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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
Royal Aero Club Of Western Australia Inc
(AG2023/4117)
ROYAL AERO CLUB OF WA (INC) COLLECTIVE AGREEMENT 2006
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT SLEVIN
DEPUTY PRESIDENT GRAYSON
SYDNEY, 11 DECEMBER 2023
Application to extend the default period for Royal Aero Club of WA Inc Collective Agreement
2006
[1] Royal Aero Club of Western Australia Inc (the Applicant) 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 Royal Aero Club of WA
(Inc) Collective Agreement 2006 (Agreement). The application seeks to extend the Agreement
for a period of 12 months until 5 December 2024.
[2] The Agreement was made in 2006 and approved under the Workplace Relations Act
1996 (Cth) (WR Act). 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’.
[3] 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 Ltd (Suncoast)1 and we rely upon what is said in
that decision.
[4] 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), to extend the default period if the
Commission is satisfied that:
(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.
[2023] FWCFB 247 [Note: a correction has been issued to this document]
DECISION
AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb247_pr769428.pdf
[2023] FWCFB 247
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[5] This application has been made on the basis that subitem (7) applies, and it is otherwise
appropriate in the circumstances to extend the default period. The Applicant did not contend
that either of subitems (8) or (9) applied to the application.
Background and Submissions
[6] The Applicant is based in Western Australia and is a not-for-profit organisation
providing aircraft pilot training and aircraft maintenance services to private consumers. The
Applicant’s employees covered by the Agreement would otherwise be subject to the terms of
the Air Pilots Award 2020 (the Award). The Agreement’s coverage clause at clause 2 provides
that it applies to the Applicant and flight instructors and charter pilots engaged by the Applicant.
[7] Of the Applicant’s 75 employees, 38 are covered by the Agreement (and any future or
proposed Agreement subject to bargaining). In support of a 12-month extension, the Applicant
indicated that the negotiation of a suitable enterprise agreement may take up to twelve months
to complete, referring to difficulties and delays in getting in touch with its casual employees
who may also be engaged to work for other employers elsewhere.
[8] The Applicant noted that the majority of its employees are engaged on a casual basis,
due to the seasonal and variable aspects of the Applicant’s business. The Applicant also
indicated that it currently employs 11 administrative staff members, and that these resources
would be unreasonably stretched should the Applicant have to negotiate a new enterprise
agreement in the lead up to the Christmas period, given leave arrangements. The Applicant also
submitted that the Award is not fit for purpose and is overly complex to administer for the 38
employees covered by the current Agreement given the nature and small scale of operations. It
was also contended that reverting to paying its staff under the Award and then under a new,
soon to be negotiated agreement, would incur significant administrative resources. The
Applicant indicated that, in the event its application was unsuccessful, the resulting wage
liability in having to comply with the terms of the Award would likely result in the Applicant
laying off some of its casual staff.
[9] In correspondence to the Commission on 16 November 2023, the Applicant indicated
that its employees were paid the same salary as the ‘base salary’ provided for in the Award.
This was contradicted in the same communication where the Applicant said that it paid an
additional 3% above the Award. On its face the Agreement does not provide for pay rates that
are 3% above the Award although clause 11(e) provides that rates of pay will be reviewed on
the 1st of April each year and at a minimum will be increased by the rates of the Consumer
Price Index All Groups (Perth). The submission that pay rates are above the Award is
inconsistent with the submission that reverting to the Award would result in a wage liability.
Nevertheless, for the purposes of our consideration, we have accepted that pay rates in the
Agreement will range from Award rates to 3% more than the Award.
[10] The Applicant also indicated that the Agreement had some terms that were more
beneficial than the Award, such as an additional day of compassionate leave over the two
provided for under the NES, and the provision of four weeks’ pay in lieu of notice on
termination of employment. The Applicant also identified that the Award contained a number
of terms that were more beneficial than those in the Agreement, including minimum
[2023] FWCFB 247
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engagement periods for casual employees, uniform allowance, loss of licence allowance,
accommodation, meal allowances, accident insurance, and accident pay.
[11] The three nominated employee bargaining representatives support the extension of the
Agreement.
Subitem (7) - Consideration
[12] 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 NERR for the proposed agreement to the coverage clause of the
zombie agreement. Relevantly, the third is that bargaining for the proposed agreement has
commenced.
[13] The Applicant lodged its application to extend the default period for the Agreement on
6 November 2023. At Part 2.6 of the application, the Applicant indicated as follows:
“Bargaining is occurring for a new enterprise agreement that would cover the group of
employees covered by the zombie agreement. We wish to request an extension of 12
months to the operation of the agreement, as we believe this to be a reasonable amount
of time necessary to complete the bargaining process for a new Enterprise Agreement.”
[14] On 10 November 2023, the Commission wrote to the Applicant to seek further material
in support of its application, including, inter alia, a copy of any Notice of Employee
Representational Rights (NERR) that had been issued to the Applicant’s employees at the
commencement of bargaining for a new enterprise agreement.
[15] On 16 November 2023, the Applicant provided further material to the Commission in
response to its request, which included an email sent to employees attaching a NERR and an
accompanying memo to employees regarding the Applicant’s intention to initiate the enterprise
agreement bargaining process. The email and the memo were both dated 13 November 2023,
being a date after the application was made. No further documentation was provided to
demonstrate that the application was made at or after the notification time for the proposed
enterprise agreement. The Applicant properly conceded in correspondence with the
Commission that it was not aware that it was required to have already commenced bargaining
prior to making its application and confirming that the Applicant had commenced bargaining
by issuing the NERR and details of its intention to commence bargaining on 13 November
2023.
[16] The Fair Work Act 2009 (the Act) provides a series of definitions of “notification time”
for the purposes of a proposed enterprise agreement. At s. 173(2)(a), it provides that the
notification time for a proposed enterprise agreement is the time when “the employer agrees to
bargain, or initiates bargaining, for the agreement”. None of the material before us supports a
finding that any of the alternative definitions have been met (such as those relating to majority
support determinations or scope orders). Given that the memo and the NERR were provided to
[2023] FWCFB 247
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employees on 13 November 2023 and that no evidence has been advanced that the employer
otherwise initiated bargaining before this date, we find that the employer agreed to bargain or
initiated bargaining on 13 November 2023. Accordingly, the application was not made “at or
after the notification time for a proposed enterprise agreement” in accordance with the
requirement at subitem (7)(a) of the Transitional Act. Consequently, we find that subitem (7)
does not apply and the default period cannot be extended pursuant to subitem (6)(a).
Item 6(b) - Consideration
[17] As subitem (7) cannot be met, the Commission may consider whether to extend the
default period pursuant to subitem 6(b), requiring a consideration of whether it is otherwise
reasonable in the circumstances to extend the default period. This involves the application of a
broad evaluative judgement.
[18] In Suncoast,3 the Full Bench said:
“[17] 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.”
[19] The Agreement was made and approved in 2006. It excludes all other statutes and
instruments, including Awards. Clause 3 of the Agreement expressly excludes:
“entitlements in relation to annual leave, personal leave, parental leave, long service
leave, notice, jury service, superannuation, public holidays, rest breaks (including meal
breaks), shift/overtime loadings, annual leave loading, allowances, penalty rates and
incentive·based payments and bonuses except as provided for by this Agreement.”
[20] The Transitional Act provides that the base rates of pay payable under agreement-based
transitional instruments are not to be less than the base rates payable under a modern award that
is in operation and covers an employee.4 The terms of the Agreement in this case represent the
benchmarks created by the legislative scheme under which it came into operation, and that
scheme has long since been superseded. The terms fall short of the safety net standards provided
for by the Fair Work Act 2009 (Cth) (Act) and modern awards made under the Act.
[21] In Peter Frick,5 the Full Bench considered that the default position of the statute to
automatically terminate transitional instruments on 6 December 2023 suggests a policy
preference for employees covered by transitional instruments to be regulated by contemporary
instruments made under the Act.6 In Kalfresh Management Services Pty Ltd,7 the Full Bench
expressed that where an agreement contains inferior and outdated terms and conditions, this
weighs strongly against a conclusion that it is reasonable in the circumstances to extend a
default period.8
[22] The Applicant does not suggest that the better off overall test is met. It instead, argues
that the Agreement provides other sufficiently beneficial terms to its employees when compared
with the Award so as to reasonably justify the extension of its operation. We do not accept this
[2023] FWCFB 247
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argument. The number of beneficial terms in the Agreement compared to the Award are limited.
In contrast, as set out at [10], the beneficial provisions in the Award that the 38 agreement
covered employees of the Applicant will miss out on if the Agreement’s operation is extended
are significant in their number and nature. Given the largely inferior conditions in the
Agreement, we think it unlikely that there would be a disadvantage to employees in a reversion
to award conditions prior to the finalisation of a new agreement. This is a significant factor in
our consideration, weighing against the grant of an extension.
[23] Further, the large number of casual employees engaged by the Applicant and the
disparity between the terms and entitlements for casual employees in the Agreement when
compared with the Award, weighs against the reasonableness of extending the Agreement.
[24] The Applicant has indicated that its employees are paid equal to or more than they would
be entitled to under the Award. However, it has also referred, in its submissions in support of
the application to extend, to the risk of having to lay off casual staff members should it be
subject to wage liability arising from, we infer, additional costs if made to comply with the
Award. These costs are not in evidence before us. It may be that the Applicant incurs increased
costs as a result of complying with the largely beneficial conditions under the Award. However,
if the Applicant is paying its employees what are essentially Award rates or slightly above
Award rates, as it has indicated to the Commission that it does, we do not consider that the
termination of the Agreement should result in such significant additional costs that render it
likely that the Applicant will lay off casual staff, as suggested.
[25] Finally, we are not persuaded by the Applicant’s submission that reverting to the Award
for the 38 affected employees would create an unreasonable administrative burden or that the
Applicant’s administrative resources are so limited as to justify the extension of this Agreement.
The Applicant has 11 administrative staff including a Human Resources Manager. The
Applicant has already had over 12 months to make arrangements for the sunsetting of the
Agreement.
[26] As to bargaining, we acknowledge that the Applicant’s 7-day operations and staff
demographics, with some employees also engaged elsewhere for other organisations, may make
bargaining slower and more challenging. However, the Applicant has had 12 months to
negotiate a replacement agreement and had not even commenced bargaining until recently.
Further, we consider that bargaining can be expedited given the technological advancements
that mean that video based, face to face and hybrid negotiations can all be readily facilitated.
While bargaining can and does take time, we do not consider it sufficiently likely that a fit-for-
purpose enterprise agreement would take twelve months that the Applicant seeks.
[27] In Qualipac,9 the Full Bench rejected an application for an extension of the default
period in circumstances where an applicant wanted to continue to rely on the inferior terms and
conditions in a zombie agreement. We consider there to be some parallels with the present case.
The Bench in Qualipac said:
[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.
[2023] FWCFB 247
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[28] We have taken into account that the Applicant has taken material steps to commence
bargaining for a new enterprise agreement, albeit this was since this application was made. We
have also factored into our consideration that the three nominated employee bargaining
representatives have indicated their support for the extension of the existing Agreement. These
factors however do not convince us that we should extend the life of a zombie agreement that
provides for terms and conditions that are inferior to the relevant modern award and fails to
reflect contemporary standards.
[29] On balance, we are not satisfied that it is 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
PR769290
1 [2023] FWCFB 105.
2 [2023] FWCFB 122 at [4]
3 [2023] FWCFB 105.
4 Item 13 of Sch 9.
5 [2023] FWCFB 137
6 Ibid, [32].
7& Kallium Management Services Pty Ltd As Trustee For The Kalium Labour Trust T/A Kalfresh Pty Ltd [2023] FWCFB
217
8 Ibid, [14].
9 [2023] FWCFB 212
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/2023fwcfb217.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb217.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb212.pdf
