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
Health Services Union
(Applicant)
v
Claro Disability Services Pty Ltd
(Respondent)
(AG2023/4551 & 4552)
AHC RESIDENTIAL SERVICES (VICTORIA) COLLECTIVE
AGREEMENT 2009-2012 & DISABILITY AND SUPPORT SERVICES
CERTIFIED AGREEMENT 2005-2008
Health and welfare services
DEPUTY PRESIDENT SLEVIN
COMMISSIONER CRAWFORD
COMMISSIONER TRAN
SYDNEY, 25 JUNE 2024
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 Sch. 3, Item
20A(4) Schedule 7 Item 30(4) -Applications to extend default period for agreement-based
transitional instruments.
Introduction
[1] The present applications are applications by the Health Services Union (HSU) to
extend the default periods for the AHC Residential Services (Victoria) Collective Agreement
2009-2012 (2009 Agreement) and the AHCS Collective Agreement 2008-2011 (2008
Agreement) pursuant to the Fair Work (Transitional Provisions and Consequential
Amendments Act 2009 (Cth) (Transitional Act). The agreements cover employees engaged as
disability services workers in regional Victoria.
[2] At the same time these applications were made the HSU applied pursuant to the
Transitional Act, to extend a number of Agreements that apply to disability services workers
in regional Victoria (the HSU applications). The current applications were amongst those.
We determined all of the HSU applications save for these matters in an earlier decision.1 The
employer covered by the two agreements, Claro Disability Services Pty Ltd (Claro), opposes
the applications.
[2024] FWCFB 294
DECISION
AUSTRALIA FairWork Commission
[2024] FWCFB 294
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[3] Each of these applications included an error. The application for the 2008 Agreement
identified an agreement made in 2005 which was the predecessor agreement to the 2008
Agreement. Claro raised jurisdictional objections to that matter proceeding. In an earlier
decision,2 we found we had jurisdiction to hear the matter and amended the application to
refer to the 2008 Agreement pursuant to s. 586 of the Fair Work Act 2009 (FW Act).
[4] The application to extend the 2009 Agreement was made on the basis that it was an
agreement-based transitional instrument and sought to extend the default period pursuant to
item 20A(4) of Sch 3 of the Transitional Act. The 2009 Agreement is not an agreement-based
transitional instrument. It is an enterprise agreement made during the bridging period for the
purposes of Sch 7 of the Transitional Act. The HSU sought to amend the application and now
seeks to extend the default period for an enterprise agreement made during the bridging
period pursuant to item 30(4) of Sch 7 to the Transitional Act. Claro expressed no view on the
amendment, and we grant it. We will consider the application for the 2009 Agreement under
Sch 7 of the Transitional Act.
[5] The grounds relied upon by the HSU in all of the HSU applications are identical. They
are repeated in the applications for the 2009 and 2008 Agreements. They are:
1. The Applicant contends that employees would be better off overall if the
Agreement continued to apply to them than if the relevant modern award applied.
2. The relevant modern award is the Social, Community, Home Care and Disability
Services Industry Award 2010 (‘the SCHADS Award’), being the award that
covers employers and employees in the social and community services sector.
3. The Agreement contains several entitlements that are superior to those provided
for by the SCHADS Award.
4. The Applicant submits that the criteria in subitem (9) are met, and further, that it is
appropriate to extend the Agreement for the following additional reasons:
a. The Applicant has consulted with members covered by the agreement and
the membership have indicated a firm desire to continue to be covered by
it.
b. A review of the National Disability Insurance Scheme (NDIS) is currently
underway and due to provide a final report in October 2023. The outcome
of that review may change the bargaining position of the covered
employees. For this reason it is appropriate to extend the coverage of the
agreement to allow the parties to consider bargaining after accounting for
any changes resulting from that review.
c. The Federal Government are currently considering the recommendation
arising from the Disability Royal Commission’s report and are due to
provide a response in approximately March 2024. This response may
change the bargaining position of the covered employees. For this reason it
is appropriate to extend the coverage of the agreement to allow the parties
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to consider bargaining after accounting for any changes resulting from that
review.
5. The Applicant further submits that it is appropriate to extend the default period
until a decision arises from B2023/1235 Application for a supported bargaining
authorisation – social, community, home care and disability services sector. The
matter is before Deputy President Wright and directions were issued with respect
to this matter on 22 November 2023.
Background
[6] Zenitas Healthcare Pty Ltd owns Claro. Zenitas was involved in mergers and
acquisitions in the disability care sector from 2016. That activity included the acquisition of
Claro on around 31 May 2018 through the acquisition of all the shares in Australian Home
Care Services Pty Ltd. It brought them together under an operational brand of Claro Aged
Care & Disability Services. Zenitas’ companies and businesses had different employment
arrangements under a range of industrial instruments resulting in varying terms and conditions
within its business. These arrangements included a combination of the SCHADS Award, three
zombie agreements, and some ‘grandfathered’ terms and conditions from a previously
terminated enterprise agreement in South Australia.
[7] The three zombie agreements were the 2009 Agreement, the 2008 Agreement and the
AHC NSW Carers Agreement 2009-2012. No application was made to extend the NSW
Agreement. Claro is in the process of standardising the terms and conditions applying to all of
its employees and sees the termination of the zombie agreements as an opportunity to have the
SCHADS Award apply across all of its businesses. It does not propose to enter into an
enterprise agreement to cover its employees.
[8] Claro provided some information about its workforce. 196 of its employees are
covered by the 2009 Agreement. Those employees are residential services workers who are
involved in providing support services to persons with a disability. The services are provided
in supported accommodation. Of these 196 employees, 101 employees were engaged on a
permanent part time basis and 95 employees were engaged on a casual basis. Claro's hours of
operations are 12 midnight to 12 midnight, Monday to Sunday (including public holidays), so
long as there are clients with a disability who require support.
Consideration
[9] The Transitional Act was amended by the Fair Work Legislation Amendment (Secure
Jobs, Better Pay) Act 2022 (Cth) (SJBP) to provide for the termination of all transitional
instruments. The SJBP Act refers to agreements of this kind as ‘zombie agreements.’ For the
purposes of the application to extend the 2008 Agreement, items 20A(1) and (2) of Schedule
3 to the Transitional Act, provide that zombie agreements were to terminate on 6 December
2023 (the end of the default period) unless extended by the Commission. Where an
application to extend the default period is made the agreement subject to the application
continues to apply, pursuant to subitem 20A(11), pending the Commission’s decision. Similar
provisions in Sch 7 apply to the 2009 Agreement.
[10] For the purposes of the application relating to the 2008 Agreement, under subitem
20A(6) of Sch 3, where an application is made for the default period to be extended, the
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Commission must grant the application 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. 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.
[11] So far as the 2008 Agreement is concerned, subitem (7) does not apply as bargaining
for a replacement agreement is not occurring. The 2008 Agreement is a collective agreement
and subitem (8) does not apply. The application to extend the default period is made on the
ground that subitem (9) applies as the employees covered by the 2008 Agreement would be
better off overall if the 2008 Agreement continued to apply to them than if the relevant
modern award applied, and it is otherwise appropriate to do so. The relevant modern award is
the SCHADS Award and potentially the Clerks – Private Sector Award 2020 (Clerks
Award). The HSU contends in the alternative that it would be reasonable in the circumstances
to extend the default period for the Agreement under subitem (6)(b).
[12] Schedule 7, which applies to the 2009 Agreement, provides at subitem 30(6) that the
Commission must extend the default period for a period of no more than four years if either:
(a) subitem (7) or (8) applies and it is otherwise appropriate in the circumstances to do so; or
(b) it is reasonable in the circumstances to do so. Subitem (7) applies if bargaining for a
replacement agreement is occurring and subitem (8) 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.
[13] Bargaining for an agreement to replace the 2009 Agreement is not occurring and
subitem 30(7) does not apply. The application is made on the ground that subitem 30(8)
applies as the employees covered by the 2009 Agreement would be better off overall if the
Agreement continued to apply than if the SCHADS award applied and it is otherwise
appropriate to do so. The HSU contends in the alternative that it would be reasonable in the
circumstances to extend the default period for the 2008 Agreement under subitem (6)(b).
[14] The main features of item 20A of Sch 3 are described in detail in the Full Bench in
Suncoast Scaffold Pty Ltd [2023] FWCFB 105 where the better off overall criterion was
described in this way:
[15] The requirement for the better off overall criterion in subitem 9(b)to be assessed
by reference to the award covered employees ‘viewed as a group’ appears to allow for
the possibility that the criterion may be satisfied, notwithstanding that some individual
employees are not better off overall than under the relevant award, as long as there is a
discernible advantage for the employees considered as a collective. Further, there only
needs to be satisfaction as to the ‘likelihood’ of such a discernible collective
advantage; that is, it only needs to be probable rather than certain. Taking these
matters together, it is apparent that the better off overall criterion is less stringent that
the BOOT in s 193 of the FW Act. However, beyond these broad observations,
subitem 9(b) discloses no methodology as to how the criterion is to be applied. All that
can be said is that a broad evaluative judgment is required based upon an overall
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
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comparison of the terms of the transitional instrument and the relevant award(s)in their
application to the cohort of award covered employees.
Are the employees better off under the 2008 Agreement?
[15] The Commission’s Agreements Team provided an analysis of the terms of the 2008
Agreement against the Award. The 2008 Agreement covers employees who are "engaged in
the provision of 'personal care services', 'home care services', and 'ancillary services' and ' the
performance of clerical and administrative duties'".3 It covers full time, part time and casual
employees. The employees would otherwise be covered by the SCHADS Award or the Clerks
Award. The Agreement operates to the exclusion of the Awards and for the purposes of this
analysis, the Awards are not taken to be incorporated. Employees can be engaged as
shiftworkers.
[16] The rates of pay under the 2008 Agreement are less than the Awards and so are
deemed to be the Award rates, having regard to Item 13 of Schedule 9 of the Transitional Act.
As a result, the employees are not better off under the 2008 Agreement so far as rates of pay
are concerned.
[17] The 2008 Agreement provides less beneficial terms such as hours of work provisions
for personal carers, maximum daily hour provisions, rostering provisions, part time
safeguards and minimum engagement. For casual employees the casual loading and minimum
engagement and public holiday penalties are less beneficial.
[18] The 2008 Agreement is silent on shift provisions including penalties and is silent on
penalties for working ordinary hours on Saturdays and Sundays. The 2008 Agreement also
provides that all overtime is paid at the employee’s ordinary rate or casual employee’s
ordinary rate.
[19] For employees covered by the SCHADS Award, the 2008 Agreement also provides
less beneficial sleepover and 24-hour care provisions. The Agreements Team concluded the
2008 Agreement does not appear to contain any provisions more beneficial when compared to
the Awards and as such, all employees cannot be considered better off overall.
[20] The HSU disagreed with the Agreement Team’s analysis and contended that the
employees viewed as a group are better off overall if the 2008 Agreement continues to apply.
The HSU suggests that the 2008 Agreement allows employees to work up to 12 hours per
shift. It submitted that this flexibility is preferred by employees who seek to consolidate their
work hours into longer shifts with fewer breaks, enabling them to work intensively one week
and enjoy more days off the next. It also contended that while the SCHADS Award may have
better overtime provisions, employers typically manage work schedules to avoid overtime
payments. The HSU submitted the 10% shift allowance in the 2008 Agreement, while less
than the SCHADS Award, may surpass the 12.5% in the SCHADS Award due to its
application to the majority of hours worked between 6pm and 6am on both weekdays and
weekends, which includes compounded penalties not offered by the SCHADS Award.
[21] The HSU also provided the following table of benefits that are said to be more
beneficial in the 2018 Agreement:
2008 Agreement SCHADS AWARD
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Probation - 3 month maximum - Cl 17.1 (4) None
Sleepover - $61.80 includes working up to one hour and
$77.30 3 hours of work - Cl 42 Sleepover - $55.89 -Cl 25.7
Personal Leave - 1st year 10 days, 2nd year 15 days - Cl 25 Only 10 days personal leave
Hours of Work - Home Carer 7am - 7pm M- Fri, Personal
Carer Mon to Sun
Day Worker 6am - 8pm Mon
to Sun
Higher Duties - work in higher classification paid at higher
classification immediately
Home Care - 2 hours or less
exceed and 2 full day after 5
consecutive days
Qualification Allowance - Home Carer Cert III $19 a
week/0.50 cents per hour Personal Carer Cert III $38 a
wk/$1 per hour None
Blood Donor - give blood and be paid for 2 hours on 4
separate occasions - Cl 31 None
Jury Service - reimbursed by employer hours including
penalties/allowances for attending jury service - Cl 32 None
Accident Pay - 26 weeks - Cl 35 None
[22] Claro provided its own comparison table which identified clauses in the 2008
Agreement which provide for terms of employment which are more beneficial for employees
than the SCHADS Award. In its response, Claro acknowledges the following terms of the
2008 Agreement are more beneficial than the SCHADS Award; cl. 25.2 amount of personal
leave, cl. 30 training, cl. 31 blood donors leave, cl. 33 employee assistance program, and cl.
37 salary packaging. A similar table was provided concerning the Clerks Award.
[23] Claro pointed out that the jury service provision in the 2008 Agreement reflects the
entitlement in State legislation which would continue to apply if the 2008 Agreement
terminates.
[24] Claro’s comparison table identified the following clauses in the 2008 Agreement
which provide for terms of employment which are less beneficial for employees than the
Awards: cl. 17 employment categories, cl. 17.3 casual, cl. 18 part-time. cl. 17.5 traineeships,
cl.18 abandonment of employment, cl. 19 redundancy, cl. 20 termination of employment, cl.
22 meal breaks, cl. 23 overtime, cl 24 annual leave, cl. 25.5 carer’s leave, cl. 26
compassionate leave, cl 27. Parental leave, and cl. 36 rostering.
[25] Regarding higher duties, the 2008 Agreement mandates payment at the higher
classification rate for such work, whereas the SCHADS Award stipulates higher pay for the
actual time worked or for the entire day/shift, depending on the duration of the higher duties.
The 2008 Agreement also permits Claro to reduce employee wages for work of a lower
classification, unlike the SCHADS Award which requires reclassification before wage
reduction. Claro submits the entitlements for higher duties and multi-skilling are comparable
in both the 2008 Agreement and the SCHADS Award.
[26] Claro submits the additional benefits in the 2008 Agreement not provided by the
SCHADS Award, including blood donor leave, training payment, and accident pay, are more
beneficial but these benefits are rarely used. Moreover, the SCHADS Award offers other
allowances not included in the 2008 Agreement. Claro argues that these additional
entitlements in the 2008 Agreement should not significantly influence the Commission's
assessment of the better off overall criterion.
[2024] FWCFB 294
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[27] The submissions going to the better off overall criterion were made in a general way.
We were not provided with details identifying the group of employees covered by the 2008
Agreement, the classifications that apply to them, the hours they work and how they work.
Those details would assist in making an assessment of whether viewed as a group they would
be better off if the 2008 Agreement applied rather than the Awards.
[28] Having considered the limited material provided and having assessed the terms of the
2008 Agreement against the terms SCHADS Award and the Clerks Award, we are not
satisfied that 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 2008 Agreement continued to
apply than if the Awards applied. The lower shift penalties, lack of weekend penalties and less
beneficial overtime provisions in particular tend towards this conclusion. The benefits
identified by the HSU do not outweigh the lesser entitlements in the 2008 Agreement. Our
view may have been different if the relevant group of employees did not work at times that
attract these provisions, but as we were not provided with that level of detail, we cannot be
satisfied that the better off overall criterion has been met.
[29] We note that Claro also made submissions disagreeing that the Clerks Award also
covers employees covered by the 2008 Agreement. The submission turns on the interaction
the coverage clauses in the Clerks Award and the SCHADS Award. The question of what
award applies to those of Claro’s employees engaged to perform clerical and administrative
duties is answered by reference to whether the employees are wholly or principally engaged
in clerical work and the environment in which that work is performed. To determine this
question the Commission would need to examine both the work performed by employees and
the environment in which it is performed. These are matters of fact to be determined by
reference to evidence which we do not have before us. The better off overall criterion requires
a broad evaluative judgment as to the likelihood of the employees viewed as a group being
better off overall if covered by the Agreement compared to the relevant modern award(s). For
the reasons outlined we are not satisfied that the clerical employees engaged by Claro would
be better off under whichever of the Awards applies.
[30] Consequently, as we are not satisfied that subitem 20A(9) of schedule 3 does applies,
we cannot extend the default period of the 2008 Agreement under subitem (6)(a).
Are the employees better off under the 2009 Agreement?
[31] Claro provided the following information about the group of employees covered by
the 2009 Agreement. Of its employees 196 are covered by the 2009 Agreement. Those
employees are residential services workers who are involved in providing support services to
persons with a disability. The services are provided in supported accommodation. Of these
101 employees were engaged on a permanent part time basis and 95 employees were engaged
on a casual basis. Claro's hours of operations are 12 midnight to 12 midnight, Monday to
Sunday (including public holidays), so long as there are clients with a disability who require
support.
[32] The Commission’s Agreements Team provided an analysis of the terms of the 2009
Agreement compared with the SCHADS Award. The analysis was as follows.
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[33] The Agreement covers employees who would otherwise be covered by the SCHADS
Award. The Agreement covers full time, part time and casual employees. It operates to the
exclusion of the Award and for the purposes of the analysis, the Award was not taken to be
incorporated. Employees can be engaged as shiftworkers.
[34] The rates of pay under the 2009 Agreement are taken to be as per the SCHADS
Award, having regard to Item 13 of Schedule 9 of the Transitional Act.
[35] For permanent employees, the 2009 Agreement provides less beneficial terms such as
hours of work provisions, part time safeguards and minimum engagement, shift penalties and
Sunday overtime penalties. The 2009 Agreement provides either less beneficial allowances or
is silent compared to the SCHADS Award. The 2009 Agreement also provides less beneficial
sleepover provisions. The Agreements Team concluded full time and part time employees are
not better off overall.
[36] For casual employees, the 2009 Agreement provides less beneficial overtime penalties,
weekend penalties, public holiday penalties and less beneficial minimum engagement
provisions. Given the above less beneficial terms, the Agreements Team concluded casual
employees cannot be considered better off overall.
[37] The HSU provided a response which maintained the view that the employees were
better off under the 2009 Agreement than the SCHADS Award. It contended the 2009
Agreement allows 12-hour shifts, offering employees flexibility and extended time off, which
some find advantageous. It notes that while the overtime provisions in the SCHADS Award
are more beneficial, employers manage rosters under the SCHADS Award to avoid overtime,
which negates the benefit. It submitted the 10% allowance in the 2009 Agreement can be
more beneficial due to its broader application compared to the 12.5% allowance in the
SCHADS Award. It also submitted that the 2009 Agreement pays a higher base sleepover rate
and more for morning shifts post-sleepovers and includes penalties that the SCHADS Award
does not. The HSU submitted that the 2009 Agreement recognises fixed term service for
conversion to permanent employment, and the SCHADS Award does not.
[38] The HSU also contended that the 2009 Agreement offers higher penalties and
allowances on weekends compared to the SCHADS Award. It provided the following table
setting out the 2009 Agreement’s terms that it considered were more beneficial.
2009 Agreement SCHADS AWARD
Probation - 3 month maximum - Cl 11.3 None
Fixed term Employee for specific project or
task - Cl 15 None
Superannuation salary sacrifice – Cl 23 None
Hours of work - 12 hour shifts allowed - Cl
27
Hours of Work - 10 hour shifts maximum -
Cl 25
Overtime - can occur once work over 9 hours
per day - Cl 29
Overtime after 10 hours a day - Cl 25 (1) (b)
(ii)
Allowances - rostered majority hours fall
between 6pm & 6am - 10% and after
sleepover 2 hour shift 10% Mon to Sun - Cl
35
Shift allowances under award are Mon to Fri
only Afternoon shift 12.5% and Night 15%
Sleepover - $74.61 includes working up to Sleepover - $55.89 -Cl 25.7
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one hour - Cl 38
Cash out annual leave - employee able to
cash out 2 weeks leave once every 12 months
- Cl 45
Cash out annual leave only if this results in a
balance not less than 4 weeks - Cl 31.5
Personal Leave - 1st year 12 days, 2nd to 4th
year 14 days, 5th year 21 days - Cl 46 10 days personal leave
Sick Leave - taking single days sick leave
with no evidence 5 days in a calendar year -
Cl 48
s 107 FW ACT evidence required to satisfy
reasonable person
Compassionate Leave – 3 days paid leave
on each occasion if death or serious ill
immediate family – Cl 52
Not in SCHADS Award - NES - 2 days
compassionate leave per occasion s 104
Long Service Leave - 1 week for every 40
weeks - At 10 years 3 mths LSL access when
resigned at 7 years - Cl 53
Not in SCHADS Award - NES - LSL Act Vic
- 1 week for every 60 weeks of service
Blood Donor - give blood and be paid for 2
hours on 4 separate occasions - Cl 66 None
Community Emergency Service leave -
reserve military, CFA or SES paid leave to
perform emergency service - Cl 67
No paid leave in SCHADS - Cl 108 FW Act
entitled to absent work (unpaid)
Jury Service - reimbursed by employer hours
including penalties/allowances for attending
jury service - Cl 68
None in SCHADS Award NES FW Act s 111
- only base rate of pay and ordinary hours
Accident Pay - 39 weeks - Cl 77 None - deleted 2015
Dispute Resolution - timeframes &
Commission able to decide matter by
mediation/conciliation/express
opinion/recommendation/arbitration - Cl 79.3
SCHADS - no timeframes and only
mediation/conciliation/consent arbitration Cl
9
[39] Claro identified the following terms in the 2009 Agreement as less beneficial than the
terms of the SCHADS Award: cl. 10 flexibility term, cl. 11 nature of employment (in terms of
minimum engagements for casual and part time employees), cl. 13 part time employment, cl.
14 casual employment, cl. 22 superannuation, cl. 28 rosters, cl. 29 entitlement to overtime, cl
32 time off between overtime and next shift, cl. 34 meal breaks, cl. 35, shift allowances, cl. 36
meal allowance, cl. 37 travel allowance, cl 39. entitlement to public holidays, cl 43 taking
annual leave, cl. 44 leave loading, cl. 45 cashing out annual leave, cl. 52 entitlement to
compassionate leave, cl 58 parental leave, cl. 63 return to work from parental leave, cl. 65
adoption leave, cl. 67 community emergency service leave, and cl. 78 consultation.
[40] Claro identified the following terms of the 2009 Agreement as more beneficial; cl. 9
savings clause, cl. 23 salary sacrifice to superannuation, cl. 26 conversion to salary, cl. 30
right to refuse overtime, cl. 31 time off in lieu of overtime, cl. 38 sleepover allowance, cl. 41
requirement to work on a public holiday, cl. 46 entitlement to personal/carers leave, cl. 48
sick leave, cl. 53 long service leave, cl. 64 paternity leave, cl. 70 special leave, cl.77 accident
pay, cl. 79 dispute resolution.
[41] Claro’s submissions responded to the HSU’s claims on the better off overall criterion.
On overtime, it notes that the HSU concedes that the overtime provisions in the SCHADS
Award are more beneficial and will apply where employees are required to work longer shifts,
save for the limited circumstances involving part time and casual employees working more
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than 9 hours on a weekday. Claro acknowledges that the overtime trigger for part-time and
casual employees under clause 28.1(b)(ii) of the SCHADS Award is marginally less
beneficial than clause 29.1 of the 2009 Agreement. This is because the overtime trigger under
the SCHADS Award is 10 hours whereas the trigger under the 2009 Agreement is nine hours.
Claro submits this needs to be balanced against the more beneficial weekly and fortnightly
overtime triggers that are provided under the SCHADS Award which are not available under
the 2009 Agreement.
[42] On sleepovers, Claro agrees that the value of the sleepover allowance in the 2009
Agreement is higher than the equivalent allowance in the SCHADS Award. However it
contends that as the 2009 Agreement does not provide employees the right to refuse a
sleepover shift, give an employee who is required to perform work during the sleepover
period payment at overtime rates with a minimum payment of one hour, or require an
employee rostered to perform work immediately before or after the sleepover shift be rostered
or paid for a minimum of four hours work for at least one of these periods of work, the 2009
Agreement provision is less beneficial.
[43] With respect to the 10% morning shift allowance for the two hours worked following a
sleepover shift, Claro disagrees that there is no equivalent entitlement under the SCHADS
Award. Clause 25.7(f) of the SCHADS Award sets out that if an employee is required to work
immediately after a sleepover period, the employee must work or be paid for a minimum of
four hours at the sleepover rate.
[44] Claro agrees that there is no 'fixed term employment' clause under the SCHADS
Award but submits this is a neutral consideration as it does not provide an additional
entitlement to employees.
[45] With respect to the 10% allowance for ordinary hours worked between 6.00pm and
6.00am under clause 35.1 of the 2009 Agreement, Claro submits that while there is no
equivalent entitlement under the SCHADS Award, the award provides for afternoon shift and
night shift, with loadings of 12.5% and 15% respectively.
[46] On long service leave Claro agrees that the entitlement under the 2009 Agreement is
more beneficial.
[47] Claro submits that the entitlement to compassionate/bereavement leave is more
beneficial under the SCHADS Award. The 2009 Agreement does provide for 3 days but it is
limited to permanent employees only. The SCHADS Award entitlement also contemplates a
broader range of circumstances in which the leave may be taken.
[48] Claro accepts that employees have a more beneficial entitlements under the 2009
Agreement to community emergency leave, blood donor leave, cultural leave, special leave,
jury service leave, and accident pay. Claro however notes that these benefits are rarely
accessed.
[49] We do not have enough details about how the work is performed by the relevant
employees to make a mathematical assessment of the financial impacts for the group. It
appears that the 2009 Agreement’s penalties for shift work are less advantageous than the
SCHADS Award. The weekend penalty rates and overtime provisions are also less beneficial.
These matters will have an impact on casual employees, who we are told account for almost
[2024] FWCFB 294
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half of the group covered by the 2009 Agreement. We are also told that the more beneficial
leave entitlements that apply to permanent employees under the 2009 Agreement are not
accessed often. The less beneficial penalties affect all employees, whereas the more beneficial
leave provisions only apply to permanent employees. Claro have chosen not to provide
modelling based on actual rosters worked which would confirm the extent of the
disadvantage. It has informed us that it operates 24 hours per day, 7 days per week.
[50] The submissions going to the better off overall criterion were again made in a general
way. We were not provided with details identifying the group of employees covered by the
2009 Agreement, the classifications that apply to them, the hours they work and how they
work. Those details would assist in making an assessment of whether viewed as a group they
would be better off if the 2009 Agreement applied rather than the SCHADS Award.
[51] Consequently, having considered the limited material provided and having assessed
the terms of the 2009 Agreement against the terms SCHADS Award, we are not satisfied that
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 2009 Agreement continued to apply than if the
SCHADS Award applied. The lower shift penalties, lack of weekend penalties and less
beneficial overtime provisions in particular tend towards this conclusion. The benefits
identified by the HSU do not outweigh the lesser entitlements in the 2009 Agreement. We
hold the same view expressed above about the 2008 Agreement, namely that we may have
come to a different conclusion if the group of employees did not work at times that attract
shift penalties, overtime and weekend penalties. However, as we were not provided with that
level of detail, we cannot be satisfied that the better off overall criterion has been met.
Is it otherwise reasonable to extend the Agreements?
[52] The HSU applies in the alternative to have the default period of the Agreements
extended pursuant to subitems 30(6)(b) and 20A(6)(b). The subitems require a consideration
of whether it is reasonable in the circumstances to extend the default period. This involves the
application of a broad evaluative judgment.
[53] In Suncoast,4 the Full Bench said:
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.
[54] In Peter Frick,5 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 FW Act.6 In Kalfresh Management Services Pty Ltd,7 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.8
[55] We consider these factors weigh against granting the current applications. Also against
extending the Agreements is our view that the employees would not be better off if the
[2024] FWCFB 294
12
Agreements applied. The terms of the Agreement are outdated and do not reflect
contemporary standards.
[56] We have also taken into account that Claro has no intention to commence bargaining
for a new enterprise agreement replacing the two Agreements. In the earlier decision
determining the HSU Applications9 we considered that it was reasonable to extend the default
period of four zombie agreements in the disability sector in Victoria. Our reasons for doing so
included that the HSU had made a supported bargaining authorisation application in
conjunction with the Australian Education Union pursuant to s242 of the FW Act to permit
multi-employer bargaining in the disability sector in Victoria. Extending the agreements in
those cases was reasonable because it would preserve the status quo in terms of wages and
conditions whilst the supported bargaining application is being determined and provide
certainty in terms of wages and conditions and preserve any bargaining leverage employees
may have arising from the more beneficial conditions in those agreements. The same
approach was taken in the decision of the Full Bench in Applications by Australian Education
Union [2024] FWCFB 233 where the Full Bench determined to extend the default periods for
11 zombie agreements that applied in workplaces which were also subject to the joint
supported bargaining authorisation application. Claro was included in the supported
bargaining application but the application was amended to remove it.
[57] In its application, the HSU also relied on the views of its members that the
Agreements should continue. No evidence was given about that matter. Claro disputed that
the employees held such a view.
[58] The HSU also relied on the uncertainty associated with the outcomes of the NDIS
Review and the Royal Commission recommendations may have in bargaining. The Full
Bench considered these matters in Application to extend the default period for the Kirinari
Community Services Limited Hume Riverina Branch - Certified Agreement 2006-200810. At
the time of determining the application in Kirinari, the NDIS Review and the Royal
Commission recommendations had not yet been issued so it was not known what impact they
might have. The Royal Commission recommendations were issued on 28 September 2023 and
the NDIS Review was published on 27 October 2023. The parties had sufficient time to
consider the implications of these matters and we do not regard them as constituting grounds
to extend the Agreements.
[59] None of the matters raised by the HSU convince us that we should extend the life of
zombie agreements that provides for terms and conditions that are inferior to the Awards. We
are of the view that the Agreements should be replaced by a modern instrument that meets the
requirements of the FW Act.
[60] For these reasons, we are not satisfied that it is reasonable in the circumstances to
extend the default period of the Agreements. The applications are dismissed.
[61] As our decision is to refuse to extend the default periods under subitem 20A(6) of Sch
3 and subitem 30(6) of sch 7 of the Transitional Act, and our decision is made after the sunset
date in the Transitional Act, the schedules provide that we must extend the default periods for
the Agreements 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
periods are extended until 9 July 2024.
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb233.pdf
[2024] FWCFB 294
13
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
AG845565 PR776379
1 Applications by Health Services Union [2024] FWCFB 243.
2 2024] FWCFB 244.
3 Clause 5.1.
4 Id at [17].
5 [2023] FWCFB 137.
6 Ibid, [32].
7Kallium Management Services Pty Ltd as Trustee for The Kalium Labour Trust T/A Kalfresh Pty Ltd [2023] FWCFB 217.
8 Ibid, [14].
9 Applications by Health Services Union [2024] FWCFB 243.
10 [2023] FWCFB 158 at [36].
THE SEAL OF TH NOISSINN
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb243.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/2024fwcfb243.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb158.pdf
