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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
Australian Municipal, Administrative, Clerical and Services Union
(AG2023/3048)
VILLAMANTA LEGAL SERVICES INCORPORATED CERTIFIED
AGREEMENT 2002
(ODN AG2002/2663) [AG816405]
Health and welfare services
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
SYDNEY, 8 NOVEMBER 2023
Application to extend the default period for the Villamanta Services Incorporated Agreement
2002
[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 Villamanta Services Incorporated Agreement 2002 (Agreement). The Agreement was
approved on 11 June 2002 in accordance with s.170LT of the Workplace Relations Act 1996. It
is an agreement-based transitional instrument to which item 20A applies. Villamanta Disability
Rights Legal Service Incorporated (Villamanta), 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] 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 206 [Note: A copy of the zombie agreement to which this
decision relates (AG816405) is available on our website.]
DECISION
AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/agreements/approved/ag816405.pdf
[2023] FWCFB 206
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[4] The ASU has made an application on the basis that subitem (7) applies.
[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 3 August 2023, Villamanta issued a NERR
to employees notifying its intention to negotiate a new agreement. The ASU submits that the
new agreement will have the same coverage as the zombie agreement. Bargaining meetings
have commenced, and three meetings had been held at the time that the ASU filed submissions
on 21 September 2023. On the basis of this information, we are satisfied that subitem (7)
applies.
[7] As subitem (7) is met, subitem 6(a) requires 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. The Agreement applies
to all 11 employees of Villamanta. Villamanta is a small organisation with no dedicated internal
human resources capacity. The ASU has consulted with its members covered by the Agreement,
and on 31 August 2023 they unanimously endorsed the extension of the Agreement.
[9] While the ASU would like to conclude bargaining this year, they proposed that a 12-
month extension be considered by the Commission to ensure that employees do not feel
pressured into resolving bargaining or accepting an unsatisfactory outcome solely due to the
termination of the Agreement. The ASU advised in their application that bargaining is likely to
be resolved in early 2024.
[10] The ASU also submitted that the relevant employees have more beneficial terms of
employment under the Agreement than the Social, Community, Home Care and Disability
Services Industry Award 2010 (the SCHADS Award) which is the modern award that will
cover the employees at the end of the default period. These more beneficial entitlements include
incremental progression, flexible working arrangements, parental leave, sick leave and long
service leave.
[11] We are satisfied that it is appropriate in all of the circumstances to extend the default
period for the Agreement. The ASU and Villamanta are committed to negotiating a replacement
agreement and need time beyond 6 December 2023 to do so. It would be unfair for the
[2023] FWCFB 206
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employees’ terms and conditions to revert to the Award while bargaining is occurring. This will
not only have an adverse impact on their conditions of employment but alter the dynamics of
bargaining.
[12] 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
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
[13] 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.
[14] As noted above, the Agreement covers only eleven employees. The subject matter of
the bargaining is not as complex as other matters that have been before the Commission where
longer extensions have been granted.5 Bargaining has been taking place for three months and
according to the ASU is likely to conclude in early 2024. Taking these matters into account, we
believe that the twelve-month period sought by the ASU is excessive and may act as a
disincentive for the parties to progress bargaining efficiently and reach agreement in relation to
a replacement agreement in a timely manner. In the circumstances, we believe that extending
the Agreement for a four-month period should allow sufficient time for the parties to finalise a
replacement enterprise agreement.
[15] An order extending the default period for the Agreement by 4 months, until 6 April
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
AG816405 PR768070
OF THE FAIR WORK L MISSION THE SEA
[2023] FWCFB 206
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1 [2023] FWCFB 105.
2 [2023] FWCFB 122 at [4]
3 [2023] FWCFB 105, [18]
4 See Suncaost Scaffolding Pty Ltd [2023] FWCFB 105, [18] and Applications by APESMA [2023] FWCFB 137, [31]
5 See ISS Health Services Pty Ltd [2023] FWCFB 105; Annecto Inc [2023] FWCFB 169; Cancer Council of Victoria [2023]
FWCFB199; Endevour Foundation [2023] FWCFB 197
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/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
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb197.pdf
