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5 December, 2022

Legislative amendments – Zombie agreements

Blog | Industry News

Comprehensive Fair Work Act 2009 (Cth) changes have been passed by Parliament in the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022. For a general summary of all changes and links to more detailed notes on each topic, please see our summary ,EMA Note.

This EMA Note focuses on the legislative changes related to old enterprise agreements and pre-Fair Work Act agreements (or ‘zombie agreements’).

One issue addressed in the Bill that has been on the Government’s agenda for a while is the continued existence of what have been dubbed ‘zombie agreements’, being pre-Fair Work Act industrial instruments that continue to apply to certain employees to the exclusion of modern awards. The Bill also limits the ability of the Fair Work Commission to terminate enterprise agreements on approval, an amendment aimed at preventing employers using the ability to terminate an older enterprise agreement as a bargaining chip during enterprise agreement negotiations.

What will change and when?

This note is not a comprehensive explanation of the changes and should not be relied on as advice. In summary:

  • If a party applies to terminate an enterprise agreement after the nominal expiry date of that agreement, the Fair Work Commission will have considerably more limitations on when it can terminate that agreement. The limited circumstances that will permit termination are if the Commission is satisfied that: the continued operation would be unfair for employees; if the agreement does not and is unlikely to cover employees; or if the continued operation would pose a significant threat to the business viability of the employer (provided some additional criteria are met, including in relation to new guarantees of termination entitlements).
  • The ability for employers to request that employees vote to agree to terminate an enterprise agreement remains the same.
  • Pre-Fair Work Act agreements will terminate automatically 12 months after the amendments commence (see below). However, a party to the agreement (or a relevant industrial association) may apply to the Fair Work Commission to extend the operation of the agreement for a maximum period of four years. The Commission may grant this application provided specific criteria are met.
  • The termination provisions also apply with substantially the same effect to some state instruments and enterprise agreements made during the bridging period of the Fair Work Act. n
  • A failure to notify employees in relation to the termination of zombie agreements (see below) will be a civil offence and may incur penalties.

These amendments will commence the day after the Bill receive royal assent.

What should employers do now?

Old Enterprise Agreements

Employers who have been considering applying to terminate old enterprise agreements will now be subject to stricter requirements before the Commission will agree to the application. One way to address this would be to request employees vote to agree to terminate the agreement (unless the new circumstances about which the Commission must be satisfied are met).

EMA Consulting can assist employers who wish to terminate their old enterprise agreements, including by assisting in any application process or in drafting communications to employees.

Zombie Agreements

Employers must, within six months of the amendments commencing, notify employees covered by a zombie agreement that they are covered by that agreement, that it will terminate (unless an application is made to the Fair Work Commission to extend its operation) 12 months after the amendments commence, and the day on which the amendments commence (or commenced).

Employers will need to review their industrial instruments that cover employees, including any employees still covered by old Australian Workplace Agreements (“AWA”) and Individual Transitional Employee Agreements (“ITEA”). Even if the employer has an enterprise agreement which seems to cover the employee, if that employee was originally covered by an AWA or ITEA, that AWA or ITEA will continue to apply to the employee instead of the enterprise agreement unless the Fair Work Commission made an order terminating the AWA or ITEA. Employers will need to confirm whether any AWAs or ITEAs remain in force within six months of commencement of the amendments so they still have time to notify employees of the effect of the amendments.

Require further information/assistance?

This EMA Note is not comprehensive advice about your situation and does not cover all your obligations. If you require further information or advice, please contact your Consultant.

EMA Consulting is not a law firm and therefore does not provide legal advice or services. The information contained within this document and associated material is general in nature and should not be relied upon. If you require specific advice on a particular matter, we recommend that you contact EMA Consulting on 08 8203 1700. Subject to the matter at hand, your EMAC Consultant may recommend that you obtain formal legal advice. If formal legal advice is required, upon your written instruction EMAC will brief your matter to a legal practitioner for this purpose. The contents of this document and associated materials do not represent legal advice.


For more information or specific advice, please do not hesitate to contact one of our employee relations consultants.

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