Pre-2010 Agreements Due To Sunset This Year, Are You Ready?

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Are some of your employees covered by a pre-2010 agreement (also known as a ‘zombie agreement’)?

These agreements will be automatically terminating (‘sunsetting’) on 7 December 2023 unless an application is made to the Fair Work Commission to extend the default period for the agreement before 7 December 2023.

Many of these pre-2010 agreements no longer cover anyone and have ceased operating.

For example, many pre-2010 agreements have been replaced by enterprise agreements, only covered employers, projects or worksites that no longer exist, only covered named employees who are no longer employed by the employer, or have been terminated by the parties, or by the Fari Work Commission.

However, for those employees still covered by this type of agreement, there are a number of key items to complete to either extend the agreement or bring them into line with the modern award.

Types Of Zombie Agreements

Pre-2010 agreements that continue to operate today (‘zombie agreements’) could include the following kinds of registered agreements:

  • ‘Agreement-based transitional instruments’

These agreements were either:

  • collective — covering employer(s) and a group of employees, or
  • individual — covering one employer and one employee.
  • ‘Division 2B State employment agreements’, or

Division 2B State employment agreements are based on agreements registered under State industrial laws in New South Wales, Queensland, South Australia and Tasmania before 1 January 2010 that covered referred employers.

  • ‘Enterprise agreements made during the bridging period’ (1 July 2009 to 31 December 2009)

Enterprise agreements that were made under the Fair Work Act between 1 July 2009 and 31 December 2009 had to pass the ‘no disadvantage test’ rather than the ‘better off overall test’.

These agreements were collective agreements.

What Do I Have To Do? 

If a pre-2010 agreement still covers one or more employees (it is a ‘zombie agreement’), you as an employer must give the employee(s) a written notice about the sunsetting of the agreement before 7 June 2023.  An application must be made to the Fair Work Commission to extend the default period for the arrangement must be made bef

You don’t have to do anything if your pre-2010 agreement no longer covers anyone.

Who Can Apply For An Extension?

You can apply to extend the default period for a pre-2010 agreement that is still in operation (a ‘zombie agreement’) if you are:

  • an employer covered by the agreement
  • an employee covered by the agreement, or
  • an industrial association that is entitled to represent the industrial interests of one or more of the employees covered by the agreement.

If you have already been granted an extension to the default period beyond 6 December 2023, you can apply for a further extension. You must apply before the end of the extended default period.

You can make as many extension applications as you like, provided the pre-2010 agreement has not yet been terminated. You must include a copy of the pre-2010 agreement with your extension application.

Your application should also specify whether bargaining is occurring for a new enterprise agreement or whether the employee(s) would be better off overall if the pre-2010 agreement continued to apply than if the relevant modern award applied.

If you’re unsure whether your employee agreements fall under a pre-2010 agreement, you should seek independent advice from a business adviser – why not start that conversation with us today?

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