The Fair Work Act 2009 (FW Act) has been significantly amended to introduce major reforms to the industrial relations landscape across Australia. One major reform is a provision that will operate to automatically terminate some legacy enterprise agreements, sometimes referred to as ‘zombie agreements’.
 

The enterprise agreements which will terminate

Prior to the reforms, enterprise agreements would only terminate if the Fair Work Commission (FWC) made an order for this to occur.

The recent reforms mean all enterprise agreements made before 2010 will automatically terminate on 7 December 2023.

Once terminated, employees covered by those legacy enterprise agreements will automatically transition to the applicable Modern Award, such as the General Retail Industry Award.

The FWC has published a list of known enterprise agreements which will terminate on 7 December 2023. Refer to the list below to determine if you have been impacted:

Zombie Agreements

Enterprise agreements made after 2010, even if they have passed their nominal expiry date, will continue to operate until replaced or terminated by the FWC.

Next steps

If an enterprise agreement is set to terminate on 7 December 2023, the employer must notify affected employees in writing that it will terminate by no later than 6 June 2023. MGA will be circulating a template letter for employers to adopt to notify affected employees.

It may be possible for some employers to extend the operation of impacted enterprise agreements by up to four years. This will be by application to the FWC which will have the discretion to decide whether an extension should be granted. MGA does not expect extensions will be easy to obtain and are likely to only be granted in limited circumstances, such as if bargaining is already underway for a new enterprise agreement or employees would be better off remaining under an enterprise agreement set to be terminated.

Further support

MGA TMA will send resources to members soon.

For additional information, please read the factsheet prepared by the Commonwealth Department of Employment and Workplace Relations:
 

Sunsetting Zombie Agreements

For further information or advice please contact our Employment Law team at 1800 888 479 or legal@mga.asn.au