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Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 20A(4) - Application to extend default period for agreement-based transitional
instruments
Applications by:
Christopher J Hart
(AG2023/3524)
Mira Leonora Georgio
(AG2023/3816)
Gerrit Knauth
(AG2023/4082)
Cindy Wan Lan Loo
(AG2023/4333)
Debra Anne Navin
(AG2023/4411)
Peter Daryl Gilbert
(AG2023/4448)
Gary Richardson
(AG2023/4497)
Ashwin Sanjesh Chand
(AG2023/4504)
Nicole Louise Matthews
(AG2023/4628)
Mervat Zahra
(AG2023/4688)
Stephen Tolhurst
(AG2023/4703)
Susan Helliwell
(AG2023/4708)
[2024] FWCFB 183
DECISION
AUSTRALIA FairWork Commission
[2024] FWCFB 183
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Rita Mola
(AG2023/4928)
Charles Balendran Casinader
(AG2023/4949)
Sara North (Willett)
(AG2023/4956)
Dianna Pelle
(AG2023/4959)
Barbara Jurcic
(AG2023/4981)
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
SYDNEY, 22 MARCH 2024
Applications to extend the default period for various Australia Workplace Agreements and
Individual Transitional Employment Agreements with the Commonwealth Bank of Australia
Introduction
[1] The Applicants in these matters are employed by the Commonwealth Bank of Australia
(CBA). Their employment is regulated by either an Australian Workplace Agreement (AWA)
or an Individual Transitional Employment Agreement (ITEA). The AWAs and ITEAs
(Agreements) are individual agreement-based transitional instruments for the purpose of Sch
3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
(Transitional Act). Individual agreement-based transitional instruments were set to expire at
the end of the default period on 6 December 2023 unless application was made to extend the
default period.
[2] The Applicants have made applications to extend the default period for their agreements
pursuant to subitem (4) of item 20A of Sch 3 to the Transitional Act. The applications are
opposed by CBA. The default period is extended by subitem (11) while a decision to extend the
default period is pending.
[3] Mr Gilbert made his application under Sch 3A of the Transitional Act. We note that Mr
Gilbert's agreement is an individual agreement-based transitional instrument to which Schedule
3 applies. We have considered his application as if made under Sch 3.
[4] The main aspects of the statutory framework applicable to these applications were
detailed in the Full Bench decision in Suncoast Scaffolding Pty Ltd1. In short, the Agreements
the subject of the application are agreement-based transitional instrument preserved in
operation after the repeal of the Workplace Relations Act 1996 (WR Act) and the
commencement of the Fair Work Act 2009 (FW Act) by items 2 and 3 of Sch 3 to the
Transitional Act.
[2024] FWCFB 183
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[5] The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (SJBP
Amendment Act) amended the Transitional Act to provide for, amongst other things, the
automatic termination of all remaining transitional instruments. It did this by adding item 20A
to Sch 3 of the Transitional Act. The SJBP Amendment Act refers to transitional instruments
as ‘zombie’ agreements. It is subitem 20A(1) which provides for the automatic sunsetting of
zombie agreements at the end of a default period.
[6] Subitem (6) of item 20A provides for the extension of the default period. The
Commission is required to extend the default period for an agreement-based transitional
instrument for a period of no more than four years if the Commission is satisfied under subitem
(6)(a) that either subitem (7), (8) or (9) applies and it is otherwise appropriate to do so, or, under
subitem (6)(b), if it is reasonable in the circumstances to do so. Subitem (7) is not relevant to
the present matters as it only applies if bargaining is occurring for a replacement agreement
which is not occurring. Subitem (9) also does not apply as it relates to collective agreement-
based transitional instruments. The Agreements are all individual agreement-based transitional
instruments.
[7] Subitem (8) applies to individual agreement-based transitional instruments. It applies
where the employee covered by the relevant instrument would be otherwise covered by an
award and it is likely that as at the time the application is made, the employee would be better
off overall if the agreement continued to apply than if the award applied. The relevant award in
here is the Banking, Finance and Insurance Award 2020 (BFI Award). The Applicants
contend, and CBA agrees, that subitem (8) applies as each employee would be better off if their
individual agreement-based transitional instruments continued to apply than if the BFI Award
applied.
[8] The CBA’s opposition to the applications is that the second limb of subitem 6(a) is not
present as it is not otherwise appropriate in the circumstances to extend the default period for
the Agreements.
Background
[9] When the SJBP Act commenced CBA had over 2,000 employees whose employment
was regulated by AWAs or ITEAs. It is evident from the material filed in these proceedings
that even though the instruments are individual agreements, CBA treated the cohort of
employees working under such arrangements the same. They applied the same terms and
conditions to those employees albeit their salary arrangements were set by reference to the
salaries agreed to in the original instruments. In responding to the applications, CBA said that
in many cases they did not have a complete copy of the original agreement on file. They
proceeded on the basis that the Agreements were in the same terms.
[10] On 30 May 2023 and 1 June 2023, CBA issued affected employees who were employed
under an individual agreement with written notice that their agreement would sunset on 7
December 2023. The notification to employees was required by subitem 20A(3) of Sch 3.
Employees were also provided with a change summary document and frequently asked
questions document. In June 2023, the CBA held employee information sessions about the
changes. These sessions covered topics such as the key dates employees needed to be aware of,
a proposal that individual offers concerning changed employment arrangements would be made
before the end of the default period, and that extensions of the default period could be sought
by applying to the Commission.
http://www.austlii.edu.au/au/legis/cth/num_act/fwlajbpa2022516/
[2024] FWCFB 183
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[11] On 8 November 2023, affected employees were provided with an offer for their new
employment arrangements. This was either an annualised salary package (ASP) arrangement
or an unpackaged arrangement which was to be underpinned by the Commonwealth Bank
Enterprise Agreement 2023 (CBA EA). The coverage provisions of the CBA EA include the
employees on individual agreements but it did not apply to their employment due to the
preservation of those agreements by the Transitional Act. Employees were required to accept
the offer by 22 November 2023. If the zombie agreements terminate, each of the Applicants
will be covered by the terms of the CBA EA and, if they have signed an ASP, the agreement
terms will be supplemented by the ASP.
[12] The Commission received 47 applications from CBA employees seeking to extend their
individual agreements. It was clear from many of the applications that employees considered
that the explanations provided by CBA about the process for transitioning from the individual
agreements to the collective agreements were inadequate and they were being rushed into
signing important arrangements concerning their employment. Consequently, the CBA was
directed to hold discussions with each applicant to address the concerns raised in their
application. Following those discussions only seventeen employees pressed the application for
an extension of their individual agreement. Directions were also issued for the filing of material
and the parties were given the opportunity to address the Commission at a hearing. All parties
declined the invitation for a hearing and the matters have been determined on the papers.
[13] Six of the Applicants were represented by the Finance Sector Union (FSU): Charles
Casinader, Dianna Pelle, Sara North, Susan Helliwell, Daryl Gilbert, and Gary Richardson. In
relation to those, the FSU filed statements of each of the Applicants and written submissions
(FSU Submissions). The remaining Applicants represented themselves and provided written
material in support of their applications.
[14] In essence, the Applicants each claim that reverting to the CBA EA will result in them
being worse off. There are some common themes. A number of the Applicants are concerned
that the change will result in a reduction in their entitlements to long service leave,
personal/carers leave, and severance payments on redundancy. Some of Applicants are close to
retirement and wish to ensure their long service leave and related superannuation benefits are
not adversely impacted by the changes. For its part CBA contends that it has taken measures to
alleviate any reduction in entitlements to long service leave and personal/carers leave by
introducing specific measures to compensate for any loss. CBA also relies on other measures
associated with the changes that will result in the employees being better off under the new
arrangements through the provision of leave entitlements that are not found in the individual
agreements. These include employees receiving guaranteed pay increases under the CBA EA
and access to a more beneficial discretionary bonus scheme. In terms of salaries, CBA has
ensured that salaries are higher under the new arrangements but only negligibly - the new salary
rates in some cases are only $10 – $20 better off per annum than their current rates.
Long Service Leave
[15] The changes to long service leave are raised as a concern by most of the Applicants.
Under the individual agreements, long service leave is determined by the terms of the agreement
which are to be read with the relevant State or Territory long service leave legislation. When
the individual agreements terminate, long service leave entitlements will be governed by the
CBA EA and the Commonwealth Bank of Australia Employees Award 1999 (1999 Award)
[2024] FWCFB 183
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which is the award‐derived National Employment Standards (NES) entitlement to long service
leave for the purpose of s 113 of the FW Act. The rules associated with the accrual of long
service leave are the same under the individual agreements and the CBA EA, however, the rate
of pay in some instances is more beneficial under the individual agreement depending on the
applicable State/Territory long service leave legislation. In some State legislation, payment
while on long service leave includes bonuses. An issue also arises as to the accrual of long
service leave where part of the service involved part-time work.
[16] CBA has addressed this issue by committing to pay all employees affected by the change
a LSL Transition Payment. This means that when an employee transitions to the CBA EA and
is found to have a lower overall entitlement to long service leave at the date prior to transition
than would otherwise be afforded under the CBA EA, they will receive a payment to
compensate for the difference. For indicative purposes the CBA has calculated the difference
between the payment that would have been due had each Applicant taken their long service
leave under the industrial instrument and the payment that applies under the CBA EA as at 7
December 2023, the date the individual agreements would have ceased operating under the
Transitional Act if an application to extend had not been made. The payments range from
nothing for a number of Applicants whose entitlement is unaffected by the change to $33,244
for one applicant who will be affected both by the exclusion of bonuses and having worked
part-time during her time with CBA. The figures are indicative and will be reviewed upwards
to reflect the loss at the time the individual agreement ceases to operate. The LSL Transition
Payment will be made to employees before the end of 30 June 2024, or in the first quarter of
the new 2024/2025 financial year if requested by an employee.
[17] A number of Applicants raised that they would lose the superannuation contribution that
would otherwise arise from the long service leave payments. Mr Casinader was one of the
Applicants who raised this issue and CBA responded that the LSL Transition Payment would
give rise to a superannuation contribution.
[18] The FSU points out that the LSL Transition Payment will still leave employees worse
off because it does not compensate for future loss. The payment is made at a point in time and
all future accruals would be paid at the lower rate provided for in State legislation as applicable.
Personal/Carers Leave
[19] The second common complaint relates to the accrual of personal/carers leave. The
individual agreements provide:
We will provide you with paid personal illness leave for genuine illness or injury as set
out in the attached schedule. We may require that you attend an appointment with a
medical practitioner so that we can obtain a medical report regarding your fitness for
work.
You may access up to 10 days of your personal illness leave per year to care for a family
member who is ill or injured. If you exhaust your paid carer’s leave, you will be entitled to
two days unpaid carer’s leave for each permissible occasion.
We may require you to provide a medical certificate (or, in certain circumstances, a statutory
declaration) in relation to a period of personal illness or carer’s leave.
[20] The schedule referred to states:
[2024] FWCFB 183
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As per our workplace policy, which provides for the continuation of your Base
Remuneration whilst absent from work on account of personal illness or injury, unless
workers compensation is payable. We will continue to pay you during such periods of
personal illness or injury until such time as we determine that a return to work is unlikely
and other alternatives such as ill health retirement become appropriate.
[21] The CBA’s practice has been to record a sick leave balance to enable an account to be
made of the amount of carer’s leave taken in a particular year. This is known as Continuation
Illness Leave. The balance of Continuous Illness Leave reduced when carer’s leave was taken
but did not reduce when personal leave was taken.
[22] CBA has accommodated the loss for employees who have already transitioned from an
individual agreement to the CBA EA by giving each employee a personal/carers leave balance
comprising their Continuation Illness Leave balance at the time of the transition and 240
additional days of personal/carers leave. The 240 days will be pro-rated for part time employees.
That balance then accrues 15 additional days per year of service in accordance with the CBA
EA. The CBA proposes to apply the same approach to the Applicants. CBA has provided a
calculation for each of the Applicants. The balance for the Applicants, based on indicative
calculations applicable on 7 December 2023, see them moving onto the CBA EA with
personal/carers leave balances of more than 240 full time equivalent days’ leave. A number of
the Applicants will be afforded personal leave balances of over 400 days under the new
arrangements. For one of the Applicants, his leave balance will be in excess of 504 days. These
balances will increase by 15 days per year under the CBA EA.
[23] The FSU submits that the Applicants will nonetheless lose the benefit to unlimited
personal leave if the individual agreements terminate.
Severance Pay
[24] Where an Applicant’s position is made redundant, the number of weeks’ severance pay
they are entitled to under their individual agreement and the CBA EA is the same. The
entitlement is 7 weeks for the first year of service and 3 weeks for each subsequent year of
service up to a maximum of 79 weeks. However, under the individual agreements, severance
pay is calculated on an employee’s ‘Base Remuneration’ which is the base remuneration at the
time of the redundancy. The calculation of the remuneration for the purposes of severance pay
under the CBA EA is less beneficial.
[25] Clause 36.5 - Severance pay of the CBA EA includes the following:
If you are entitled to severance pay under this clause, your severance payment will be calculated
by determining the number of weeks’ severance you are entitled to at the time of exit, then
multiplying the number of weeks’ severance by your full time equivalent weekly Salary at the
time of exit and then multiplied by your average fulltime equivalent during your employment
with the Group (excluding periods of casual service unless the law provides otherwise).
[26] The consequence of this provision is that should the CBA EA apply, the severance
entitlement will be less beneficial than under the individual agreement depending on the nature
past working arrangements. If an employee has been full‐time for the entirety of their
employment, their severance entitlement will remain the same. However, if an employee has
had a period of part‐time or casual service, the entitlement will be less.
[2024] FWCFB 183
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[27] A number of the Applicants are women who during their career with CBA, worked part-
time. CBA accepts that these applicants will have a reduced severance pay benefit. For Ms
Mola, if her role were made redundant, the rate of pay for severance under the individual
agreement would be her current base rate, while under the CBA EA it would be approximately
79% of her base rate. For Ms North, the figure is 92% of her base rate. Ms Helliwell would
receive 89% of the amount she would receive under her individual agreement if she were
retrenched. For Ms Jurcic, the figure is 85%. Ms Loo would only receive 87% of the benefit
that would be payable under the individual agreement. Ms Zahra was made redundant on 22
February 2024 in accordance with the terms of her individual agreement which continued to
operate pending this decision and the reduction did not apply to her.
[28] A number of the Applicants expressed concern that their work was reducing, and they
believed that it was possible that their employment would be terminated on the ground of
redundancy. The CBA responded that it had no intention of making those Applicants’ positions
redundant.
Other Matters
[29] Mr Hart’s application included that he believes the move to the CBA EBA will have an
adverse impact on his superannuation entitlement. He plans to retire in June 2025. The CBA
provided calculations that demonstrate that he will not be worse off in terms of superannuation.
[30] Mr Chand raised that he was not given enough time to fully consider the CBA’s
proposals concerning the transition to the CBA EA and he would like time to negotiate a better
transitional arrangement. Ms Georgios raised that the CBA EA was less flexible than the
individual agreements in accommodating overtime for part-time employees such as herself.
CBA responded that the flexibility that had been applied to her employment in the past was
provided at the discretion of her manager rather by the operation of the individual agreement.
[31] CBA EA submits that the change to the CBA EBA will give the Applicants access to
benefits not provided for in their individual agreements. Those benefits include compassionate
leave, paid parental leave, gender affirmation leave, domestic and family violence leave, jury
service payments, and community service leave.
Consideration
[32] In determining whether subitem 20A(8) of Sch 3 applies we are required to consider
whether it is likely that at the time the application was made the Applicants would be better off
overall if the individual agreements applied than if the BFI Award applied. The parties agree
that this test is met. We are satisfied that it is. The rates of pay in the individual agreements are
well in excess of the Award rates. The Applicants would be better off on the Agreements
compared to the Award and subitem (8) does apply.
[33] Once satisfied that subitem (8) applies we are required to consider whether it is
otherwise appropriate to extend the default period of the AWA. In Suncoast Scaffolding the
Full Bench said2:
[16] Under subitem (6)(a) of item 20A, in addition to being satisfied that subitem (7), (8) or (9)
applies, the Commission must also be satisfied that ‘it is otherwise appropriate in the
circumstances’ for the default period to be extended. ‘Appropriate’, on its ordinary meaning,
[2024] FWCFB 183
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connotes that it is ‘suitable’ or ‘fitting’ to grant the extension. ‘In the circumstances’ connotes
the relevant matters and conditions accompanying the particular case. The inclusion of the
adverb ‘otherwise’ indicates that appropriateness must be assessed by reference to
circumstances other than those addressed by subitem (7), (8) or (9), as applicable. A broad
evaluative judgment is required to be made.
[34] Full Benches of the Commission have said a number of times that the purpose of the
sunsetting arrangements introduced in the SJBP Act3 is that zombie agreements are to be
replaced by contemporary instruments made under the FW Act. We consider that relevant to
the question of whether it is fitting or suitable that the individual agreements continue to apply.
[35] The Full Bench in Northern Inland Credit Union Limited4 noted that the statutory
intention behind the SJBP amendments is that transitional instruments approved many years
ago under earlier iterations of the legislation sunset and be replaced by modern industrial
instruments made under the FW Act. The Full Bench also observed that this intention is
particularly relevant to AWAs which are a species of individual employment agreements that
are referred to in the objects of the FW Act as being inconsistent with a fair workplace relations
system.
[36] We also note that the purpose of the provisions is relevant to the broad evaluative
judgment we must make. The explanatory memorandum expressed the purpose of the
provisions relating to extending the default period in this way:5
Provision would be made for the FWC to (upon application) extend the default period to ensure
the automatic sunsetting of zombie agreements does not operate harshly, including by leaving
employees worse off.
[37] The CBA submits the circumstances relevant to the current applications include that
when assessed on an overall basis, the termination of the Agreements will not operate harshly
by leaving the Applicants worse off. This is so because should the Agreements terminate, the
CBA EA will apply to the Applicants’ employment. The Applicants were also offered, and most
have accepted, either the ASP arrangement or an unpackaged arrangement. The combined
effect of these arrangements in that the Applicants will be comparatively better off than under
their respective individual agreements. To the extent that a particular benefit from the individual
agreement is not replicated in the CBA EA, or is less beneficial, the CBA has sought to
compensate the Applicants for the loss of that benefit. CBA further submits that the terms of
the individual agreements are not wholly consistent with the benefits the Applicants actually
receive in their employment, rendering the individual agreements in some respects obsolete
when compared to the benefits currently afforded to the Applicants.
[38] As the FSU has pointed out there are a number of aspects of the arrangements put in
place by the CBA that either will, or have the potential to, leave the employees worse off. Long
service leave is one of those. The LSL Transitional Payment goes some way to addressing the
detrimental impact of the transition to the CBA EA, but as it is a one-off payment fixed to a
point in time it does not operate to address prospective losses. The changes in personal leave
arrangements are also less beneficial than the arrangements under the individual agreements.
We are of the view that the arrangements put in place which include the crediting of the
employees with 240 days accrued personal/carers leave must be considered on an objective
basis to be generous. The FSU also raises the issue of the reduced severance payments. We
consider that this gives rise to some concern. The manner of calculating the benefit using a full-
time equivalent calculation appears to us to operate in a discriminatory manner adversely
[2024] FWCFB 183
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impacting on women who have moved to part-time employment during their careers. We note
that the object of the FW Act was amended by the SJBP Act to include a reference at s 3(a) to
promoting gender equality.
[39] We have decided on balance that it is not appropriate to extend the default period for
the individual agreements. The agreements are old. Some date back more than 20 years. We are
satisfied that the measures taken by CBA to ameliorate the losses arising from the change in
instruments such as the reduced long service leave benefits and personal leave entitlements
associated together with the additional benefits provided by having their employment regulated
by a modern enterprise agreement that has been tested against current standards and includes
additional benefits including domestic and family violence leave, paid parental leave,
compassionate leave, gender affirmation leave and community service leave outweigh the
detriment associated with the reduction in a small number of entitlements.
The severance pay issue is of some concern, but it is an entitlement that is contingent upon
employees being made redundant. In each case where this is raised as a concern the CBA has
indicated that it has no intention of making the employee’s position redundant. In the case of
Ms Zahra her severance payment was calculated on the individual agreements.
[40] Having decided to not extend the default period for the Agreements under subitem 6 (a)
we may also consider whether it is reasonable in all of the circumstances to do so under subitem
6 (b). We were not directed to any circumstances that went beyond what had been put in relation
to the appropriateness test. We are of the view that, for the same reasons that it is not appropriate
to extend the default periods for the Agreements, it is not reasonable in all the circumstances to
extend the default periods under item 6(b) of Sch 3 to the Transitional Act.
[2024] FWCFB 183
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[41] As our decision is to refuse to extend the default periods under subitem 20A(6) of Sch
3 and our decision is made after the sunset date in the Transitional Act, subitem (10)(e) provides
that we must extend the default period for each agreement to the day of this decision or specify
a day that is not more than 14 days after the day of this decision. We have decided that to enable
the parties to make the necessary administrative arrangements to give effect to the sunsetting
of the AWAs and ITEAs the default periods are extended until 4 April 2024.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
PR772631
1 [2023] FWCFB 105 at [3] to [18].
2 Ibid at [16].
3 See for example Quinn Transport Pty Ltd Enterprise Agreement 2009 [2023] FWCFB 195at [23] and One HPA Certified
Agreement 2004-2007 [2023] FWCFB 137, at [32].
4 [2023] FWCFB 120 at [23]-[25].
5 Explanatory Memorandum Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 at [670].
OF THE FAIR WORK L MISSION THE SEA
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb195.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb137.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb120.pdf
