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Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 7, Item 30(4) - Application to extend default period for enterprise agreements made
during the bridging period
Pace Farming Pty Ltd T/A Pace Farming Pty Ltd
(AG2023/1672)
PACE FARMING PTY LTD ENTERPRISE AGREEMENT 2009
Agricultural industry
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
SYDNEY, 5 OCTOBER 2023
Application to extend the default period for Pace Farming Pty Ltd Enterprise Agreement
2009
[1] Pace Farming Pty Ltd (the Applicant) has applied under item 30(4) of Schedule 7 to
the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)
(Transitional Act) to extend the default period for the Pace Farming Pty Ltd Agreement
2009 (Agreement, or the zombie agreement) for a period of four years.
[2] The Agreement was made during the ‘bridging period’ as defined1 in the Transitional
Act and approved under the Fair Work Act 2009 (Cth) (FW Act). Agreements of this kind are
a species of what are commonly referred to as ‘zombie agreements.’
[3] The Agreement applies to the Applicant and its employees on the Applicant’s various
farming operations in the state of Queensland.2
[4] The main aspects of the statutory framework for applications for the extension of
zombie agreements were detailed in the Full Bench decision in Suncoast Scaffold Pty Ltd.3
The Full Bench there dealt with an application to extend a ‘WR Act agreement’ under item
20A of Sch 3 to the Transitional Act. The terms of item 20A of Sch 3 are relevantly the same
as item 30 of Sch 7. The Full Bench’s analysis of those provisions applies equally to item 30
of Sch 7 and it is not necessary to repeat it here.
[5] The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth)
(SJBP Act) amended the Transitional Act to include item 30 in Sch 7. Item 30 provides for
the sunsetting of remaining enterprise agreements made during the bridging period on 6
December 2023 unless extended by the Commission. Subitem 30(6) provides that where an
application is made under subitem 30(4) for the period to be extended, the Commission must
extend the default period for a period of no more than four years if either:
[2023] FWCFB 184
DECISION
AUSTRALIA FairWork Commission
http://www.austlii.edu.au/au/legis/cth/consol_act/fwpacaa2009656/
http://www.austlii.edu.au/au/legis/cth/consol_act/fwpacaa2009656/
[2023] FWCFB 184
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(a) subitem (7) or (8) applies and it is otherwise appropriate in the circumstances to do
so; or
(b) it is reasonable in the circumstances to do so.
[6] Subitem (7) applies where the application is made at or after the notification time for a
proposed enterprise agreement that will cover the employees and bargaining for the proposed
enterprise agreement is occurring. No reliance was placed on this subsection by the Applicant.
[7] The present application was advanced on the basis that subitem (8) applies. Subitem
(8) applies if it is likely that at the time the application is made, the relevant employees
covered by the Agreement would be better off overall if the Agreement continued to apply
than if the relevant modern award referred to in subitem (9) applied to the employees. The
relevant modern award in this case is the Horticulture Award 2020 (the Award).
Grounds for the Application
[8] The Applicant contended that the employees of the Applicant would be better off
overall if the zombie agreement continued to apply because:
(i) the ‘voluntary hours’ provisions of the Agreement provide employees with the
option to earn extra income, which is paid at the equivalent of 133% of the ordinary
hourly rate, that would not be available to them under the Award because the overtime
rate of 150% in the Award is not a viable option given business income during
particular harvesting periods;
(ii) casual employees of the Applicant receive a 25% casual loading; and
(iii) the ‘banked hours’ provisions of the Agreement allow employees to bank
hours during peak periods providing for greater rest periods during the hotter months
of February and March.
Better Off Overall Analysis
[9] The Fair Work Commission’s Agreements Analysis Team prepared a written
assessment of the Agreement for the purpose of comparing the wages and entitlements with
those contained in the Award. The assessment took account of a number of undertakings that
were given to the Commission at the time the Agreement was approved. A copy of this
analysis was provided to the Applicant who was given an opportunity to make further
comments or submissions about that analysis. The Applicant provided information relating to
current weekly rates of pay and the rates paid for ‘voluntary additional hours’.
[10] Clause 1.2 of the Agreement provides that the rates of pay in the Agreement
incorporate payment for all allowances, loadings and penalties unless otherwise stated. Clause
3.1 of the Agreement provides for a minimum rate of pay of $543.78 per week. Schedule 1
provides for a slightly higher base rate of $544.92 for the Farmhand Level 1 classification and
base rates for the remaining Farmhand Levels 2 and 3 classifications. Clause 3.7 provides that
wages are to be increased in accordance with the Federal Minimum Wage decisions as
determined by the Australian Fair Pay Commission, or its successor.
[2023] FWCFB 184
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[11] For the purposes of comparing base rates of pay between the Agreement and the
Award, we have taken into account the operation s.206 of the FW Act which relevantly
provides:
206 Base rate of pay under an enterprise agreement must not be less than the
modern award rate or the national minimum wage order rate etc.
If an employee is covered by a modern award that is in operation
(1) If:
(a) an enterprise agreement applies to an employee; and
(b) a modern award that is in operation covers the employee;
the base rate of pay payable to the employee under the agreement (the agreement rate)
must not be less than the base rate of pay that would be payable to the employee under
the modern award (the award rate) if the modern award applied to the employee.
(2) If the agreement rate is less than the award rate, the agreement has effect in relation to the
employee as if the agreement rate were equal to the award rate.
[12] Clause 3.5 of the Agreement provides that the leading hand allowance is incorporated
into the rates for Farmhand Levels 2 and 3. Clause 18.2(b) of the Award provides for the
payment of an all-purpose leading hand allowance for employees who are in charge of 2 or
more employees. Where that allowance is payable under the Award for those in charge of 7 to
10 other employees, the analysis concluded that the Farmhand levels 2 and 3 classifications
would not be better off under the Agreement. We accept that assessment. We also note that
clause 3.2 of the Agreement provides for a casual loading of 23% compared to the Award
loading of 25%.4 Although the Applicant indicated that a casual loading of 25% is paid to
employees in practice this is not provided for by the terms of the Agreement. Consequently,
the rates of pay payable to casual employees because of the operation of the Agreement are
less than under the Award.
[13] There are various conditions of employment in the Agreement that are inferior for
employees compared to the equivalent provisions in the Award. The Agreement provides that
ordinary hours can be worked Monday to Sunday. The Award provides for ordinary hours to
be worked on Monday to Friday (or Saturday by majority agreement).5 The Agreement does
not provide for a span of ordinary hours. The default span of ordinary hours under the Award
is 6am to 6pm. Clause 3.9 of the Agreement provides that overtime is payable for hours
performed outside the ordinary hours stipulated in clause 3.8. Ordinary hours can be worked
Monday to Sunday under the Agreement. However, permanent employees are entitled to
overtime for all work on Sunday under the Award. Award allowances such as first aid
allowance6, tool and equipment allowance7, travelling allowance8 and overtime meal
allowance9 are not payable under the Agreement. The higher duties provision in the
Agreement requires an employee to work for 2 days in the higher role to qualify for the
additional payment.10 Under the Award, the payment applies immediately.11 Unlike the
Award, there is no accident pay provision in the Agreement.
[14] Under clause 3.9.3 of the Agreement all time worked by an employee at their request
in excess of their ordinary hours is deemed voluntary additional hours and paid at the ordinary
time rate. While we note the advice of the Applicant that these hours are paid at a rate of
133% of the ordinary hourly rate, this is not what is provided for by the terms of the
[2023] FWCFB 184
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Agreement. Hours worked in excess of ordinary hours is deemed overtime under the Award
and attracts an overtime rate of 150% for such work on Monday to Saturday.12
[15] In relation to the Applicant’s claim that employees would be better off under the
Agreement because of the operation of the ‘banked time arrangement’ clause at 3.9.2, we note
that at the time the Agreement was approved, a concern was raised that the operation of the
clause may not pass the no disadvantage test when compared with the overtime rates payable
to employees who work in excess of the ordinary working hours. It was said that the clause
may result in a reduction in the overall terms and conditions of employment for employees
covered by it because such banked additional hours were to be paid at the ordinary rate. As a
result of that concern, the Applicant provided an undertaking to the Commission that included
the following:
(a) The enterprise agreement, if approved, will not be applied so as to permit
employees to bank additional hours worked in excess of the ordinary working
hours; and
(b) The employer will not accept any request made by an employee for the banking of
hours as provided in the agreement, and all hours worked will be paid for in
accordance with the usual arrangements in the agreement as to time of payment,
and as required by the Fair Work Act 2009 (Cth) and the Fair Work Regulations
2009 (Cth); and
(c) …
(d) The Employer will conform with this undertaking.
[16] In the circumstances it is unclear to us how the Applicant can apply the clause at all or
seek to rely on its terms in support of the present application. We note in any event that the
Award makes provision for time off instead of payment for overtime at clause 21.2.
Moreover, the Award provides that for overtime worked and not taken within 6 months the
employer must pay the employee at the overtime rates unless the employer agrees to pay out
the accrued overtime earlier. Similarly, on termination, time off not taken is to be paid at
overtime rates. Under the Agreement, and assuming the clause has any operation at all
notwithstanding the terms of the undertaking, such payments are made at the ordinary rate.
The Award also prohibits the exercise of undue influence by the employer for an employee to
make or not make an agreement to take time off in lieu of overtime. There is no equivalent
sub-clause in the Agreement.
Consideration
[16] In Suncoast Scaffolding the Full Bench observed that the application of the better off
overall test in Item 9 of Item 20A in Schedule 3 required a broad evaluative judgment based
upon an overall comparison of the terms of the transitional instrument and the relevant
award(s) in their application to the cohort of award covered employees. We apply the same
approach here.
[17] Given the above analysis, we are not satisfied that the award covered employees,
viewed as a group, would be likely to be better off overall if the Agreement continued to
[2023] FWCFB 184
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apply to them rather than if the relevant modern award applied. In particular, we note that
none of the three grounds relied on in support of the application provide any basis to conclude
that employees are better off under the Agreement. The rates of pay provided for in the
Agreement are not superior to the Award and there are many conditions of employment that
are either not contained in the Agreement or are included in inferior terms.
[18] Consequently we conclude that subitem 8 of item 30 does not apply.
[19] Although the Applicant did not contend that the default period should be extended
because it was reasonable in the circumstances to do so within the meaning of subitem (6)(b)
we have, for completeness, considered that issue.
[20] The continuation of an Agreement such as this, made in 2009 with inferior rates and
conditions, would be unfair to employees who are covered by it. There was no independent
evidence as to the views of the Applicant’s employees to suggest that they were supportive of
its continued operation. Nor was there anything to suggest that the continued operation of the
Agreement was important for the ongoing operation of the business. We conclude that it is not
reasonable in the circumstance to extend the default period for this agreement.
[21] For the above reasons, the application is dismissed.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
AE871948 PR766853
1 Item 2, Part 1 of Schedule 1.
2 Clause 1.3.
3 [2023] FWCFB 105 at [3]-[18].
4 Clause 11.2.
5 Clause 13.1.
6 Clause 18.2(d).
7 Clause 18.3(b).
8 Clause 18.3(a).
9 Clause 18.3(c).
10 Clause 3.4.
11 Clause 15.4
12 Clauses 21.1 and 21.3.
OF THE FAIR WORK L MISSION THE SEA
https://www.fwc.gov.au/documents/agreements/approved/AE871948.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
