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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
Armesto’s Transport Pty Ltd
(AG2023/4985)
ARMESTO’S TRANSPORT EMPLOYEE COLLECTIVE
AGREEGMENT 2007
Transport Industry
DEPUTY PRESIDENT WRIGHT
COMMISSIONER CONNOLLY
COMMISSIONER TRAN
SYDNEY, 13 MARCH 2024
Application to extend the default period for the Armesto’s Transport Employee Collective
Agreement 2007
[1] Armesto’s Transport Pty Ltd has applied under 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 Armesto’s Transport Employee Collective Agreement 2007
(Agreement).
[2] The Agreement is a collective agreement-based transitional instrument under item
2(5)(c) of Sch 3 of the Transitional Act. The application seeks to extend the default period of
the Agreement to 7 December 2024 on the grounds that bargaining for a replacement agreement
is occurring or, alternatively, that it is reasonable the circumstances to do so.
[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.
Specified parties may apply to the Commission for an extension of that period for up to four
years in prescribed circumstances. The main features of item 20A of Sch 3 are described in
detail in the Full Bench decision in Suncoast Scaffold Pty Ltd1and we rely on what was stated
in that decision.
[4] The application is made under subitem (4) of item 20A of Sch 3 to the Transitional Act,
on two bases. First, that the Commission can be satisfied under subitem (6)(a) that subitem (7)
applies and it is otherwise appropriate in the circumstances to extend the default period for the
Agreement. Subitem (7) applies if bargaining for an enterprise agreement to replace the zombie
agreement is occurring. In the alternative, the Applicant relies on subitem 20(6)(b), which
provides for an extension to be granted if the Commission can be satisfied that it is reasonable
in the circumstances to do so.
[2024] FWCFB 140
DECISION
AUSTRALIA FairWork Commission
[2024] FWCFB 140
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[5] In the matter of ISS Health Services Pty Ltd,2 the Full Bench stated that in order for
subitem (7) to apply, three requirements must be satisfied:
1. The application must be made at or after the notification time for a proposed
enterprise agreement; and
2. The proposed enterprise agreement must cover the same or substantially the same
group of employees covered by the Agreement; and
3. Bargaining for the proposed enterprise agreement must be occurring.
[6] ISS Health Services Pty Ltd related to an application under item 26A(4) of Sch 3A,
which relates to Division 2B State employment agreements. The wording in item 26A is
substantially the same as the wording in item 20A.
Background
[7] Armesto’s Transport Pty Ltd lodged its application with the Fair Work Commission on
6 December 2023. In its Form F81 it indicated the reason it was seeking an extension was
because it was about to commence bargaining for a new agreement that would cover the same
or substantially the same group of employees as covered under the existing agreement. No
additional information was provided, however, a copy of the existing agreement was included
with the application.
[8] In considering the application, on 20 December 2023 we sought further information
from the Applicant including a copy of a notice of representational rights issued; details of
bargaining representatives; a chronology of negotiations to date and any further proposed
negotiations; the Applicant’s views on the relevant Modern Award and whether or not
employees under the agreement would be better off under the Award or the existing agreement;
and whether a 6 month extension to the default period would be sufficient.
[9] In reply on 5 January 2024, the Applicant advised that no employees had indicated an
interest in being a bargaining representative or forming a bargaining committee but that they
had communicated with all employees via email about the request for an extension to the
zombie agreement and the need for it to be updated. They further advised that work had begun
on a draft of the new agreement, that they believed employees were better off on the current
agreement when compared to the Award and that they believed a 6-month extension would be
sufficient time to finalise a replacement agreement.
[10] The Applicant’s response also indicated the replacement agreement that was to be
proposed was intended to cover all of its employees who were currently covered by the existing
agreement and would otherwise be covered by the Road Transport and Distribution Award
2020, the Road Transport (Long Distance Operations) Award 2020, the Vehicle Repair,
Services and Retail Award 2020 or the Clerks – Private Sector Award 2020.
[11] On 12 January 2024, the Applicant’s representatives provided the Commission with
further information supporting its application, including an analysis of the agreement terms in
comparison to the relevant Modern Awards and indicating that it envisaged bargaining for the
new agreement would commence on or before 2 February 2024. This correspondence also
[2024] FWCFB 140
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clarified that it was now the Applicant’s intention that the replacement agreement would only
cover its linehaul drivers who would otherwise be covered under the Road Transport (Long
Distance Operations) Award 2020.
[12] In early February 2024, we again sought further information from the Applicant to
demonstrate that bargaining for the replacement had commenced or is otherwise occurring or
underway, along with confirmation that the proposed agreement was now intended to only
cover linehaul drivers employed by Armesto’s Transport Pty Ltd.
[13] The Applicant did not provide any additional information in support of its submissions
that bargaining was occurring. However, on 13 February 2024, confirmed that the proposed
agreement was only intended to cover its linehaul drivers.
Consideration
[14] The Applicant submits that it is in the process of preparing a draft replacement
agreement to cover its linehaul drivers and that its employees are better off under the existing
agreement when compared to the relevant Modern Awards.
[15] First, we have considered the application with regard to 20A(6)(a) and subitem 7 as set
out by the Full Bench in ISS Health Services Pty Ltd as follows:
1. This application was made on 6 December 2023. However, the Applicant has not
provided any additional information to identify a notification time for the proposed
agreement or provided the Commission with a copy of the NERR it is required to
provide to employees in advance of the commencement of bargaining.
2. The Applicant submits that there are approximately 150 of its employees who are
linehaul drivers who will be covered by the proposed new agreement. It has made
no submissions on the terms proposed for the approximately 50 remaining
employees covered under the existing agreement who would otherwise be covered
by the Road Transport and Distribution Award 2020, the Vehicle Repair, Services
and Retail Award 2020 or the Clerks – Private Sector Award 2020.
3. The Applicant has not provided any additional information to support its assertion
that bargaining is occurring for the proposed replacement agreement.
[16] The Full Bench in ISS Health Services Pty Ltd identified the requirements for subitem
7 to be satisfied as threefold. The Applicant has not been able to satisfy any of the three
requirements. On this basis, its application to extend the default period cannot be granted
pursuant to 20A(6)(a).
[17] In the alternative the Applicant may rely on subitem 20A(6)(b) to have the default period
extended. The subitem requires a consideration of whether it is reasonable in the circumstances
to extend the default period. This involves the application of a broad evaluative judgement.
[18] In Suncoast Scaffolding Pty Ltd,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
[2024] FWCFB 140
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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 under the terms of the Workplace Relations
ACT 1996. The Applicant contends that employees under the agreement are better off under the
existing agreement than the relevant Modern Awards.
[20] We have considered these submissions and compared the terms of the agreement to the
relevant Modern Awards. The agreement contains some rates of pay and conditions that appear
above or comparable to those provided for under the Awards.
[21] However, on balance we do not consider these more beneficial conditions as sufficient
to outweigh the detrimental conditions in the Agreement. These detrimental conditions include
the following:
1. Road Transport & Distribution Award 2020
• Less beneficial casual loading of 23% compared to 25% in the Award.
• Less beneficial minimum engagement of 3 hours for casuals compared to 4 hours in
the Award.
• Silent on casuals being paid additional 10% on ordinary hourly rate when working
overtime.
• Less beneficial or silent on casuals being paid shift penalties on a cumulative basis
with the casual loading.
• For employees who would otherwise be covered by the Transport, Distribution and
Courier Industry Award – Southern Division 2003 (QLD), the agreement and pre-
reform Award are silent on shift definitions.
• Less beneficial shift penalties compared to the Award.
• Less beneficial overtime compared to the Award for Brisbane and QLD local
drivers.
• Provides less beneficial or is silent on most Award allowances.
2. Road Transport (Long Distance Operations) Award 2020
• Silent on all part time provisions provided for in the Award.
• Less beneficial casual CPK rate compared to the Award.
• Provides less beneficial or is silent on most Award allowances.
3. Vehicle Repair, Services and Retail Award 2020
• Less beneficial casual loading of 23% compared to 25% in the Award.
• Silent on casual loading of 50% for hours worked between 6pm and 6am.
• Silent on casual loading paid on a cumulative basis with weekend, public holiday
and overtime penalties as per the Award.
• Varied shift definitions and less beneficial shift penalties compared to the Award.
• Provides less beneficial or is silent on most Award allowances.
4. Clerks – Private Sector Award 2020
• Less beneficial casual loading of 23% compared to 25% in the Award.
[2024] FWCFB 140
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• Silent on casual loading paid on a cumulative basis with overtime penalties as per
the Award.
• Silent on shift definitions and shift provisions provided for in the Award.
• Provides less beneficial or is silent on most Award allowances.
[22] Upon review of 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 Awards applied. We have considered this finding with regard to whether it is
“reasonable in circumstances” to extend the default period in accordance with subitem
20A(6)(b) of Sch 3 and satisfied this is not the case.
[23] 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
[24] We have found this to be the case in the present circumstances. We have also considered
the purpose of the provisions to be relevant to the broad evaluative judgement that we are
required to make. The Explanatory Memorandum for the Secure Jobs Better Pay Act expressed
the purpose of the provisions relating to extending the default period in this way:6
“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 leaving employees worse off.”
[25] In Peter Frick,7 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.8
[26] In the present circumstances, we are not satisfied that it is reasonable to extend the
default period for the Agreement because the Agreement does not contain contemporary terms
and the employees covered by the Agreement would be better off overall under the Award.
[27] As our decision is made after the sunset date in the Transitional Act, subitem 20A(11)
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 to
Applicant to make the necessary administrative arrangements to give effect to the sunsetting of
the Agreement that the default period is extended to 27 March 2024.
DEPUTY PRESIDENT
OF THE FAIR WORK L MISSION THE SEA
[2024] FWCFB 140
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Printed by authority of the Commonwealth Government Printer
AC310013 PR772323
1 [2023] FWCFB 105
2 [2023] FWCFB 122 at [4].
3 [2023] FWCFB 105.
4 Kallium Management Services Pty Ltd As Trustee For The Kalium Labour Trust T/A Kalfresh Pty Ltd [2023]
FWCFB 217.
5 Ibid at [14].
6 Explanatory Memorandum Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 at [670].
7 [2023] FWCFB 137.
8 Ibid at [32].
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/2023fwcfb217.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb217.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb137.pdf
