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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
Pakwin Pty Ltd T/A Inglewood Hotel
(AG2023/4751)
THE PAKWIN PTY LTD EMPLOYEE COLLECTIVE AGREEMENT 2008
Hospitality industry
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT SLEVIN
COMMISSIONER ALLISON
SYDNEY, 21 MARCH 2024
Application to extend the default period for The Pakwin Pty Ltd Employee Collective
Agreement 2008
[1] This decision relates to an application made pursuant to item 20A(4) of Schedule 3 of
the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the
Transitional Act) by Pakwin Pty Ltd (the Applicant) to extend the default period for The Pakwin
Employee Collective Agreement 2008 (the 2008 Agreement).
[2] The application is made in accordance with subitem (6)(a) and subitem (7) on the
grounds that bargaining is occurring for a proposed enterprise agreement and that “it is
otherwise appropriate in the circumstances” to extend the default period.
[3] The Full Bench in ISS Health Services Pty Ltd1 described the three requirements that
must be met for the first limb of subitem 6(a) and subitem (7) to apply. We are satisfied on the
material provided that these requirements have been met and bargaining is occurring. In fact,
the Applicant recently lodged an application in the Commission for the approval of an enterprise
agreement.
[4] The second limb of the test under subitem (6)(a) is whether the Commission is satisfied
that “it is otherwise appropriate in the circumstances” to extend the default period.
[5] The Applicant employs casual staff at the Inglewood Hotel (WA) under the 2008
Agreement. Were it not for the 2008 Agreement, which expressly excludes all awards,
employees would be covered by the Hospitality Industry (General) Award 2020 (the Award).
[2024] FWCFB 179
DECISION
AUSTRALIA FairWork Commission
[2024] FWCFB 179
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[6] The 2008 Agreement includes “rolled up rates” for both permanent and casual
employees. The hourly rates of pay in the 2008 Agreement now fall below the Award, however,
Item 13 of Schedule 9 of the Transitional Act operates to ensure the base rates of pay payable
under an agreement-based instrument are the applicable Award rate. In addition, the Applicant
submits that:
“The Hotel pays an additional 9% on the Award Monday to Friday casual hourly rates
for work done between Monday and Saturday, a Sunday rate that is 55% above the
Award Monday to Friday full-time/part-time hourly rates and a Public Holiday rate that
is 101% in addition to the Award Monday to Friday full-time/part-time hourly rates.”
[7] While the Applicant submits its pays above award rates for permanent workers, the
Applicant also submits the Agreement only covers casual workers.
[8] The 2008 Agreement contains a number of reduced terms and conditions when
compared to the Award. These include (but are not limited to) the following:
• The 2008 Agreement does not contain shift penalties, unlike the Award which provides
for penalties for work engaged in between 7pm and 7am;
• The 2008 Agreement does not include weekend penalty rates;
• The 2008 Agreement offers reduced public holiday penalty rates;
• The 2008 Agreement does not provide overtime rates for casual workers;
• The 2008 Agreement does not contain minimum engagement for casual employees;
• The 2008 Agreement does not include any entitlement to annual leave loading;
• The 2008 Agreement does not include any of the Award allowances.
[9] In a number of recent Full Bench decisions, the Commission has expressed a reluctance
to extend the default period of transitional instruments that contain inferior conditions to those
in the relevant modern award. In Peter Frick,2 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.3 In Kalfresh Management Services Pty Ltd,4 the Full
Bench expressed the view 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.5 In Surf Hogs Pty Ltd T/A Hog’s Breath Café Surfers
Paradise,6 the Full Bench found that it was not appropriate to extend the default period of an
Agreement on the basis that bargaining was occurring as “the inferior conditions in the
Agreement mean it is likely that there would be a disadvantage to employees if the Agreement
continues to apply prior to finalisation of the new agreement.”
[10] Having regard to the Full Bench authorities and all the material presently before the
Commission in this matter, we have determined it is not appropriate to extend the default period
[2024] FWCFB 179
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of the 2008 Agreement. It is not appropriate to do so because the inferior conditions in the 2008
Agreement mean it is likely that there would be a disadvantage to employees if the 2008
Agreement continues to apply.
[11] In coming to this decision we have taken into account that there is currently an
application for approval of an enterprise agreement before the Commission. We have also
considered the fact that the Applicant only seeks a short extension to the default period until 1
May 2024 and it will take time and resources for the Applicant to make necessary administrative
arrangements to give effect to the sunsetting of the 2008 Agreement and then to incorporate
changes required from any future Agreement.
[12] However, we are of the view that the potential disadvantage to employees of allowing
the 2008 Agreement to continue outweighs these matters. In coming to this decision we have
had regard to the fact that an application for approval of an enterprise agreement, particularly
in cases where there are BOOT7 and other concerns, can take a number of weeks. Indeed, in
some cases an application for approval may not be successful and the parties will need to return
to bargaining. In addition, we are mindful of the upcoming Easter and ANZAC day public
holidays and the fact that if the 2008 Agreement continues, employees are likely to be receiving
below Award rates for work on public holidays.
[13] Given the circumstances outlined above, we do not think it is appropriate to extend the
default period for bargaining when the ongoing operation of the 2008 Agreement is likely to
disadvantage employees while they await the approval outcome. We are of the view that the
2008 Agreement should be replaced by a modern instrument that meets the requirements of the
FW Act.
[14] The Applicant, in the alternative, has submitted pursuant to subitem 6(b) that the default
period should be extended on the grounds that it is “reasonable in the circumstances to make
an order for extension of the default period.” The reasons given above in relation to it not being
appropriate to extend the default period equally apply to our conclusion that it is not reasonable
to extend the default period.
[2024] FWCFB 179
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[15] As our decision to refuse to extend the default period in accordance with subitem (6) 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. Taking into account both the necessary administrative arrangements
the Applicant will need to take to give effect to the sunsetting of the 2008 Agreement, and the
fact that employees should not be further disadvantaged by being paid below award rates over
the Easter public holiday period, the default period is extended to Thursday 28 March 2024.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
AC313764 PR772620
1 [2023] FWCFB 122.
2 Peter Michael Frick [2023] FWCFB 137.
3 Ibid, [32].
4 Kallium Management Services Pty Ltd as Trustee For The Kalium Labour Trust T/A Kalfresh Pty Ltd [2023] FWCFB 217.
5 Ibid, [14].
6 [2024] FWCFB 12, [16].
7 Better Off Overall Test, Fair Work Act 2009 (Cth) s 193.
OF THE FAIR WORK L MISSION THE SEA
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb122.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/2024fwcfb12.pdf
