The recent Secure Jobs, Better Pay reforms to the Fair Work Act require employers to notify employees covered by so-called 'zombie agreements' – being agreements that were made before 1 January 2010 – that:
- the employee is covered by an agreement based transitional instrument; and
- 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.
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; and
- whether it is prudent to initiate bargaining for an enterprise agreement to replace the Zombie Agreement.
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