Zombies rise from the industrial crypt

Upcoming notification obligations for 'zombie agreements' under the Secure Jobs, Better Pay reforms

BY Rohan Doyle and Mitchell Brennan 01 Jun 2023

The recent Secure Jobs, Better Pay reforms to the Fair Work Act require employers to notify employees covered by so-called “zombie agreements” – agreements that were made before 1 January 2010 – that:

The employee is covered by an agreement-based transitional instrument
The instrument will terminate on 7 December 2023 (unless an application for extension is made to the Fair Work Commission before that time).

Employers who are covered by such operative “zombie agreements” are required to comply with the obligation to notify employees by 6 June 2023.

It is important that employers comply with this this obligation as a failure to do so constitutes a breach of a civil remedy provision of the Fair Work Act.

The Fair Work Commission has published information about the notification obligation and the automatic sunsetting of such agreements (including a list of pre-2010 agreements) on its website.

The deadline for notifying employees affected by sunsetting ‘zombie agreements’ is fast approaching.

What should employers covered by ‘zombie agreements’ be doing?

Employers who are covered by operative “zombie agreements” should also give consideration to the following matters:

Whether to make an application to extend the termination date from 7 December 2023 to up to 7 December 2027
How to respond to any application by an employee or union to extend the termination date
The extent to which any applicable modern award terms will apply to their employees from the termination date, and any payroll reconfiguration required to apply such terms
Whether it is prudent to initiate bargaining for an enterprise agreement to replace the zombie agreement.

Rohan Doyle is a partner and Mitchell Brennan is a senior associate in Herbert Smith Freehills’ Employment, Industrial Relations and Safety practice, based in Melbourne.