Employers currently covered by a pre-2010 workplace agreement (Zombie Agreement) are required to notify their employees by 6 June 2023 that the Zombie Agreement (being the source of their minimum entitlements) will be terminated by 7 December 2023.
The Fair Work Commission has recently released a list of the Zombie Agreements that will automatically expire on this sunset date. This list is not exhaustive.
The intention behind the policy is to bring all employment conditions up to the minimum standards of a Modern Award. Therefore, if your business is currently paying its employees through a Zombie Agreement, that agreement will be terminated on 7 December, even if it’s not on FWC’s list.
Termination of Zombie Agreements will be automatic. Employers don’t need to do anything to terminate the agreement, except notify their employees and prepare for the shift to Modern Award based entitlements.
If you have a Zombie Agreement, you are required to notify your employees of the upcoming termination by no later than 6 June 2023. We recommend that you do this as a priority. There may be particular financial ramifications where terms and conditions are less than the underpinning Modern Award so some planning is required as a priority.
Retainer clients will have access to our template notice to employees, which will cover the specific notification requirements.
*NB Whilst some employers may have already checked the FWC ‘list’ and found some of their ‘old agreements’ on it, there is no need to notify employees if your business has previously operated under a Zombie Agreement that has already been replaced and has no employees covered by its terms and conditions. This will be fairly common where a business is on its 3rd or 4th generation agreement.
Opportunity to Delay Termination
FWC has provided an opportunity to employers to apply for an extension to the 7 December 2023 deadline. Extensions are likely to be relevant if your business is currently engaged in enterprise bargaining, or the terms of the Zombie Agreement are already more beneficial to employees than the alternate Modern Award.
If these circumstances apply, we recommend seeking advice. Otherwise, efforts will be best spent preparing for Modern Award based entitlements.
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