1
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
Sunnyspot Packhouse Pty Ltd
(AG2023/3828)
Agricultural industry
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
COMMISSIONER CRAWFORD
SYDNEY, 10 JANUARY 2024
Application to extend the default period for Sunnyspot Packhouse Pty Ltd Enterprise
Agreement 2009 – application dismissed
Introduction
[1] Sunnyspot Packhouse Pty Ltd (Sunnyspot) has made an application under the Fair
Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional
Act) to extend the default period for the Sunnyspot Packhouse Pty Ltd Enterprise Agreement
2009 (Agreement). The application seeks to extend the default period to 6 December 2027.
[2] 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. The Agreement is one such transitional instrument.
[3] The application does not specify which schedule in the Transitional Act is relied upon
to extend the default period. It initially appeared that the Agreement may not have been subject
to the automatic sunsetting provisions in the Transitional Act given it was approved by Fair
Work Australia on 2 August 2010. However, clause 2.1 of the Form F17 filed in support of the
application for approval of the Agreement and dated 12 December 2009 states that the
Agreement was “made” on 30 November 2009 which is during the “bridging period”.
[4] “Bridging period” is defined in the following terms in Schedule 2 of the Transitional
Act:
bridging period means the period:
(a) starting on the WR Act repeal day; and
(b) ending immediately before the FW (safety net provisions)
commencement day.
[2024] FWCFB 2
DECISION
AUSTRALIA FairWork Commission
[2024] FWCFB 2
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[5] The “WR Act repeal day” was 1 July 2009 and the “FW (safety net provisions)
commencement day” was 1 January 2010. The “bridging period” is therefore 1 July 2009 to 31
December 2009. Since the Agreement was made during the bridging period, Sch 7 of the
Transitional Act applies.
[6] Subitem 30(1) of Sch 7 to the Transitional Act is in the following terms:
An enterprise agreement made during the bridging period ceases to operate at the end
of the grace period for the agreement if the agreement has not already ceased to operate
before that time.
[7] Accordingly, the Agreement will cease to operate in accordance with subitem 30 of Sch
7 to the Transitional Act, unless the default period is extended in accordance with subitem 30(4)
of Sch 7.
[8] On 6 December 2023, we advised Sunnyspot that we were exercising our discretion
under s.586 to amend the application to the effect that it is made pursuant to subitem 30(4) of
Sch 7 to the Transitional Act.
[9] Under subitem 30(6) of Sch 7, where an application is made under subitem 30(4) for the
default period to be extended, the Commission must extend the default period for a period of
no more than four years if either subitem (7) or (8) applies and it is otherwise appropriate in the
circumstances to do so, or, it is reasonable in the circumstances to do so.
[10] Sunnyspot has not suggested it is bargaining for a replacement enterprise agreement,
which means subitem 30(7) of Sch 7 is not applicable. As a result, the default period for the
Agreement can only be extended under subitem (6)(a) because subitem (8) applies and it is
appropriate to do so, or if it is “reasonable in the circumstances to do so” in accordance with
subitem (6)(b).
[11] The grounds relied upon in Sunnyspot’s application refer to the nature of its farming
operations, challenges it faces finding employees, and several superior conditions in the
Agreement compared to the Horticulture Award 2020 (Award). Sunnyspot also filed a
declaration from Ms. Jo-Anne Taylor (Packhouse Manager) which indicated the Agreement is
simple and employees are content with the current arrangements. Ms Taylor also stated that the
inferior terms in the Agreement compared to the Award have no practical impact given the
hours worked by the affected employees.
Consideration
[12] The first issue is whether subitem 30(8) of Sch 7 applies. Subitem (8) reads:
(8) This subitem applies if it is likely that, as at the time the application is made, the award
covered employees for the agreement under subitem (9), viewed as a group, would be
better off overall if the agreement applied to the employees than if the relevant modern
award or awards referred to in that subitem applied to the employees.
[2024] FWCFB 2
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[13] Subitem (9) provides that award covered employees are the employees who are covered
by the agreement and at the time of the application, are covered by one or more modern awards
and are employed by an employer who is covered by the agreement and one or more modern
awards. The Award is the relevant modern award for the purposes of these subitems.
[14] We do not consider that at the relevant time, it is likely that the relevant Sunnyspot
employees, viewed as a group, would be better off overall if the Agreement applied to them
than they would be if the Award applied.
[15] The Agreement contains only one classification, Level 1. The rate for this level in the
Agreement is $14.31 per hour, although that rate could not be paid because it is below the base
rate in the Award and s.206 of the Fair Work Act 2009 requires employers to pay at least the
minimum base rate in an applicable modern award. Schedule A of the Agreement permits any
employee in the horticulture industry to be classified at Level 1. In contrast, the Award contains
five classifications with minimum rates ranging from $22.61 per hour to $26.18 per hour.
[16] The casual loading prescribed in clause 2.4.2 of the Agreement is 23%. The Award
prescribes a higher casual loading of 25% in clause 11.2. Although Sunnyspot has indicated it
actually pays a casual loading of 25%, that is not relevant to the comparison between the terms
of the Agreement and the Award. The Agreement also does not contain a minimum engagement
period for casual employees. Clause 11.3 of the Award prescribes a two-hour minimum
engagement for casual employees. Sunnyspot has indicated many of its employees are engaged
as casuals.
[17] There is no span of ordinary hours in the Agreement and no shift work conditions. The
Award contains detailed ordinary hours of work conditions in clause 13, including for casual
employees, and contains shift work conditions in clause 13.3.
[18] Although the overtime penalty rates in the Agreement are higher than the Award if the
base rates in the Award are used for the penalty rate calculations, the Agreement allows
employees to request to work additional hours at ordinary rates. The effect of this provision is
that employees would not receive overtime entitlements when they request and work additional
hours to increase their overall earnings. Although employees may request to work overtime at
ordinary rates if the alternative is not working the additional hours, they would be better off if
they were to receive overtime rates for working the additional hours as provided for in the
Award.
[19] Sunnyspot’s application identifies the following conditions in the Agreement as
providing justification to extend the default period:
a. Redundancy.
b. Overtime rates for casuals.
c. Time off in lieu of overtime.
d. Wage adjustments.
e. Casual loading.
f. Additional public holiday.
g. Tree pruning/budding/grafting allowance.
[2024] FWCFB 2
4
[20] We do not consider the superior conditions identified above are sufficient to outweigh
the detrimental conditions in the Agreement. In addition, the Agreement conditions identified
above are not all superior to the Award. The casual loading in the Agreement is less than the
Award. The wage adjustment provisions in the Agreement are also inferior to the Award, given
the lack of higher classification levels in the Agreement. Contrary to Sunnyspot’s submission,
the employees will not lose Easter Saturday as a public holiday if the Agreement terminates
because it is gazetted in Queensland and hence an entitlement under the National Employment
Standards.1 We consider the redundancy conditions in the Agreement to be of limited relevance
in the overall assessment given the workforce is predominantly casual.
[21] We do not consider Sunnyspot’s submissions to the effect that inferior conditions in the
Agreement do not disadvantage employees because of its current working arrangements to be
persuasive for the assessment required by subitem 30(8) of Sch 7. We cannot disregard inferior
Agreement terms as part of our assessment on the basis that they are not currently being utilised.
[22] After reviewing the terms of the Agreement and the Award, we have determined the
relevant employees, viewed as a group, would not be better off under the Agreement than they
would be if the Award applied. As a result, the default period for the Agreement cannot be
extended under subitem 30(8) of Sch 7.
[23] As subitem (30)(8) does not apply, we are not required to extend the default period
pursuant to subitem(6)(a). We will now consider whether it is “reasonable in the
circumstances” to extend the default period in accordance with subitem 30(6)(b) of Sch 7.
[24] In Suncoast Scaffold Pty Ltd,2 the Full Bench described the ‘reasonable’ criterion in item
20A(6)(b) of Sch 3 to the Transitional Act, which replicates the wording in subitem 30(6)(b) of
Sch 7, 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.
[25] 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 way3:
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.
[26] Full Benches of the Commission have said a number of times that the purpose of the
sunsetting arrangements introduced in the SJBP Act4 is that zombie agreements are to be
replaced by contemporary instruments made under the Fair Work Act 2009 (FW Act).
[2024] FWCFB 2
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[27] We are not satisfied that in the circumstances of this case it is reasonable to extend the
default period for the Agreement. The Agreement does not contain contemporary terms and the
employees covered by the Agreement would clearly be better off overall under the Award. We
consider the Agreement is precisely the type of instrument that the SJBP Act was intended to
address because its continued operation would disadvantage employees and the conditions are
outdated.
[28] As our decision is to refuse to extend the default period under subitem 30(6) of Sch 7
and our decision is made after the sunset date in the Transitional Act, subitem 30(10) provides
that we must extend the default period to the day of this decision or specify a day that is not
more than 14 days after the day of this decision. We have decided that to enable the parties to
make the necessary administrative arrangements to give effect to the sunsetting of the
Agreement the default period is extended to 24 January 2024.
[29] The application is dismissed.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
AE879600 PR770088
1 Section 115(1)(b) of the Fair Work Act 2009.
2 [2023] FWCFB 105.
3 Explanatory Memorandum Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 at [670].
4 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].
WORK COMMISSION THE SEAS
https://www.fwc.gov.au/documents/awardsandorders/pdf/pr770088.pdf
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
