The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 put into force key amendments for the sunsetting of so-called ‘Zombie’ agreements.
What is a ‘Zombie’ agreement?
A ‘Zombie’ agreement refers to any agreement which commenced before 1 January 2010 and continues to operate currently. The recent amendments to the Fair Work Act began the process of sunsetting these agreements.
When are ‘Zombie’ agreements getting terminated?
All ‘Zombie’ agreements will be automatically terminated on 7 December 2023,unless the agreement gets extended. Click here to view a full list of the remaining ‘Zombie’ agreements.
How can you extend your agreement?
To extend one of these agreements beyond 7 December 2023, an application must be made to the Fair Work Commission (FWC). The FWC can only approve the extension if:
- it is reasonable in the circumstances to do so, or
- it is otherwise appropriate in the circumstances to extend the default period and one of the following applies:
– bargaining is occurring for a new enterprise agreement that would cover the employee or group of employees covered by the ‘Zombie’ agreement, or
– the employee or employees would be better off overall if your ‘Zombie’ agreement continued to apply to them than if the relevant modern award applied.
Click here to view the FWC’s page about extending ‘Zombie’ agreements for further information.
What should employers do if they use a ‘Zombie’ agreement?
Employers are required to give each employee covered under a ‘Zombie’ agreement notice that the agreement will be terminated. Click here to view the FWC’s template written notice.
From 7 December, it will no longer be legal to use these agreements. Therefore, employers must ensure that they are prepared to switch their employees over to a modern award or enterprise agreement. This is something that will take considerable planning to ensure that employees are classified correctly, all provisions are recognised and any payroll systems are updated.
ER Strategies has a wealth of expertise in the areas of modern awards, enterprise agreements and payroll compliance. If you have any questions regarding these changes, or if you are unsure of what to do, we encourage you to call ER Strategies on 1300 55 66 37, or click the button below.