A Zombie Agreement is a workplace agreement made between employers and employees before 2010 and continues to operate today. As part of the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, provisions have been inserted into the Fair Work Act 2009, which will automatically terminate (also referred to as ‘sunset’) Zombie Agreements from 7 December 2023.
What does this mean for employers?
If you currently have a Zombie Agreement there are some mandatory steps you need to take and some key dates you need to comply with.
Before 6 June 2023, Employers must notify employees that they are currently covered by a Zombie Agreement and it will be terminated on 7 December 2023. Importantly failure to notify your employees of the termination of a Zombie Agreement may result in significant penalties (up to $16,500 individually and/or $82,500 for businesses).
The Fair Work Commission has the power to grant extensions to Zombie Agreements in certain circumstances. An application must be submitted before 6 December 2023.
If you intend to continue to be covered by an Agreement, you should consider commencing this process now, although an extension may still be required. Employers will also need to consider what Modern Award is applicable to the business and its employees.
If you elect not to apply for an extension or negotiate a new agreement, you will be covered by the applicable Modern Award. This could result in major changes to ordinary hours of work, overtime provisions, allowances, and penalty rates.
How the South Australian Business Chamber can help
Agreements are complex – the South Australian Business Chamber is on standby to guide you through this process and can represent your business in the Fair Work Commission.
Contact us today for assistance with meeting your obligations and avoiding costly penalties before 6 June 2023. Our Industrial Relations experts can assist you with drafting the required notification to your employees ahead of 6 June 2023.
Our team is on standby to discuss how we can help you navigate these complex changes to Zombie Agreements.
Get in touch with our Business Advice Hotline today on 8300 0000 (select option 1) and read more about our workplace relations team on our website.
