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Payroll Zombie agreements that are not yet terminated will automatically terminate (sunset) on 7 December 2023 unless you apply for and are granted an extension.
https://www.fwc.gov.au/agreements-awards/enterprise-agreements/sunsetting-zombie-agreements-0
This article draws on the material published by Fair Work and several media outlets and consultant reviews to provide the details behind the retirement of these agreements.
As Rostering, Timekeeping, Timesheet, and Award Interpretation are all part of the processes covered in Modern Awards, the impact will be substantive if the business is required to move on to them.
‘Zombie agreement’ is the name given to certain agreements made before the Fair Work Act 2009 commenced (or fully started) and that continue to operate.
They could be:
- Agreement-based transitional instruments
- Division 2B State employment agreements
- Enterprise agreements made during the bridging period (1 July 2009 to 31 December 2009)
There are over 100,000 Agreements listed as Zombies in the Fair Work published list. We are not saying that these agreements are currently being used, but it is an incredible number. Some industries with many zombie agreements are listed below:
Public Services
Health Services
Retail
Security Companies
Hotels
Restaurants
Security Companies
Labour Hire Services
Transport Industry
Health Services
Building Industry
Is your workplace agreement one of them: Visit the FWO:
Under the new amendments, agreement-based transitional instruments made under the Workplace Relations Act 1996 will automatically expire on 7 December 2023, meaning they will no longer apply. Employers covered by an affected agreement (Agreement) will need to ensure that:
- By 7 June 2023, you inform your employees:
That the Agreement covers them;
- That on 7 December 2022, the sunset provisions came into effect; and
- Unless an application is made by June 2023 to extend the Agreement’s termination date, the Agreement will terminate on 7 December 2023.
Once terminated, you mwill need tocomply with your obligations under any applicable modern award or have approved a new enterprise agreement.
Agreement-based transitional instruments
Before the Fair Work Act started, several types of agreements were in place.
These agreements were either made:
- collectively between the employer(s) and a group of employees, or
- individually between an employer and an employee.
Collective agreement-based transitional instruments are:
- collective agreements
- workplace determinations
- preserved collective State agreements
- pre-reform certified agreements
- old IR agreements
- section 170MX awards
Individual agreement-based transitional instruments are:
- individual transitional employment agreements (ITEAs)
- preserved individual State agreements
- Australian Workplace Agreements (AWAs)
- pre-reform Australian Workplace Agreements
Fair Work Published -Sunsetting of zombie agreements
All agreements made before the commencement of the Fair Work Act that is still in operation will automatically ‘sunset’ (or terminate) on 7 December 2023 (12 months after these changes commenced). These agreements, commonly known as ‘zombie agreements’, include:
- agreement-based transitional instruments
- Division 2B state employment agreements
- enterprise agreements made between 1 July 2009 and 31 December 2009.
Parties to an agreement can apply to the Commission to extend the sunset date for the contract by up to 4 years at a time. Applications need to meet certain conditions, for example, that bargaining is occurring for a proposed replacement agreement, or employees would be better off under the zombie agreement.
Employers who have employees covered by these agreements need to let those employees know, in writing, that the agreement will be terminating on 7 December 2023 unless an application for extension is made to the Commission. The written notice needs to be provided before 7 June 2023 (within six months of 7 December 2022).
The Commission will publish its decision and any written reasons for extending or not extending a zombie agreement on its website. This includes publishing a copy of the relevant agreement if it’s a collective agreement. The Commission can’t publish an individual agreement.
They have the power to start court proceedings for alleged breaches relating to employers failing to notify employees about sunsetting for zombie agreements. Employers who are found to have breached their obligations may face penalties. You can read the FWO Compliance and Enforcement Policy for information about how they perform compliance and enforcement roles.
- agreement-based transitional instruments
- Division 2B state employment agreements
- enterprise agreements made between 1 July 2009 and 31 December 2009.
Parties to an agreement can apply to the Commission to extend the sunset date for the agreement by up to 4 years at a time. Applications need to meet certain conditions, for example, that bargaining is occurring for a proposed replacement agreement, or employees would be better off under the zombie agreement.
Employers who have employees covered by these agreements need to let those employees know, in writing, that the agreement will be terminating on 7 December 2023 unless an application for extension is made to the Commission. The written notice needs to be provided before 7 June 2023 (within six months of 7 December 2022).
The Commission will publish its decision and any written reasons for extending or not extending a zombie agreement on its website. This includes publishing a copy of the relevant agreement if it’s a collective agreement. The Commission can’t publish an individual agreement.
They have the power to start court proceedings for alleged breaches relating to employers failing to notify employees about sunsetting for zombie agreements. Employers who are found to have breached their obligations may face penalties. You can read our Compliance and Enforcement Policy for information about how we perform our compliance and enforcement role.