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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
Coolangatta Tweed Tenpin Pty Ltd t/a Coolangatta Tweed Tenpin
(AG2023/3117)
COOLANGATTA TWEED TENPIN PTY LTD AGREEMENT
Amusement, events and recreation industry
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
SYDNEY, 9 NOVEMBER 2023
Application to extend the default period for Coolangatta Tweed Tenpin Pty Ltd
[1] Coolangatta Tweed Tenpin 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 Coolangatta Tweed
Tenpin Pty Ltd Agreement (Agreement, or the zombie agreement) for a period of four years.
[2] The Agreement was made during the ‘bridging period’, as defined in the Transitional
Act1, 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.’
[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.2 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)
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: pursuant to subitem (6)(a) subitem (7)
or (8) applies and it is otherwise appropriate in the circumstances to do so or, pursuant to
subitem (6)(b) it is reasonable in the circumstances to do so.
[2023] FWCFB 207 [Note: A copy of the zombie agreement to which this
decision relates (AE874236) is available on our website.]
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/
http://www.austlii.edu.au/au/legis/cth/consol_act/fwpacaa2009656/
https://www.fwc.gov.au/documents/agreements/approved/ae874236.pdf
[2023] FWCFB 207
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[6] 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. The relevant modern award in this case is the Amusement, Events and
Recreation Award 2020 (the Award).
Better Off Overall Analysis
[7] In Suncoast Scaffolding the Full Bench observed that the application of the better off
overall test required a broad evaluative judgment based upon an overall comparison of the terms
of the zombie agreement and the relevant award(s) in their application to the cohort of award
covered employees. We apply the same approach here.
[8] At the time the application was made the Applicant employed 15 employees at the
Coolangatta Tenpin Bowl. Two of the employees were engaged on a full-time basis, 3 as part
time employees and 10 as casuals.
[9] The Applicant contended that the employees would be better off overall if the zombie
agreement continued to apply because the rates of pay under the Agreement are far in excess of
the Award.
[10] The Commission’s Agreements Analysis Team prepared a comparison the wages and
entitlements under the Agreement with those contained in the Award (the analysis). A copy of
the analysis was provided to the Applicant who was given an opportunity to make further
comments or submissions. The Applicant also provided information relating to current rates of
pay that are being paid, which are higher than those strictly required by the terms of the
Agreement.
[11] The rates of pay set out in Schedule 1 to the Agreement are below the Award. The
Agreement notes to the effect that rates of pay will also be determined by any transitional
decisions or legislation. Section 206 of the FW Act fits that description as it 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] As a consequence the base rates in the Agreement are taken to be no less than the rates
in the Award. The actual rates paid to employees were relied upon by the Applicant to submit
that the employees covered by the Agreement are paid above the Award (and so are above the
[2023] FWCFB 207
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Agreement as well). However, the better off overall analysis for current purposes requires a
comparison between the Agreement rates and the Award rates. It does not involve a comparison
with actual rates of pay.
[12] The analysis showed the Agreement provides several provisions that are more beneficial
when compared to the Award such as a span of hours for full time employees and for full time
and part time employees, higher Sunday penalties, more beneficial overtime provisions in some
circumstances and shift provisions which the Award does not provide. The Agreement also
provides a higher casual loading of 30% when compared to the Award. For casual employees
however, the Agreement excludes casuals from overtime penalties and is silent on casuals being
paid penalties for Sundays and Public Holidays.
[13] The Applicant advised that casual employees do not work overtime. The consequence
of the exclusion of Sunday and Public Holiday rates however is that when casual employees
are engaged on Sundays or Public Holidays they will not be better off. The question is whether
the additional 5% loading paid to casual employees when not working Sundays and Public
Holidays is adequate to make those employees better off overall. The Applicant submits that
the base rate paid is over the Award and the 30% casual loading is paid on the over award rate,
allowing employees to receive annual remuneration of pay that is in excess of the wages and
penalties they would otherwise receive if work performed on Sundays and public holidays were
paid in accordance with the Award. Employees do not work every Sunday or Public Holiday
during the year and the Applicant submits that as a result the employees are better off under the
current arrangements. We were not provided with sufficient information about the number of
hours worked on Sundays and Public Holidays to assess whether the submission is correct. The
Applicant suggests that some of the employees do not work Sunday at all. Consequently, we
cannot be satisfied that employees are better off overall under the Agreement.
[14] 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 apply
to them rather than if the relevant modern award applied. The employees are paid above the
Award and above the Agreement however the rates of pay provided for in the Agreement are
not superior to the Award and while the casual loading is higher than the Award, the removal
of Sunday and Public Holiday penalties are likely to make the casual employees worse off.
[15] Consequently, we conclude that subitem 8 of item 30 does not apply and the default
period cannot be extended pursuant to subitem 6(a).
Otherwise Reasonable
[16] The Applicant also made submissions that it would like the Agreement extended so it
had time to make a new agreement. It submitted that as a small family run business which had
suffered significant losses in recent years due to the response to COVID it needed time to
renegotiate an agreement without the need to also reorganise its arrangements to pay strictly in
accordance with the Award. It says that any reorganisation would only be for a brief time whilst
it finalised a replacement agreement. Negotiations had not commenced when the application
was filed and so subitem 30(7) which permits an extension of default period when bargaining
is occurring, does not apply. We may, however, and do, take this aspect of the Applicant’s
submissions as supporting an extension of the default period because it is reasonable in the
circumstances to do so within the meaning of subitem (6)(b). The application of subitem (6)(b)
also involves the application of a broad evaluative judgment.
[2023] FWCFB 207
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[17] As can be seen above, the Applicant is paying rates above those required under the
Agreement. The Agreement allows it to pay a salary rate to permanent staff and a flat hourly
rate for casuals. This provides administrative ease in managing wages. It also provides
employees with certainty as to their weekly wages. If the Award were to apply the Applicant
suggests it would need to disturb current rostering patterns to ensure it could maintain the
flexible arrangements and weekly income for employees. We are satisfied that there would be
a need to depart from the current arrangements should the Award be in place instead of the
Agreement. In the usual course we would not consider this as sufficient to justify an extension.
The intention of the legislation is that the zombie agreement should be replaced by a
contemporary agreement underpinned by the relevant modern award. However, given the size
of the Applicant’s enterprise, its recent challenges to rebuild business after COVID, the fact
that it is paying employees in excess of the Agreement (and the Award), that the impact of the
move to the Award would result in merely rearranging rostering and payroll systems, and the
intention to enter into a new agreement we find that it is reasonable in the circumstances to
extend the default period of the Agreement.
[18] Having found that it is reasonable to extend the default period we must consider the
length of the extension. We have a broad discretion in this regard, save that the extension cannot
be longer than 4 years. The Applicant asks that the Agreement be extended for the maximum
period of 4 years. We do not consider a 4-year extension appropriate. A lengthy extension to
address a short-term inconvenience is not appropriate. We have found that it is reasonable to
extend to give the Applicant time to enter into a replacement agreement without having to
temporarily reorganise its administrative arrangements to strictly comply the Award. The
enterprise is a small enterprise and bargaining should not be complex. Consequently, we believe
that an extension of 4 months is sufficient time for a new agreement to be in place and allow a
smooth transition to the new arrangements.
[19] An order extending the default period for the Agreement by 4 months to 6 April 2024
will be published separately. The Agreement is also published, in accordance with subitem 30
(9A) of Schedule 7 of the Transitional Act, as an Annexure to this decision.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
AE874236 PR768101
1 Item 2, Part 1 of Schedule 1.
2 [2023] FWCFB 105 at [3]-[18].
OF THE FAIR WORK L MISSION THE SEA
https://www.fwc.gov.au/documents/agreements/approved/AE874236.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
