What is a Zombie Agreement?

What is zombie agreement?

If you’ve been keeping an eye on the headlines around fair work and underpayment scandals in recent months (and why wouldn’t you be?), you’ll undoubtedly have stumbled across the term ‘zombie agreement’.

And while it conjures up some pretty interesting Walking Dead imagery, the term doesn’t refer to anything quite as gory as you’d think.

When we talk about workers being on ‘zombie agreements’, we’re talking about workplace agreements that were implemented during the Howard Government’s controversial WorkChoices era.

What was WorkChoices?

WorkChoices, for those of you who don’t remember it, was the name given to sweeping changes made to federal industrial relations laws by the conservative Howard Government in 2006. While a number of changes were made in the passing of the Workplace Relations Amendment (Work Choices) Act 2005, one of the most significant was the removal of the No Disadvantage test for workplace agreements.

Prior to WorkChoices, workplace agreements (that is, contracts employees can sign that differ from the relevant award for their industry) had to pass something called a No Disadvantage Test, which ensured that no agreement would leave an employee worse off than they would be under the award.

Under WorkChoices, the No Disadvantage Test was scrapped, with opponents claiming that it was too complex, and that removal of it would create more job opportunities.

Unsurprisingly, the removal of the test was widely criticised, causing the Howard Government to introduce something called the Fairness Test around a year after the initial WorkChoices legislation came into effect.

However, plenty of workplace agreements were created between March 2006 (when WorkChoices came into effect) and April 2007, when the Fairness Test was introduced. And given that the Fairness Test was not retrospective, agreements created in that time period exist in a sort of liminal state, neither dead nor alive.

How are these agreements still in effect?

On paper, it seems outrageous that any of the agreements made between March 2006 and April 2007 are still in effect. After all, WorkChoices was repealed in its entirety by the Labor Government and replaced by the Fair Work Act 2009which effectively restored a number of the conditions employees lost under WorkChoices.

And on top of that, WorkChoices-era agreements had a five-year nominal expiry date – so even if an agreement was lodged at the last minute, in March 2007, it should have nominally expired in 2012.

Unfortunately, under the Fair Work Act, agreements continue to operate after the nominal expiry date passes, until they’re either replaced or terminated by application to the Fair Work Commission.

While any of the parties to the agreement can apply to the FWC for a termination of the agreement, that requires either an employer who wants to terminate an agreement that likely saves them money, or employees who are aware that they’re on a lesser agreement, and that they can do something about it.

What can we do about it?

There have been a number of high-profile Australian businesses that have come under fire for paying employees based on WorkChoices-era agreements – and a large percentage of these businesses are characterised by young, casualised workforces.

And that means, unless the rules change, the responsibility for getting rid of zombie agreements lies overwhelmingly with workers.

To find out how to make an application to terminate an agreement, visit the FWC website here.

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