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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
Qualipac Farms Unit Trust Pty Ltd T/A Qualipac Farms Pty Ltd
(AG2023/3530)
Agricultural industry
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
SYDNEY, 17 NOVEMBER 2023
Application to extend the default period for Qualipac Farms Pty Ltd Employee Collective
Agreement
Introduction
[1] Qualipac Farms Unit Trust Pty Ltd (Qualipac) has made an application under subitem
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 Qualipac Farms Pty
Ltd Employee Collective Agreement (Agreement). The application seeks to extend the default
period to 29 February 2024.
[2] The Agreement was made in 2007 and approved under the Workplace Relations Act
1996 (Cth) (WR Act) by the Workplace Authority. The Agreement is a ‘WR Act instrument’
within the meaning of item 2(2) of Sch 3 to the Transitional Act. It is classified by item 2(5)(c)(i)
of Sch 3 as a ‘collective agreement-based transitional instrument’. Agreements of this kind are
commonly referred to as ‘zombie agreements’.
[3] The Transitional Act was amended by the Fair Work Legislation Amendment (Secure
Jobs, Better Pay) Act 2022 (Cth) (SJBP Act) to provide for the automatic termination of all
remaining transitional instruments. Pursuant to items 20A(1) and (2) of Schedule 3 to the
Transitional Act, the Agreement will terminate on 6 December 2023 (the end of the default
period) unless it is extended by the Commission. The main features of item 20A of Schedule 3
to the Transitional Act are described in detail in the Full Bench decision in Suncoast Scaffold
Pty Ltd.1
[4] Under Subitem 20A(6) of Sch 3, where an application is made under subitem 20A(4)
for the default period to be extended, the Commission must extend the default period for a
[2023] FWCFB 212
DECISION
AUSTRALIA FairWork Commission
[2023] FWCFB 212
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period of no more than four years if either (a) subitem (7), (8) or (9) applies and it is otherwise
appropriate in the circumstances to do so, or (b) it is reasonable in the circumstances to do so.
[5] Qualipac does not contend that subitems (7), (8) or (9) apply. Rather the applicant relies
on paragraph (b) of subitem (6). It contends that it is reasonable in the circumstances to extend
the default period to the end of February 2024.
Qualipac’s circumstances
[6] Qualipac provided the following information in support of its application.
[7] Qualipac is a family owned and operated farming business that grows, packs and
supplies fresh vegetables for both domestic and international markets. The business operates
farms across several regions in South-East Queensland. Key product lines include broccoli,
onions, pumpkins, potatoes, sweet corn and beans. Approximately 60 employees are covered
by the Agreement. Eight are full-time employees on a salary with the remaining workers
employed on a casual basis.
[8] During the period from October to the end of February, Qualipac will be harvesting and
packing onions as well as potatoes, beans and sweet corn.
[9] The onion season, in particular, is a busy period where many casual workers have come
to expect additional hours over and above 38 hours per week, including working overtime
during the week and on Saturdays. Many employees volunteer for this overtime and have come
to rely on and expect the additional income these hours bring during this time. Under the
Agreement, these additional hours are paid at ordinary time rates.
[10] Planning for this busy season begins well in advance of the harvesting period. This
includes consultation with customers and suppliers regarding overall volumes, supply volumes
per week, prices, field allocations and ordering and purchasing inputs. During this period the
business has commitments to supply a number of key customers with agreed volumes of product
at agreed prices. Should employees revert to the Horticulture Award 2020 (Award) on 7
December 2023, the additional wages that would need to be paid in order to meet these
commitments would mean that the harvesting and packing of these products would no longer
be financially viable at the previously agreed prices. Qualipac’s customers have indicated that
there will be no price increase. In those circumstances, Qualipac’s employees would have to
revert back to a 38-hour week resulting in a loss of income, the business would compromise
key business relationships and some product would likely be left unharvested.
[11] An extension of the default period until 29 February 2024 will allow the business to fill
current commitments to key customers and offer the additional hours to employees at the
Agreement rates.
[12] Qualipac further submits that since it made the application for an extension of the
Agreement, several employees have raised concerns about reverting back to the Award and the
effect this will have on their overtime hours. Consequently, Qualipac is considering the option
of entering into bargaining for a new agreement. This additional time provided by the extension
will assist it to explore the option of a replacement agreement.
[2023] FWCFB 212
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Consideration
[13] In Suncoast Scaffold Pty Ltd the Full Bench described the ‘reasonable’ criterion in item
20A(6)(b) of Sch 3 to the Transitional Act in this way:
[17] Subitem (6)(b) of item 20A constitutes an independent pathway to the grant of an
extension. The ‘reasonable’ criterion in the subitem should, in our view, be applied in
accordance with the ordinary meaning of the word – that is, ‘agreeable to reason or
sound judgment’. Reasonableness must be assessed by reference to the ‘circumstances’
of the case, that is, the relevant matters and conditions accompanying the case. Again,
a broad evaluative judgment is required to be made.
[14] We also consider the purpose of the provisions to be relevant to the broad evaluative
judgment we are required to make. The explanatory memorandum expressed the purpose of the
provisions relating to extending the default period in this way2:
Provision would be made for the FWC to (upon application) extend the default period
to ensure the automatic sunsetting of zombie agreements does not operate harshly,
including by leaving employees worse off.
[15] Full Benches of the Commission have said a number of times that the purpose of the
sunsetting arrangements introduced in the SJBP Act3 is that zombie agreements are to be
replaced by contemporary instruments made under the Fair Work Act 2009 (FW Act).
[16] For the reasons which follow, we are not satisfied that in the circumstances of this case
it is reasonable to extend the default period for the Agreement.
[17] Qualipac’s application is essentially that it would like to continue to pay its employees
rates that are lower than the Award for one more season. No suggestion is made that the better
off overall test is met. The Agreement provides for a 23% casual loading. The casual loading
in the Award is 25%. The Agreement makes provision for additional hours to be paid at ordinary
rates where such hours are requested to be worked by employees. Overtime in the Agreement
is otherwise paid at time and a half. Under the Award overtime for casual employees is 175%
of the ordinary rate inclusive of the casual loading. Qualipac’s submissions are to the effect that
should the overtime provisions of the Award apply there would be an additional wage cost for
the work performed. We understand that to be the difference between paying its casual
employees a 25% loading instead of a 23% loading for ordinary hours and 175% of the ordinary
rate rather than 123% for the overtime they work.
[18] Further, Qualipac’s submissions are that it would like to continue to pay the lower rate
for overtime because it failed to adjust the prices in its contracts with suppliers to accommodate
the higher wage costs. It has not explained why it failed to make those adjustments. We note
that parties have been aware of the sunsetting provisions associated with zombie agreements
for almost 12 months. Qualipac has had time to make appropriate arrangements.
[19] In Tinmarl Pty Ltd4 the Commission extended the default period for a zombie agreement
at a mango farm where it was proposed to use the period of the extension to negotiate a
[2023] FWCFB 212
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replacement agreement. Tinmarl has a predominately seasonal workforce, many of whom
reside in the Pacific Islands. They are engaged under a seasonal worker program. The
employees were not available to negotiate a replacement agreement at the time the application
was made. Timarl sought an extension to enable it to make offers of employment in accordance
with the seasonal worker program and stated a clear intention to enter into a replacement
agreement at the earliest opportunity. This was a relevant factor in assessing reasonableness.
For its part, Qualipac says it is merely considering negotiating a replacement agreement.
Qualipac falls short of the approach taken by the applicant in Tinmarl and its non-committal
approach to bargaining tells against extending the default period.
[20] We are mindful of the need to ensure that the integrity of the safety net provided for by
the Act and modern awards is not undermined by very old agreements that may no longer meet
contemporary standards.
[21] Qualipac’s submissions included that it would not offer overtime if it had to pay
overtime rates. It said this may result in customer orders not being met and crops not being
harvested. The submission is not put on the basis that paying employees overtime would have
a significant impact on Qualipac’s business.
[22] For these reasons we do not consider it reasonable in the circumstances to extend the
default period of the Agreement. The application is dismissed.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
AC313050 PR768378
1 [2023] FWCFB 105 at [3] to [18].
2 Explanatory Memorandum Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 at [670]
3 See for example Quinn Transport Pty Ltd Enterprise Agreement 2009 [2023] FWCFB 195 at [23] and One HPA Certified
Agreement 2004-2007 [2023] FWCFB 137, at [32]
4 Tinmarl Pty Ltd [2023] FWCFB 124
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/2023fwcfb195.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb137.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb124.pdf
