FWC Scathing Attack on Zombie Agreement Employer

A hospitality industry employer has been condemned by the FWC for sitting on a 20 year old agreement which was, by any measure, seriously sub-standard to the award it displaced. The fierce censure was contained in both the FWC reasons for decision and in incidental commentary, highlighting the negative impact on employees and the gross disadvantage at which competitors of the employer were placed.

One casual employee, out of 143 employees covered by the agreement, made an application to cancel the agreement and the evidence revealed the employees were paid the award base rate for all ordinary time worked (including public holidays).

The FWC didn’t need much persuasion to cancel the zombie agreement, observing “it is difficult to understand how an employer could have, for so many years, knowingly deprived a large number of employees of penalty rates, to which they would have otherwise been entitled under the relevant award”. And further “in my view it is unconscionable this arrangement has continued in place without an application by the Employer to terminate the Agreement”.

After deciding to cancel the agreement, the FWC deliberately went on to make further disapproving remarks which included “I consider it necessary for a light to be shone on these kinds of archaic arrangements.  Presently, it is incumbent upon employees, often casual employees, to make an application to the Commission, to request termination of an agreement where an employer does not have the intestinal fortitude to recognise what a significant benefit it has had for a substantial period of time and make its own application”.

As part of the decision, the FWC also made withering remarks about the employer’s practices in a related entity, including offering employees so-called ‘voluntary overtime’ agreements to sign. The FWC virtually invited “interested parties” to disabuse employees of any benefits they might see in signing up to one of those.

While not rare, it is highly unusual to say the least for a FWC member to be so explicitly critical of an employer. But the stance underlying these remarks is shared among FWC members about these zombie agreements, for the same reasons, unfairness to employees and competitors alike. The opprobrium attaching to this employer as a result of this decision is considerable.


Application by Thom re Staff Services Pty Ltd Certified Agreement 2000 –  [2022] FWCA 1543 (12 May 2022


By Ross Clarke and Shane Coyne