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Are you reliant on a ‘Zombie Agreement’?

Posted on by Ethan Edwards

What are ‘Zombie Agreements’?

A ‘Zombie Agreement’ is a workplace agreement (you may also know them as Collective or Enterprise Agreement) that was approved in the Federal jurisdiction before the Fair Work Act 2009 (Cth) took effect. The old agreements would have been decided under the Workplace Relations Act 1996 (Cth) after amendments were made through the implementation of the Workplace Relations Amendment Work Choices) Act 2005 (Cth). Although the National Employment Standards still apply to such Zombie Agreements, they can contain terms and conditions that would now not be possible in an enterprise agreement due to the restrictions of the Fair Work Act 2009. For these reasons many organisations have chosen not to replace their Zombie Agreements continuing to operate even though they have long since expired and the legislation under which they were made was superseded nearly 9 years ago.

The term ‘Zombie Agreement’ is one that appears to be gathering traction as part of calls for further changes to Australian industrial relations and in the mainstream media. Recently it was referred to in a Recommendation of a Queensland Parliamentary Inquiry as follows:

Recommendation 16

‘The committee recommends an automatic termination date be legislated for remaining Work Choices ‘Zombie’ agreements, with consideration given to necessary transitional arrangements and protections to ensure no workers are disadvantaged as a result.’

Recommendation 16 would change the current operation of the Fair Work Act 2009 (Cth) so that ‘Zombie Agreements’ have a legislated sunset clause terminating them even if it is against the will of the employer and employees involved. This would replace the current law that such an agreement continues to operate passed its nominal expiry date until it is terminated or replaced.

Background to the Queensland Parliamentary Inquiry

In November this year, the Queensland Education, Employment and Small Business Committee released its report titled ‘A fair day’s pay for a fair day’s work? Exposing the true cost of wage theft in Queensland’ following its investigation into wage theft in Queensland. The report makes 17 recommendations addressing the questions around wage theft. The chair, Leanne Linard MP says:

“It is my hope that this report will shine a light on the issue in a Queensland context and build on a growing body of work nationally that is making the case for real change on behalf of affected workers.”

The committee traversed Queensland conducting 24 hearings and receiving evidence from more than 100 witnesses; 350 survey respondents and received 49 written submitters.

The outcome of the committee was 17 recommendations for Queensland Parliament. Due to the Federal system of Industrial Relations covering almost all employees, such recommendations are limited. The report does however reflect a growing movement in industrial relations, and that Australian State Parliaments are active in pursing changes to employee entitlements. This is in addition to the union ‘Change the Rules campaign’ where recommendations in the report may be reflected in future federal parliament legislation. The recommendations for Parliament demonstrate one platform where the issue of Industrial Relations and employee wages are being raised in the public and political spheres.

It is important that employers maintain awareness of these developments as future and long term decision making will certainly be impacted should the recommendation become federal law. This means, in addition to the changes already occurring in the Fair Work Commission to Modern Awards, if  ‘Zombie Agreements’ are terminated, if your business is operating under these old agreements, you are likely to revert back the applicable modern awards unless an alternate agreement is put in its place.

What this means for you?

The Parliamentary Inquiry report is not binding and does not mean that the current laws will change. However, where there are times of change it is important to look at what you can do to protect yourself from potential future changes. This is particularly so if you are reliant on a ‘Zombie Agreement’ in the operation of your business. The timing of this committee, other union activism and the rise of the term ‘wage theft’ are important considerations as we are fast approaching a potential change in government early next year. The union movement is also pushing hard for changes to the industrial law. Although the details of what such changes would entail is currently somewhat unclear, given the seriousness of the potential changes it is best to be proactive rather than reactive. This is particularly so where there are considerable changes occurring to modern awards and the increasing costs associated with employment benefits from those changes.

We therefore recommend that employers review their industrial instruments and the potential impacts of future changes in the operation of these instruments. For further information or to speak to one of our consultants, please contact us on +61 7 3833 1200 or solution@livingstones.com.au

Written by Ethan Edwards

Ethan Edwards

Ethan adopts a holistic approach when working with clients, to ensure he analyses issues from every angle and takes into consideration the big picture. He really takes the time to listen to understand the issues clients are facing to evaluate risks and consider options available in order to provide comprehensive, tailored and innovative solutions.

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