Tuesday, 14 February 2023

Zombie Agreement Update

Following the passage of the Secure Jobs Better Pay Act which provides for the sunsetting of ‘Zombie Agreements’, the Fair Work Commission (FWC) has today released a list of these Zombie Agreements which will automatically end on 7 December 2023.

Zombie Agreements are agreements that were made before 31 December 2009 under previous workplace relations legislation and includes collective agreements, Australian workplace agreements (AWAs) or individual transitional employment agreements (ITEAs).

There are over 100,000 Zombie Agreements listed by the FWC which will automatically end on 7 December 2023.

To check whether your business is included in this list, please click here.

Please note that is not a complete list of the Zombie Agreements which will automatically end, as the list does not include any AWAs or ITEAs and certain collective agreements made from 2006 to 2009.

Importantly, if your business or organisation is on this list, this should not be cause for panic, as many of these Zombie Agreements are no longer in operation.

If your Zombie Agreement has already been replaced:

The list does not recognise if a Zombie Agreement has been replaced by another enterprise agreement. So, if your business or organisation has entered in a new enterprise agreement since 2010, or even several enterprise agreements since 2010, the automatic sunset of the older Zombie Agreement will have no impact on a practical level.

If your Zombie Agreement has not been replaced or terminated by the FWC:

The new Secure Jobs Better Pay Act provides that all Zombie Agreements will automatically terminate on 7 December 2023 unless it is replaced or extended by the FWC. An application can be made to extend the agreement if bargaining has commenced for a proposed replacement agreement, or if the relevant employee(s) would be better off overall on the Zombie agreement.

If your business or organisation’s Zombie Agreement does terminate on 7 December 2023, then employees’ terms and conditions will automatically revert to the underpinning modern award (if any). This should not impact the base rate of pay (given the base rate of pay within a Zombie Agreement cannot be less than the underpinning modern award or National Minimum Wage), however it may impact penalty rates, overtime, rostering arrangements or other terms and conditions that will revert to the modern award (if any).

Further, employees must be notified by 7 June 2023 if they are covered by a Zombie Agreement and that the Zombie Agreement will terminate unless it is replaced or extended.

Therefore, if a Zombie Agreement still applies to your business or organisation, you may wish to consider the following:

  • how and what you will communicate with affected employees before 7 June 2023. Understandably, employees will want to know how their terms and conditions will change if the Zombie Agreement is terminated and how their employer is planning on addressing this;
  • whether an extension to the Zombie Agreement will be sought and/or if a new replacement agreement will be bargained for; and
  • the business or organisation’s industrial relations strategy generally in light of the other changes to enterprise agreements created by the Secure Jobs Better Pay Act which are summarised in our recent article here.

Please contact HR Legal for strategic and practical advice on how to manage the termination of your Zombie Agreement, including relevant employee communications and documentation. We can also assist with determining an appropriate industrial relations strategy in light of the broader changes arising from the Secure Jobs Better Pay Act.


This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.