1
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 20A(4) - Application to extend default period for agreement-based transitional
instruments
Ms Susan Edmondson
(AG2023/4681)
Commonwealth employment
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT SLEVIN
DEPUTY PRESIDENT GRAYSON
SYDNEY, 9 APRIL 2024
Application to extend the default period for an Australian Workplace Agreement by Ms Susan
Edmondson
[1] Ms Susan Edmondson (the Applicant) has lodged an application to extend the default
period for an individual agreement-based transitional instrument pursuant to subitem (4) of item
20A of Sch 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act
2009 (Cth) (Transitional Act). The relevant instrument is an Australian Workplace Agreement
(AWA) made under the Workplace Relations Act 1996 (Cth) (WR Act) in 2008. The parties to
the AWA are Ms Edmondson and her employer, the Australian Maritime Safety Authority (the
Respondent). The application seeks to extend the operation of the AWA to 31 March 2025. The
application is opposed by the Respondent.
[2] The main aspects of the statutory framework applicable to this application were detailed
in the Full Bench decision in Suncoast Scaffold Pty Ltd.1 In short, the AWA—the subject of the
application—is an agreement-based transitional instrument preserved in operation after the
repeal of the WR Act and the commencement of the Fair Work Act 2009 (Cth) (FW Act) by
item 2 of Sch 3 to the Transitional Act. The Fair Work Legislation Amendment (Secure Jobs,
Better Pay) Act 2022 amended Sch 3 to add item 20A. Item 20A provides for the automatic
sunsetting of remaining agreement-based transitional instruments at the end of the ‘default
period’. The default period is the period ending on 6 December 2023 unless extended by the
Commission. Subitem (6) of item 20A provides that, on application under subitem (4), the
Commission must extend the default for a 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 its reasonable in the circumstances to do so.
[3] The application is advanced pursuant to subitem (7). Subitem (7) applies only where the
application is made at or after the notification time for a proposed enterprise agreement that,
[2024] FWCFB 205
DECISION
AUSTRALIA FairWork Commission
[2024] FWCFB 205
2
in the case of an individual agreement-based transitional instrument, will cover the Applicant
covered by the instrument, and bargaining for the proposed enterprise agreement is occurring.
[4] The Full Bench in ISS Health Services Pty Ltd2 described the requirements that must
be met for an application to extend the default period where bargaining for a replacement
agreement is made.
[5] A Notice of Employee Representational Rights (NERR) was issued to employees of the
Respondent on 28 September 2023. The NERR notified of an intention to bargain for an
enterprise agreement the scope of which will cover the Applicant. The proposed enterprise
agreement is intended to cover 463 employees of the Respondent, most of whom are covered
by an enterprise agreement, the AMSA Enterprise Agreement 2016-2019. The Applicant filed
her application on 29 November 2023, which was after the notification time for the proposed
enterprise agreement.
[6] Employee bargaining representatives have been appointed and two meetings held in
2023. Further meetings were scheduled to occur in 2024.
[7] We are satisfied that the requirements in item 20A(7) of Schedule 3 to the Transitional
Act are met.
[8] Accordingly, we must consider whether it is appropriate in the circumstances to extend
the AWA.
Applicant’s submissions
[9] The Applicant contends that it is appropriate in the circumstances to extend the default
period for the AWA for the following reasons:
1. It would be appropriate to extend the default period until the conclusion of the
bargaining period of the replacement enterprise agreement. This would avoid
breaking the continuity between the AWA and the start of the new and more modern
enterprise agreement better allowing the Applicant to negotiate a transition to the
closest equivalent classification level in the replacement enterprise agreement
without disadvantage.
2. In emails dated 17 November 2023 and 26 November 2023 the Respondent advised
that it will transition the Applicant to interim terms and conditions being a
combination of the expired AMSA Enterprise Agreement and an AMSA
remuneration determination (‘the interim terms and conditions’).
3. The interim terms and conditions disadvantage the Applicant as follows:
(a) The Applicant will be paid a salary that is 3% less than the salary paid to the
Applicant under the AWA with no change to Applicant’s duties or
responsibilities.
(b) The Respondent has stated incorrectly that the salary being offered is in excess
of what the Applicant is currently paid, interpreting the meaning of “salary” in
[2024] FWCFB 205
3
the AWA narrowly and disregarding the non-discretionary cash component
reflected in the calculation of what is described as the “superannuation salary”.
(c) The reduction in the Applicant’s salary would also cause a reduction in the value
of the Applicant’s leave entitlements accrued under the AWA including
recreation leave and long service leave.
(d) The reduction in the Applicant’s salary would also be reflected in what is
reported to the Applicant’s super fund so that the reportable super salary will go
backwards and be equivalent to the Applicant’s reportable super salary of 3 years
ago if the interim terms and conditions were to apply.
(e) The Respondent is refusing to replicate the Applicant’s eligibility for certain
leave arrangements, in particular the removal of 12 leave days under clause 7.15
of the AWA.
(f) The Respondent is refusing to allow the Applicant access to certain leave
entitlements already accrued under the AWA (i.e. carers leave under clause
13.21) post 7 December 2023.
(g) The Respondent has indicated that it will transition the Applicant at an AMSA
level 8.3 which is not the nearest equivalent classification to the Applicant’s
salary paid under the AWA.
(h) The Respondent has offered the Applicant a one off payment of $10,000 but has
not adequately explained to the Applicant what that amount is for.
(i) The Respondent has not advised whether it will meet its liability for salary
accrued from 1 July 2023 to 7 December 2023 which is salary conditional on
competent performance — the Applicant estimates approximately $4000 falls
into this category of salary which would ordinarily become a debt owed to the
Applicant under the AWA.
4. On 17 November 2023, the Applicant proposed an arrangement that would operate
after the sunsetting of the AWA to ameliorate the detriment caused by the transition
to the AMSA Agreement, but this proposed agreement was refused by the
Respondent.
5. It is reasonable for the Commission to extend the default period so that the Applicant
can avoid the imposition of terms and conditions that make the Applicant worse off.
This extension will allow more time for consideration of the replacement enterprise
agreement and time to conduct further discussions to ameliorate any disadvantage
or harshness caused by any lack of equivalency under the replacement enterprise
agreement.
6. The Applicant requests the extension of the default period until the commencement
of the replacement enterprise agreement for which bargaining has been
notified/commenced.
[2024] FWCFB 205
4
7. The Applicant anticipates (from past observation of bargaining in AMSA) that
bargaining will take approximately 12 to 18 months and will most likely be
completed by 31 March 2025 for commencement of a new enterprise agreement in
July 2025.
Respondent’s submissions
[10] The Respondent opposes the extension of the AWA on the grounds that it would not be
appropriate in the circumstances to do so. The Respondent’s view is that the Applicant is better
off under the terms of the AMSA EA than the AWA. The Respondent indicated that the
Applicant is the only employee who is subject to an AWA and that in the interests of equity,
transparency and efficiency, her arrangements should be brought in line with the balance of the
Respondent’s employees. The Applicant’s AWA was agreed in 2007 and has not seen any
update to its terms since. These terms differ from those under the AMSA EA, including by way
of the method of calculation of salary and salary increases, provision for payment of bonuses,
and some leave arrangements, as well as other matters not currently canvassed by the
application.
[11] Further, the Respondent contended that bargaining for the new EA is expected to be
finalised by mid-2024, as opposed to mid-2025 as submitted by the Applicant. The Respondent
submitted that the Applicant is not entitled to be engaged in the bargaining process while she
remains on an AWA, and that this disadvantage to the Applicant can only be avoided by
refusing to extend the default period of her AWA. The Respondent says that the Applicant may
only transition to the closest classification in the EA which is level 8.3, as classification 8.4
would require a promotion to that position, and there are no positions available in her work
area.
[12] In relation to the specific issues raised by the Applicant the Respondent contends:
1. The remuneration for the level 8.3 position, being $177,834 per annum, is higher than
the AWA base salary, being $174,815 per annum, by $3,019. Should the Applicant not
be engaged under the EA when the new enterprise agreement commences, she will not
be eligible for the 0.92% bonus payment that may be available, as approved by the
Australian Public Service Commission. This bonus will be worth $1,636 for a full-time
level 8.3.
2. The Applicant’s salary calculations included a 5% performance bonus, and the
Respondent indicated that it did not agree that this performance bonus should be treated
as salary because it is contingent on participation in the Respondent’s performance
management arrangements. The Respondent properly acknowledged that the bonus has
been paid to the Applicant for each year of operation of the AWA, and that 5% of the
Applicant’s salary under the AWA is $8,740.
3. The Applicant’s superannuation under the EA would move to a calculation based on
salary and recognised allowances. The Respondent acknowledged that the Applicant
had noted, correctly, that this would not include non-cash benefits that are currently
specified as being included for superannuation in the AWA (such as the notional value
of a car park). However, the Applicant is a member of the Public Service
Superannuation Scheme, and as such, her superannuation salary will be retained and
increased by average weekly ordinary time earnings (AWOTE). Accordingly, there is
[2024] FWCFB 205
5
no reduction in super salary – rather, the Applicant’s super salary may be greater under
the AWOTE calculation methodology and will not go backwards or be frozen. The
Respondent submits that in these circumstances, there is no loss to the Applicant’s
superannuation salary, which is maintained in accordance with scheme rules.
4. The value of the Applicant’s leave under the AWA compared to the EA or its
replacement are not easily measured, as pay increases under an EA under negotiation
are hard to predict. In addition, the Applicant is eligible for three additional leave days
for Christmas closedown under the EA as compared to the AWA. The value of these
days is $2,010 (based on her current AWA salary). The Respondent submits that the
leave provisions under the AWA and the EA are essentially the same, with the exception
of Professional Hours, which must be approved.
5. The Respondent offered the Applicant a $10,000 one-off payment to go off the AWA.
6. There is no liability for a partial payment of the performance bonus under the AWA. It
is not an accrued amount – it is only payable after the completion of the performance
year or cycle in June each year and is subject to satisfactory performance.
Applicant’s submissions in reply
[13] In response to the Respondent’s contentions the Applicant argues that the Level 8.3
salary ($177,834) under the current EA is equivalent to the Applicant’s AWA salary ($183,555
which comprises $174,815 + 5% being $8740) and disagrees that reverting to the EA would
involve no disadvantage to the Applicant. The Applicant submits that this equivalency is
dependent on a 3% performance payment and that the Applicant considers that she would be
unlikely to be assessed as eligible for this as it requires a rating of “exceeding expectations”.
Under the AWA, the Applicant receives a 5% bonus payment if she receives an assessment of
“fully competent”, and accordingly, her total package is more than she would be entitled to
under the EA, irrespective of the EA’s base salary being higher.
[14] The Applicant submits that she will also lose discretionary carers leave under the AWA
(5 days) which, she acknowledged, would probably be offset by extra days of personal leave (3
days) and Christmas and New Year shut down (3 days) under the EA. However, this was offset
by the uncertainty arising from the administration of Professional Hours leave (12 days) under
the EA which the Applicant contended, would, as a result, be harder to access.
[15] The Applicant also submits that she has not been offered a level 8.4 classification under
the EA.
[16] The Applicant contended that if the Commission did not extend the default period for
the AWA then this would effectively result in the loss of 5% of her salary (being $8740), as
well as potentially losing 12 days of professional hours leave. The possibility of the
compensation of $3019 and a sign-on payment of $1636 is insufficient to offset the net loss to
the Applicant under the EA as opposed to remaining under the AWA. The Applicant submits
that under the AWA, she expected to receive an annual increase of approximately 3.8% of her
salary to be applied in September 2024 (per clause 6.2 of the AWA).
[2024] FWCFB 205
6
[17] The Applicant expressed an interest in being able to review the terms of the final
negotiated EA in order to compare them with her AWA and the benefits of the AWA that she
might lose if she moved to the current EA.
[18] When the Commission sought the Applicant’s views as to whether a six-month
extension would be sufficient, the Applicant made submissions that bargaining would be
unlikely to be finalised within 6 months as in the past, negotiations for replacement enterprise
agreements have taken several months with 3 unions actively involved. The Applicant
estimated that bargaining should end by March 2025 for a new enterprise agreement to
commence on 1 July 2025.
Consideration
[19] We are satisfied it is appropriate in the circumstances to extend the default period for
the AWA pursuant to subitem 7. However, we do not consider that it is appropriate to extend
the default period to 31 March 2025 as sought by the Applicant.
[20] We consider that it is appropriate to extend the default period until the conclusion of the
bargaining for the replacement enterprise agreement. We accept the position of the employer
that this should likely be achieved by mid- 2024.
[21] We further consider that a comparison of the terms and conditions between the AWA
and the AMSA EA demonstrate that there are some beneficial conditions under the EA and
likely, some inferior, ones. Some of the conditions under the EA are uncertain or likely
contingent on higher performance assessments. On balance, we consider that the terms of the
AWA are likely to be more beneficial than the AMSA EA.
[22] We consider that an extension of time until 30 July 2024 will allow the Applicant and
the Respondent to negotiate and finalise an effective transition without resulting in any
disadvantage to the Applicant in reverting to the existing EA. Whilst we appreciate that the
Respondent would prefer to have all of its employees under one agreement we do not consider
that the extension that we have determined to grant will require the Respondent to make any
special arrangements or entail any new administrative burden as the current procedures and
arrangements can remain on foot.
[23] Accordingly, we consider that an extension to the AWA until 30 July 2024 is sufficient
time for a replacement agreement to be made and approved.
[2024] FWCFB 205
7
[24] Pursuant to item 20A(6) of Sch 3 to the Fair Work (Transitional Provisions and
Consequential Amendments) Act 2009 (Cth), we order that the default period for the Agreement
is extended until 30 July 2024.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
PR773325
1 [2023] FWCFB 105 at [3]-[18].
2 [2023] FWCFB 122 at [4]
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
