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
Australian Municipal, Administrative, Clerical and Services Union
(AG2023/2961)
P T GARUDA INDONESIA LTD UNION COLLECTIVE AGREEMENT
2007
Airline operations
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
SYDNEY, 17 OCTOBER 2023
Application to extend the default period for the P T Garuda Indonesia Ltd Union Collective
Agreement 2007
[1] The Australian Municipal, Administrative, Clerical and Services Union (ASU) 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 P.T. Garuda Indonesia Ltd Union Collective Agreement 2007 (Agreement). The Agreement
was approved on 27 July 2007 in accordance with s.170LT of the Workplace Relations Act
1996. It is an agreement-based transitional instrument to which item 20A applies. P.T. Garuda
Indonesia Ltd (Garuda), the employer covered by the Agreement, supports the application.
[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 Ltd1 and we rely upon what is said in that decision.
[3] Relevant to this matter, when an application is made under subitem (4) of item 20A of
Sch 3 to the Transitional Act the Commission is required under subitem (6)(a) to extend the
default period if the Commission is satisfied that subitem (7), (8) or (9) applies and it is
otherwise appropriate in the circumstances to do so.
[2023] FWCFB 188 [Note: A copy of the zombie agreement to which this
decision relates (AC308492) is available on our website.]
DECISION
AUSTRALIA FairWork Commission
/documents/agreements/approved/ac308492.pdf
[2023] FWCFB 188
2
[4] The ASU initially made an application on the basis that subitems (7) and (9) apply and
it is otherwise appropriate in the circumstances to extend the default period. At the initial
hearing the ASU was content to proceed on the basis of only subitem (7) applying.
[5] The Full Bench in ISS Health Services Pty Ltd2 described the three requirements for
subitem (7) to apply. The first is the requirement that the application is made at or after the
‘notification time’ for a proposed agreement as defined in s 173(2) of the Fair Work Act 2009
(FW Act). The second is that the proposed agreement must cover the same or substantially the
same group of employees as the zombie agreement. The Full Bench stated that this could be
established by comparing the Notice of Employee Representational Rights (NERR) for the
proposed agreement to the coverage clause of the zombie agreement. The third is that
bargaining for the proposed agreement is occurring.
[6] The ASU informed the Commission that on 29 June 2023, Garuda agreed to renegotiate
an enterprise agreement. On 7 August 2023, Garuda issued a NERR to employees notifying its
intention to negotiate a new agreement. The NERR was provided to the Commission. The
NERR refers to an enterprise agreement covering employees that are covered by the Agreement.
Garuda is an international airline based in Indonesia. The company has engaged local
representation to assist in bargaining. At the hearing Garuda confirmed that a draft agreement
had been developed and negotiations were set down for 5 October 2023 and 19 October 2023.
On the basis of this information, we are satisfied that subitem (7) applies.
[7] As subitem (7) is met, subitem 6(a) requires a consideration of whether it is otherwise
appropriate in the circumstances to extend the default period. In ISS Health Services, the Full
Bench considered it appropriate to do so where the parties sought time to negotiate a
replacement agreement and are not simply seeking to extend an agreement for the maximum
period for the sake of convenience. The Full Bench also took into account that while the zombie
agreement remained in place, the employees would be better off overall than if the modern
award applied.
[8] The ASU submitted that it is appropriate to extent the default period in all of the
circumstances. It relied on the fact the application is made by consent. Further, as Garuda is an
international airline with its head office in Indonesia and has engaged local representation to
assist in negotiations, the negotiations for the replacement agreement may extend beyond the
default period. It also submitted that the employees receive a higher rate of pay and have more
beneficial terms of employment under the Agreement than the Airline Operations – Ground
Staff Award 2020 which is the modern award that will cover the employees at the end of the
default period.
[9] We are satisfied that it is appropriate in all of the circumstances to extend the default
period for the Agreement. The ASU and Garuda are committed to negotiating a replacement
agreement and need time beyond 6 December 2023 to do so. The negotiations will take longer
due to Garuda’s head office being based in Indonesia. It would also be unfair for the employees’
terms and conditions to revert to the Award whilst bargaining is occurring. This will not only
have an adverse impact on their remuneration but alter the dynamics of bargaining.
[10] As we are satisfied that subitem 6(a) applies, we are required to extend the default
period. As the Full Bench observed in Suncoast Scaffolding Pty Ltd3 the Commission has a
discretion as to the length of the extension, subject to the limitation that the extension cannot
[2023] FWCFB 188
3
be more than four years. The nature of the discretion is such that we are not bound to grant the
period of extension sought in the application.4
[11] The extension sought by the ASU in this application is 12 months. At the hearing of the
matter the ASU agreed that 6 months should be adequate. Garuda also agreed that 6 months
should be sufficient.
[12] In ISS Health Services Pty Ltd the Full Bench ordered an extension of 12 months in
circumstances where subitem (7) applied. The Full Bench considered this sufficient time for a
replacement agreement to be finalised in circumstances where there was some complexity in
the bargaining including issues of contested scope. The Full Bench noted that should the parties
require assistance to finalise an agreement then s. 240 of the FW Act provides the parties with
access to the Commission to resolve any disputes that arise. The Full Bench noted that the
additional 12 months amounted to an 18-month period in which to conclude an agreement
where the NERR in that matter had been issued in June 2023.
[13] In this matter, given the parties’ view that 6 months should be sufficient to conclude a
replacement agreement, we will order a 6-month extension of the default period. We believe
this to be appropriate in all of the circumstances of this case. The subject matter of the
bargaining is not as complex as other matters that have been before the Commission where
longer extensions have been granted5. Six months should allow sufficient time for the parties
to finalise a replacement enterprise agreement.
[14] An order extending the default period for the Agreement by 6 months, until 6 June 2024,
will be published separately. The Agreement is published, in accordance with subitem
20A(10A)(c), as an Annexure to this decision.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
AC308492 PR767315
1 [2023] FWCFB 105.
2 [2023] FWCFB 122 at [4]
3 [2023] FWCFB 105 at [18]
4 See Suncaost Scaffolding Pty Ltd id and Applications by APESMA [2023] FWCFB 137 at [31]
5 See ISS Health Services Pty Ltd [2023] FWCFB 105 and Annecto Inc [2023] FWCFB 169
OF THE FAIR WORK L MISSION THE SEA
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb122.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb137.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb169.pdf
