“You’re Dead to Me!” – The Termination of Zombie Agreements & What You Need to Know

In December 2022, The Federal Parliament instigated a wave in Australia’s industrial relations reforms when they passed the Secure Jobs, Better Pay Amendment Act 2022.  A key aspect of the reforms includes the termination of the ‘zombie’ agreements, demanding action from affected employers before 6 June 2023.

Zombie Agreements are workplace agreements which were created prior to the introduction of the Fair Work Act and during the transitional period which took place prior to 1 January 2010. These agreements continue to operate despite having passed their nominal expiry date and will often contain less favorable terms than the National Employment Standards and the relevant Modern Award

There are indicative factors which distinguish zombie agreements from agreements made after 1 January 2010. An agreement is likely to be a zombie agreement if:

• It is dated 2009 or earlier;
• It contains “Collective Agreement”, “workplace agreement” or “Transitional” in its name; or
• It references the Workplace Relations Act 1996, an Award dated prior to 2010, The Australian Industrial Relations Commission, The Fair Pay Commission or the Workplace Authority.

Although it is not a complete list, the Fairwork Commission has also published a list of zombie agreements that you can find here to assist employers identify whether or not a zombie agreement applies to them.

Unless there has been a request to the Fairwork Commission for an extension, zombie agreements will automatically terminate at the end of 6 December 2023. Upon termination, employees will be covered by the appropriate modern award unless a new enterprise agreement is made to replace the zombie agreement’.

The application for an extension to a Zombie Agreement can be approved for a period of up to 4 years and can be submitted by either an employer, an employee who is covered by the agreement, or an authorized industrial association.

The Commission can approve an extension if the employees are better off under the agreement, or if bargaining for a replacement agreement is occurring, or if it is otherwise reasonable in the circumstances.

Immediate action is required from employers with zombie agreements. You must inform your employees in writing on or before 6 June 2023 that:

• they are covered by a zombie agreement
• the agreement will be terminated at the end of 6 December 2023, unless a request for an extension is made to the Commission.

It is also important that you begin to think about how this will impact your business and the ways you can strategize a plan for the transition. You will need to assess the options your business has to mitigate any risk factors. For example, if your employees are going to be covered by a Modern Award after the termination of zombie agreements, you will need to begin to familiarize yourself with the contents of the applicable modern award and ensure that your business and payroll system is compliant with its terms and conditions.

Our consultants are continually monitoring the implementation of the amendments to the Fair Work Act, and their implications. If you would like more information on the impact the Legislative Reforms might have on your organisation, please contact us here and a Mapien Workplace Strategist will be in touch ASAP.