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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
ANNE ELIZABETH O’DONNELL
(AG2023/4970)
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
SYDNEY, 22 APRIL 2024
Application to extend the default period for an Australian Workplace Agreement
Introduction
[1] Ms Anne O’Donnell 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
(Transitional Act). The relevant instrument is an Australian Workplace Agreement (AWA)
made under the Workplace Relations Act 1996 (WR Act) in 2003. The original parties to the
AWA are Ms O’Donnell and her employer at that time, Commonwealth Bank of Australia
(CBA).
[2] There was a transfer of business from CBA to CMLA Services Pty Ltd (CMLA) on 26
March 2021 and Ms O’Donnell’s employment transferred to CMLA on that day. The AWA
was a transferrable instrument and applied to Ms O’Donnell’s employment after the transfer
date. Pursuant to subitem 20A(1) of Sch 3 of the Transitional Act, the AWA was to terminate
on 6 December 2023 unless application was made to extend it under subitem 20A(4). Ms
O’Donnell seeks to have the default period extended to 6 December 2027.
[3] The main aspects of the statutory framework applicable to applications under subitem
20A(4) were detailed in the Full Bench decision in Suncoast Scaffolding Pty Ltd1. In short, the
AWA 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 (FW Act) by items 2 and 3 of
Sch 3 to the Transitional Act. The Fair Work Legislation Amendment (Secure Jobs, Better Pay)
Act 2022 (SJBP Amendment Act) amended the Transitional Act to provide for, amongst other
things, the automatic termination of all remaining transitional instruments. It did this by adding
item 20A to Sch 3 of the Transitional Act. The SJBP Amendment Act refers to transitional
instruments as ‘zombie’ agreements. Item 20A provides for the automatic sunsetting of
remaining agreement-based transitional instruments at the end of a ‘default period’. The default
period is the period ending on 6 December 2023 unless extended by the Commission.
[4] Under subitem (6) of item 20A, upon application, the Commission is required to extend
the default period for an agreement-based transitional instrument for a period of no more than
[2024] FWCFB 228
DECISION
AUSTRALIA FairWork Commission
http://www.austlii.edu.au/au/legis/cth/num_act/fwlajbpa2022516/
[2023] FWCFB 228
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four years if the Commission is satisfied that (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] The application is advanced under subitem 6(b) on the basis that it is reasonable in the
circumstances to do so. Ms O’Donnell is concerned that she will be worse off under
arrangements proposed by CMLA should the AWA terminate and so wishes the AWA to
continue.
Background
[6] At the time that Ms O’Donnell’s employment transferred to CMLA, the AWA also
transferred, and became binding upon CMLA as a "transferrable instrument" under the FW Act.
In addition, the Commonwealth Bank of Australia Group Enterprise Agreement 2016
(‘Enterprise Agreement’) also transferred by operation of the same rules. The Enterprise
Agreement covered the applicant but did not apply at the time of transfer.
[7] On 24 May 2023, Ms O’Donnell was notified about the upcoming changes to her terms
and conditions of employment. In a letter to Ms O’Donnell, CMLA stated that from 7 December
2023 onwards, the Enterprise Agreement would apply to her employment with CMLA.
[8] On 5 December 2023, Ms O’Donnell was provided with an individual arrangement,
which sought to vary certain terms in the Enterprise Agreement. The arrangement is a proposed
individual flexibility arrangement. Ms O’Donnell does not agree to the terms of the proposed
individual flexibility agreement. She otherwise has no concern about the Enterprise Agreement
regulating her employment.
[9] The Enterprise Agreement permits individual arrangements to be entered into by
agreement. Sections 202 – 204 of the FW Act provides safeguards for employees around
individual arrangements. An enterprise agreement must include a flexibility term identifying
the terms that may be so varied. Only terms identified in the enterprise agreement can be varied.
The safeguards allow individual employees to only agree to arrangements varying the effect of
an enterprise agreement in order to meet the genuine needs of employees and employer. The
safeguards also include that the arrangement be in writing, it must be genuinely agreed to by
the employee and employer, the arrangement must result in the employee being better off
overall under the arrangement than if there had been no arrangement. A copy of the arrangement
must also be provided to the employee. The arrangement must provide that the employee may
terminate the arrangement it writing by no more than 28 days’ notice.
Consideration
[10] Ms O’Donnell applies to extend the default period for the AWA under Item 20A(6)(b)
on the basis that it is reasonable in all of the circumstances to do so. In Suncoast Scaffolding
Pty Ltd the Full Bench described the ‘reasonable’ criterion in applications to extend default
periods as follows2:
[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,
[2023] FWCFB 228
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that is, the relevant matters and conditions accompanying the case. Again, a broad evaluative
judgment is required to be made.
[11] Full Benches of the Commission have said a number of times that the purpose of the
sunsetting arrangements introduced in the SJBP Act3 is that zombie agreements are to be
replaced by contemporary instruments made under the FW Act.
[12] The Full Bench in Northern Inland Credit Union Limited4 noted that the statutory
intention behind the SJBP amendments is that transitional instruments approved many years
ago under legislation sunset be replaced by modern industrial instruments made under the FW
Act. The Full Bench also observed that this intention is particularly relevant to AWAs which
are a species of individual employment agreements that are referred to in the objects of the FW
Act as being inconsistent with a fair workplace relations system. The Enterprise Agreement
was made under the FW Act. The AWA was made over 20 years ago under the WR Act. We
consider those matters relevant to our broad evaluative judgment as to whether that the
individual agreements continue to apply.
[13] We find that it is not reasonable in the circumstances to extend the default period of Ms
O’Donnell’s AWA. Once the AWA terminates her employment will be regulated by the
Enterprise Agreement. While Ms O’Donnell has some misgivings about CMLA’S proposal to
enter into an individual flexibility arrangement varying the effect of some of the terms of the
Enterprise Agreement, the FW Act is quite clear that any such arrangements should ensure Ms
O’Donnell is not disadvantaged. Further if Ms O’Donnell does not want to enter into the
proposed arrangement she cannot be forced to do so as she must genuinely agree.
[14] As our decision is to refuse to extend the default period and our decision is made after
the sunset date in the Transitional Act, subitem 20A(11)(e) of Schedule 3 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 AWA and the
default period is extended until 6 May 2024.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
PR773831
1 [2023] FWCFB 105 at [3] to [18]
2 id at [17]
OF THE FAIR WORK L MISSION THE SEA
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
[2023] FWCFB 228
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3 See for example Quinn Transport Pty Ltd Enterprise Agreement 2009 [2023] FWCFB 195at [23] and One HPA Certified
Agreement 2004-2007 [2023] FWCFB 137, at [32].
4 [2023] FWCFB 120 at [23]-[25].
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb195.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb137.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb120.pdf
