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Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 20A(4)—Application to extend default period for agreement-based transitional
instruments
Application by Dilek Henderson
(AG2023/1697)
JUSTICE HATCHER, PRESIDENT
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
SYDNEY, 28 JULY 2023
Application to extend the default period for Australian Workplace Agreement between Dilek
Henderson and Symphony Services Australia Limited.
[1] Ms Dilek Henderson has lodged an application to extend the default period for an
individual agreement-based transitional instrument pursuant to subitem (4) of item 20A of
Sch 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
(Cth) (Transitional Act). The relevant instrument is an Australian Workplace Agreement
(AWA) made under the Workplace Relations Act 1996 (Cth) (WR Act) in 2006. The parties to
the AWA are Ms Henderson and her employer, Symphony Services Australia Limited (SSA).
The application is supported by SSA.
[2] The main aspects of the statutory framework applicable to this application were
detailed in the recent Full Bench decision in Suncoast Scaffold Pty Ltd.1 In short, the AWA
the subject of the application is an agreement-based transitional instrument preserved in
operation after the repeal of the WR Act and the commencement of the Fair Work Act 2009
(Cth) (FW Act) by item 2 of Sch 3 to the Transitional Act. The Fair Work Legislation
Amendment (Secure Jobs, Better Pay) Act 2022 amended Sch 3 to add item 20A. Item 20A
provides for the automatic sunsetting of remaining agreement-based transitional instruments
at the end of the ‘default period’. The default period is the period ending on 6 December 2023
unless extended by the Commission. Subitem (6) of item 20A provides that, on application
under subitem (4), the Commission must extend the default for a period of no more than four
years if either:
(a) subitem (7), (8) or (9) applies and it is otherwise appropriate in the circumstances to do
so, or
(b) it its reasonable in the circumstances to do so.
[3] Subitem (7) applies only where the application is made at or after the notification time
for a proposed enterprise agreement that, in the case of an individual agreement-based
transitional instrument, will cover the employee covered by the instrument, and bargaining for
[2023] FWCFB 132
DECISION
AUSTRALIA FairWork Commission
[2023] FWCFB 132
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the proposed enterprise agreement is occurring. It is not contended in respect of this
application that subitem (7) applies. Subitem (9) applies only to applications relating to
collective agreement-based transitional instruments and is therefore not relevant here.
Subitem (8) provides:
(8) This subitem applies if:
(a) the application relates to an individual agreement-based transitional instrument;
and
(b) the employee covered by the instrument would be an award covered employee for
the instrument under subitem (10) if the instrument were a collective agreement-
based transitional instrument; and
(c) it is likely that, as at the time the application is made, the employee would be
better off overall if the instrument applied to the employee than if the relevant
modern award referred to in that subitem applied to the employee.
[4] Under subitem (10), for a person to be an ‘award covered employee’ for the purpose of
subitem (8)(b), they must be covered by one or more modern awards that are in operation and
cover the employee in relation to the work to be performed under the instrument.
[5] The application, as filed, stated the following reason as to why the default period for
the AWA should be extended:
I am better off under my AWA as my AWA has a redundancy provision.
My employer is covered by the modern award Clerks—Private Sector Award 2020 (code
MA000002) and has less than 15 employees therefore I am not entitled to a redundancy
payment if terminated.
[6] On one view, the above constitutes an invocation of subitem (8). However, at a
preliminary hearing on 16 June 2023, Ms Henderson conceded that the Clerks—Private
Sector Award 2020 (Award) did not cover her. We consider that this concession was properly
made. Her position is that of Finance Manager, which Ms Henderson described in her written
submissions as a ‘senior management position’, and her salary (even as prescribed in the
AWA as at 2006, and for a part-time position of 22.05 hours per week) is, on a weekly basis,
significantly higher than the current weekly full-time wage for the highest classification in the
Award. The Award covers only those employees who are wholly or principally engaged in
‘clerical work’ (defined in cl 2 to include ‘recording, typing, calculating, invoicing, billing,
charging, checking, receiving and answering calls, cash handling, operating a telephone
switchboard, attending a reception desk and administrative duties of a clerical nature’). We do
not consider that Ms Henderson performs clerical work.
[7] It was not suggested, and we cannot identify, that any other modern award covers Ms
Henderson’s employment. Accordingly, she is not an award covered employee, and subitem
(8) cannot apply to her. Subitems (7) and (9) are clearly not applicable. Ms Henderson’s
application therefore falls to be considered under subitem (6)(b).
[8] Ms Henderson seeks that the default period for her AWA should be extended so that
she retains the long service leave and redundancy entitlements in the AWA. Clause 3.4.5 of
https://www.fwc.gov.au/documents/awards/html/ma000002.htm
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the AWA provides for long service leave of three months after 10 years’ service whereas, Ms
Henderson contends, SSA’s other employees are only entitled to two months’ leave after 10
years’ service (as per the Long Service Leave Act 1955 (NSW)). Clause 5 of the AWA
provides for an uncapped severance pay entitlement. Ms Henderson is not entitled to the
less-beneficial redundancy pay entitlement in s 119 of the FW Act because SSA is a ‘small
business employer’ (see ss 23 and 121(1)(b) of the FW Act). However, the circumstances in
which the entitlement in clause 5 of the AWA arises are unclear, because clause 5 provides
that it applies ‘[i]f the Company terminates this Agreement by virtue of it no longer requiring
the position’ (underlining added). Read literally, this would mean that if SSA terminates Ms
Henderson’s employment without terminating the AWA, the entitlement would not apply.
However, we accept that contextual consideration might arguably lead to clause 5 being
construed in a more beneficial way. Ms Henderson submitted that the retention of the
redundancy entitlement is important to her:
I am appealing to Fair Work to allow my AWA entitlements to be extended as this is of great
consequence to me and would provide protection if my role were to be made redundant, or the
company wound up. The company has been the subject of a number of reviews in the past, and
is almost completely reliant on the ongoing support of its six members. These members are the
six state symphony orchestras, which themselves are not for profit companies that rely on
government grants and box office sales for their own revenue. COVID-19 affected them badly
and they are still recovering. While there is no current threat of the company being wound up,
it is always a possibility and my redundancy provisions are therefore valuable to me.
[9] SSA, through its CEO Ms Lidbetter, made the following written submission:
As outlined in the hearing, Symphony Services Australia is a not-for-profit company limited
by guarantee. Dilek and I report to a board which comprises the CEOs of our members, the six
state symphony orchestras. These member orchestras contribute the vast majority of the
company’s annual revenue via service fees. We are reliant on the ongoing fees of our
members, and they themselves rely on generating revenue through box office (severely
impacted from 2020 onwards due to COVID) and their [S]tate and federal government grants.
At various times in the history of the organisation there have been discussions regarding the
future of Symphony Services Australia and in 2019 we were substantially downsized to our
current small number (3.7 FTE employees). There is always the possibility of the company
being wound up if the members decide they no longer require our services, and a company of
our size would not be required under the Fair Work Act to pay redundancies to staff. Dilek’s
AWA redundancy clause therefore provides her with valuable protection. Her Long Service
Leave provision is also more generous than that required under the Act.
Dilek is a senior and highly valued member of the SSA team, however her remuneration
reflects her part-time status within a not-for-profit arts company and is well below an
equivalent salary in the private sector.
The Chair of our board supports Dilek’s request for an extension, as do I. If the extension is
not granted, the board would presumably negotiate a new contract with Dilek and it is possible
she would not be offered any benefits beyond those required by law. She would prefer to
avoid such a negotiation if possible.
[10] In her oral submissions at the preliminary hearing on 16 June 2023, Ms Lidbetter
additional submitted that Ms Henderson was an ‘extremely valued employee’ who ‘shouldn’t
be penalised in any way’ by the sunsetting of zombie agreements. Asked about the prospect of
the AWA being replaced by a new employment contract in the same or similar terms, Ms
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Lidbetter said that she thought ‘it possibly could’ and that while she could not guarantee it,
she would recommend to the Board that there be no change in Ms Henderson’s conditions. As
to the prospect of Ms Henderson being made redundant in the future, Ms Lidbetter said this
was possible but not probable.
[11] It is apparent that that Ms Henderson and SSA have no plan to transition to a
contemporary employment arrangement but rather seek the extension of the AWA for the
maximum time available as a matter of convenience. As stated in the Full Bench decision in
Northern Inland Credit Union Limited,2 we do not consider that it is consistent with the
statutory intention to sunset transitional instruments as the default position that an AWA
should be allowed to continue to operate merely because the parties agree that this should
occur, absent any other relevant consideration which would render it reasonable to do so. The
only consideration raised in this case is the benefit which Ms Henderson will obtain from the
continuation of the long service leave and redundancy pay entitlements in the AWA.
However, as SSA positively supports the extension of the AWA, which would result in the
continuation of these entitlements, we see no reason why it would not equally, and readily,
agree to a new employment contract with Ms Henderson containing these entitlements. The
proposition that SSA is happy for the AWA to continue but might seek to exclude these
entitlements from any new employment contract is incongruous and lacking in credibility.
The drafting and execution of a new employment contract between Ms Henderson and SSA
containing the same entitlements to long service leave and redundancy pay would be a
straightforward matter to be undertaken prior to the sunsetting date of 6 December 2023.
Additionally, it would provide an opportunity to correct the drafting anomaly in clause 5 of
the AWA which we have earlier identified.
[12] We are not satisfied, for the purpose of item 20A(6)(b), that it is reasonable in the
circumstances to extend the default period for the AWA between Ms Henderson and SSA.
Accordingly, the application is dismissed.
PRESIDENT
Appearances:
D Henderson, the applicant, in person.
K Lidbetter, for Symphony Services Australia Ltd.
Hearing details:
2023.
Video using Microsoft Teams:
16 June.
THE FAIR WORK FAI COMMISSION THE
[2023] FWCFB 132
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Printed by authority of the Commonwealth Government Printer
PR764703
1 [2023] FWCFB 105 at [3]-[18].
2 [2023] FWCFB 120 at [23].
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb120.pdf
