Zombie workplace agreements and the law

Zombie workplace agreements don’t necessarily mean you will be pursued and devoured by the living dead when you turn up for work. It’s a term to describe ageing workplace agreements that will be declared deceased by the end of 2023.

Business lawyer Geoff Baldwin at Stacks Law Firm explains that all workplace agreements made before the commencement of the Fair Work Act 2009 that are still in operation will automatically terminate on 7 December 2023.

“The Fair Work Commission recently revealed there are more than 100,000 zombie workplace agreements still in place, some of them dating back unchanged to the 1990s,” Mr Baldwin said.

“They range from large companies that are Australian arms of multinational corporations to thousands of small businesses.”

The Labor government said the requirement to set new workplace agreements would modernise pay and conditions for workers.

Minister for Employment and Workplace Relations

Tony Burke said zombie agreements had been a “major loophole undercutting pay and conditions”.

The end of zombie work agreements was legislated in the government’s Secure Jobs, Better Pay Act, which on 7 December ends all workplace agreements established before 1 January 2010.

Businesses reliant on those outdated agreements, many of which date back to the WorkChoices era, have until 6 June 2023 to provide a written alert to any covered employees.

Mr Baldwin warned that employers who fail to alert affected employees about the new workplace agreement requirements may face compliance action or civil penalties levelled by the Fair Work Commission.

“Employers should get legal advice to ensure they comply with the new workplace agreement laws and understand how their business will be impacted,” Mr Baldwin said.

“The laws are often complex, requiring examination of several new pieces of legislation and the results of court judgements.”

Infringing workplace laws can lead to fines of $1,650 per breach for an individual, and $8,250 per breach for a company. Court litigation for serious contraventions of workplace agreements can lead to fines up to $165,000 per breach for an individual and $825,000 per breach for a company.

If an employee applies to terminate a zombie agreement in the coming months, employers may ask the FWC for a transitional period of up to 12 weeks before it takes effect.

But the FWC must compare the terms of the proposed agreement with the modern award that would otherwise apply for the employee. The FWC sets out to ensure employees are better off overall under the new enterprise agreement, taking into account base rate of pay, penalty rates, casual rates, overtime rates, allowances and rostering.

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