By 6 June 2023, employers need to ensure they are prepared to inform any affected employees by providing written notice of the impending termination of zombie agreements and the consequent reversion to the relevant modern award.
Jobs Australia (JA) has created letter templates for this purpose which are available here:
What are zombie agreements?
Zombie agreements are industrial agreements made before 1 January 2010, when modern awards commenced operation under the Fair Work Act 2009 (Cth) (FW Act), and which continue to operate.
Unlike enterprise agreements made after that date, zombie agreements were not required to be compared against modern awards for the purposes of the better-off overall test (BOOT), meaning that employees covered by those agreements may have less beneficial terms and conditions than they would otherwise receive under the applicable modern award.
How do I check if an employee is covered by a zombie agreement?
Helpfully, the Fair Work Commission (FWC) has published a list of ‘zombie’ agreements.
See the weblink below:
Members need to check if their existing agreement at your workplace was made before 1 January 2010. If you have an agreement operating at your workplace made before 1 January 2010, under the FW Act it will automatically cease to operate on 7 December 2023.
Can we extend the agreement?
Employers can make an application to the FWC on or before 6 December 2023 to extend an agreement for up to 4 years.
An application to extend the operation of the agreement may be made by an employer, an employee covered by the instrument, or an industrial association entitled to represent the interest of one or more employees covered by the instrument.
See the weblink below:
Immediate action required:
If any employees in your workplace are covered by a zombie agreement, as the employer you must provide affected employees with written notice on or before 6 June 2023 informing them that:
- they are covered by a ‘zombie’ agreement;
- the ‘zombie’ agreement will automatically terminate on 7 December 2023, unless an extension request is made to extend the default period; and
- the sunsetting process commenced on 7 December 2022.
If you intend to extend the agreement you must also inform employees and notify an association that is entitled to represent the industrial interests of one or more of the employees covered by the zombie agreement.
To assist members, Jobs Australia has created a template letter for this purpose.
Key takeaways – act now
As the employer, you are obliged to be proactive in determining whether any employees are covered by zombie agreements to avoid penalties for non-compliance by notifying employees about the automatic sunsetting of zombie agreements.
If you are in doubt as to whether any of your employees are covered by a zombie agreement, or are seeking advice about extending the default period, please contact our Workplace Relations Team.