographical areas that each zombie agreement operates in as to whether the agreements should be extended or not. We think that it is more likely that unfairness arises if we do not take into account those differing views in our consideration of the applications. We think it is particularly important that we have regard to the fact that there is no indication that any employees support the extension of the Agreements, and that there is evidence before us, that is not disputed by Kirinari, that employees will be disadvantaged financially as long as the Agreements apply.

[31] We accept that there will be some disadvantage experienced by Kirinari in relation to organising rosters and administering payroll if the Agreements are not extended. However, we note that there are already some differences between the three Agreements, for example in relation to long service leave, so there are likely to already be systems in place to accommodate such differences. We consider that any temporary disadvantage of that kind is outweighed by the financial disadvantage that employees will continue to experience while covered by the Agreements. We therefore do not consider it reasonable to extend the default periods of the Agreements.

[32] Accordingly, we decline to grant the applications to extend the default periods of the Agreements.

[33] The applications are dismissed.

[1] [2023] FWCFB 105.

[2] Application by Health Services Union [2023] FWCFB 158.

[8] [2023] FWCFB 105, [17].

[9] Application by Health Services Union [2023] FWCFB 158, [29].

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