1
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 Northern Inland Credit Union Limited and Kathy Beavan
(AG2023/534)
Application by Northern Inland Credit Union Limited and Anna Lise Clark
(AG2023/535)
JUSTICE HATCHER, PRESIDENT
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
SYDNEY, 6 JULY 2023
Application to extend the default period for Australian Workplace Agreements with Kathy
Beavan and Anna Lise Clark.
Introduction
[1] This decision concerns two applications to extend the default period for individual
agreement based transitional instruments 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 first application is made jointly by the Northern Inland Credit Union
Limited (NICU) and Kathy Beavan, and concerns an Australian Workplace Agreement (AWA)
made under the Workplace Relations Act 1996 (Cth) (WR Act) in 2007. NICU and Ms Beavan
are the parties to the AWA. The second application is made jointly by NICU and Ms Anna
Clark, and similarly concerns an AWA made in 2007 under the WR Act to which NICU and
Ms Clark are parties.
[2] The main aspects of the statutory framework applicable to these applications were
detailed in the recent Full Bench decision in Suncoast Scaffold Pty Ltd.1 In short, the two AWAs
the subject of the applications are agreement-based transitional instruments 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:
[2023] FWCFB 120
DECISION
AUSTRALIA FairWork Commission
[2023] FWCFB 120
2
(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
the proposed enterprise agreement is occurring. It is not contended in respect of either
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] The applications, as filed, implicitly invoked subitem (8) in that they contended that Ms
Beavan and Ms Clark would be better off overall if their AWAs continued to apply to them
than if the Banking, Finance and Insurance Award 2020 applied to them. However, it was
subsequently conceded by the applicants that the identified award did not apply to Ms Beavan
or Ms Clark because of the seniority of their respective positions, and any reliance on the
application of subitem (8) was eschewed. The application was ultimately advanced under
subitem (6)(b).
[5] The applicants filed submissions in support of their application on 30 March 2023. On
27 June 2023 we sent to the applicants a document identifying a number of issues which we
considered arose in the matters. The applicants each filed a further submission in response to
these issues on 30 June 2023. The applicants agreed for the matters to be determined on the
papers.
The AWAs
[6] The AWA between NICU and Ms Beavan was made on 5 October 2007, and has a
nominal term of four years (cl 1.3). It identifies that Ms Beavan holds the Board-appointed
position of Executive Manager Finance (cl 1.1), with duties determined by the Board in
consultation with the Chief Executive Officer and subject to annual review (cl 2.1). The AWA
specifies Ms Beavan’s annual salary package effective from the first pay period in July 2007
(cls 8.1-8.2), which may be increased as part of a performance review and having regard to the
CPI and industry standards (cl 7.3).
[2023] FWCFB 120
3
[7] Ms Beavan’s leave entitlements under the AWA are as follows:
• personal leave is in accordance with the Australian Fair Pay and Conditions
Standard (AFPCS) as provided for by the WR Act and, in addition, three days per
quarter to be taken within the year in which they accrue (cls 10.1 and 10.5);
• annual leave in accordance with the AFPCS (cl 10.2), with up to two weeks’ leave
each year able to be cashed out by agreement;
• long service leave in accordance with the Credit Union Award 1998 (cl 10.3);
• proclaimed public holidays (cl 10.4); and
• study leave days (cl 10.6).
[8] Other relevant provisions of the AWA include:
• on termination for other than cause, a payment in lieu of notice which increases
with service is payable (cl 3.2.4);
• accrued sick leave is payable on termination other than for cause (cl 3.2.7);
• a generous redundancy payment is required if the employment is not continued by
election of either party upon NICU entering into a merger or transfer of business
(cl 4);
• Ms Beavan is subject to an indemnity against loss, claim or cause of action arising
from her employment provides she acts honestly, diligently and in good faith (cl
5.3);
• Ms Beavan’s hours of work are 38 per week with reasonable additional hours as
agreed, with the 38 hours able to be worked on any number of days Monday to
Friday and at any NICU site or off site provided that Ms Beavan is telephone
contactable and attends meetings and events as notified by NICU (cl 9);
• any disputes which cannot be resolved by the parties is to be determined by
decision of an agreed mediator, with the mediator’s fees to be shared equally
between the parties (cl 15); and
• Ms Beavan’s employment is subject to the provisions of the AWA and all policy
and procedure documents established by NICU from time to time (cl 16).
[9] Ms Clark’s AWA was made on 28 May 2007 and has a nominal term of five years (cl
1.3). The AWA states that Ms Clark holds the Board-appointed position of Executive Manager
Compliance, Human Resources and Training (cl 1.1), with duties determined by the Board in
consultation with the Chief Executive Officer and subject to annual review (cl 2.1). The AWA
specifies Ms Clark’s annual salary package effective from the first pay period in July 2007 (cls
8.1-8.2), which may be increased as part of a performance review and having regard to the CPI
[2023] FWCFB 120
4
and industry standards (cl 7.3). Ms Clark’s AWA is otherwise in the same terms as Ms Beavan’s
in respect of the matters identified in paragraphs [6] and [7] above except that there is no study
leave entitlement.
Applicants’ submissions
[10] The primary submissions advanced by the joint applicants in each matter are
substantially the same. It is submitted that the ‘central relevant consideration’ in the application
of item 20A of Sch 3 to the Transitional Act is whether the automatic sunsetting of the AWAs
would leave Ms Beavan or Ms Clark worse off or at a disadvantage. The applicants in each
matter rely on the following factual circumstances as demonstrating reasonableness in the
circumstances:
• the mutual desire and wish of both parties to each AWA to extend it;
• the more favourable entitlements and conditions under the AWAs compared to
the minimum entitlements and conditions under the National Minimum Wage
(NMW) and the FW Act; and
• the capacity of Ms Beavan and Ms Clark to pursue civil penalties for breach of a
term of their AWAs under item 2(2) of Sch 16 of the Transitional Act.
[11] The applicants submit that the AWAs provide ‘clear benefits’ in respect of:
• salary, which in each case is substantially higher than under the NMW Order;
• redundancy, which is more beneficial than the minimum National Employment
Standards (NES) redundancy entitlement under s 119(2) of the FW Act;
• notice of termination, which is more beneficial than the NES notice requirement
in s 117(3) of the FW Act;
• the payment of accrued sick leave upon cessation of employment, for which the
FW Act makes no provision;
• professional indemnity, for which the FW Act makes no provision;
• flexibility as to where and when hours of work are to performed, for which the
FW Act makes no provision; and
• additional entitlements to personal leave (for both employees) and study leave (in
Ms Beavan’s case), for which the FW Act makes no provision.
[12] The applicants in each matter submit that it is reasonable in these circumstances, where
the automatic sunsetting of the AWA would operate harshly to leave Ms Beavan and Ms Clark
worse off, for the Commission to extend the default period of each AWA by four years.
[2023] FWCFB 120
5
Consideration
[13] For the reasons which follow, we are not satisfied for the purpose of subitem 6(b) of
item 20A of Sch 3 to the Transitional Act that it is reasonable in the circumstances to extend
the default period for either Ms Beavan’s or Ms Clark’s AWA.
[14] First, we are not satisfied that the automatic sunsetting of the AWAs would operate
harshly by leaving Ms Beavan or Ms Clark worse off. There is no contention, let alone evidence,
that Ms Beavan or Ms Clark would actually be worse off upon the sunsetting of their AWAs in
the sense that NICU would take advantage of this by altering their conditions of employment
to their detriment. Indeed, the fact that NICU seeks in each case for the AWAs to continue
operating indicates that it is content with the current employment terms of Ms Beavan and Ms
Clark rather than that it would seek to change them if given the opportunity.
[15] In this context, the applicants’ comparison between the terms of the AWAs and the
otherwise applicable provisions of the NES and the NMW Order is of little weight. It might be
said that the sunsetting of the AWAs would alter the minimum legal entitlements of
employment of Ms Beavan and Ms Clark. But this need not be the case. It would be a reasonably
simple matter for the conditions of each AWA to be reproduced in new contracts of employment
in the same or similar terms. Ms Beavan and Ms Clark are not employees lacking in bargaining
power: they are clearly key employees of NICU since they hold executive management
positions and have been employed by NICU for 25 and 20 years respectively.
[16] The applicants submitted, in their further submissions, that if the AWAs terminated at
the end of the grace period,2 the parties would be required ‘at their expense and inconvenience’
to negotiate, draft and agree upon new contracts, Ms Beavan and Ms Clark would be required
to obtain independent legal advice to ensure the terms of the new contract are not less
advantageous than the AWAs, and there is no guarantee the parties will agree to the same terms
and condition in the AWA in the new contracts. We consider that these submissions are
overstated and self-serving. As already stated, the establishment of new contracts of
employment need not involve any real complexity or inconvenience. In the case of Ms Beavan,
as we explain below, a new contract may not be needed at all.
[17] The applicants’ submission that, unlike a private employment contract, the AWAs may
be enforced by seeking civil penalties is theoretically correct but has no practical significance
in these matters. There is nothing before us to indicate that compliance with the AWAs by
NICU has ever been an issue and, in their further submissions, the applicants concede that no
compliance issues have ever arisen. Accordingly, there is no reason to think that NICU might
not comply with any future employment contract it makes with Ms Beavan or Ms Clark. The
applicants contend in their further submissions that they ‘enjoy comfort knowing that the AWA
was approved under a federal legislative scheme and wish for it continue within the jurisdiction
of the Fair Work Commission’ and that ‘having an independent industrial … umpire available
to the parties should there ever be cause for review of compliance concerns is reassuring to the
parties’. This is rejected: the AWAs are not ‘within the jurisdiction’ of the Commission and, as
to dispute resolution, clause 15 of the AWAs merely requires this function to be undertaken by
an agreed mediator.
[2023] FWCFB 120
6
[18] Second, the AWAs are not consistent with the current circumstances of Ms Beavan or
Ms Clark’s employment and are substantially obsolete. The position currently held by Ms
Beavan is Deputy Chief Executive Officer and Chief Financial Officer. Ms Clark’s current
position is Company Secretary and Chief Risk Officer – Compliance and Risk. These are not
the role descriptions in the AWAs. Although the applicants submit that the current positions are
‘evolutions over time’ of the positions referred to in the AWAs, they appear on their face to be
positions involving wider or different responsibilities, and the descriptions of the roles in the
applicants’ submissions tend to confirm this. The value of Ms Beavan’s current salary package
is more than twice that specified in her AWA, and Ms Clark’s is almost twice as much. We do
not consider that the current salary packages, even if they are the result of the performance
reviews contemplated by cl 7.3, are enforceable as terms of either AWA because no provision
of either AWA renders any adjusted salary amount an entitlement under the AWA.
[19] In the case of Ms Beavan, the further submissions disclose that she had in fact entered
into a new contract of employment with NICU in 2019 to give effect to her appointment as
Deputy CEO. This contract specifies her duties and functions, reporting line, work location,
entitlement to travel expenses and hours of work. Although this contract states that it is not
intended to ‘negate, cancel or otherwise terminate’ her AWA, we consider that it renders the
terms of her AWA substantially irrelevant to her employment.
[20] The leave entitlements in the AWAs operate by reference to external provisions which
are no longer operative. As earlier stated, under the AWAs, annual leave and personal leave
entitlements apply in accordance with the AFPCS. The AFPCS provisions of the WR Act were
repealed effective from 1 July 2009. They were replaced by the NES provisions of the FW Act.
The NES provisions of the FW Act concerning annual leave and personal leave are different to
those of the AFPCS in a number of respects. Under item 23(1) of Sch 3 of the Transitional Act,
a term of a transitional instrument (including an AWA) is of no effect to the extent that it is
detrimental to any employee in any respect when compared to an entitlement of the employee
under the NES. It is sufficient to say that this calls into question whether cls 10.1 and 10.2 of
the AWAs remain operative. We note that, in relation to annual leave, the further submissions
disclose that Ms Beavan and Ms Clark now receive annual leave entitlements in accordance
with the NES provisions of the FW Act and, in addition, receive a 17.5 percent annual leave
loading – a benefit which is not provided for in the AWAs. This is further demonstrative of the
irrelevance of the AWAs.
[21] As to cl 10.3 of the AWAs, long service leave entitlements are said to be in accordance
with the long service entitlement provisions of the Credit Union Award 1998, but this award
was terminated on 10 August 2011. The operative effect of this clause is therefore also in
question. In their further submissions, the applicants contend that the termination of the Credit
Union Award 1998 had no practical effect because, relevantly, it provided for long service
entitlements in accordance with the Long Service Leave Act 1955 (NSW) (LSL Act), and the
position now is that the LSL Act, which is not excluded by the FW Act, applies to Ms Beavan
and Ms Clark. This may be accepted, but it does not assist the applicants. Their entitlements are
drawn directly from the LSL Act, not the AWAs, and the termination of the AWAs would
therefore have no effect on long service leave entitlements.
[22] Third, the applications for extension of the default period are not supported by any
proposal to transition within a reasonable period of time to a contemporary employment
[2023] FWCFB 120
7
arrangement consistent with the FW Act and the current circumstances of Ms Beavan’s and Ms
Clark’s employment. The applicants have simply applied for the maximum available extension
to the default period. It appears to be possible under item 20A to make an application for and
obtain further extensions to a default period which has already been extended under subitem 6,3
so the grant of the four-year extensions now sought by the applicants might open the door to
further extensions down the track. In the further submissions, it is stated in respect of Ms
Beavan that ‘[a]t this point in time, the parties do not have an end date for when they seek the
operation of the AWA to come to an end’ and, in Ms Clark’s case, the intention is to have her
AWA to continue to operate until her anticipated retirement within the next four years.
[23] We do not consider that it is consistent with the statutory intention to sunset transitional
instruments as the default position that AWAs 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.
[24] We also note that part of the object of the FW Act contained in s 3(c), which provides:
(c) ensuring that the guaranteed safety net of fair, relevant and enforceable minimum wages
and conditions can no longer be undermined by the making of statutory individual
employment agreements of any kind given that such agreements can never be part of a
fair workplace relations system;
(underlining added)
[25] The Full Bench in All Trades Queensland Pty Limited v CEPU & CFMMEU and
Others4 observed that the Transitional Act is legislation which is cognate to the FW Act, and
because both Acts operate as component parts of an overall scheme of industrial relations
legislation, the two Acts should generally be interpreted in a co-ordinated way as far as their
respective texts permit. We similarly consider that the object of the FW Act may be taken into
account in the exercise of any discretion or the making of any evaluative judgment required
under the Transitional Act. Our conclusion in paragraph [23] above is, we consider, supported
by, but is not dependent on, that part of the object of the FW Act contained in s 3(c).
[26] The applications are, accordingly, dismissed.
PRESIDENT
Appearances:
H Dawson, solicitor, with V Renshaw for Northern Inland Credit Union Limited.
K Beavan, employee, in person.
A Clark, employee, in person.
THE FAIR WORK FAI COMMISSION THE
[2023] FWCFB 120
8
Hearing details:
2023.
Video using Microsoft Teams:
16 March, 5 April.
Printed by authority of the Commonwealth Government Printer
PR763999
1 [2023] FWCFB 105 at [3]-[18].
2 That is, after 6 December 2023: Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) Sch 3
item 20A(2)(a).
3 See item 20A(2)(b) of Sch 3 to the Transitional Act – ‘if the default period is extended for the instrument on one or more
occasions under subitem (6)’ (underlining added).
4 [2017] FWCFB 132, 264 IR 364 affirmed on judicial review in in All Trades Queensland Pty Limited v Construction,
Forestry, Mining and Energy Union [2017] FCAFC 189, 256 FCR 19, 272 IR 219.
https://www.fwc.gov.au/documents/awardsandorders/pdf/pr763999.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb132.htm
