[2024] FWCFB 202
The attached document replaces the document previously issued with the above code on 5 April
2024.
The attached document replaces the document previously issued to insert the Publications Id
linked to each Agreement.
Associate to Deputy President Wright
Dated 22 April 2024
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
SGE Trust
(AG2023/4800)
Watergardens Enterprises Trust T/A Watergardens
(AG2023/4811)
Hospitality industry
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT GRAYSON
COMMISSIONER THORNTON
SYDNEY, 5 APRIL 2024
Application to extend the default period for Restaurant Café Moderno Employee Collective
Agreements
[1] SGE Trust (SGE) has made an application under the Fair Work (Transitional Provisions
and Consequential Amendments) Act 2009 (Transitional Act) to extend the default period for
the Restaurant Café Moderno Employee Collective Agreement (AC309209) which applies to
SGE and its employees. The application seeks to extend the default period for the Agreement
to 5 December 2027. At the time the application was made, the Agreement covered 15
employees working in a café serving food and drinks.
[2] Watergardens Enterprises Trust (Watergardens) has made an application under the
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional
Act) to extend the default period for the Restaurant Café Moderno Employee Collective
Agreement (AC309210) which applies to Watergardens and its employees. The application
seeks to extend the default period for the Agreement to 5 December 2027. At the time the
application was made, the Agreement covered 12 employees working in a café serving food
and drinks.
[3] The Commission’s Agreements Analysis Team considered both agreements in detail
and have confirmed that they are in exactly the same terms, with the only differences being the
employer’s name in the first clause of each agreement and the publications ID of each
agreement. On that basis, we have considered these applications together and publish this
decision with respect to both applications. We refer to the SGE and Watergardens Agreements
as ‘the Agreements’ and the Applicants either by their respective name or collectively as the
Applicants.
[2024] FWCFB 202
DECISION
AUSTRALIA FairWork Commission
[2024] FWCFB 202
2
[4] The Agreements are collective agreements made under the Workplace Relations Act
1996 (Cth) (WR Act) and approved under that Act by the Workplace Authority. The
Agreements are each a ‘WR Act instrument’ within the meaning of item 2(2) of Schedule 3 of
the Transitional Act. They are each classified by item 2(5)(c)(i) of Schedule 3 as a ‘collective
agreement-based transitional instrument’. Agreements of this kind are commonly referred to as
‘zombie agreements’.
[5] The Transitional Act was amended by the Fair Work Legislation Amendment (Secure
Jobs, Better Pay) Act 2022 (SJBP Act) to provide for the automatic termination of all
remaining transitional instruments. Pursuant to items 20A(1) and (2) of Schedule 3 to the
Transitional Act, the Agreements would have been terminated on 6 December 2023 (the end of
the default period) unless extended by the Commission. The main features of item 20A of
Schedule 3 to the Transitional Act are described in detail in the Full Bench decision in Suncoast
Scaffold Pty Ltd (Suncoast Scaffold).1
[6] Under subitem 20A(6) of Schedule 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 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.”
[7] 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 agreement 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.
[8] In these applications, the Applicants submit that the Agreements should be extended
under subitem (9) as the employees would be better off overall under the Agreements than they
would be under the relevant modern award. The Applicant has indicated that the modern award
that covers the employees and will apply to the employees if the Agreement is terminated is the
Restaurant Industry Award 2020 (the Award).
Better Off Overall Analysis
[9] The Commission’s Agreements Analysis Team prepared a written assessment
comparing the conditions in the Agreements with those contained in the Award. A copy of these
analyses were provided to the Applicants who were given an opportunity to make further
comments or submissions. The Applicants provided a response in writing. These responses
have been considered in reaching this decision.
[10] The Agreements are either largely silent on terms and conditions otherwise set out in
the Award or provide for reduced entitlements.
http://www.austlii.edu.au/au/legis/cth/num_act/fwlajbpa2022516/
http://www.austlii.edu.au/au/legis/cth/num_act/fwlajbpa2022516/
http://www.austlii.edu.au/au/legis/cth/num_act/fwlajbpa2022516/
[2024] FWCFB 202
3
[11] There is no provision for penalty rates in the Agreements. A fixed rate is paid to
employees irrespective of the hours they work. In addition, overtime is payable at an ordinary
rate without any loading provided for by the Award. No annual leave loading is payable under
the Agreements. The Applicants say that the payrate is higher than the Award rate and is
intended to incorporate all penalty rates, leave loading and overtime payable under the Award.
[12] The Applicants assert that the employees covered by the Agreements would be better
off overall because hours or overtime worked that would attract penalty rates under the Award
but are paid at a fixed rate under the Agreements have been “bought out” by higher hourly rates
of pay. The Applicants provided a table of wages currently paid to employees with their
submissions. They argue that “[c]onsideration ought to be given to the increased pay rates
which have effectively compensated all employees as a group who benefit equally by the
increased rate.”
[13] The wage rates in the Agreements fall below the Award and wage increases are payable
at the discretion of the Applicants. The Applicants have advised the Commission that the rates
currently paid to employees are above Award rates. However, there is nothing in place to
compel the Applicants to pay the above Award rates they say are in fact paid. Further, no
information was provided by the Applicants as to how the rates are determined.
[14] The Agreements allow for employees to be rostered to work 38 hours per week, from
Monday to Sunday, averaged over a 12-month period, set in accordance with the demands of
the business. There are no restrictions on how many hours can be worked in a day, the number
of days that can be worked in a week or requirements for minimum breaks between shifts as
provided by the Award. With respect to part-time employees, there are no safeguards with
respect to minimum and maximum engagements, nor any requirement for reasonably
predictable hours of work or guaranteed hours of work.
[15] The Applicants accept “this is correct in terms of how it is set out in the agreement”
but argue “in practicality the application of the rostering process provides for set shifts for
employees”2 that operate according to the employees’ needs. The Applicants submit that the
businesses have set opening hours as they operate within shopping centres with fixed opening
and closing times, thereby reducing the likelihood that overtime will be worked, and limiting
the hours that can be worked by employees.
[16] There are no safeguards in the Agreements to limit the hours worked by employees as
there are in the Award. The Applicants have asked the Commission to determine the extension
of the default period on the basis of what they say currently occurs in practice in the Applicants’
businesses, in the absence of conditions commensurate to the Award being contained in an
applicable industrial instrument.
[17] The paid meal break provided for in the Agreements is more beneficial than the Award.
Full-time employees are entitled to a 30-minute paid break, and part-time employees are entitled
to a paid 10 minute break after 4 hours of work or a 30 minute break, of which 10 minutes are
paid, if they work in excess of 7.5 hours in a shift. Casual employees have no entitlement to a
paid break.
[2024] FWCFB 202
4
[18] Other than provision of a meal to the value of $15.303, other allowances payable under
the Award are excluded.
[19] The meal break and entitlement to a meal are more beneficial than the Award, however,
as set out above, the amount of paid breaks varies between employees according to the status
of their employment and may not be available to all employees, depending on the hours they
are rostered to work.
[20] Regarding the reduced casual loading of 20% under the Agreements, compared with
25% in the Award, the Applicants say they do not employ casual employees and do not intend
to do so in the future, and as such, the casual loading has no application to its respective
workforces. However, the Applicants suggest that if an extension is granted to the default
periods of the Agreements, the Commission ought to also make an order that the Applicants
make payment of 25% casual loading for the remaining life of the Agreements.
Consideration
[21] In Suncoast Scaffold,4 the Full Bench observed that the application of the better off
overall test in subitem (9) of item 20A in Schedule 3 required a broad evaluative judgment
based upon an overall comparison of the terms of the transitional instrument and the relevant
award(s) in their application to the cohort of award covered employees.5 We adopt the same
approach here.
[22] While full-time employees may be better off overall compared to the Award on account
of receiving a 30-minute paid meal break if engaged to undertake shifts that would not attract
penalty rates under the Award, this falls well short of the requirement in subitem (9) that the
award covered employees, viewed as a group, be better off overall if the relevant Agreement
applied to them.
[23] Having regard to the lack of shift, weekend, public holiday and over-time penalty rates,
leave loading, reduced casual loading and lack of limits concerning hours of work, the
employees, considered as a group, cannot be considered better off overall under the relevant
Agreement compared to the Award. Therefore, the default period for either Agreement cannot
be extended under subitem 20A(6)(a) and (9) of Schedule 3.
[24] We are also not satisfied that it is ‘reasonable in the circumstances’ to extend the default
period in accordance with subitem 20A(6)(b) of Schedule 3.
[25] In Suncoast Scaffold6, the Full Bench described the ‘reasonable’ criterion in item
20A(6)(b) of Sch 3 to the Transitional Act in this way7:
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.
[2024] FWCFB 202
5
[26] The Applicants make no argument that it is otherwise reasonable in the circumstances
to extend the default period for the Agreements.
[27] The argument of the Applicants that higher rates of pay instead of the payment of
applicable penalty rates “equalizes” rates across the workforce and delivers benefits to all
employees across the workforce does not persuade us that it is otherwise reasonable in the
circumstances to extend the default period of either Agreement.
[28] The Full Bench has noted that the purpose of sunsetting zombie agreements as provided
by the SJBP Act is to replace them with contemporary instruments made under the Fair Work
Act 2009.8 It is not reasonable in this case to extend the default period of the Agreements
because they do not contain contemporary terms and if employees remained covered by their
outdated terms, they would not be better off overall than under the Award.
[29] As our decision is to refuse to extend the default period under subitem 20A(6) of
Schedule 3 for both Agreements and 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 the parties to make the necessary administrative arrangements to
give effect to the sunsetting of the Agreements the default period is extended to 12 April 2024.
[30] The applications are dismissed.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
PR773231
1 [2023] FWCFB 105 at [3]-[18].
2 See submissions of the Applicant dated 12 January 2024.
3 The Applicants note that the meal provided is now for the above amount, an increase on the amount included in the
Agreements.
4 [2023] FWCFB 105 at [15].
5 Ibid at [17].
6 [2023] FWCFB 105.
7 Ibid at [17].
8 See for example, see Quinn Transport Pty Ltd Enterprise Agreement 2009 [2023] FWCFB 195 at [23].
THE FAIR WORK CO L MISSION THE SEAL OF
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb195.pdf
