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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
Application by Construction, Forestry and Maritime Employees Union
(AG2023/4982)
NEW LINE SUPPLIES PTY LTD AND CMFEWU FORESTRY DIVISION
ENTERPRISE AGREEMENT 1998
Timber and paper products industry
DEPUTY PRESIDENT SLEVIN
COMMISSIONER LIM
COMMISSIONER THORNTON
SYDNEY, 26 MARCH 2024
Application to extend the default period for the New Line Supplies Pty Ltd and CFMEU
Forestry Division Enterprise Agreement 1998
[1] The Construction, Forestry and Maritime Employees Union (CFMEU) 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 New Line
Supplies Pty Ltd and CFMEU Forestry Division Enterprise Agreement 1998 (Agreement). The
Agreement is an agreement-based transitional instrument to which Sch 3 applies, since it was
made as a collective workplace agreement under the Workplace Relations Act 1996 (Cth).
[2] Clause 3 of the Agreement states that it shall apply to New Line Building Supplies Pty
Ltd (New Line) and the Construction, Forestry, Mining and Energy Union (as it was then) and
all employees including new employees of New Line Building Supplies Pty Ltd. We note that
the employer’s name is now Hardware & General Supplies Ltd (Employer).
[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 the default period for up
to four years in prescribed circumstances. The main features of item 20A of Sch 3, and
principles concerning its proper construction and application, are described in detail in the Full
Bench decision in Suncoast Scaffold Pty Ltd,1 and we rely upon without repeating what is said
in that decision.
[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
[2024] FWCFB 191
DECISION
AUSTRALIA FairWork Commission
[2024] FWCFB 191
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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] Subitem (7) applies if bargaining for a replacement agreement is occurring. Subitem (8)
relates to individual agreement-based transitional instruments. Subitem (9) applies if the
application relates to a collective agreement-based transitional agreements and it is likely that
as at the time the application is made the award covered employees, viewed as a group, would
be better off overall if the agreement continued to apply than if the relevant modern award
applied.
[6] The Commission must also extend the default period under subitem (6)(b) if satisfied it
is reasonable in the circumstances to do so.
[7] The CFMEU and Employer agree that the relevant employees would be covered by the
Timber Industry Award 2020 (Timber Award) if not for the Agreement.
[8] The CFMEU seeks an extension of the default period to 6 December 2025. The grounds
of the application are as follows:
a. The employees would be better off if the Agreement continues to apply when compared
to the Timber Award, due to superior redundancy entitlements and hours of work
arrangements in the Agreement.
b. Although bargaining has not formally begun, the Applicant is seeking to bargain and
anticipates that bargaining may be initiated within the next year. Therefore, it is
appropriate in the circumstances to extend.
c. The employees covered by the Agreement support the application to extend the default
period.
[9] We take the CFMEU’s position to be that they seek the proposed extension to 6
December 2025 under either subitem 20A(6)(a) and (9) of Sch 3 in relation to the argument that
the employees covered by the Agreement, viewed as a group would be better off overall, or
alternatively, because it is reasonable in the circumstances pursuant to subitem 20A(6)(b).
[10] The Employer does not consent to the CFMEU’s application. The Employer submits
that employees are not better off under the Agreement compared to the Timber Award. The
crux of the contention between the parties is whether the Agreement incorporates the Timber
Award – the CFMEU contends that it does, the Employer takes the opposite view.
[11] For the reasons that follow, regardless of whether the Agreement is better off overall
compared to the Timber Award and subitem (9) is enlivened, we are not satisfied that it is
appropriate or reasonable in the circumstances to extend the default period.
The ‘Better Off Overall Test’
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[12] The Employer is in the timber industry and 11 of its employees are covered by the
Agreement. The Employer employs 37 other employees who are covered by the General Retail
Industry Award 2020.
[13] Clause 6.2 of the Agreement states that all the clauses of the predecessor agreement, the
New Line Building Supplies Pty Ltd Enterprise Agreement 1995 (1995 Agreement) are taken
to be terms of the Agreement.
[14] Clause 11.1 of the Agreement sets out the rates of pay. These rates of pay are below the
rates in the Timber Award, and therefore rates of pay under the Agreement would be equal to
the Timber Award having regard to Item 13 of Schedule 9 of the Fair Work (Transitional
Provisions and Consequential Amendments) Act 2009 (Cth). The Employer submits that the
employees are paid rates above the Timber Award.
[15] Clause 7.12(iii) of the 1995 Agreement provides for larger redundancy entitlements
compared to the Timber Award and National Employment Standards (NES), as set out below:
Years of
Service
NES Entitlement
(under 45 years of age)
1995 Agreement
Entitlement (45 years of
age and over)
0-1 NIL NIL
1-2 4 weeks 5 weeks
2-3 7 weeks 8.75 weeks
3-4 10 weeks 12.50 weeks
4-5 12 weeks 15 weeks
5-6 14 weeks 17.5 weeks
6 years and over 16 weeks 20 weeks
[16] Page (4) of the 1995 Agreement provides that the ordinary hours of work shall be from
7:00am to 3:50pm Monday to Thursday, as opposed to 6:30am to 6:00pm Monday to Friday in
the Award.
[17] If the Agreement does not incorporate the Timber Award, then it cannot be said to pass
the better off overall test, as the Agreement is silent on almost all entitlements contained in the
Award, such as weekend penalties, shift penalties, public holiday penalties, overtime and
allowances.
[18] Clause 6 of the Agreement provides that:
6.1 Relationship to Awards and Other Agreements
This Agreement shall be read and interpreted wholly in conjunction with the Forest and Building
Products, Manufacturing and Mechanising (General) Award 1996, as it existed at 16 July 1997,
providing that to the extent of any inconsistency between the Award and this Agreement, the
latter shall prevail.
The parties agree that this agreement will read to incorporate all of the provisions of the Forest
and Building Products, Manufacturing and Mechanising (General) Award 1996, as it existed at
16 July 1997. Any increase, upgrade, or broadening of entitlements to this myard [sic] after this
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date will also be taken to be included in this agreement. This will guarantee that regardless of
any future reductions to the above mentioned award, employees covered by this agreement will
not suffer a reduction in entitlements, conditions or benefits.
6.2 Maintenance Of Existing Conditions and Arrangements
This agreement builds upon the previous New Line Building Supplies Pty Ltd Enterprise
Agreement. To that effect all the clauses of previous New Line Building Supplies Pty Ltd
Enterprise Agreement apply for the life of this agreement and can be taken to be considered as
part of this agreement. The Company agrees for the life of this agreement not to reduce existing
pay and employment conditions, and will continue to abide by the terms and provisions of the
Forest and Building Products, Manufacturing and Mechanising (General) Award 1996, as it
existed at 16 July 1997 and any other agreements applying to the parties to this agreement at
that time.
[19] The Company agrees to maintain the existing collective process of negotiation of pay and
employment conditions for employees through the CFMEU and not to introduce Australian Workplace
Agreements.
[20] We have taken the reference to “this myard” to be a typographical error that was meant
to say “this award”.
[21] The parties agree that the effect of clause 6.1 is that an award is incorporated into the
Agreement. The Employer submits that applying the accepted principles of interpreting
agreements,2 the words of the Agreement should be read as incorporating the Forest and
Building Products, Manufacturing and Merchandising (General Award) 1996 (1996 Award)
only. The CFMEU submits that the words “increase, upgrade or broadening of entitlements” in
clause 6.1 includes the Timber Award replacing the 1996 Award and therefore the Timber
Award is now incorporated.
Consideration
[22] For the purposes of subitem 6(a) of item 20A there is no indication that bargaining for
a replacement agreement is occurring, so subitem (7) does not apply. The Agreement is not an
individual agreement-based transitional instrument so subitem (8) does not apply.
[23] The CFMEU contends that subitem (9) applies as the employees would be better off
overall if the Agreement continued to apply to them than if the Award applied.
[24] We find that the phrase “Any increase, upgrade, or broadening of entitlements to this
[award]” in clause 6.1 cannot be read to include the Timber Award replacing the 1996 Award.
That is because the “increase, update or broadening” is in reference to the entitlements of the
specifically named 1996 Award. The Timber Award is therefore not incorporated into the
Agreement and the Agreement would not pass the better off overall test.
[25] Subitem (6)(a) is therefore not enlivened. We now turn to consider whether it is
reasonable in the circumstances to grant an extension of the default period pursuant to subitem
(6)(b). 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:
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[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.
[26] Multiple Full Benches of the Commission have found that the purpose of the sunsetting
arrangements introduced in the Transitional Act is for zombie agreements to be replaced by
contemporary arrangements made under the Fair Work Act 2009 (FW Act).3
[27] In this matter, we do not find there are sufficiently compelling reasons to make a finding
that it is reasonable to extend the default period. The Agreement is 26 years old. The Agreement
is severely outdated and is inferior to the Timber Award. We note that though the CFMEU
wishes to commence bargaining for a modern enterprise agreement, it has not commenced. We
find that it is not reasonable in the circumstances to grant an extension of the default period.
[28] For completeness, we note that if we are incorrect as to the interpretation of clause 6.1
and the Timber Award is incorporated into the Agreement, we would have found that the
Agreement did pass the better off overall test – albeit marginally – based on the more favourable
hours of work and redundancy provisions. However, subitem (6)(a) also requires a finding that
it is otherwise appropriate in the circumstances to extend the default period. If subitem(6)(a)
had been enlivened due to the Agreement incorporating the Award, we still would not have
found that it was appropriate to extend the default period due to the age of the Agreement; the
differences between the Agreement and the Timber Award not being substantial; and the fact
that bargaining has not commenced for a replacement agreement.
[29] As our decision is to refuse to extend the default period under subitem 20A(6) of Sch 3
and our decision is made after the sunset date in the Transitional Act, subitem (11)(e) 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 Applicant
to make the necessary administrative arrangements to give effect to the sunsetting of the
Agreement, the default period is extended to 14 days from the date of this decision.
DEPUTY PRESIDENT
R-WORK OMMISSION THE SEAL OF TH
[2024] FWCFB 191
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Printed by authority of the Commonwealth Government Printer
AG791451 PR772748
1 [2023] FWCFB 105.
2 AMWU v Berri Pty Ltd [2017] FWCFB 3005; City of Wanneroo v Australian Municipal, Administrative, Clerical and
Services Union (Wanneroo) [2006] FCA 813, [57].
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].
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb3005.htm
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb195.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb137.pdf
