1
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 4, Item 20A(4) - Application to extend default period for enterprise agreements made
during the bridging period
John Donald Roach
v
Rio Tinto Iron Ore/Dampier Salt Limited T/A Dampier Salt Limited
(AG2023/4926)
DEPUTY PRESIDENT SLEVIN
COMMISSIONER CRAWFORD
COMMISSIONER TRAN
SYDNEY, 10 JULY 2024
Application to extend the default period for Dampier Salt Employee Agreement 2009
[1] John Donald Roach has applied pursuant subitem 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 Dampier Salt Employees Agreement 2009 (the Agreement).
The employer covered by the Agreement is Dampier Salt Ltd (Dampier).
[2] The Agreement was made under the Workplace Relations Act 1996 (Cth). It is an
agreement-based collective agreement for the purposes of the Transitional Act. The Agreement
was to terminate at the end of the default period on 6 December 2023 in accordance with
subitems 20A(1) and 20A(2) of Schedule 3 to the Transitional Act unless an application was
made under subitem 20A(4) for that time to be extended. Mr Roach’s application seeks to
extend the default period to 5 December 2025. The Agreement continues to apply pursuant to
item 20A(11) pending our decision in this matter.
[3] The Transitional Act was amended by the Fair Work Legislation Amendment (Secure
Jobs, Better Pay) Act 2022 (Cth) (SJBP Act) to provide for the automatic termination of all
remaining transitional instruments. The SJBP Act refers to agreements of this kind as ‘zombie
agreements.’ The main features of item 20A of Sch 3 are described in detail in the Full Bench
decision in Suncoast Scaffold Pty Ltd1. Under subitem 20A(6) of Sch 3, where an application
is made for the default period to be extended, the 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.
[2024] FWCFB 303 [Note: A copy of the zombie agreement to which this
decision relates (AC324928) is available on our website.]
DECISION
AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/agreements/approved/AC324928.pdf
[2024] FWCFB 303
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[4] Bargaining for a replacement agreement is not occurring here, so subitem (7) does not
apply. The Agreement is a collective agreement and subitem (8) does not apply. The application
to extend the default period of the Agreement is made on the grounds that subitem (9) applies
as the employees covered by the Agreement would be better off overall if the Agreement
continued to apply to them than if the relevant modern award applied and that it is otherwise
appropriate to do so and that it is reasonable in the circumstances to extend the default period.
[5] Dampier opposes the application. It does not accept that employees would be better off
overall if the Agreement continued to apply. It contends that as the employees, including Mr
Roach, have contracts of employment that provide obligations to pay rates of pay in excess of
those required to be paid under the Agreement (and the applicable Award), the Agreement is
no longer relevant to their employment and so they are not better off under it.
Background
[6] Dampier operates three solar salt operations – at Lake MacLeod, Dampier and Port
Hedland. There are approximately 240 employees covered by the Agreement. They are
involved in growing, harvesting and shipping salt from Dampier’s operations. This work
includes operating and maintaining heavy maintenance equipment and fixed plant. All
employees are full time except for one, who is part time. Dampier does not employ casual
employees. Heavy maintenance equipment operators work a combination of dayshift and
nightshift across a 7-day per week roster. Maintenance and other team members tend to only
work dayshift.
[7] Dampier wrote to each employee, including Mr Roach, on 29 May 2023, confirming
that on an overall comparison the rate the employees receive under their individual contracts of
employment is much greater than they would be entitled to under the Salt Industry Award 2020
(Award) which would apply if the Agreement were terminated. In that letter Dampier
committed to continuing to apply the terms and conditions of employment from the employees’
contracts and the Agreement after the Agreement terminates.
Consideration
[8] The better off overall criterion in subitem 20A(9) requires a consideration of whether it
is likely that as at the time the application is made, the employees, viewed as a group, would be
better off overall if the Agreement continued to apply than if the Award applied. The Award
is not incorporated into the Agreement. The Agreement covers full time and part time
employees. Casual employees cannot be engaged under the Agreement. The base annual salary
under the Agreement is less than the Award and so is taken to be the rate in the Award, having
regard to clause 2.4 of the Agreement and item 13 of Schedule 9 of the Transitional Act.
Consequently, the rates of pay are a neutral factor for the purposes of the better off overall
criterion.
[9] In relation to the better off overall criterion in subitem 9(b), the Full Bench in Suncoast
Scaffold2 said:
“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
[2024] FWCFB 303
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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
comparison of the terms of the transitional instrument and the relevant award(s) in their
application to the cohort of award covered employees.”
[10] We will apply that same broad evaluative judgment here.
[11] The Agreement is silent on nearly all Award provisions. The employees receive an
annual base salary which is at least equal to the Award, a site allowance and a roster allowance
calculated on the roster worked. On that basis it is likely the rates of pay are better off overall
when compared to the Award. Employees also receive 5 weeks of annual leave with 7-day
continuous roster employees receiving 6 weeks which is more beneficial than the Award
entitlement.
[12] Mr Roach identified the following terms of the Agreement which are more beneficial
than the Award:
a) Call Out provisions;
b) Leave Loading;
c) On Call roster;
d) Airfares;
e) Education assistance;
f) Relocation costs;
g) Study Leave;
h) Long Service Leave;
i) Sick Leave;
j) Military Service Leave;
k) Jury Service;
l) Housing subsidies;
m) Medical Assistance;
n) Notice of termination;
o) Meal breaks on 12 hour shifts;
p) Rest breaks; and
q) Overtime.
[13] Dampier did not contest that these Agreement conditions were more beneficial than the
Award. Rather, it contended that all benefits provided for in the Agreement would continue to
apply if the Agreement terminated in accordance with the employees’ contracts of employment.
It also submitted that the terms of the contract provided additional benefits to both the
Agreement and the Award. Dampier pointed out that the following additional benefits are
provided under the contracts:
a) 5 weeks annual leave continuously accrued;
b) Two return economy air travel tickets to Perth for employees and dependents,
a benefit paid out on termination;
[2024] FWCFB 303
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c) Paid parental leave of 4.5 months at full pay or 9 months at half pay;
d) Long service Leave of 13 weeks after 10 years’ service;
e) 3 months sick leave per year;
f) 5 days compassionate leave;
g) 10 days carer’s leave;
h) Subsidised private health insurance;
i) Salary sacrificing;
j) Reimbursement for eligible hospital expenses over $1,000 per calendar year;
k) A company share scheme which allows employees to purchase shares up to a
capped amount and the company will match the shares 1:1 (i.e. doubling the
employee’s contribution) after three years;
l) Financial and psychological counselling available for all employees free of charge;
m) Various company discounts, including Adamas Diamonds, event tickets,
accommodation and car hire, car manufacturer discounts, Qantas Club
membership, and various other discounts with retailers and financial
institutions;
n) Dependent education allowance policy, providing support to employees’
children who are secondary and tertiary students;
o) Education assistance for employees, including study leave and financial
support for education expenses; and
p) Departing gifts and service awards.
[14] The better off overall criterion requires comparison between the Agreement and the
Award. It is not a comparison between the Agreement and the employees’ contracts of
employment. It is clear from the above that the terms of the Agreement are more beneficial than
the Award.
[15] There are two matters to be considered in applying the test in subitem(6)(a). The first is
whether one of the subitems mentioned applies. Subitem (9) is whether the employees are likely
to be better off if the Agreement continues to apply compared to the Award. The second is
whether it is appropriate to extend the default period for the Agreement. We are satisfied that
the first matter is met. The employees as a group are likely to be better off overall if the
Agreement continues to apply.
[16] As to the second matter, Dampier submits that as Mr Roach and the other employees
have common law contracts of employment that provide terms and conditions that are more
generous than the Agreement or the Award it is not appropriate to extend the Agreement. We
are not persuaded by this argument. While the contracts are more beneficial, they do not allow
the employees access to the enforcement and compliance mechanisms provided under the Fair
Work Act 2009 (FW Act) that apply to industrial instruments. Those mechanisms include access
to provisions to enforce the terms of the Agreement in a court of competent jurisdiction in
accordance with the FW Act or access to the Commission to assist in resolving disputes in
accordance with clause 19 of the Agreement and the FW Act. We note that clause 19 of the
Agreement allows any question, dispute or difficulty that arises may be referred to the
Commission for resolution.
[17] We are satisfied that it is appropriate to extend the default period with respect to the
Agreement. As a result of this conclusion, we are required under subitem (6) to extend the
default period.
[2024] FWCFB 303
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[18] We have a discretion as to the length of the extension (subject to the limitation of a four-
year maximum extension) and we are not bound to grant the period of extension sought in the
application3. In Applications by the Association of Professional Engineers, Scientists and
Managers, Australia4, the Full Bench observed that the default position of the statutory scheme
to automatically terminate transitional instruments on 6 December 2023 suggests a policy
preference in the legislative scheme for employees covered by transitional instruments to
eventually become regulated by instruments made under the FW Act. The Full Bench noted in
that case the employer did not intend to negotiate a replacement agreement and that it may be
necessary for the employees and the unions representing them to take a number of steps to
facilitate this occurring. Those steps may include applying for a majority support determination
under s 236 of the FW Act. The Full Bench saw it necessary to allow a reasonable amount of
time for this to occur, and that a period of approximately three years from the date of its decision
was appropriate for the parties to take the necessary steps to secure the employees’ conditions
in a new enterprise agreement.
[19] Mr Roach seeks an extension to December 2025. We consider that to be an appropriate
length of time for Mr Roach. He indicated that his union intends to pursue bargaining under the
FW Act on his behalf and on behalf of his workmates. We are content that the timeframe sought
in the application is sufficient for this to occur. We will extend the Agreement until 6 December
2025.
[20] Pursuant to item 20A(4) 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 6 December 2025.
[21] The Agreement is published, in accordance with subitem 20A(10A)(c), on the Fair
Work Commission’s website.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
PR776739
1 [2023] FWCFB 105
2 Id
3 See Suncoast Scaffolding [2023] FWCFB 105 at [18]
4 [2023] FWCFB 137
E FALROMKOR OMMISSION THE SEAL OF TH
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/2023fwcfb137.pdf
